Three banks failed last week: Working my investment plan amid instability.
Part 2 | Notes from my read-through of The Single Best Investment by Lowell Miller.
In the late-2000s and early-2010s, I didn’t follow financial markets, and I didn’t have much of a grasp on the havoc that the 2008 financial crisis was having on my state’s economy (Michigan), or on the national and international economy at large.
Thinking back, I was aware of one thing. A couple of my childhood friends moved away from my neighborhood.
It wasn’t until years later that my dad told me that nearly half of the homes in the neighborhood of the inner-ring Detroit suburb we live in were vacant at one point during that period.
The 2008 financial crisis was a gut-punch to investors. And from 2008 to 2012, the Federal Deposit Insurance Corporation (the government entity that insures your deposits in the bank) closed 465 failed banks.
Coming back to the present day, some financial analysts are concerned after three banks failed in the past week. And it seems like the writing is on the wall for an economic downturn.
Thankfully, in his latest Substack post,
, talks about why he believes the failure of Silicon Valley Bank (the most prominent of the failed banks) won’t lead to my bank and your bank failing.Still, I believe that these shocks to the financial system provide an opportunity to reflect on the fundamentals of my investing. Even as I believe that a financial downturn of some sort is coming down the pike, I plan to continue investing, and potentially increase the amount I’m investing.
Long term investing isn’t day trading. I’m partnering with companies, and with certain financial assets, because I believe that they will continue to grow in the long term.
Great companies weathered the financial storms of 2008, and they will weather whatever challenges are brewing for the rest of 2023.
As I continue to explore the strategy of buying stocks that pay dividends to shareholders, here are a few take-aways I had from reading The Single Best Investment by Lowell Miller this past week.
Any investment must account for human emotion, error, and the tendency to follow groups.
In order to achieve longterm growth, I need to become comfortable with some level of risk and volatility in my investing.
Short term returns aren’t the end goal. Time and patience are two of my best friends.
My portfolio should be comprised of stocks I’m comfortable holding through downturns.
Reinvesting my dividends can super-charge the compounding effect of my investing over time.
In this newsletter, Evan Invests, I explore the world of investing from the perspective of the everyday investor by making small investments every month. Follow along with me as I look to grow my wealth through wise money management and making investments in cryptocurrency, index funds, stocks and more.
Let’s take a quick look at how my portfolio has been performing in the past week.
My Portfolio Holdings as of 3/10/23
Apple stock
Rocket Companies stock
Bitcoin
Fidelity 500 Index Fund
Invesco International Small-Mid Company Fund Class R6
Vanguard High Dividend Yield ETF
Vanguard International Dividend Appreciation Index Fund Admiral Shares
Vanguard Mid-Cap Growth Index Fund Admiral Shares
Interestingly enough, with everything I just covered about three banks failing last week, and the thick cloud of recession seeming to hang over the economy, my investments seem to be holding steady.
My portfolio lost value last week, but so far this year, I haven’t experienced losses multiple weeks in a row.
As I prepare myself for the possibility of weeks of sustained portfolio losses this year, I’d do well to remember what I wrote above: In order to achieve longterm growth, I need to become comfortable with some level of risk and volatility in my investing.
I’ll report back next week.
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