As I turn 50, I feel it is appropriate to look back and give some advice to a 30-year old me who was encountering a crazy bullish stock market like the current one in 1999.

Twenty years ago, I had just turned 30. I was a newly-minted MBA working in a dead-end job with GE in Connecticut. As the Century was drawing to a close, the internet bubble was raging (in spite of Bill Clinton’s impeachment). Having already moved most of my assets into high-flying technology and internet companies like Qualcomm and Akamai, I left my job to join a technology and telecom venture capital firm in Europe.

Everyone knows that the internet bubble popped in March of 2000 before finally hitting bottom in mid-2002. Those years hurt many. Fortunes were wiped clean.

But, technology is resilient and today some twenty years later it has lead the US stock market to new levels (and valuations that, in many cases, would be absurd even by 1999-levels). And, life refreshes such that our economy is now run by 30 year-olds who sit in positions like the one I held 20 years ago. For me, it is sometimes startling to speak with these 30-year olds who have no knowledge or understanding of what I and those like me went through some 20 years ago (they also have no knowledge of the 2008 – 2009 financial crisis).

So here, I write my advice to a younger me in the hope that maybe it will help other folks.

First, do not be afraid to take serious risks. Quit your cushy job with some stodgy old company to work for an innovative start up or to create your own company. You only live once.

Second, quantify the risk you are taking. Working in a job that can deliver tens of millions of dollars in options or stock appreciation and is exciting is a bet worth taking. But, if you are going to do that, then do what you can to pay down your mortgages, any outstanding loans you might have, and keep some cash on hand in case things go bad, because they inevitably do. Many smart young people went from wealthy to broke in the 2000 to 2002 timeframe. Committing to keeping 40% or more of your assets in cash will protect your lifestyle and save you years of anguish.

See the best online savings rates today.

Third, if you feel the need to stay heavily in the market all the time, then diversify, diversify and then diversify some more. If you just made a fortune on your company’s public listing, you may not want to sell but don’t become so wedded to the story that you start buying more at crazy prices and tons of shares in other companies in the same industry. Semiconductor investments really worked well in 2019, but if you work in the industry and have all of your exposure there, you might want to put new money to work in a biotech fund or even an oil and gas fund in 2020 (even though a market crash will sink all boats).

Fourth, stocks do not all go to infinity no matter what Jim Cramer and the other talking heads on CNBC may say. They are all pushing their own books and they are not experts. In fact, one fellow on CNBC’s Fast Money has spent 2019 shorting Tesla and buying cannabis. A monkey can throw darts better than most of these people. Do you own research, find your own experts, and never invest in what some talking head says – even if they promise that next year JDSU or AOL is a “lock to go up 30%”.

Fifth, no matter how rosy things get, financial markets can change on a dime. Commit to a portfolio and an asset allocation that reflects your risk tolerance levels and that you won’t need to adjust dramatically if things go seriously badly. Ultimately, you want to be able to sit on your hands for long periods when things go south without jeopardizing your happiness and your lifestyle.

Full disclosure: The author is ending 2019 with 50% of his assets in savings and short-term CDs and 50% in equities. He is long Qualcomm, Akamai and Tesla.

The Federal Reserve voted unanimously today to leave the Fed Funds rate unchanged at 1.50% to 1.75%. This move was widely expected after Chairman Jerome Powell and other Fed governors signaled that they were comfortable with where borrowing costs were after three Fed funds rate cuts this year.

In its statement, the Federal Reserve removed its earlier guidance indicating that it would increase rates once in 2020, and noted that it now does not anticipate needing to raise rates again until 2021.

Thus, loan products that are tied to interest rates, e.g., credit cards, auto loans, personal loans, and home equity lines of credit (HELOC), are now much lower than they were at the beginning of 2019 when the Fed funds rate peaked at 2.25% to 2.50%. While, those seeking new mortgages and home equity loans could act now to take advantage of lower rates, the Fed also indicated that there is no hurry as current rates will most likely remain unchanged for much or all of next year.

You can check mortgage and home equity loan rates here.

Likewise, savings rates aren’t likely to go up anytime soon, but they also aren’t likely to fall much further either. Those with excess cash reserves can still take advantage of short-term CD rates that offer a nice, but not necessarily great, premium over savings rates in consideration of their loss of liquidity.

Check local savings and CD rates here.

I began BestCashCow’s November newsletter by saying that it was hard to get excited about cash. It is still hard to get excited about cash with the Fed Funds target remaining at a range of 1.50% to 1.75%. But, in the last month, the stock market has spiked higher to unsustainable levels, impeachment has begun, and the President has become completely unbound. It bears stating the obvious again: cash is safe as long as you stay within FDIC or NCUA limits.

And, you can still get over 2% APY in online savings and money market accounts from online banks. And, of course, you may also find high savings and money market rates at banks and credit unions near you. Check local bank savings rates here. Check local credit union savings rates here.

As I stated in November, rates on No Penalty CDs no longer offer a premium over savings rates. However, you should consider these offerings as protection against savings rates that could fall still further in 2020. See No penalty CD rates here.

CD rates have, by and large, come in much too far and much too fast over the last month. You can still get online one-year CD rates at 2.25% APY and you may be able to find local rates that are still higher.

Check local bank-offered CD rates here.

Check local credit union-offered CD rates here.

However, we’d be very careful about going out further than 1-year. That having been said, if you must lock up your money for a longer period, there is no reason to get less than 2.36% APY on an 18-month CD, 2.50% on a 2-year CD or 2.80% on a 5-year CD.

Have a great month. Happy Hannukah and Merry Christmas!