May 31


Buying a CD with a -7% Interest Rate

Family Update


My wife grew up around family that loves fishing.  Her oldest brother, in particular, would fish all day every day if he could. 

We found a fishing good spot on the shore, and the family has been trying to catch a keeper ever since.  Up to this point we’ve caught mangrove snapper, snook, catfish, and sheepshead.  In my opinion, the snapper is the tastiest.   

Below you can see Grandpa helping the kids bait hooks and release fish.  He barely has any time to fish himself.  Lines keep getting tangled and hooks get stuck on rocks underwater.  

You might also notice a pelican waiting patiently.


Dawn was a nurse for an OBGYN doctor. The stock market keeps going down, she thought. It seems like every time I put my money into my 401k it just disappears. I had $100,000 in the account, then I added $5,000 and now it is worth $95,000. Why would I keep putting money toward retirement when all my contributions get lost in the market? I’m going to stop putting money into my 401k.  

Dave’s Take: Huge mistake! If anything she should be increasing her contributions. Nobody can predict the movements of the market but we certainly are not at the top of the market. Keep saving! You’re buying low. 

Next up . . .  

Jack, a retired engineer, was studying his portfolio. These accounts have lost $50,000 this year. This is all we have. If this portfolio runs out, I don’t know what I would do. I am going to cash out and wait for the markets to stabilize. It feels like if I don’t do something I’m going to lose all of my money. 

With his money on the sidelines, Jack very quickly realized how hard it is to re-invest money once you’ve sold low. Jack watched as the markets went lower. He felt pretty smart. But then they started creeping back up.  

Not quite yet, Jack thought to himself. The economy still seems fragile. The markets may have rebounded back to their original levels, but at least I didn’t lose any money. I guess I missed out on all those gains, but there is no way I’m going to invest now. The market is at an all-time high. I’ll wait until the market goes down again… 

Dave’s Take: Many people fall into the same trap as Jack at some point in their investing lives. They sell low and wait for things to “settle.” Before they know it, it is a year later, and the markets have fully rebounded and you’re still on the sidelines.  

Next up . . .  

Bobby was incredibly stressed about his investments. He didn’t really have anyone around to help him navigate the choppy waters. As soon as the account was down 20% he threw in the towel. He thought, I am done with this. I swear I’m never going to invest again. I’m too old anyway. So Bobby went ahead and put his money in CDs. 

Dave’s Take: Bobby’s financial situation is going to get crushed by inflation. Remember, you can temporarily lose money in the stock market, but by putting your money in low-interest-bearing instruments, you are guaranteed to lose purchasing power.  

Next up…

 George saw his account values going down and it was making him sick. One day he heard on the radio about software that would help him day trade. It proclaimed, “CenterPoint Securities is a great place to trade because it offers direct access to all the assets you could want. The platform offers several helpful features like: advanced charting, level 2 order routing, short inventory access, capacity for advanced and high-volume traders, built-in scanners, custom alerts, and advanced order entry.” 

George, while having no idea what all those words meant, was excited and, after paying the hefty subscription fee, started trading stocks several times a day. Not only did he trigger all kinds of unnecessary taxation, but his money went down even faster.

 I thought these guys knew how to make money in any market conditions, George grumbled.  

Dave’s Take: All of these software programs are garbage.  All of them.  

Next up . . . 

Joey and Jan had been looking forward to a trip to Europe. COVID has really put a damper on their plans. By the time travel started up again, Joey and Jan watched their portfolios falter. “We can’t take this trip,” Jan said, “Our portfolio is almost 20% less than a year ago. It’s time to buy toilet paper in bulk, only eat Ramen noodles, start cutting our own hair, keep the air conditioning at 80 degrees, sell one of our cars, and cancel our trip to see the kids up in Minnesota.”

 Dave’s Take: This is just sad. As far as their financial plan went, nothing has changed. Economies expand and compress. The compression happens much more quickly than the expansion. It’s worked that way for hundreds of years. 20% moves in the market are very common.  

Two years ago, due to COVID, the markets lost 34%. It’s easy to forget. 

In 2018 the market fell 20%, at one point during the year. Do you remember that? Probably not. 

In 2015 there was a short-lived market selloff with the markets dropping by 15%. 

In 2011 the markets dropped by 20% but fully recovered by the end of the year. I guarantee you don’t remember that one. 

All of this to say: Looking back on 2022 we will remember rampant inflation but there is a good chance that the market correction will be long forgotten. 

 Lastly . . .  

Doug and Amy were looking at their iPads one morning in the kitchen. On TV they saw a hysterical “investment guru” talking about how the sky was falling. Doug said, “These yahoos are basically guessing. If this guy could consistently predict the ups and downs of the markets, he would be the first one in modern history to do so.” 

Amy piped in, “If he’s so smart why is he not living on his own tropical island with investors lining up, begging him to help?” 

“It’s all theater,” Doug replied.  

Be Blessed,



Share this Post:

You may also like

Investing in Tulips?
Can It Get Any Worse?