Fat Bear Week, an annual competition celebrating the bears prepping for winter in Alaska’s Katmai National Park, just ended. What wisdom can we take from Backpack (the competition winner) to keep our wallets fat?
Rob Hart asked Chuck Carlson, CEO of Horizon Investment Services, that very question this week on WBBM Newsradio’s Noon Business Hour.
“I think that one… is this idea of building reserves during the good times,” said Carlson. “I mean, as the bears, you know, are obviously trying to fatten up to go into hibernation, there’s opportunities for investors to take advantage of kind of the good times, the plentiful food, so to speak.”
Now, Hart acknowledged that hearing recent years be described as economic “good times” might sound like a bit of a record scratch to some listeners. Wages have remained pretty stagnant as inflation has made both everyday items and other goods more expensive. Then, the Federal Reserve Bank just raised interest rates again, making it more expensive to borrow money.
At the same time that the economic conditions have made it harder to basically live, things have been strong in the stock market, and therefore strong for investors.
“We’re coming off a market that’s had three pretty strong years,” Carlson explained. “A lot of stocks are up. A lot of people have made pretty good money.”
This is where the first Fat Bear lesson kicks in. Just as bears load up on food to store as fat, investors can start moving some of their investments “into cash where you can actually make a few bucks now because of interest rates,” Carlson said.
Then, there’s diversification. Bears munch on salmon, berries, nuts, plants – and in some cases, garbage. When we translate that to investing advice, Carlson said the Fat Bear approach would be to make sure their investments are balanced – especially after exposure to the artificial intelligence (AI) trade might have made some portfolios get “a little out of whack,” in recent years.
A final lesson comes from Backpack’s mother, Holly. She won Fat Bear Week back in 2019, according to Smithsonian Magazine. That is, sharing wisdom with younger generations.
“To get a younger person involved in the investment process… you’ll absolutely change your life,” said Carlson. “I know it sounds a bit grandiose but, the fact of the matter is… if you can get somebody, you know, in their teens or twenties to really start a process, discipline investment program.. the beauty is you don’t even have to be that smart. Time will work for you and work a lot of magic for you.”
