car wash

Content provided by Steve Donahoe, CLS Senior Portfolio Manager

Recently, Omaha had a pesky little snow storm that put down just enough snow to get my car dirty, and that is about it. After driving a couple of days in a filthy car, and being too lazy to wash it myself, I got the brilliant idea to hire my kids to wash it for me. They are 11 and 13 and have never washed a car before. I told them I would pay them each $5 to wash it. At first my daughter said, “No.” I then turned to my boy and told him I would give him $10 to wash it, he said, “ok.” So I looked back at my daughter and said something along the lines of “I am surprised you turned it down. I did not know you were in a position to refuse an opportunity to make some money.” Her reply was something to the effect of “You are right. I was just thinking it was cold out but I will help too.”

The question I asked my daughter could apply to some investors as well. Recently, I was asked what retirees and pre-retirees should do to protect recent gains? My response was that the first thing retirees and pre-retires need to understand is that in an attempt to protect a portfolio’s current gains, they could be making decisions that prevent the portfolio from further gains. It is important to understand the fundamentals of the market and how they play into the fact that just because the market is setting new highs does not necessarily mean it is going to correct. Valuations matter, at least as much as index price levels, in understanding the potential for further gains.

As for the car wash, meh. I certainly would have gotten a better one for about $6 at the local wash, but in their defense it was the first time they had ever washed a car and it was dark out, not to mention barely 32 degrees. Little do they know I am preparing them for an unpaid chore they will be inheriting as they get closer to driving age!