Investing 301

Waiting for the dust to settle

It looks more and more like we’re in for a recession, and a hard landing rather then a ‘soft’ landing. Markets pulled back rather sharply last week and on Monday 8/5/24.

In Investing for Beginners, I wrote “This is not investment advice; If you follow my ideas and lose your shirt, don’t even think about suing me, because you wouldn’t get anything, because I would have lost my shirt too. This is just what I would do and what I recommend to my children, based on my own personal experience, unprofessional opinions and philosophy. Take it for what it’s worth and use your own good judgment. At present, I believe the stock market is priced so high that it’s not a good time to get into it.

I also said “Start by deciding whether to put your money in short term treasury bills (T-bills) or in stocks. If the stock market is hitting all-time highs, and T-bills are paying over 5% interest, like today (June 2024) then I would buy a T-bill with an online account at treasury.gov.”

It turned out my non-investment advice was good. Short term T-bills are about as safe a place for cash as we can find in this world, and the correction in the stock market once again reminds us that all investments have risk.

I heard a sermon Sunday about the parable of the rich man [in Luke 12] who had so much grain and goods that he thought he would just build bigger barns and sit back and take life easy, eat, drink and be merry. But it turned out that he was to die that night.

Perhaps this is the most important thing to keep in mind when you’re investing. We’re just passing through this world; material and investments will all be burned up in the end, and we couldn’t take it with us anyway. Becoming “rich toward God” is much more important. Trust in God no matter what happens.

I closed Investing for Beginners with “As time permits, I’ll write Investing 301, which will go into a lot more options, usually called ‘alternative investments’. That’s when the fun begins!”

I’ll share lots of ideas on that, some very cutting edge, but I’ll wait a bit to see if there’s going to be some new trends in the market after the election. Stay tuned. As Yogi Berra said, “Making predictions is hard, especially if they’re about the future”.