MSNBC Alarmists Prove They Don't Know Squat About Equity Markets, Basic Investment Strategies - but I Do
By Mike MillerSo the S&P 500 fell 274 points, or 4.8 percent, to 5,396.52 on Wednesday, as nervous investors reacted to President Donald Trump's sweeping tariffs — or "Liberation Day," as it were, declared the president. Likewise, the Dow Jones Industrial Average fell 1,679.39 points, or 4 percent, to 40,545.93, while the Nasdaq composite fell 1,050.44 points, or 6 percent, to 16,550.61.
Democrats and their sock-puppet media were, of course, eager to catastrophize the daylights out of the precipitous across-the-board decline, with an abundance of ill-informed ultracrepidarians rushing into the breach to promptly make fools out of themselves.
One typical exchange occurred on Wednesday's episode of MSNBC's "Chris Jansing Reports," during which the host and her guest howled at the moon about the whole thing — ominously focusing on 401(k) and the perceived (by these willfully ignorant clowns) danger for retirees (a favorite tactic of the Democrat Party for decades).
Jansing kicked off the festivities by proving — right out of the box — that she knows zero about investment strategies or the basics of personal financial planning. During a discussion with her guest, former Romney campaign consultant Stuart Stevens, Jansing opined:
First of all, set a baseline in- politically- that says your most reliable voters are older, right? Older voters tend to vote more than younger people. The average 401K balance is around $127,000. But if you're lucky enough to have one, if you're not depending just on a pension or Social Security, but you have a 401K and you're over 65, your 401K on average is about $272,588, that's before today. Okay? That- those are the latest numbers that are out there.
If you take a 20 percent hit, a 25 percent hit, and you lose 40 or $50,000 of your 401K, if you're Elon Musk, if you're Donald Trump, if you're any of the billionaires who work in the administration, that's not real money. That's like me taking a ten out of my pocket, or maybe less.
But that's years, that is years, off of what you planned for, to be able to actually pay for your retirement. So how do you message that?
There is so much ridiculously wrong with the above scenario that I don't know where to start— so I'll wait a bit.
Needless to say, Stevens was all over it like an anti-Trump activist clutching a "Hitler" protest sign:
Well, I think that- you just laid it out. They have to- Democrats need to get in front of people, and say how this is affecting you personally. That's absolutely the right thing to do.
You know, people never believe the politicians will cut taxes. They are willing to believe they will raise taxes, and they are willing to believe that a politician might not raise taxes. So, generally people are very skeptical of any good that is going to come, but they will embrace the harm because they'll see what it's doing to them.
And this is what Democrats should be out there hitting. They have to understand that this is not a normal moment. They have to stand up. I- Booker was- was heroic in this. But do that over and over and over.
OK, it's time to stop the tape and jump in.
Having spent nearly 30 years in the investment business as a CFP (Certified Financial Planner) with a focus on asset allocation investment strategies and retirement planning, I know a thing or two about the subject at hand.
Let's visit a few fundamentals of investing:
Any qualified and objective investment advisor is going to tell his or her clients not to put all investment eggs in one basket. Jansing's example is based on 100 percent of a 401(k) invested in the equity (stock) markets. To do so would be irresponsible — including any investor who follows his or her own advice and does such.
Any responsible investment strategy allocates assets in relation to an individual's risk-tolerance level, investment goals, and a timeframe before those goals occur. Defensive investments — to protect against equity market adjustments or precipitous declines due to external factors (Trump's "Liberation Day" moves, for example) — should be included (to varying degrees) in a portfolio.
As we know, the stock market goes up — and it goes down. The more it goes up, sooner or later, the more it will go down. It's the market's ability to drop that, in part, drives its ability to go up. Over time, the growth potential increases.
In short, if an investor's retirement assets won't be utilized for 10 years or longer, a larger percentage of those assets (again, depending on one's risk tolerance) are generally invested for growth — hence, equity markets.
But if an investor is in or near retirement, a responsible strategy prioritizes preservation of assets with a larger percentage of a portfolio (or 401(k)) invested in fixed assets.
The point here is Jansing and others on the left running around like Chicken Little and declaring the sky is falling are doing so solely to scare low-information people about the evils of Trump.
Stevens continued by taking an obligatory shot at Trump:
You know, this is a corrupt administration that is breaking the law. And that's how we should start talking about it. Elon Musk- it’s been said over and over- is probably engaged in criminal activities. That makes him a criminal. That makes him someone who should be held accountable under law.
And that's the framework this needs to be put in. It's not a normal moment.
"Breaking the law," Mr. Stevens? How so?
And the "Elon Musk is probably engaged in criminal activities" thingy? "Probably"? Again, how so? Please.
And, Ms. Jansing?
You might want to learn yourself up a bit on the basics of investment planning before you make a fool out of yourself again. You know, while you're trying to scaremonger to the viewers who watch your silly show.
Spoiler: Jansing and her ilk will do none of the kind.
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