I took this quote one from a fellow Facebook subscriber. I find it funny and entertaining.
October: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February. ~Mark Twain
It is amazing how folks still subscribe to the notion that one must invest to save versus save to invest. Investing in the market is fine and acceptable, but financial education is paramount. Why not place your retirement funds into something that is much more solid and secure? Why are people subjecting their life savings to the ebbs and flows of the market without a loss mitigation strategy?
Top Rated Life Insurance companies have cash reserves, and then they invest those policy premiums into other investments. They are audited on a regular basis, and must show the pay claims based on the regulations of the various States. These top carriers are successful in managing their portfolios but the financial experts advise us to do the opposite of what these successful Life carriers have done for Decades--maybe for some carriers over a century. The consistent theme by these experts is to invest to save and the life insurance companies do the opposite. No wonder people are confused.
With the current stock market volatility, many smaller investors are losing their shirts, shorts, underwear, bras, socks, and whatever undergarments to the equities market. I repeat: There is nothing wrong with investing into the stock market; it is functioning as expected. The issue is still with the investor and his financial IQ.
Saving is a slower process, but you must have some cash reserves to deal with the ups and downs of the market. Cash reserves can cushion the down turns, and cash can be used to jump on asset sales that frequently happen in those down turns of the economy. Nothing continues to go up in price; all things have an elastic attribute to it.
So while everyone is on hot commodities, stock or bond tip, just remember the lemmings follow the crowd. Model what works. Review the financial statement of a top rated Life Insurance Company. They should know how to invest better than anyone; they are paid to manage risk.
P.S. Here is a 28 min teleconference call about how to handle the recent changes in the Stock Market.