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When people think about investments, they mostly think about stocks and bonds—this is usually because these are the most common assets types held by individuals. Just because these are the most common investments doesn’t necessarily mean they are the best in all market environments. There are many other asset types that you should consider when you’re allocating your investment capital.
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The reason we invest in anything is that we believe we can increase our savings. For many years, investors have been told that the key to riches is to buy low and sell high. I believe that is foolish advice, and I’m here to put in my two cents.
The main problem is that it lowers the overall return on investment, and as a result, reduces certainty more.
Recently, I have seen many articles stating that the stock market will drop by 5%-20% by the end of the year. Despite these many predictions by pundits, analysts, and economists, no one knows the market’s future direction—even if they guessed right previously. I can say this with certainty because the world doesn’t have a trillionaire.
We live in a world of unknowns. In the finance world, insurance is used to offset financial risks—the risk of having your car totaled in an accident, the risk of your house flooding or burning down, the risk of being unable to travel because you get sick, etc. Life insurance is a specific tool used to offset the risk that a primary breadwinner or homemaker dies without sufficient savings for the remaining spouse to live on.
I recently had an acquaintance of mine pass away suddenly from a heart attack—he was in his 40s. He had an active business and a family, but he didn’t have a will or a trust.
Since no one knows the exact moment when they will die, do yourself and your loved ones a favor and don’t procrastinate.
In less than one month, the federal pandemic unemployment benefits will expire. Kenadi Silcox from Money Magazine says that “there are currently no official plans from congressional leadership to extend the pandemic unemployment programs or introduce new legislation.”
So, when those benefits end, there may be a flood of able workers rushing to fill a smaller amount of desirable jobs.
In my previous report, I said that I believed the Fed “will not touch interest rates for the foreseeable future, which means that 2021 will likely be a year of higher-than-usual inflation.”
Since that report, the Fed has made some announcements which make me think that my previous statement will be the understatement of the year!
Imagine working your tail off to earn a bunch of money that is just sitting there in a bank account earning nothing. It sounds like a bad investment, but it is some of the best financial advice I can give, and it is called an emergency fund.
There is wisdom in an emergency fund, and everyone should have one.
Insurance is intended to offset the risk of an unknown future problem. Automobile insurance offsets the risk of getting in an accident, home insurance offsets the risk of a catastrophic event destroying your home, and life insurance is intended to offset the risk of you dying without enough savings for your dependents to live on.
The housing market is on fire which is bad news for new home buyers! Houses in good neighborhoods are selling over list price within mere hours of being listed. A major culprit of this market craziness is the government moratoriums on foreclosures and evictions—this has frozen real estate markets which has left homebuyers and investors scrambling for the scraps.
Are you interested on learning more about specific topics regarding your business? Click on the links below to learn more!