VA-VA VOOM!!!

VA-VA VOOM!!!

Does it strike you at all that the stock market has been firing on all cylinders? Hard to dispute when we see all-time highs, right? And even if we're not tuned into the facts and figures of the S&P and the Dow, most folks have bought into higher and higher - forever.

The Big Tech stocks continue to rocket, even after recent corrections. And don't even ask about Nvidia. AI has wormed its way into our lives in ways we can't avoid and will in ways we can't even imagine.

Between Nvidia, it's brother Big Tech-ers and AI, we've got a cocktail that's gotten the retail investor drunk on visions of getting rich quick.

The latest poster boy: Roaring Kitty. If you don't know this guy, count your blessings. It likely means you've got a life.

Indeed, AI may be the spark the explodes stocks higher and higher. Remember the Dot-Com days. We may be in the throes of a similar push to the stars. But if you remember the endgame, you'll start thinking: Caution. Right?

Admittedly, being cautious hasn't been the happiest state of mind lately. While our portfolios have done OK, they're not stock hogs. And for some, that's just not smart. Jump on the bandwagon when it's running wild.

At times like this, one simple reminder can provide at least a modicum of ballast - something that provides us with some stability. And stability remains a key component of adult life. We're not little children anymore, folks. Seriously.

So today's ballast: Avoid the Big Loss.

The Big Loss is the Angel of Death when it comes to our investments. It's always been, and must always be, in the forefront our decision-making matrix when we construct a prudent portfolio.

If you've never considered the devastation wrought be a Big Loss, do yourself a favor and get Googling. We could go through the numbers here, but unless the numbers hit you like a ton of bricks, it won't matter.

The simplest example:

Take $100. You lose 50% in a market crash or Bear Market. Now you've got $50. So how do you get made whole. A 50% gain won't do the trick. 50% of 50 = 75, not 100. What you'll need is a 100% gain to be made whole.

100%!!!

But what's 50 bucks right?

Okay, let's jump over a few examples and go straight to $1,000,000 - as in million.

Do the math. 

Losing $500,000 vs. $50 is night and day, right?

We try to make this point to clients when discussing the Big Loss. Sure, it's about percentages. But when you've spent a lifetime saving, investing, and building up a tidy nest egg, the actual dollars matter a whole lot more than the percentages.

Then again, if you've not bothered to build a nest egg, none of this really matters. You've got little, so you've got little to lose.

Even better, have nothing. They you'll have nothing to lose, right?

Oh, and haven't we heard - ad nauseum - that if the Imperial Pooh-Bahs who want to run our lives have their way, we'll own nothing? Maybe they're just being kind and generous - you know, helping us to avoid the Big Loss.

Meanwhile, stock up and...VA-VA VOOM!!!