Tag: Jesus

You Can’t Time The Market!

The ‘right time’ to invest was yesterday.

The Dow Jones Industrial Average (DJIA) often simply called ‘The Dow’ was founded on May 26, 1896. It was created by Wall Street Journal editor Charles Dow, and is named after both Dow and statistician Edward Jones.  It is one of popular financial guides used to track how well investment stock markets are doing.  Other popular indices used by business and finical watchers include:

  • The Standard & Poor’s 500 – often abbreviated as the S&P 500, or just the S&P was introduced in 1923, but fully realized in its current form on March 4th 1957.   
  • Nasdaq Composite  – created on February 8, 1971 by the National Association of Securities Dealers (NASD)
  • CBOE Volatility Index or VIX –   a  measurement of  expected  volatility implied by S&P 500 index options, created by the Chicago Board Options Exchange on January 19, 1993. This last one is sometimes referred to as ‘the fear index’, and moves inversely to the S&P. You want this one to plunge.

I will be limiting the scope of this blog post to the American stock markets and  economy.  I have very little experience with foreign stocks and markets. One important thing to note, the stock market is driven by investment expectations and is an ’emotional’ response to the economy. It is not the same thing as the economy, but it can impact it. There are many factors that impact the market that can include everything from oil prices to politics to weather.  Ultimately, shrewd investors study multiple factors before committing their stock trades as past performance is  never an indication of future earnings. No one can know the future, but we can study the past and make an educated guess.

“The sad fact is that people are poor because they have not yet decided to be rich.” —Brian Tracy

The Time is NOW!

Quite often  a few misguided friends and co-workers tell me that they are waiting for the right time to invest in the market.  Fear of a correction or a crash keep them from potential earnings. Poor spending habits hamper their ability to invest. Ignorance and the refusal to seek wise counsel on fiscal issues keep them in poverty. You cannot spend your way into prosperity, the only sure-fire way to get rich is by making diverse, informed investments over a long period of time. You can’t achieve this if you spend every penny  you make on food, ‘toys’, and entertainment.   You need to first get your financial house in order because the money you use to invest must be disposable income not earmarked for essential monthly expenses. Refer to my many earlier blog posts on finances, planning,  and budgeting.   

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“Whenever I hear people talk pessimistically about this country, I think they’re out of their mind.” — Warren Buffett, Berkshire Hathaway chairman

But a crash is coming!

Maybe. Maybe not.  And, so what? There have been 14 crashes in the history of the Dow. The market has ALWAYS rebounded usually within a matter of months. The longest recovery period was from  the Great Crash on October 24th 1929 which lasted four years and then led to the Great Depression.

Three examples of why uninformed and/or misinformed investing is dangerous:

 #1 On November 8th 2016, Donald J. Trump became the 45th president of the United States. (Full disclosure,  I’m a Christian first, and a lifelong Republican second. I FULLY support the current President. I voted for him in both the primary and general election, and will vote for him again when he runs for his second term in 2020. I’ve lost friends because of this fact, but I stand my ground.)

When Trump won the election, there were a lot of newscasters , Democrats, and entertainers who said the country was DOOMED! I had a discussion with a very upset friend at work who thought that this was the end of the world. On Nov 07, 2016, the day before the election, the Dow closed at 17,994.64. I was hoping and praying that Trump won, because I fully believed that a Clinton win would be the death of the U.S.  and a disaster for its economy. Being precautious, I moved all of my investments out of the market, just in case the unthinkable happened and ‘That Woman’ won. (I had done the same thing in the 2008 election, more on that later.)  Fortunately the best man won.

The Dow shot up nearly a 1000 points over the next week, a gain which I missed out on because I couldn’t move my investments back fast enough.  It kept going up. About two or three weeks after the election, I told the same co-worker that I had read several financial analysts who predicted the Dow would hit 30,000 by the end of Trump’s first term, and 50,000 by the end of his second term should he win again in 2020. I EVEN showed him the articles stating this. He didn’t believe it, not a word, and dismissed it as propaganda.  As of Friday January 5th 2018 the Dow closed at 25,295.87!

#2 There’s an old Investment adage – Sell in May and go away, but remember to come back in September! It’s meant to avoid seasonal declines in the market, and I’ve used it more often than not. Sometimes I’ve benefited, other times I missed out on an unexpected spike in the markets during the Summer.  You can’t time the market, but you can attempt to lock in gains and minimize losses. You see market sell-offs all the time. These are mini corrections and just people trying to time the market because they think it may go down, then they plan to jump back in and capture the dip. In May of 2008, the Dow ran between 12,818.34 and 12,638.22, so it was pretty flat that month. I don’t remember the exact date I got out of the market that May, but It was probably near the end of the month. In either case it was a presidential election year, and I was not 100% thrilled with John McCain, but I absolutely HATED the other option and I’d sooner vote for Satan than a Democrat. (Unfortunately my guy didn’t win that year.)  The Dow closed at 9,625.28 On November 4th 2008. It plunged 500 points two days later and kept dropping. Fortunately as I knew that presidential election years are very unpredictable, I chose to stay out in May and remained out as I kept watching the market drop, and drop, and drop! It hit a low on Mar 05, 2009 of 6,544.10 before it started its long climb back. During this time I was still buying new shares of stock in my 401k, and even increased my paycheck deductions to 20% to capture these incredible bargains, all the while, my original balance total from May 2008 was locked away safely earning interest in a no-risk bond fund. When it got to May 2009, I uncharacteristically moved my nest egg back into the market and rode that elevator to the top! A co-worker wasn’t so lucky. He stayed in during the plunge, got out at the bottom and stayed out missing the rebound because of fear.

 #3 I was speaking about the market with a friend on December 16, 2017. He had his investments in a no risk fund, because he was fearing a crash, and was waiting for the ‘right time’ to re-enter the market. My investments were all in the high risk C Fund, or Stock fund. They still are, and probably will be for the foreseeable future. Anyhow, I told him there wasn’t anything to worry about and that the market would keep going up. December 15th 2017, the Dow closed at 24,651.74. Three weeks later on Jan 5th 2018 it closed at 25,295.87, up over 600 points.

Can any one of you by worrying add a single hour to your life?  Matthew 6:27 NIV

Let me tell you, I’ve been broke and deep and debt, and I’ve been debt-free and financially sound. Rich is better than broke. I’ve been investing for my retirement since I started working. If you keeping putting off investing in your 401k and building your savings because you’re afraid, you’ll always be broke. The USA has endured many disasters and tragedies which have impacted the stock market since its inception, yet it always rebounds and yields an average return on investments of above 10.5% over the long term. The fact is, if you let your life be ruled by fear and doubt, you will second guess everything, become skeptical with anything and succeed at nothing except making yourself miserable and poor. The decision is up to you, choose well. As always I wish you happiness and success!

Secret Santa

A man’s gift maketh room for him, and bringeth him before great men. –– Proverbs 18:16 KJV

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As I’m sitting here in the wee small hours of the morning of Christmas Eve 2017 working on my last Christmas-themed financial blog post of 2017, the main thought that is going through my mind is, ” I LOVE CHRISTMAS!”  It is impossible ignore the fact that whatever your personal religious beliefs are, Christmas begins with CHRIST, Jesus is the reason for the season, and Christians like myself become ‘a little more vocal’ about what we believe. Christmas is a very good thing for both the believer and the non-believer alike.  It truly is the most wonderful time of the year! So if you don’t believe in Christ, please don’t take offense at a person extending you a heartfelt ‘Merry Christmas’ at this time of year. It’s not a religious threat or insult, it’s a olive branch or a bridge to show that we are all connected. Take it in the spirit of goodwill in which it’s meant.

Talking about ‘spirits’ and giving brings to mind two secular and fictional aspects of Christmas: Ebeneezer Scrooge and Santa Claus.  

I have shown you in every way, by laboring like this, that you must support the weak. And remember the words of the Lord Jesus, that He said, ‘It is more blessed to give than to receive.’ — Acts 20:35 The Holy Bible, New King James Version

There are people in this world today who claim that being wealthy is a sign of greed, and that somehow the rich people of the world are responsible for causing the poverty in it. This is far from the truth. Wealthy people pay the majority of all taxes collected, and donate the largest sums to charities. They build the factories, fund the businesses, and create the jobs.   

The protagonist of A Christmas Carol written by Charles Dickens is a miser named Ebeneezer Scrooge. Some people get the idea that he’s the villain of the tale because all he cares about is money. Scrooge isn’t the bad guy because he has money, but because he lives a joyless existence, he mistreats his employees,  and he’s horded his wealth instead of using it to bless the needy and do acts of great good. After he’s visited by the Christmas spirits, he sees the error of his ways, and is transformed by the renewing of his heart and mind. He then does great acts of charity that would not have been possible had he been poor. There are some acts of generosity that only  a wealthy person has the ability to do. Anyone can smile, say a kind word, do good deeds, or pray for other people. These things are good, and we should always do them. Most people can even afford to donate money to the less fortunate, even if it’s only coins in the Salvation Army Kettle at Christmastime.

Only the rich can give charities million-dollar endowments or build factories to create jobs.

 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’— Matthew 25:23, New English Translation

 Santa Claus is a bit more tricky. His origins have been mixed with fable thanks to L. Frank Baum and Clement C. Moore. Elves and reindeer aside, ‘Father Christmas’ is based on a real person, Saint Nicolas of Myra was a Christian bishop who helped the needy. He was born circa 280 AD and died December 6th 345 AD. In the twentieth century, Santa Claus stated to supplant Christ as the focus of Christmas, basically because he was a fun way to make the season more ‘inclusive’. Some people who were not religious felt left out. So advertising departments of companies like Coca-cola and Macy’s ran with Santa as a jolly alternative, and a new representative of Christmas goodwill.  This is both good and bad. Bad because Santa distracts us from ‘the real reason for the season’ and can be confusing for young children. Good because Santa is FUN, and inspires giving.      

As a Christian, I KNOW that ALL things come from God, and everything I have ultimately came from The Lord of All Creation. Christians especially have a duty to use their God-given gifts in the service of God, and Christmas gives us many great opportunities to help the less fortunate. I find myself a little merrier wearing a red Santa hat, it inspires me!

I’m going to wrap this up with the inspiring true story of Larry Stewart, the Secret Santa.  

 Kind words and kind actions can change lives!

Larry Stewart (April 1, 1948 – January 12, 2007) was an American philanthropist from Kansas City better known as “Kansas City’s Secret Santa.” After poor beginnings, Stewart — from 1979 through 2006 — made a practice of anonymously handing out small amounts of cash, typically in the form of hundred-dollar bills, to needy people.

Larry was a traveling salesman in 1970, and he wasn’t very good because by 1971 he was broke and sleeping in his car. After a few days of not eating, in desperation he decided to ‘rob’ a diner by ordering a big breakfast he couldn’t pay for, and then claiming he accidentally lost his wallet somehow.  Ted Horn owner of the Dixie Diner realized the true nature of the situation, and instead of getting mad, or calling the cops, decided to give Larry a $20 bill he ‘found’ on the floor, which ‘might’ have fallen out of Larry’s ‘lost’ wallet. This lesson of kindness and generosity stayed with Larry Stewart. Ashamed of his initial act of deception, and humbled by the kindness of the diner owner, he vowed to himself that he would  ‘pay it forward’ as soon as he was able.

Around Christmas of 1979 on a very cold day, he stopped at a drive-in restaurant. A carhop waitress was outside wearing a small, thin coat, and freezing as she served the diners at their cars in the hope of maybe nickel or dime tips. When she brought Larry his lunch, he handed her a $20 bill, and told her to keep the change. Her lips begin to tremble and tears begin to flow down her cheeks as she said, ‘Sir, you have no idea what this means to me.’

Stewart went on to become a multimillionaire, earning his fortune from cable television and long distance calling. Each Christmas from 1979 until his death in 2007 he continued giving cash away to the needy as Secret Santa.  He quickly progressed from giving out $20s to handing out $100s, not just in Kansas City but traveling to other areas in times of tragedy, like NYC after 9/11/01 and Mississippi in 2005 after Hurricane Katrina.  Sadly, he developed cancer, but because he was concerned about the poor and needy, he trained an army of Secret Santas and assistant ‘elves’ who would pass out $100s to the needy after he was gone. By the time he passed away on January 12th 2007, Larry Stewart had given away over a million dollars, all inspired by the kindness of ONE man who gave him a $20 bill decades earlier. Today, the army of Secret Santas continue to hand $100 bills to poor, their efforts supported by other wealthy philanthropists, and inspiring others to do likewise.

So as we open our gifts on Christmas morning, and give presents to our friends and family, let us all be inspired by all the beauty and wonder of all the aspects and icons of the season. Let us not focus on ourselves, but think of our fellow man, and be grateful for all that we have. May we all find the courage to better ourselves, so that we can extend a hand-up to the fallen, and together we can with a smile, encouragement, charity and kindness, make this a better world. As always I wish you happiness and success!  Merry Christmas and God bless us, everyone.