The TreeceCo Report
By Tony Treece
If you do not want to be challenged in the way you think about the stock market investing, stop reading. This is not for you. If you can put aside greed, closed-mindedness, or ignorance, continue reading.
In our recent past it was revealed that the stock market operates on bubbles. In the early 2000s we saw that with the tech bubble, and again in 2008-09 we saw that the mortgage bubble had a drastic impact on the stock market.
After I would hold workshops to help educate about how to prepare for retirement, pre-retirees and retirees would schedule free consultations to review their options. Countless people sat across from me and began crying at the realization that their retirement dreams had been devastated by a rogue stock market. Many of them had to return to work in retirement at retail stores, and are not fully enjoying their golden years.
The current stock market is no different than the past bubbles. The government began printing and circulating money into the economy when the economic downturn began, and it has not stopped. This has artificially caused the market to go up. To prove this point, Federal Reserve Chair Janet Yellen has said that the money printing will continue despite the alleged unemployment rate closing in on 6.5%. Previously, the Federal Reserve has stated that the quantitative easing will cease when unemployment is below 6.5%. Clearly, the economy is not stable.
So we are experiencing a record high stock market despite indicators that show that it should be much lower. The fundamentals are not sound. Remember, prior to the stock market crash that started the Great Depression, economist Irving Fisher famously proclaimed, “Stock prices have reached what looks like a permanently high plateau.”
You see, investors were speculating that the market would continue going up despite the fundamentals not being in place. The worst part is that when the next bubble bursts, you may not be able to sell your stocks and mutual funds as they drop in value if there are no buyers on the other end. You will own “penny stocks.”
In last week’s newsletter the history of the 401k was discussed. Click here to read it. The important takeaway was that Wall Street lobbied Congress in the 1970s and 80s to give workers a tax incentive to save and tapped into paychecks before the workers ever saw their money. This created cash flow into the stock market that it never had before. This helped contribute to our prosperous economy from 1980 to 2000.
There are alternatives to speculating or gambling with your retirement savings. You can have guarantees. You can have a defined pension plan that you can be completely assured will be there when you need it the most.
Playing the Wall Street games with your retirement savings is stressful. Relieve yourself. You can have guaranteed income for life with a fighting chance against inflation. You can have peace of mind and have your principal protected and earn guaranteed income benefit growth of 4% to 7% in any type of economy, even when the stock market is crashing.