Dr. Dave on money

Before I give you “advice” on money let me tell you my qualifications.

I do not study money, I do not study finance and I know no more about money than the next person. Which, in the current situation makes me as qualified as anyone else who is out there.

Turn on any “news” channel and after the bevy of “reality news” featuring the latest tragedy that this economy has caused somewhere in some remote corner of the globe and you will see people known as pundits screaming at the top of their lungs about why their way is the way to correct the economy.

So everyone has an opinion and everyone knows everything. And you know what they say about opinions: they remind one of a certain body part because every one has one and they stink.

Sorry, I find that hard to believe that any of these so-called experts has any real value to add here except to upset people and glue them to the TV. So I took a different look at things. I looked at them through the eyes of "neuroeconomics” which is how the brain works “on money” as opposed to on drugs or alcohol (or food!).

Turns out that the brain reacts to money issues much the way people who are compulsive gamblers or crack head; addicts.

The other interesting things that were found were that people consistently overestimated the value of their investment and their ability to make good decisions about money.

It was very hard as well for people to divorce themselves from their emotions when it comes to money even though it is a relatively new invention in the grand scheme of humanity.

Even the lead author of the neuroeconomics text who was an editor for Money magazine admitted he lost over a quarter of million dollars in the market because “he knew better than the rest of the world”.

Money seems to represent love, lust, power, security, social status and vanity all wrapped up in one.

Now remember I have the same qualifications as the pundits do, maybe even more: I know nothing about money.

But I do know human behavior.


So here are my predictions about the economy.

It will be volatile, up and down and until it goes up continuously people will freak out every time it dips.

And it’s likely to dip a lot deeper for some time. Then if you’re smart you can make money!

And dip it will; the media will make sure you know this. They will also feed the fear and convince you that this is reality so you need to focus on it. And by focusing on this reality we will all create more of it, I promise you.

When the economy does finally recover everyone will take credit for it, and all the pundits will tell you “I said we needed to do this to turn it around”. No one will ever look back to now to see what they really said.

So my advice: Since I don’t play the market much, again I have all the qualifications to tell you this. Anyone who tells you they are doing much better than the market in returns is either lying or cheating.

So don’t expect your market investments to do any better than the market and for the immediate future that means don’t expect much!

Above all take care of your health. And take care of the ones you love. That is what will matter in the long run.

Take your fish oil!

Doc