HELP!

In August of 1965, the Beatles recorded their fifth album titled "Help". They also made a movie of the same name which featured seven songs from the album including "Ticket to Ride" and "Yesterday". The album won critical acclaim for it's use of symphony music and baroque style. It topped the charts in the US, UK, Germany, and Australia in 1965. I was reminded of this album when I recently read a post in social media written by a young mother whose husband suddenly fell ill from a cardiac event and was unable to work anymore. She was behind on all her bills including rent, and was facing eviction. With two school-age children and a sick husband, eviction was an unthinkable hardship. Even though they both worked, they obviously did not have enough savings to negotiate this unfortunate life event. She posted an appeal for financial help from strangers in our community because she was desperate and had nowhere else to turn. I read through the replies from my neighbors and very few actually offered financial assistance. Most replies were referals to agencies who assist the poor in crises like this. The last thing this woman wanted to hear was investment and budgeting advise from me but I think that is what would have prevented her situation in the first place. The sad fact is that this could happen to anybody. With escalating prices, especially for health care, we are all just one or two unfortunate events from economic diaster. The best way to avoid such an event is to prepare for it by learning how to save and invest your earnings during the good times. The reason I bother to write this blog is to possibly help avoid this from happening to anyone, especially members of my family. Spending control is the first step in the budgeting process, ask yourself "Do I really need this item?", "Is there a lower cost alternative?". Money not spent is money that could be saved and invested. Once this mindset is established, it becomes second nature. Living "paycheck to paycheck" is a dangerous strategy especially if something unexpected happens. Financial literacy is a life skill that is mostly missing from our educational system, that's another reason I write this blog. Once money is saved it should be invested in a safe and sound way with an eye to maximum return. A newly established household with a modest amount of savings should be especially cautious with their savings to avoid losses like we are experiencing now in the stock market. Once a cushion of 6 months earnings has been saved in a liquid account, some riskier assets can be introduced into a portfolio. Timing is key to make the most of your investments. Right now the Federal Reserve is raising interest rates to combat inflation. I've been waiting 10 years to get more than a zero return on safe investments like CD's and US Treasury Bills. Since I expect rates to continue their upward climb, I am buying a new CD each time the Fed hikes rates to increase my overall yield. I like the two year maturity because it is higher than even the ten year. In normal times, longer maturities have higher yields, but these aren't normal times. That's why I am turning to the safety of FDIC insured CD's and Treasuries. I won't be happy until I have 50% of my investable assets in fixed income investments. Suddenly stocks are not the only game in town. I have not sold any stocks to finance these fixed income investments, they are being funded with money that has gathered dust during the long period of zero rates. I still believe in the stock market as the best way to build wealth for long term savers. Right now stocks are on sale because of the Feds agressive assault on inflation. Technology stocks have been hit especially hard but I am not rushing to buy more right now because there may be more pain to come. I am content to sit back and earn interest on my fixed income investments until this Fed tightening cycle is complete. At some point, when inflation is reduced to the Feds target rate of 2%, interest rates will start to decline. That is when stocks should resume their upward trajectory. Currently, the best stocks to hold during this market volitility are defensive names like drugs, utilities, and tobacco stocks. The reasoning is that these products are purchased in all economic cycles. While it may take quite a while, I am confident that help is on the way.