I was too lazy to jog outside after working a 24-hour shift in the ER. So, I went to the gym and was forced to watch the screen tuned CNBC as I took the only remaining treadmill, one in between the big lady walking slowly drinking a sugary beverage and the muscular dude who was slowly walking backward and texting on his phone. My unswitchable screen was bathed in red flashes as the world appeared to be ending. Somewhere in Asia, the markets had crashed over night and it was spreading into the US. The commentators seemed to be saying, “The great stock market crash of 2024 is happening, so let’s make the most of it.” The segment ended with the announcer’s statement, “All you need to decide is whether to buy in on the dip, or hang on to your hats! Let’s find out when we come back.” Cut to the advertisement for the stock broker du jour.
Don’t misunderstand: What I was watching was entertainment. Purely designed to get eyeballs on the advertisements of stocks talked about and inventions shilled. On CNBC, any day is remarkable and new, and at any moment a big crash can happen. So you better do something with your money. Don’t let it sit on the sidelines, which to them is anything not in a stock. What struck me about the announcer’s statement was the binary nature of it. He made it sound like there were only 2 options. Buying on the dip means to put more money in the stock market, hoping that the stock will rebound and money will be made. Hanging onto your hats means to hold your position and see what happens. No mention, of course, to sell.
That struck me as odd. Pull your money out of the stock market? The announcer must have felt no one would be stupid enough to do that and ‘lock in the losses’. I also understand and agree with those people who think that your money shouldn’t be idle. On the other hand, I just pulled out half a million dollars from my IRA into a self-directed IRA account 2 weeks ago, narrowly missing the 2% Dow Jones drop that just happened, and saving $10,000. That was luck, by the way. But I’m even happier now that my hard-earned money is going into my Bismarck deal. Ten years from now, I’m planning that to be tripled.
What’s even better, is the pressure on the FED to drop the FED funds rate, which drops my deal’s interest rate, and makes me instant equity. But enough of that.
The important thing is that there is so much pressure out there to be putting your money into the stock market. To be sure, there is a place for that. But diversification is not just putting money into different sectors of stock. Case in point: The 2% loss that happened across the board yesterday. Ten to twenty percent should be in actual real estate of some sort.
And no, that wasn’t a stock market crash yesterday. That was a teaser. Try not to be hurt too much by the next one.
