The Prudent Retiree - March 16, 2023

In March 1973, the Rock Super Group, Pink Floyd, released the critically acclaimed album, Dark Side of the Moon. The album was an instant hit and charted on Billboard for a record 973 weeks. Over 45 million copies have been sold and Dark Side is always in the discussion of greatest albums of all time. The song, “Money” was released as a single and brought the band widespread attention.

“Grab that cash with both hands.” It’s March 2023 and we’ve just experienced the second and third largest bank failures in US history. In both cases, there was a run on the bank and depositors couldn’t grab fast enough. The FDIC took control of both. The markets sold off in a panic last week as investors worried about contagion throughout the financial system. Panic and contagion brought about the 2008 market collapse. Do we need to grab the cash this time? Initially, there was confusion over the weekend. Would depositors lose everything over the $250,000 FDIC limit? Treasury Secretary, Janet Yellen, announced there would be no bail out. Futures markets went into a free fall, fearing Monday’s opening. The government changed course and President Biden announced all deposits would be covered and available on Monday morning. No taxpayer money would be used, though I’m not sure how that works. Markets seemed to calm down, but who knows about tomorrow? It is important to remember that since 1934 every deposit, both insured and uninsured, has been covered by the FDIC in a bank failure. You most likely don’t need to grab your cash with both hands.

Dark Side’s track list includes a song about lunatics among us. Beware of those screaming the economy and markets are on the verge of collapse. There are myriad reasons for investors to worry. Pink Floyd sang that our heads can explode with dark forebodings and the news of the day is usually dark. We need to ignore that news and listen to the market. Our allocation remains 50% invested, 50% cash. Prudent Retiree has said repeatedly to expect continued volatility. Prudent risk management will help us make the cash that you can grab.

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Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com

Advisory Services offered through Horseman Group. Securities offered through AW Securities, a registered Broker/Dealer, member FINRA/SIPC.