Study Break Memes and Funny Images
Quotes, Messages, and Social Media Posts of the Day
Notice Who They’re Fighting For
I’m so glad that Democrats, RINOs, and media hacks have figured out taxes are bad. 👍 Yes, a tariff is a tax, which apparently now is a problem since foreign companies have to pay. American companies have been paying unreciprocated tariffs most of our lives, but I don’t remember ever hearing the same outrage? 🤔 Isn’t it interesting what brings out the fight in these people?
Trump is Putin’s Puppet 👍
Buying Power
I get it, it’s scary and frustrating to see such big drops in the stock market, especially when you’re near retirement, but keep a few things in mind. First of all, the value didn’t just disappear. It’s not like a nuclear bomb went off and took out trillions of goods from the economy. The money was just shifted around from stocks to other areas–most notably low risk investments, such as treasuries, CDs, and bonds. Guess what that means? Lower interest rates and borrowing costs for individual as well as companies and government (the biggest debtor of all). However, there’s a natural springboard built into the system. A lot of investors fled stocks because CDs and bonds are still paying a decent return of 4-5 percent. If rates get driven back down to 1-2 percent, many investors will likely return to higher risk investments like stocks. Plus, lower interest rates eventually cascade to mortgages, car loans, etc., motivating consumers to spend again, which drives economic growth and business profits.
A second thing to keep in mind–the numerical valuation of your stock portfolio is not what’s important. What matters is its buying power. Think of it this way–say you had $1 million in stocks a few weeks ago, and a house you wanted was listed also at $1 million. Now, your portfolio is worth $800,000; however, the high end buyers are now 20 percent poorer, so the house seller can no longer get $1 million. They’re forced to drop the price to $800,000. Has your financial situation changed in real terms? Admittedly, that is an oversimplified example, but the point is that all too often people feel richer or poorer based on raw numbers. The main reason the stock market and inflation in general were so high to begin with is because the last four years have featured gargantuan levels of money printing and government deficit spending. All the Covid cash being thrown around combined with higher salaries made most of us feel richer, but when it came time to buy houses, food, cars, vacations, and so on, suddenly we couldn’t buy as much as we used to.
So, don’t panic and keep the big picture in mind. Investing is a game, and the emotional, follow-the-crowd types are usually the biggest losers.
Blog Link: https://educationdojo.com/study-break/2025/04/04-07-education-dojo-daily/#random_thoughts