3 Things 7-1-24
Thing One
An Important Declaration (Revisited)
(The following was witten a few years ago when "meme stocks" were all the rage and Gamestop's stock was one of the main beneficiaries of a frenzy that saw its price go from 90 cents a year before this post was written to $56 the day this post was published on February 1, 2021. Today, a couple of weeks after a mini-rally and retreat, it sits at $24. That's still much better than 90 cents but it's well off the speculative highs of a few years ago.)
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Got some cash you want to play around with and try to make a quick buck? Cool. There are lots of options.
You could head to your nearest gas station and buy a few lottery or scratch off tickets. If you're lucky, you could win anywhere from a few dollars to several hundred million for the price of a cup of coffee.
Or, you could go (either on-line or virtually) to a casino and try your luck at one of the many games of chance that offer you the opportunity to turn a small amount of money into a fortune.
Or, you could bet the horses (again either online or in-person) and turn a little into a lot.
Or, since it's that time of year, you could find a group that has a Superbowl Squares game going and buy in. For a few bucks and a lot of luck, you could end up with overflowing pockets.
Or, since on-line stock trading platforms have "democratized Wall Street" and "put the little guy on even footing with the big guy", you could plunk down some money on a company like Gamestop. Unless you've been under a rock for the last week or so, you've undoubtedly heard about what's happened to that company's share price. And you've also probably learned a bit about what a short squeeze is. We're not going into the details of that here nor are we going to make a judgment about whether buying Gamestop, or AMC, or Blackberry, or any number of other stocks that became Robinhood-famous this week is the right or wrong thing to do. We're just going to take the opportunity to make this declaration: You can put your money to work, you can put it to play, and you can even do both. Just know which option you've chosen and why.
Putting it to work means investing for the long term. It means accepting volatility as a fact of life. And it also means accepting that there are no guarantees. But, if done the way most successful long-term investors have done it, with similar results, it means you can reasonably expect to produce solid returns over time.
Putting it to play means doing things like trading on the news, or following the crowd, or digging around for the next obscure startup to hit it big. And, who knows, it all just might work out like you hoped and you might hit it big too. You should understand though that your windfall didn't come as a result of investing but rather speculating, which is perfectly fine as long as you understand the risks and set some parameters for yourself. But you should also understand that the word (playing) correctly implies you're in a game, of sorts, and you just might lose - all of it.
So, to restate what we've said above more concisely, buying stock in a company like Gamestop, for the reasons that most people have been buying it in the last week or so, is not investing. It's playing and it's okay to do. Investing, on the other hand, is where the games stop.
Thing Two
Credit Protection In The Online Age
We’re all susceptible to identity theft but those of us who trade with our credit cards over the internet, or even in person, are even more prone to being victimized. In light of this, the credit reporting agencies are reminding us that they offer various ways to help us protect our identities from criminals. The two most common are credit freezes and fraud alerts.
If you never intend to apply for any type of financial credit or use a service (like a utility company) that would require a credit check, then perhaps you should freeze your credit. Any attempt thereafter to use your social security number to apply for credit would be denied on the basis of that freeze. That would be the case until you had your credit unfrozen.
But freezing credit is impractical for many of us so adding a fraud alert to your credit file makes more sense in most cases. A fraud alert asks any business seeking your credit report to contact you to confirm your identity before granting credit in your name. These could include:
Credit issuers
Landlords
Potential employers
Car insurance companies
Car rental agencies
Actual victims of fraud can ask for an extended fraud alert, which stays on your file for seven years unless you have it removed sooner, while those of us in fraud-prevention mode should opt for a temporary fraud alert, which lasts for one year but can be renewed.
Yes, it has gotten much easier to buy anything your heart desires with just a few clicks. But it has also gotten much easier for unscrupulous individuals to take advantage of us using the same methods. Adding a fraud alert is a no-brainer. Visit Experian here and get it done.
Thing Three
Just A Thought
"You win a few, you lose a few. Some get rained out. But you gotta dress for all of them." - Satchel Paige
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