| No doubt, shoppers are looking for bargains and for ways to cut spending with prices higher than they were last year. We'll see soon where holiday retail sales come in. That could be a good signal of the health of the consumer in 2024. There are a lot of moving parts that affect the economy and markets, but as long as unemployment stays very low, I have a hard time envisioning "everything" crashing. If anything tumbles, I'd expect it to be real estate, as homes are becoming unaffordable for many people. As a real estate investor, my new friend may be very smart to wait to put money to work. But for stock investors, it's vital to remember that the stock market goes up over the long term. Timing a crash is impossible. Now, it's always a good idea to keep some cash on the side in case the market or some individual stocks you're watching go on sale. But sitting out of the stock market because you're afraid of a crash is always a losing proposition. Let's face it. On the rare occasions that stocks do crash, there are very few ice-in-the-veins investors who are bold enough to deploy money as prices are tanking. Lots of people say they're going to buy when prices go lower, but in reality, most investors are too scared to do so because they're afraid of further losses. It's not until stocks have recovered in a big way that they finally feel comfortable investing their cash. The solution is to not play that game. Since 1957, the S&P 500 has returned an average of 10.7% annually with dividends reinvested. That's a very solid return and includes many crashes, such as the COVID-19 crash in March 2020, the global financial crisis from 2007 to 2009, the dot-com crash at the beginning of the century, the 1987 crash, etc. Another way to avoid fearing a crash is to take any money out of the market that you'll need within around three years. This way, your long-term money will still be invested and growing while the funds you'll need in the short term to pay bills will be protected. (I recommend putting that money in short-term Treasurys and certificates of deposit, which can earn you more than a 5% return.) Lastly, some of your portfolio should be in corporate bonds. Today, you can earn nearly stocklike annual returns with a fraction of the risk of stocks. Having bonds in your portfolio provides ballast when stocks tank. Bonds pay you interest twice a year, and you get your money back at maturity no matter what the stock price of the underlying company is doing. A company's stock could be down 90%, but as long as the company doesn't go bankrupt, bondholders will continue to receive interest and will get paid back at maturity. I'm not worried about a stock market crash at all. But if it does happen, I'll rest assured knowing that stocks go up over the long term and that the money I need to pay the mortgage and college tuition won't be affected. I hope to see this new friend next Thanksgiving to compare notes and see what moves he's made in reaction to the markets. I know that I won't have done much. Good investing, Marc | 
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