There is always an excuse to delay doing something that involves risk.
When we went whitewater rafting on the American River in California, our guide said their policy was “Safety second” because those who put safety first don’t go whitewater rafting. In investment management, return follows risk, not safety. A sure thing does not exist, which is why we always advise people to walk away from scenarios that are “too good to be true.”
If you put safety first, you would put all of your money in FDIC-insured CDs paying very little. Your money would be safe, if by safe you mean the dollar amount would not go down. The purchasing power, however, would continually dwindle as inflation ate away at your so-called safe investment.
An attitude of “safety first” results in putting all of your other financial goals second. This is not an investment strategy. A favorite Paul Volker quote is “You can’t hedge the world,” to which we would add, “and if you could, it would cost too much.”
On Tuesday, February 12, 2019, David John Marotta appeared on Radio 1070 WINA’s Schilling Show to discuss market timing, lessons from 2018 “almost bear” market, and more on the best time to invest.
Listen to the audio here:
At the first part of the show, David and Rob talk about the standard investment disclaimer, “Past performance is no guarantee of future results.” If you enjoyed this part of the discussion, you might enjoy the articles “A Closer Look at the Past Performance Disclaimer” or “Does Past Performance Have Anything To Do With Future Results?”
At 5 minutes in, they discuss when is the best time to invest? The short answer is now! If you want more information on this topic, you might enjoy reading “If You Are Tempted to Stay Out of the Markets, Read This First” or “Invest Even When Afraid.”
At 7 minutes in, David answers the question, “What investment advice do you have for new grandparents who would like to do something for their new grandchild?” With this, they discuss 529 accounts as well as funding a child’s Roth IRA. They also talk about the The Real and Present Danger of Inflation, Even for Babies and how you can teach your child a better savings methodology than a sock drawer. If you have young grandchildren, you might enjoy our Gift Ideas for Your Grandbabies series. Here are the articles for 0-12 months and 1 Year Olds.
At 12 minutes in, they discuss “Buying on the Dips” and the Bull Market of 1990s. David suggests that “Buy on the dips” is a good strategy only because of the first word: “Buy.” If you enjoyed this part of the discussion, you might enjoy the article “Is ‘Buy On The Dips’ A Good Investing Strategy?”
At 15 minutes in, they discuss inflation. During 2018, inflation averaged 2.44%, which is a very small inflation. David Marotta predicts that, “We will have a Bear Market in cash over the next decade” because, at a 2.44% rate of inflation, cash loses 21.42% of its value in the next decade. In 35 years, it loses 56.99% of its value. If you enjoyed this part of the discussion, you might enjoy the article “The Real and Present Danger of Inflation, Even for Babies.”
At 17 minutes in, they discuss the CPI’s inflation calculation and how that changes your retirement planning. For more information on this, you might enjoy reading “How the Government Lies About Inflation,” “Better to Bank with Cyprus Than the United States?” or “How Manipulations to the CPI Affect Your Retirement Planning.”
At 21 minutes in, they discuss the cause of inflation. For more information on this, you might enjoy reading “Tax By Inflation.”
They close the show reminding you not to wait. Invest now.
Photo by Jazmin Quaynor on Unsplash