A ninny at investments, my current money-management strategy is the modern equivalent of stuffing it in a mattress. Back in 1878, one great-great-grandfather lost his Gold Rush fortune in a national financial panic, and I’m still traumatized. He went from big-time rancher to seasonal farm worker, before homesteading in Washington Territory slowly got us back on track.
Since the November election, the stock market has mostly been zipping along like a rum runner’s cigarette boat. After an economic near-death experience in 2008 left many Americans feeling wrung out and hung out to dry, we apparently now are yearning for a new Gilded Age of rapid expansion. Previous ones in the 1990s and 1920s did not end well, but who knows — maybe we have learned our lesson and this time will be kinder and gentler.
In this month’s Coast River Business Journal, we talk with two of our region’s professional investment advisors. They both offer sensible insights about taking the market’s long-term performance and personal goals into account in deciding how to invest. There’s really no doubt that seeking and taking such advice is among the best ways to ensure a life free of the terrors and doubts of financial struggle. Saving money in such a way that it is fairly safe and compounds upon itself eventually will pay for a house, college tuition and a comfortable retirement.
One of my uncles in Seattle used to tell of a stock tip he got about a start-up that the tipster thought might succeed. My uncle, considering it ridiculous that anyone would ever be willing to pay several dollars for a cup of coffee, passed on Starbucks. Similar investments are no doubt out there today. But rather than trying to hit the jackpot by guessing which new firm will strike it rich, a broad-based investment strategy capitalizes on the proposition that small bets on a broad cross section of the economy will include enough winners to provide a good return. Instead of wishing for a time machine so we can go back and buy Microsoft’s initial offering, rational investors mostly now buy index funds that take advantage of America’s proven long-run success.
So whisper this tip in the ears of your children and grandchildren: The future arrives a lot quicker than you realize, so start saving and investing today.
Besides our investment Q&As, this edition of CRBJ includes a package of content on legal marijuana retailing in Washington and Oregon. It is remarkable — but not a surprise — to see the extent to which different regulatory approaches in the two states are currently impacting these small businesses. The shelves of one store are bursting with product options, while 18 miles away on the Columbia’s south side, stores struggle to obtain some popular items.
This will be resolved in due course. But the big question in the industry is how an attorney general appointed by Donald Trump will handle the question of enforcing strict federal laws against marijuana. The weeks and months ahead will be a tense time for marijuana industry investors. Will states-rights Republicans stay out of the way of private business, or intervene and kill a multi-billion-dollar enterprise? It will be interesting to see.