The Wealthy Accountant gave away money this week! On Wednesday I set the random number generator a spinning and in a nanosecond a subscriber was $100 richer.
Sara N of Buffalo, NY was our winner. I give a choice of a PayPal transfer or an Amazon gift card. Sara asked for the gift card and Amazon emailed the code straight to Sara. Congratulations, Sara! Thank you for subscribing.
If you didn’t win this drawing there are plenty more. The dates and terms are published on the Where Am I calendar. There are two drawings for three winners in February. I never recommend the lottery, but if you get a ticket for free, why not!
I poked the hornets this week and ran like hell to no avail. I was stung. I made the mistake of mentioning on Facebook I moved to my highest cash position of my adult life in late January. Then the market introduced some reality this week.
Of course, if you call for a bitcoin decline and then it happens and do the same for the stock market you qualify as a guru. On the farm we call it being luckier than a two peckered Billy goat.
Before anyone starts to bow, please reference Elaine Garzarelli. She is the kind lady who accurately called the market crash of 1987 and hasn’t made many accurate calls since. A few, but not many.
My reasoning for the cash position is simple; I no longer understand how the market can go higher. Yesterday’s post explains my reasoning in more detail.
And now I’m getting lots of questions on how I think people should invest. Nothing has changed, kind readers!!! Steady as she goes.
Keep filling retirement accounts to the max. Stop watching market news if it bothers you or freaks you out. And for the love of God, DON’T SELL BECAUSE YOU ARE SCARED BECAUSE THE MARKET IS DOWN!!!
For readers with large net worth’s, consider moving some percentage of your portfolio to cash. Locking in a gain isn’t a crime, especially when the gains in the last decade exceed 400%.
I’m at 52% cash and my cash balance will not go higher. I’m willing to forgo future gains at this point. This level of cash is still a six figure income even with the low money market rates. I’m in no danger of starvation! (Though I have been looking a bit pale lately.)
Where will the market go from here? people are asking. How would I know? I’m just a country accountant from the backwoods of Nowhere, Wisconsin. But since you asked . . .
There tends to be a repeating pattern when the market gets carried away (goes parabolic). Without belaboring all the details, it seems to this accountant we are headed for a market crash. The tax cuts will overstimulate the economy, cause inflation (read yesterday’s post again), interest rates will rise and the market will catch a case of the hives.
This said, DON’T TRY TO TRADE AROUND THIS MARKET!!! If you do, I will find you and kick you in the . . .
The “crash” pattern usually starts with the warning shot across the bow as we had this last week. There generally is some type of recovery as the last buyers (the general public, aka the weaker hands) push in. New highs are not reached and the decline renews, accelerating until massive fear sets in and people rush the exits faster than they greedily wanted in.
If you have cash sitting around, I recommend casually buying when you see blood in the streets. When the crowd is in full panic mode start loading up on those index funds!
As your portfolio grows you might want pretty charts and data on your growing stash. PERSONAL CAPITAL is a program perfect for monitoring your net worth. You can’t control what you don’t know so it’s a good idea to have a firm understanding where you stand financially.
‘nough said about the markets. Time for some FUN!
What I’m Reading
This is the second book I’ve read in the last few months involving climate change and extinction. Chris D. Thomas did an excellent job of discussing the facts in our modern world as it relates to extinction of species. Inheritors of the Earth: How Nature is Thriving in an Age of Extinction set my heart at ease. All the Chicken Littles screaming something about the sky falling are way off base! Yes, species are going extinct, but diversity is increasing at an incredible rate, a rate even faster than the extinction rate. A highly recommended read.
What I’m Watching
There was plenty of cool stuff I saw when reviewing my YouTube history. The first was this short video from the Mars Curiosity Explorer showing a panoramic of everywhere the explorer traveled.
Here is an interesting video on the farthest look our species has ever looked into space. Fascinating.
Finally, a money nerd like me couldn’t go a week without falling prey to a money video on how the Federal Reserve works.
What I’m Listening to
Here is an oldie that rocked my office as I plugged numbers. It’s a catchy tune. If you remember when this song was all the rage, you’ve been dated.
Have an awesome weekend, kind readers!!!
See y’all Monday!