As I look back over the (far too
few) posts I’ve put up on this blog over the last year, I thought this might be
a good time to give some updates on subjects I wrote about. So…..
In “Used Car, New Car, or Same Car” I contemplated whether it was time to replace my 1999 Toyota Solara that
at the time had logged 325,330 miles.
The check engine light had come on permanently and the air conditioner
was blowing warm air in August. I opted
to tough it out and keep driving it through the last few weeks of hot weather
last summer and maybe replace it this summer.
To my shock, when I tried the air
conditioner this spring, it blew frigid air, as if it had just rolled out of
the factory. And the engine light is
off. Needless to say, I’m sticking with
my beloved Solara. Four hundred thousand
miles, anyone? Two miracles for one car
is not too much to ask, right?
But that does raise once again
the whole question of when to replace a car.
Should you trade it in while it’s still a reliable drive and has lower
mileage or wait until it’s falling apart?
Ordinarily I’d say the latter; but as you probably realize, the market
for new and used cars is going crazy, and the conventional wisdom may not hold
true. For example, my wife’s car—the
“family car”—could bring us in trade-in value the full amount we paid for it
40,000 miles ago. Essentially, we drove
the car for free all that time (save for the gas and minor repairs and upkeep).
Should we take advantage of that
high-value trade? There’s an emotional appeal
to that. It’s a tough decision; and I’m
sure we’ll be paying a steep price for the replacement ride. But there might be a deal to be made—assuming
I move quickly. I have a feeling a
recession is coming and this car market can invert again really fast.
In “A Safe Way to Earn 7% on Your Savings” I sang the praises of Series I savings bonds and their 7.12% interest
rate. I explained the advantages and
disadvantages of a savings bond, but I still think it’s a solid
investment. Only now the interest rate is
9.62% ((It is adjusted every six months for the inflation rate.) You may purchase bonds with that rate through
October 2022, after which it will be firm for six months. A new rate will be set on November 1, and at the
current pace of inflation I suspect the rate will climb again at that time.
In “SCOTUS Got it Wrong”, I
lamented what I considered a poor, anti-freedom decision by the Supreme Court
that would likely limit the variety of investment options for patrons of
company 401(k) retirement savings accounts by making companies liable for
offering too many investment choices or needlessly expensive options. Just a few short weeks later Fidelity started
marketing a cryptocurrency mutual fund to 401(k) managers. Fidelity claimed that they were doing so in response
to high demand for such an option in retirement plans. Does anyone besides me see a disconnect
here? Expensive? High risk?
This is just the kind of fund the Court was aiming at. If any companies added that mutual fund to
their retirement plans, I’ve got to believe they are experiencing buyer’s
remorse about now. If they don’t get
sued by disgruntled (and now much poorer) crypto investors, then I’m sure
there’ll be a government bailout down the road.
And finally, speaking of
cryptocurrencies, I railed against them in “My Non-cryptic Thoughts About Cryptocurrencies” in May. I may still be
proven wrong and they turn out to be a good investment, but I’m sticking to my
guns on this one. Crypto has been a
disaster scene since I wrote that post, and the minor and short-lived
recoveries of some cryptocurrencies has been due to panicked purveyors of the
investments trying to prop up their shares; or worse, uninformed investors
throwing good money after bad thinking that they are buying while the price is
low and their shares will only go up from here.
Maybe. Maybe not. Still sounds like a Ponzi scheme to me, and
even some major media voices have said the same. Steer clear, is my advice. And by the way, just because Fidelity is
offering a crypto mutual fund doesn’t mean it’s a good investment. Remember, it’s YOUR money they are
investing. They make money off your
investment whether it goes up or down.
Until next time,
Roger
“If any of you lacks wisdom,
he should ask God, who gives generously to all without finding fault, and it
will be given to you.” James 1:5 NIV*
*Scripture quotations taken from
the Holy Bible, New International Version® NIV® Copyright © 1973, 1978, 1984, 2011 by Biblica, Inc.™ Used by permission. All rights reserved worldwide
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