Christmas Vacation

Cousin Eddie's Financial Advice

December 23, 2019
Tom LimogesBy Tom Limoges
Assistant Vice President - Investments

The traditions of the holiday season hold a special place in our hearts. Some families bake cookies, some look at Christmas lights around town, and others may participate in some form of community service, like serving at the Soup Kitchen or Food Bank. One tradition my family has is watching classic holiday movies together. Funny movies like Elf, A Christmas Story, and Christmas Vacation rank among our favorites. These comedies are light hearted ways to celebrate the season, but they can also be great resources for memorable life advice. Today, I’d like to share with you a few of my favorite lines from National Lampoon’s Christmas Vacation. While I’m no Clark Griswold, I do appreciate three pieces of sound financial advice from his Cousin Eddie.

1.  Jelly of the Month Club: “Clark, that's the gift that keeps on giving the whole year”.

Yes Edward, the Jelly of the Month Club is the gift that keeps on giving- and so are stock dividends.  Dividends are the cash payments paid by a company to shareholders out of their profits.  Over the long-term, those dividends re-invested can have a major impact on the total return of your investment portfolio.  In the chart below, you can see that dividends can make up to half of the total return of an index.  Clark, that difference in return could make or break whether or not you install that in-ground pool.   

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Market Bottom
Source: JP Morgan

2. On RV Investing: “I borrowed it off a buddy of mine. He took my house, I took the RV.”  

    

Sorry Eddie, selling your home to invest in an RV may not be the soundest financial advice.  However, if you did invest in Winnebago Industries Inc. in 2019, the manufacture of those tenements on wheels, you have a good reason to celebrate.  Through the end of last week, a $1,000 investment in Winnebago at the beginning of the year would have you sitting on over $2,100. Yes Eddie, “That’s a real nice surprise.”   

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YTD Winnebago Price Chart

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Source: Thomson Eikon

 

3.  To the cat who chewed on the Christmas lights: “If that thing had nine lives, he just spent them all”

Market Bottom
Market Bottom
Source: JP Morgan

Over the summer the current bull market made history as the longest bull market on record.  This climb has not been without volatility, as there have been at least nine events over the last ten years that many thought would derail this historic run:   

1.     European Debt Crisis
2.     Brexit
3.     Rising Interest Rates
4.     Negative Interest Rates
5.     Volatile Presidential Elections
6.     Debit Ceiling
7.     Trade
8.     Natural Disasters
9.     Falling Energy Prices

Has this bull market used up all of its nine lives? There is an old saying that the stock market climbs a wall of worry.  That statement has rang true over the current bull market run and will continue over the next.  Patient investors have been and will continue to be rewarded for staying the course.

Recently, Security National Bank celebrated our holiday party with caroling, trivia contests, and tables decorated with themes from holiday movies. The infamous leg lamp and pink bunny suit from A Christmas Story made an appearance, along with characters from the classic Rudolph, and of course, Cousin Eddie and his RV. These movie traditions helped connect each of us with a sense of community and a touch of humor. We can all appreciate a reprieve from the stress and hustle of this time of year. I don’t normally use movies to bolster my financial advice, but sometimes these comedies can actually relate to our life choices. I hope you found a bit of humor in this article, and that you and your family find connection and community this holiday season. From our family to yours- Merry Christmas & Happy New Year.

 

About the Author

Tom Limoges

Tom Limoges is an Assistant Vice President in Investments, developing investment strategies for Security National Bank's Wealth Management Division. He holds an M.B.A. from Wayne State (Neb.) College, and has been a member of the SNB Wealth Management team since 2002.