The Sky Is Not Falling
Last evening brought a panicked visit from the daughter. Seems like some of her friends are crying the sky is falling . .. the stock market is failing and that anyone with investments in the market are going to lose them. Talk about 1930's thinking, especially from "that" generation. Wow. In keeping with that theme the friends suggested that the daughter cash in her 401K, put it in gold or a money market account and better yet, stuff it under the bedroom mattress.
Better yet, the suggestion also had it that soon it would be every person for themselves. Money would be worthless and barter the rule of the land. Everyone would not have enough to eat and needed a loaded weapon to bring home the bacon or to protect the family from someone stealing the bacon. We're talking Mad Max living. Lord, how I'd love that. The dawn of each day would bring the comment, How I love the smell of gunpower in the morning.
She asked my opinion on what to do which in itself a rare occasion. I know a lot about many things meaning my intelligence has great breadth but not a lot of depth. Scratch the Surface Bob.
Simply put I advised the daughter to look at the present state of affairs with logic. Yes, things are a shitmess from sea to shining sea and around the world. Yes, our economy is not only hinged with what happens in our own country but that in other countries, too. Yes, there has been major Bozo decisions coming from the White House, the governments of each of the 50 states and in Europe as well. And yes, it's all looking bleak today.
We're hit not some bumps in the road but a lot of major potholes which playing hell on most all of us.
Without going into detail (goes with Scratch the Surface Bob thinking) there will be a better day. The stock market will recover. Europe, like the USA, will find a way to fix things though they may be a lot less and not more of or the same of what we're used to. It's gonna take time.
As I told the daughter, ride this out and everything in time will be fine. Or, there are options in what to do with the money in her 401K. Do nothing. Move it to a money market account. Cash it in and either pay down the mortgage on her home and refinance the loan with a lower percentage of interest OR, purchase a rental which if bought at the right price will only reap more rewards compared to paltry interest earned in a 401K account.
My sense is that things are going to get worse before they get better. Just be prepared to enjoy the ride.