Bad Time to Invest

Family Update

I’ve become a Tesla fanatic. Dalanee got one, and I may never want to drive another car. You press a button, and it steers, brakes, changes lanes, and makes the turns while you keep your eyes on the road. It took a couple of days to trust it, but now I arrive places relaxed. My favorite trick is coming out of Publix, tapping my phone, and watching the car pull out of its spot to come get me. It's like science fiction. Driving always stressed me out, and now it feels like having a chauffeur.

Yesterday Dalanee and I sat in the living room for a video call on the laptop. Desmond, who normally treats the couch like his full-time job, suddenly decided we needed his attention more than the people on the screen. He climbed all over us and parked himself in our laps until the call ended. Who knew our laziest dog had a jealous streak?

Getting older isn’t for the faint of heart. My mother-in-law has been having trouble hearing. Her inexpensive hearing aids were never fitted properly, and I suspect they’re defective, so she’s been missing most of what goes on around her. It's like I have to shout in her face to communicate. We’ve booked an appointment to get her a better pair, and I’m hoping it makes a real difference in her day-to-day life. I know Medicare doesn't cover the good hearing aids, but if you can afford them, I would gently suggest they're worth it.

I am truly blown away by AI. Below is a picture I took at a convenience store, and I told AI I wanted a sugar-free drink that tasted fruity and cost less than three dollars. It immediately told me. 

Have you ever seen Back to the Future? Let’s all jump into a handy time machine and travel back to the early 20th century.

(Buzz. Whirr. Beep. Clunk.) Those were time machine sounds.

We’ve arrived!

1. 1941: The Shadow of World War II

The year is 1941. Hitler is marching across Europe, and the war is clearly going his way. The reality of World War II is on every American’s face. News just hit that the Japanese have bombed Pearl Harbor, and boys are heading off to war.

American citizens are realistically thinking, "THIS time is different. The stock market could collapse and never recover. Heck, there may not even BE a stock market in a few years. We may all be speaking German."

The Result: If you invested $100,000 in 1941, ten years later you’d have $483,014, an annualized return of 17.06%.

2. 1951: The Red Menace and Korea

Let’s jump ahead a decade. Next stop, 1951!

Harry Truman has just ordered the development of the hydrogen bomb, and Russian aggression is a massive concern. The Korean War begins when North Korean Communist forces invade South Korea.

Why in the heck would you invest your money at this time in history?! A new "red" menace has appeared from the wreckage of WWII, and the world feels uncertain and scary.

The Result: If you invested $100,000 in 1951, it would be worth $446,944 ten years later, an annualized return of 16.15%.

3. 1962: The Cuban Missile Crisis

Buckle up, because our time voyage has a few more stops.

The year is 1962. The Cold War is heating up as the USSR makes plans to build nuclear missile bases in Cuba (just a year after successfully testing a staggering 50-megaton hydrogen bomb).

The American populace is gripped with fear. Schools are running nuclear attack drills, having kids hide under desks which were not designed to survive a thermonuclear blast. The possibility of worldwide nuclear Armageddon would make any investor nervous. You’d have to be completely nuts to invest right now, right?

The Result: If you invested $100,000 in 1962, it grew to $257,778 ten years later, an annualized return of 9.93%.

4. 1974: Watergate and Stagflation

Let’s jump ahead to the seventies. Groovy, man.

The year is 1974. The Watergate scandal has led to Richard Nixon's resignation. The Arab oil embargo has deeply crippled the economy, sending unemployment to historic highs as cars line up for miles at gas pumps. Economically, politically, and socially, society is experiencing some of its worst struggles since the Great Depression.

Investing your hard-earned savings right now feels ludicrous. The economy is in shambles with no relief in sight.

The Result: If you invested $100,000 in 1974, it reached $397,874 ten years later, an annualized return of 14.81%.

5. 1991: Desert Storm and Real-Time War

The year is 1991. Saddam Hussein invades Kuwait, and George H.W. Bush initiates Operation Desert Storm. Meanwhile, racial tensions explode in Los Angeles following the Rodney King verdict. For the first time, news stations report on war in real-time, broadcasting frightening images of exploding bombs and tracers filling the night sky.

Investing during such upheaval would seem nothing short of irresponsible.

The Result: If you invested $100,000 in 1991, it would be worth $337,272 ten years later, an annualized return of 12.93%.

6. 2003: Post-9/11 and the Iraq Invasion

Only two more stops on our way back to the present day.

The year is 2003. The September 11th attacks have radically changed how Americans view the world. The USA PATRIOT Act is passed, hundreds of thousands of troops are mobilized, and the U.S. invades Iraq amid the looming shadow of terrorism. Tension fills the public's hearts and minds.

Why would anyone risk their savings amid such intense geopolitical uncertainty?
The Result: If you invested $100,000 in 2003, it would have grown to $204,207 ten years later, an annualized return of 7.40%.

7. 2008: The Great Recession

Last stop on our Time Travel Express!

The year is 2008. The housing market plunges. Banks are hit hard, dividend payouts plummet to near zero, and legendary institutions like Lehman Brothers, Washington Mutual, and Countrywide go bankrupt as the stock market goes into free fall.

The Result: If you invested $100,000 at the absolute peak right before the 2008 crash, it was worth $225,863 ten years later, an annualized return of 8.49%. Even with the worst timing imaginable, your money more than doubled.

The Bottom Line

I think you get the point.

The phrase "This is a bad time to invest my money" can carry dramatic, wealth-eroding consequences. The world will always seem unstable, irrational, and just plain ridiculous.

In the twenty-five years that I’ve helped people with their investments, there has never been a single moment when I thought to myself, "Man, everything is working out A-OK in the world right now. What a perfect time to invest."

Be Blessed,

Dave