Penny the puppy is getting naugty. When she came home she was somewhat potty trained (it was a great breeder). She was sweet and gentle and loving and cuddly.
She is turning into a terror. She eats anything she sees on the ground; she chews on electrical cords, shoes, and people. She bites her brother's ears constantly.
She relentlessly chases the cats who have resorted to eating and sleeping on the dining room table. She digs holes and gets filthy. She doesn't go potty outside as faithfully. She runs away if she's not on a lease. Bad dog! I think we need a trainer.
On another note, Grammy is now another pickleball player in the family. On August 8th, we celebrated National Pickleball Day, and as you can see below, everyone had a good time.
There are two very different ways to view our economic future.
For those of you who invest in stocks, you’re saying, “I believe the American (and global) economy will continue to grow and develop as the years go by.”
By not investing in stocks, you say, “I believe the economy will decline indefinitely.”
Let’s take these two thoughts to their logical conclusions.
For those of you who believe that we will continue to advance as a culture, there are some valid reasons.
- Innovators
- Visionaries
- Philanthropists
- Technological advancements
- The human spirit
I think we can agree that these reasons make sense. You believe that the economy will continue to grow, and naturally, your standard of living will improve. Remember, we have 200 years of history that prove this exact point. The Dow Jones was 68 in 1900, and it is now 34,000.
Investing in stocks lets you get on board with the most brilliant and driven human beings.
Now, for those of you who say, “I believe the economy is going to decline for many years.”
Your rationale may be:
- Unstable geopolitical situations
- Political uproar
- War
- Selfishness
- Greed
- Corruption
- Killer A.I. robots taking over the Earth
- The belief that innovation has reached its peak
If you fall into the second category, these reasons can feel like they make sense. Let’s take this mindset to its logical end.
If the economy has not advanced in any way ten years from now, with no innovation or societal improvement, it would be the first time in 200 years of American economic history.
But let’s say all your fears come true. Wars rage, markets collapse, and we start to decline into a time akin to the Great Depression: mass unemployment, food lines, homelessness.
Now, at this point, the banks are in trouble, too. Remember, if nobody can pay back their debts, banks start failing. If banks start failing, you can't withdraw money from your accounts. There would be a run on the banks. There would be rioting in the streets as citizens attempt to pull their savings. ATMs would not work. Banks would lock their doors. Martial law would be declared.
FDIC insurance? It doesn’t mean a thing in this scenario. There is no way the government can fulfill its promises.
Would the stock market dive in this scenario? Of course. During the Great Depression, the markets went down by 80 percent. The only way the markets could go to zero is if every publicly traded company went bankrupt.
What about if you put your money in “guaranteed” products like life insurance or annuities? Same problem. Those promises are only as good as the companies who make them. You would lose everything.
So, in a way, in this doom and gloom scenario, those of you with money in safe investments could lose everything. But those with their money in the stock market might walk away with something. It happened during the Great Depression. Those with money in the banks lost everything, and those with money in the markets lost 80%, which recovered over the next ten years.
So, ironically, those who had their money in “risky” investments may end up with more than those who had their money tucked away safely in banks.
The next logical step would be that society is wiped out. We return to tribes and gangs fighting for territory. Food, water, shelter, fuel, and weapons would be the most prized possessions. Gold would be worthless. Paper money is used as toilet paper.
At that point, does it matter where you had your money?
All of this is to make this point: You are investing in the stock market whether you are or not.
What do I mean? If the stock market dives for ten years or more, we are in economic chaos with banks failing and hyperinflation. Either way, you lose money.
If the stock market and economy improve you will get far greater returns than money in the bank.
We are at a point in history where everything is based on the stock market. Either go for the ride and reap the benefits, or only utilize “safe” instruments that become worthless if the markets collapse.
So what do you believe? Will America continue to change the world for the better or falter permanently? Own stocks or feel “safe"? You need to decide.
Myself. I believe in America. With all the uncertainty, I still believe in the power of capitalism and democracy. I believe we will keep growing, keep innovating, and continue to make life better. I believe the stock market will continue to grow as it has for hundreds of years.
I refuse to bet on economic Armageddon. Anyone betting on that has been wrong every single time. I’m going to live my life with a sense of opportunity. Not a sense of fear.
Be Blessed,
Dave