The song “stuck in the middle with you” is playing in the background (if you’re an AARP card carrier you’ll get it) as I write this brief. A dozen years and a heck of a growth spurt later since the carnage of 2008 and here we are back in in the middle of uncertainty. However, unlike ’08, no one could have seen Covid coming. Right? It is said that through hindsight we gain perspective and insight. Presumably because you actively remember and analyze the situation that took place and run “what if” and “should have” scenarios on what you might have done differently. Another way to put it would be you continue torturing yourself over the unalterable past.
I was a year shy of mile marker #50 on the road to retirement bliss and “bam” like a Mike Tyson left hook and right uppercut, fifty percent of my 401K was history. Ironically, I was getting my feet wet in the real estate investment world at the time, learning how important it was to identify alternatives to the stock market rollercoaster. I also learned that it was not the first nor would it be the last time economic tragedy would rear its ugly head.
So, here’s a few nuggets of Sam’s hindsight and learned insights:
- Most of us were not taught about the do’s n don’ts of investing nor cared to learn because it was taken care of for us (401k’s)
- No one should care more about your money than you
- $250k of liquidity may barely cover medical expenses during retirement
- Different investors look at risk differently, high risk comes with high prices
- What goes up most certainly will come down hard
- The stock market is dictated by daily events and occurrences & tweets from the White House
- You absolutely must have alternative investments as a hedge against inflation and the stock market
- The economy goes thru 4 critical cycles & knowing what they are and how to navigate thru them is critical if you want to enjoy your “Golden” years
- Corrections are normal and healthy & Investors should look at them opportunistically more so than be afraid of them.
- The last two economic recovery cycles, in the 1990s and the 2000s, had three corrections apiece toward the end. Investors who bailed after the first correction in each recovery missed out because the markets rose 20 percent afterward.
- There’s persistence in volatility but volatility is not necessarily a bad thing when you have a plan. Even big corrections were a normal part of an economic cycle.
- Risk is inherent in living; your investments are no different. Learn how to identify and manage risk to fit your goal. You do have one, right?
- Life changing opportunities can be found in any market cycle
- A self-directed IRA (SDRP) serves no purpose if you don’t know how or what to deploy your capital into. Educate yourself.
- Roth IRA’s are the “bomb-diggity”
- I had more time to recover at age 49, than I do now at 61 (it took over 5 years to get back to 2007 highs do you have time to endure another loss like that?
- You must have a consistent passive residual income if you expect to live comfortably in retirement
A couple additional thoughts come to mind. In 2012 when we began private lending, the proverbial lightbulb went on & I realized what it meant to be at the top of the food chain within an industry. And finally, the importance of having a seasoned team that is successfully navigating thru its fifth full real estate cycle is experience you cannot buy.
When we’re in a bull market we are typically caught up in the euphoria of earnings, but when in a bear market and we see our portfolios drop frequently panic mode sets in. And when we panic, we often make foolish short-term decisions with long term adverse effects. Do your future self a favor, make the time to plot a course, to learn more about the velocity and movement of money, and most of all, identify a hedge against market conditions to not only off-set losses but to grow your nest egg.
Talk to us about our passive options that will help insulate you from market turbulence and give you some peace of mind. 877-452-6569 x103