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Advice for a Stormy Stock Market

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
May 19, 2020 8:03 am

Advice for a Stormy Stock Market

MoneyWise / Rob West and Steve Moore

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May 19, 2020 8:03 am

The stock market has seen its share of highs and lows since the coronavirus hit. What can you do to navigate through this turbulent storm? On the next MoneyWise Live, hosts Rob West and Steve Moore welcome investing expert Mark Biller who offers advice about investing in a stormy stock market. The best defense is a strong offense on MoneyWise Live at 4pm Eastern/3pm Central on Moody Radio. 

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From OU fees right once it is possible to fly without motors and lodging. Not one of them skilled in the same way anyone can invest but to do it successfully, you need to know what best things I storm by Pres. from last down investing expert friend. Find out how to take your calls at 805 five 7800 525-7000 four advice for stormy stock market that's not right here was Rob.

I don't know if Mark Miller has his pilots license but he is the executive editor at don't mind investing in the word on the street is he only will fly first class with the layers I sent nothing. Something tells me that's not a word about weather is my friend. Take your back you you flown coach for a time or two.

I'm sure right yeah pretty much exclusively from you never know what let's let's stay with our pilot analogy here for a bit. You're the perfect guy to help us keep our investments in the air.

So what you give us a bit of an overview, perhaps a recap if you can do that of the market conditions over the last couple of months and help us understand what's been going on and how we can really analyze that and understand yeah sure and I think that everyone has an idea that things have been really wild in the markets lately, but people haven't been following it super closely may not really understand that you know what we've seen over the last few months has been, as is wild as anything in at least a decade and and really probably going all the way back to the 1929 crash in that. You are truly incredible to think that stocks hit their all-time highs.

Exactly 3 months ago today that was February 9. So everything happened has been jammed into this compressed three month time span. So here's a real quick recap of that first and foremost, the headliner was the stock market falling into a bear market faster than it ever had before. So the typical definition of a bear market is a drop of at least 20% in the market got to that point twice as fast as it ever had before 1929 had been the prior fastest and this was half the time that it took in 1929 and then just as suddenly, after the market has bottomed out at a 35% loss that plunge reversed violently and we've had this massive rally now erase a huge portion of those losses over the last eight weeks, so today where we stand. The NASDAQ stock index which you want talk about quite as much is like the S&P 500, but the NASDAQ is where all the big tech stocks are housed, and that index is only about 5% below its all-time highs.

The S&P 500 index, which is a little broader is down little over 10 maybe 12%. So the bounce back has been huge couple other highlights in her early on in the panic. There was big trouble in the bond market. At one point even US treasury bonds were struggling to trade and that's really what drew the Fed because when treasuries are having trouble. The feds got a step in that treasury market is usually the deepest and most smooth part of the whole financial system so the Fed had already cut interest rates by 1%. But when the credit markets started seizing up. The Fed unleashed a barrage of liquidity measures really unlike anything any of us have ever seen before. Some of that was kinda controversial, like buying high-yield corporate bonds which they've never done before, but the Fed's response along with that response from the US government, which included course the direct payments to individuals expanding unemployment benefits massive loan programs to businesses and other stuff like that. It's been a huge combined response and by all indications they're not done yet German was testifying today and suggest that they will do more as needed. Sounds like they're ready, willing and able. Well, a lot more to come with Mark Miller right around the corner, Seymour.

That's right Mark Miller are good friends. Our monthly visit today from work is so mind investing.for you really will be right back in your calls, buying a home is the largest most nerve-racking perches, most of us ever make. It doesn't help that you're entering a maze of unfamiliar words and confusing options that can leave you intimidated frustrated and afraid you been taken advantage of navigating the mortgage me by Dale Vermillion help you clear up the confusion on rack your nerves and make the best mortgage decisions possible with confidence navigating the mortgage made available when you click the start button moneywise live.org if you need investing guidance, you probably want help that's grounded in God's were taken by sound mind investing since 1990. SMI has helped tens of thousands of Christians in higher wisdom and confident in their investing experience how much you have doing that you can learn will still carry out investing more information about SMI and financial wisdom for living well is available online.

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That's what muscle about Mary. That perfect woman and get that job pays a fortune, and by that time that Jansky will be happy. The sweet sweet taste of success on many dominant people think that way I used to think that one fact we conditioned to think that way. The same thing is that so many people spend their whole lives chasing success. I sacrifice the earth for a vision of success that's been painted by spin merchants and highly paid advertising companies when they take a bond of success when I expected sweetness.

They find business thinking. What I imagine the salary the car the Korea but I don't get what I expected because that type of success it's empty.

Believe me I know and after having you will want the one thing that I discovered in life that really satisfies is Jesus meant, that sounds a bit corny you and Almighty. It sounds too good to be true. Jesus is robbing you of freedom and peace of mind. Christian credit counselors can help where a nationwide nonprofit counseling organization has helped over 3000 individuals in the last 27 years get out of credit card debt percent faster while doing that, that info to learn how Christian credit counselors can help you visit Christian credit counselors.org Christian credit counselors.org or call 800-557-1985 moneywise live. We talk about anything actually true that you maybe it's that maybe it's investing maybe it's credit saving putting your children through college. Whatever I give us a call, but for the first half of today's program were blessed to have Mark Billy here from sound mind investing.org and that were discussing what's new in the newsletter and obviously what's going on in today's economy, which has been volatile, to say the least user phone number. We have open lines for your calls.

800 525 7000 for Jerry Powell was talking today just about this massive expansion of the balance sheet talk about what the real objective is there market is really the end of the day about keeping the markets functioning properly and keeping businesses pumped with cash in propping up the consumer music just a matter of keeping everything working like it should be an answer. They're going to depend on because you know that that may give you one answer and then other people believe a little differently. You know, in theory, the Fed is trying to keep the economy moving forward as much as possible, and so forth. And they will say up and down that they are not targeting the financial markets. Specifically, this is in our first go round you know we we saw the same exact playbook in the 2008 financial crisis in a way, it's kinda nice that they have a playbook having been through this once before, because both the Fed and the federal government were able to reach for that playbook and and do things really quickly. This time much faster than last time 10 years ago, but the flipside of that is it's no secret what the end result of those actions was a decade ago and that was that huge amount of the liquidity and stimulus that came out of the government and the Fed ended up in the financial asset markets and unproduced not the inflation on Main Street that everybody was looking for. 10 years ago. Everyone said their borrowing like crazy there spitting out this new money Shirley were going to see inflation and we never really saw that in the main street numbers.

The man on the street are prices that were paying for things really didn't see that type of big inflation, but where we saw the patient was in the asset markets so the stock market just took off coming out at 2009. I never really looked back with this huge long bull market in stocks and other financial assets and so you'd have to kinda be burying your head in the sand intentionally to say what were doing all the same things, but were doing more than ever.

And where is that likely to have an impact.

Well the first place. You have to look is where it had an impact last time, which is the financial market and sure enough, that has been the response of the financial markets since they really said the gloves are off. No holds barred. Here we go, you know, the stock market has rallied immensely since then and financial asset prices of them going up yet what that's exactly right and something to keep an eye on, especially as the years progress and we continue to take on higher and higher debt levels but something we gotta stay on top of her, sure that the other crazy element of what's been happening in the markets is the oil market talk about the action we've seen there, and why were seeing that was really the kind of the final! I'm just the wild things that were happening early in the financial markets and we had a situation I guess was about a month ago now where were the oil price beat the oil price went to a dramatic negative number.

So actually traded as low as $37 negative per barrel, which means that there were actually people who were paying $37 to take a barrel of oil off of their hands because they were not in a position to be able to take physical delivery of that oil and that was a combination of you know that shutdowns globally just crushing demand for oil at the same time that Saudi Arabia and Russia were in a little spat along with our shale producers here in the state so there is way too much supply almost no demand, and all of the storage useful, so there really wasn't anywhere to put this oil on that led to this really crazy situation with negative oil prices not quickly reversed and oil prices are back up to a little bit more normal 30 S dollar per barrel range. But it just shows the extreme volatility in the just the weird kind of stuck in order a fax of some of what we seen in the financial market you like. I think calls that we received after the first months of this, and there were people selling and as you pointed out five weeks after all this started.

Then everything went back up again so you know it went down it's going on.

You talk about whips. That's exactly what we've seen and who knows where to go right so that's why we believe that a long-term approach typically is the better approach correct. Yeah, for sure you want you want to have a plan. We always talk about having a long-term plan and boy this last three months it's been just the perfect example of what I do want to operate from a long-term plan that said, you know there is something to be said for for risk management and there's nothing wrong with your plan. Accounting for really volatile. Then, potentially pulling back some risk during those. We've done that ourselves with some of our strategies of sound mind investing by.

You don't want to be operating without a plan, because in these types of markets like we've had.

If you're not operating from a steady long term plan you're going to be blown around by the emotions of the moment and that is where people really get into trouble because then they sell baby everything her way more than they should and they got no plan for how to get back in. That's a totally different situation than potentially de-risking a portfolio little bit. As things get volatile with a plan that's going to force you back in if the market you know surprises you and goes back up the way it has. So again, we always gotta bring it back to that long-term plan and this really is a great example of why information that's more like the squeeze in a call before the next break, Fort Lauderdale hello Tim, what's in your mind today how to I well love your program trying to figure out my daughter I go start a education and we don't know will be living in Florida will be living in one will go to college but I'm just trying to figure out. I looked at 529 you know people say no way to go little confused about that big question can I take an equity of stock and 1 mile in my work which account if I write an education plan. Can I transfer back directly into her take a stab at it and will get Mark Twain on the investment strategy inside the college savings accounts, Tim. I'm a big fan of the 529 education savings plan. You obviously there in the state of Florida have the prepaid plan as well as the college savings. I like the college savings because it acts like a Roth IRA in the sense that if you use it for qualified education expenses when your daughter gets to college then you get the tax-free growth you don't get the deduction on the way and but you do get the tax benefits, or at least there in the state of Florida because you don't have a state income tax.

You don't even get the state deduction, but the tax-free growth is really worth its weight in gold. And it's going to allow you to be able to put in more than you'd be able to put in through an IRA and still continue to save for the longer term, which is something that you need to be working on as well for your own retirement. The other benefit of the 529 as if she doesn't need it. You could transfer it to another child, or yourself.

So there are ways to pass it on.

You can also pull it out on a pro rata basis based on scholarship awards that would be given where she would need portions of it and you can take that back out and reclaim it because it acts like a 401(k) in that each plan will have their own investments inside the plan what they call subaccounts you would not transfer insecurities you have to make contributions and then pick among their investment solutions inside the plan, but Mark talk about how to evaluate and build a proper investment strategy for a college plan based on a five-year-old and looking out 13 years or so for college yeah I think that's a great overview Rob and in one one other point to tell Ms. while you usually want to start looking at your own states plan. First, because a lot of times there are state tax benefits. As Rob was talking about. Most of these plans allow residents of any state to invest in them. So even though you're in Florida you could potentially be using the New York State plan are, or whatever the case may be. I actually have 529 money for for my children in the New York State plan. Even though I don't live in New York State.

So saving for college.com is a good site that compares a lot of these plans, he can see some of the pros and cons how you want to invest within that plan with a younger child mutant you generally going to want a very high stock allocation and in relatively low bonds.

Now a lot of these plans will provide you with a track where they will make changes over time to decrease the riskiness as the child approaches college-age so that's a good option to look at as well for most people called information helps you think so much Mark Miller with this today from some mind investing. They have a wonderful website. Lots of great materials and resources, there some of their articles. You can read without subscription check about today attention moneywise. Not if you don't like free to change the station now, still with great you can get today to the new moneywise with valuable expert articles practical to go with you will even find exclusive podcast episodes, you won't.

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Barbara because you're right, you do see an increase of about 80% a year for every year you delay beyond your full retirement age does Out of the 70s you would want to do it. Beyond that, in the basically as long as you don't need the money right now you're essentially locking in an 8% return which you not get a bill to do necessarily in the stock market certainly not guaranteed like that. And then there's cost-of-living adjustments on top of that, that would add to that check. So I think it's a good idea. I guess the question is do you really need the money right now or do you have the ability to delay, I have the ability to delay yeah okay what I think in that case, it's in a really mean the big question nobody knows his longevity right so we can look at the data.

If I'm relatively healthy once you reach age 65 life expectancy increases quite a bit and so you usually you should be in a position where the increased amount you get every month. Once you start collecting at age 70. As long as you live beyond your eight year early 80s you'll be you enjoying that higher amount for the rest of your life which is nice to have. And you know it's one of the benefits of being able to delay that.

So if you're in that position what you're hearing is true, and I think it makes a lot of sense for most people I like about 70 without ticket now with the cost-of-living rate will be 79, 8800 yeah run those numbers. The problem is the cost-of-living adjustment has been very low.

In fact it's been coming down lately because it doesn't factor in some of the costs is heavily that are the ones that seniors most often will be hit with so with the rising cost of medical expenses. For instance, and food. Often times those are offset by things that are much lower.

Like in this case with the oil prices lower and and gas being lower it's going to actually cut it because that cost-of-living adjustment to take down so you're not get to see much of the wave and increase their it. It actually won't even truly keep up with your your true cost-of-living increases. So I think you can be better off going ahead and and waiting. If you can get away with it and that we appreciate your call today. Margaret got just about a minute left you we been talking about the market, the choppiness all the Fed action.

Of course, the uncertainty around reopening our economy and still the lingering questions regarding what's gonna happen through the summer and into the fall and winter with COBIT. 19 so some up with you for us today. How we should be thinking about our investment strategy.

Yeah, yeah, I think that the big picture here is if you're going to invest over many decades. You're going to have to weather a number of these bear market in these periods likely then and are always characterized by uncertainty and fear. That's why it's so important that a long-term plan exactly right. Hey, thanks for joining us. Mark sound mind investing.org check it out and will look for you next appreciate that it will be right back. How should we as Christians think about and testing.

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I worked for many radio and the Moody Bible Institute first of the week standing June 2021 yourself praying waiting for the mercy 20 and 21 Moody Bible Institute founder Dwight Moody once said, we walk in the wilderness and the promised land like one when he went 70 Romans 13: chewing microbrews financial show 4 inches of financial wisdom help my power of God's word right now. Financial support lines not $25 and moneywise my dental capital is a prison trunk meeting with Senate Republicans over lunch to consider next steps in the coronavirus response VP Mike pence and Treasury Secretary Nguyen huddled with Senate Majority Leader Mitch McConnell and House GOP leader Kevin McCarthy, Fed Chairman Jerome Powell told the Senate banking, housing and urban affairs committee that central banks lending programs for medium-size businesses and state and local governments will be operational by the end of this month during a White House meeting this morning with farmers and ranchers from around the country prison. Trump announced the coronavirus food assistance program $19 billion initiative to support the nation's agricultural producers and suppliers in the department of Health and Human Services awarding a $350 billion for your contract to Virginia-based biotech company flow Corporation to manufacture coronavirus drugs and other essential medicines. This is SRN news is really happy to have you along today and our phone lines are open to discuss any subject with you, not just investing so anything that's fair game or anything is fair game. If it interests you or something. You're concerned about as far as your money in your dollars and your investing in your giving and your generosity in the Bible is concerned, here's the number 800-525-7000 open lines at 800-525-7000 manners question, if I might know will go to our phones.

I realize this is something we always get but it's its unique situation. When I visit my financial planner which is only once a year so want to do it in the right way.

Is it okay to wear my culvert 19 mask when I meeting with him or her, absolutely yeah I would think that the light of the current environment that he or she would probably expect now okay. Better yet, Steve would be a zoom meeting with your financial planner and then you could just do it right there from your computer. We should've bought stock in that company couple months ago. Zoom was something that offices used and now grandmothers and aunts and uncles and neighborhoods and high school reunions. Everyone is using zoom these days. Wedding really exploded right well okay let's go back to what what what we should be talking about Lancaster, Pennsylvania. Elizabeth nice to have you with us. You are blessed to have a wonderful radio station in your backyard. How can we help our LIKE Aaron like everybody else where shut down.

But by divine Rick open for operation will probably be about 25 probably take a year and 1/2. They float I left.

Although counting on indeterminate amount of time to have an emergency savings have a pension on which I am going to take Social Security on which I will type you probably know recently, unemployment became billable small business owner so I want to know do I hide the unemployment benefit.

Yeah, you know, it's a great question, Elizabeth appreciate the spirit in which you're asking the question because clearly you want to honor the Lord and follow the admonition of Scripture which we see replete throughout God's word that we should be givers we should be generous, we should be giving as God has prospered us.

And certainly he has we should give proportionately and and I would add systematically as he has entrusted resources to us and based on Proverbs 39 honor the Lord with your wealth, with the first of your increase.

So the question is what is that increase and I would say the increase is at least my conviction is anything that comes into your hand, is a blessing from the Lord.

Remember, it all belongs to him. He is our provider and he brings that provision through any number of sources, but it's ultimately from him so that would include in my mind, salary and interest and dividends in gifts and inheritance in Social Security and yes unemployment because that's just God's provision in your life.

So to be able to say I'm gonna take the first of what God has given to me whether you might say some as a return of capital because I paid into the Social Security system and we could try to figure that out. Are you the same might apply to unemployment you. We don't try to do that. We just say God I want to honor you with what you've entrusted to me.

I'm going to do it off the top and do it systematically and the principle of the tide would be the 10th but you know I think the key is it's between you and the Lord. It's not about being legalistic. It's about giving with a generous heart and a cheerful spirit out of recognition of all that God has entrusted to us and that he is the ultimate giver because he gave us his son and paid the penalty for our sin. So in my mind. Elizabeth, that's the approach that I would take, but I think for you. It's ultimately something you need to pray about.

Develop a conviction about and and then respond accordingly. Does that make sense though that I that's right. I firmly believe that it I'm sure you've experienced that life over the years being a generous person yourself, so we appreciate your call today. Thank you for weighing in on the program. Thank you about Greenacres, Florida hello Karen, you have a question calling for the radio up there years old. She retired working for the state of New York. She had a goal issue got herself into financial trouble and she filed bankruptcy and number of years ago I foolishly took out a line of credit her condo variable interest rate. Yes and now she owes hundred and 27,000 and she said the principal is not going down at all until going interest CL 37,000 mortgage. She does have attention.

I'm not sure if she's taking Social Security by she worked without her condo at Wesley and praised her about 189,005 at this point she just paralyzed with fear.

Yeah well I can certainly understand that, you know, one option she may have here would be to refinance with one new first mortgage. Both the line of credit and the current first mortgage which would get her potentially her interest rate down. We want to be careful not to extend the term too far.

It would take, though some of the pressure off and get her out of the high interest rate environment.

I realize you said she filed for bankruptcy. Typically, the type of bankruptcy will affect the waiting period if you will. Chapter 7 is a longer waiting period and 13. If it's an FHA or VA or government loan you generally have to wait two years before you refi could refinance with a conventional were usually seeing about four years for a chapter 7, two years for a chapter 13 so that would be my question.

How long ago was it and you know what her credit score is today and for years okay so that might be something to look into just to see if she could refinance this. I think the key is to try to without extending the term too much beyond what is currently let's get a payment that works with her budget, realizing she's on a fixed income and try to get the overall the aggregate interest rate down in a fixed rate situation. This low low interest rate environment is the time to do that, assuming she can qualify given her current credit score. The fact that she's had a bankruptcy and the income that she has today in weather that you would be sufficient for somebody to refinance at an attractive rate good news is, she's got a little bit of equity you with the 20% down first 20% equity on 189,100 51,000, which would just about cover of the first and second mortgage should be a little bit beyond that. But I think it would save her a ton interest so what you recommend that you check that out. You could check with your local bank. She could go to the bank rate.com or even visit with her friends and movement mortgage movement.com would be the way to go there. Any of those would be a great starting point for her to check out whether she could qualify for a new first mortgage and finance Karen. We appreciate your phone call today and your interest in our program.

Thanks very much, and thank you for listening. If you will enjoy the program.

Please tell a friend will be back for the final segment of today's broadcast's money and life run on the same track.

Unfortunately, sometimes it seems like your money is heading in a different direction from your goal in never enough three keys to financial contentment.

Author Ron blue helps you to break down all your financial options to a basic floor and then shows you how to keep it all chugging along in the right direction on the same track never enough three keys to financial contentment available when you click the store button moneywise. Life.org. This is very I'm a car guy here to help you understand God's purpose for you like the eyes of a layman as a car guy sleeping in the garage doesn't make your car even more than sleeping in church doesn't make the far too many people are sleeping in church going to the boat 2nd to 5 describes having a form of godliness, denying the power thereof that's what it is there's no power, no energy, no showing no sins that just going to the motion, the church remaining spiritually unchanged honoring God apart from him restorative joy of my salvation should be the cry of everyone born church after joy being found in John 1511 God promises that your joy will be full when you focus on leading people to Jesus Christ. Your job is to guide revival outside the will. By moving everyone your windy day closer to Jesus. If you want to know how easy that is go to our TW.com success. He's such a nice ring. You know I probably have different aspirations and we look forward to different things because I will with different dreams. We want to succeed and wouldn't bring. I want to have a successful marriage to make a difference in people's lives through what I do will look back on our lives since that logic, we succeeded. The things that we sent out to do.

Nothing wrong with it. Unless of course, success becomes something that other people see what you think of this lease, we strive so hard to impress name that we end up becoming a prisoner run 60s like a king who can't go for walk down the street outside the palace walls. Jesus said I came to set the captives free success. The financial wealth you leave behind could be the best thing that ever happened to your loved ones or the worst, and it splitting hairs, giving your money and things to your children without ruining their lives. Ron blue explains why it's important to make these decisions now, instead of forcing your heirs to do it later. Splitting hairs will foster a real appreciation for the precious resources that God has entrusted to you, and it's available. Click the start button moneywise live.org if you haven't visited our website and while you might want to do that. Lots of information coming out a weekly basis, at least where it moneywise live.org moneywise live.org that's also going to make a nation. Consider that prayerfully we would be blessed were ministry and we depend quite substantially on the gifts and the generosity of you, our listeners, just click the donate tab at the top of the page.

When you visit moneywise live.org Queensberry, New York hello Barbara, how can we help you.I at the topic at the I can do like how the aggregate. I want to be looked at my house and lean not update the kid.

Maybe not empty but what what what the money what the mind is like taking a nap. I need to find it by now. I see okay so you said this is proceeds from a home sales that right back when I see okay and you are you looking to buy something else with this money at some point or no, it'll just be money that you will draw down, I cannot get him and Barbara, how are you supplementing Social Security today if it's not enough to cover your bills on a plaque at my house and met Margaret Blackman $1100 for everything. Okay so you have some rent money coming in. In addition to Social Security without in between the Social Security and apartment income.

This does not cover your bills on a monthly basis. Are you still short right now on your butt when you're ready I see and do you have any other savings, Barbara, in addition to this hundred thousand cash reserves from that lead to I get like to make sure it will be able to gain my log caught me home to be make sense okay here's my thoughts.

You know I get to see you demonstrated. You can live on a fixed income.

Keeping her lifestyle very modest and that's great and obviously once you sell this last apartment this you have a this last rental that you have dental give you some additional capital.

I think the key is to your point, you want to be very conservative and that really is the decision that needs to be made right now if you want to be able to draw an income off of this 100,000 and you don't want to take any risk, then you'd be limited to just CDs and basically high yield savings accounts or money market earning probably around 2% at the most know if you built a CD ladder. The question is, is that going to be enough based on what you're anticipating. It certainly would keep the principal intact because you wouldn't be taking any risk you have FDIC insurance, but should only be thrown off about 2000 a year in the way of income, but that may be all you need.

So I think you need to evaluate that. Just to say am I okay with the 2000 a year in income with a CD ladder but in this environment probably just high yield savings until rates begin to tip tick tick up down the road. Or do I want to perhaps put 6 to 12 months worth of my expenses in a liquid account and then with the balance due more of a stock and bond portfolio with a small allocation to stocks and a larger allocation to bonds but where you're trying to get the overall return up from let's say 2% year to maybe four were not trying to go to six or eight or 10% because I be far more risk than you want to take, but that's a decision that you have to make.

Again, the goal being what's can give you peace of mind allow you to meet your needs for the rest of your life and follow your whatever the Lord has for you.

So let me recommend you do this, we got some wonderful certified kingdom advisors.

There in upstate New York.

If you just go to moneywise live.org. Click on find ACK a certified kingdom advisor putting your ZIP Code.

I'd sit with a couple of those folks and just talk to your full scenario. Let them see what your expenses are what asset you have and let them talk to you about how you could conservatively put this money to work where very little, very little portion of it is at the risk of the market so to speak, but you still have the ability to earn a little bit more than you might get if you just leave it in a savings account or in a CD in the slow rate environment that's gonna be my best suggestion, where you go from here. If you have other questions after you do that give us a call back. Barbara, thank you very much we appreciate your phone call today quickly. Kennewick, Washington. Patrick what your situation where I have not laid out with 19 my wife is not an overnight from the treasury. We want to use it for a key, you have a lecture that I can get it nine 340 9B9 and were kind don't know what to do with the wish that you are emergency or go ahead of the trigger on that we have to start the supply chain approximately being interrupted me and things like that. It's a great question for me Patrick.

I think I'd rather you have the liquid funds available if you don't have your emergency fund fully funded, which gives you little bit more flexibility on how you can use that money based on needs that may arise down the road and we certainly heard quite a bit around supply chain and the good news is, despite some very minor disruptions. We've seen the supply chain working in this country despite the fact that our economies been closed and we been in the midst of the pandemic.

And now, if anything, with the loosening of that. I think we should see some of those inefficiencies work themselves out. Clearly we've heard about the meat plants in and what's been happening there. But I do see the government federal government is very interested in keeping the supply chain functioning around food in the United States and of the good news is here they been able to do that to this point. So unless you have a real conviction around a potential problem there. I don't think just based on what I'm seeing in the prices potentially rising significantly that it necessarily makes sense for you to go out and do that especially if you don't have a proper emergency fund. But if you're saying Rob, I have concerns about it and because I can get it at such a deep discount.

And this is really quoted quote extra money then I don't see anything wrong with that. I just would love for you to have the flexibility that comes with having an emergency fund that's fully funded so you got a little bit more ability to respond with something that might come unexpected as opposed to going and sinking that all into the meat at this point Patrick were glad you called today, my friend. Thank you very very much quickly Evanston, Illinois Ebony, we have about 90 seconds or so. What your brief question and eight that your DD select about 50 and so I wanted to know if I should put an end or starting 529 for my 10 month old. I told that the time to do like index fund and think that I'm not sure when you talk about the index fund are you talking about putting that money aside for your child as well through the index fund or would the index fund before you versus the child and you're trying to waive the two well it actually beat for me but court, it would be like me saving so that I can gift to him and think that if I do have fun payment for him as well. Alright.

But I do want him to have a 529 Jericho, I don't really have to have the money right now.

Okay well I think if you're already kinda moving in that direction and you really earmarked this money for his use for college related expenses down the road that I think this is a great opportunity to to open a 529. Go ahead and make the contribution. The good news is you're buying these stocks. Whether it's your mutual funds or whatever might be inside the 529 plan at a discount because the market is down, certainly not as much as it was, you know, at the beginning of COBIT. 19 but were still down from our highs and so you have the ability over the next 17 years for your 10 month old for this money to really grow up plus whatever you'd add to it so we recommend Ebony that you go to saving for college.com that's my favorite website. On this particular topic.

You can run a quick analysis to see whether you'd be better off taking the state of Illinois plan or using a different plan. And that's good to come down to the tax benefits versus the investment performance. And then I get it open. Make your contribution get it invested in the try to systematically fund and alongside your other goals and priorities down the road and that's our best advice for you. We wish you and your little baby boy. All the best thing so much for calling in today Rob, thank you sir will do it again tomorrow and thank you for tuning in, and listening moneywise live is a partnership between radio and moneywise media.

We appreciate you being there. If you enjoy the program. Please tell a friend, and my thanks also to our technical crew today. Judy Crone, our executive producer servicing guard handling calls Courtney Young, our engineer Jim Henry doing research.

Thanks for listening


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