Natural Disasters, Bitcoin, and Market Uncertainty: What Every Investor Needs to Know to Stay Sane and Solvent
A New Year brings excitement, hope, and a little extra motivation to achieve some major goals. But 2025 has also brought some uncertainty as well. Political, economic, environmental, and technological events have all made big headlines, sometimes all on the same day. If you're feeling a little unsure about your financial planning right now, you're not alone.
So, on today's show, we answer three timely listener questions that hopefully will give folks some perspective on where the economy is right now, where we could be headed, and how to set the best course for the rest of the year.
1. “What happens if your house burns down while you're still making mortgage payments?”
I'm sure folks all over the country have been watching the terrible wildfires in California and wondering what happens after a fire, or other natural disasters like floods, hurricanes, or tornadoes.
If you lose your house, you're still responsible for the outstanding balance on your mortgage. Most home loans have some kind of forbearance built into them that allows borrowers to pause -- but not cancel -- payments for up to a year in the event of major damage or a loss. Borrowers then work with their lenders on making catch-up payments to cover the forbearance period.
The wildfires have also raised some issues around insurance that are unique to California. Wherever you live, reviewing the terms of your mortgage and your homeowner’s insurance coverage should be on your annual financial checklist.
2. "I'm worried about my coworker. She's in her late 50s and she owns a rental property worth approximately $500,000. She's thinking about selling the rental property and putting the profits into Bitcoin. Is this a good strategy for someone her age?"
Bitcoin has been in the news lately because the new Trump administration has signaled that it might be friendly to cryptocurrency and related technologies. That optimism has pushed the price of Bitcoin to record highs.
But the best way to answer this question is to set aside the pros and cons of Bitcoin specifically. Let's even set aside everything that's involved in selling a house: cleaning, repairs, brokerage fees, capital gains taxes.
The root issue here is whether it's a good idea to put a large sum of money into one investment. And, in almost all cases, Keen Wealth's perspective is that it's better to diversify your assets. We saw a real-world example this week when Nvidia’s stock value dropped almost $600 billion in one day after a new AI rival emerged in China. Imagine if, last week, you'd sold your rental house for $500,000 and put all the proceeds into Nvidia, which was then the most valuable company in the world.
Of course, it's hard to say what "diversification" would look like for this woman. We don't know how much of her total net worth or annual income is tied up in this rental property. We also don't know how much debt she has, if she's currently struggling to pay her bills every month, if she's thinking about early retirement, etc. In Keen Wealth's comprehensive financial planning process, these personal details go hand-in-hand with designing portfolios that help folks meet their needs now while simultaneously working towards their long-term goals.
3. "I've been hearing a lot about the potential for a major economic downturn from my family members and on social media. I have just under $1 million spread out over a couple of different accounts. What steps should I take to protect these accounts from significant losses? Should I be moving things around now?"
Learning to live with volatility is an important investment skill that comes with experience and perspective.
On average, the financial markets weather a 14% drop every single year. There's always a potential for a larger correction, as we saw during the 2008-09 financial crisis or the 2020 pandemic. But, historically, the markets have always regained their losses, progressed to new highs, and compounded investments at positive rates of return.
If you're wrestling with these kinds of questions about your own finances, I believe that the single best "move" you can make is to sit down with your financial advisor. If you already have an advisor, make an appointment to do a thorough review of your current plan. And if you don't have an advisor, consider starting your search with Keen Wealth. Through the inevitable ups and downs of any given year, my team and our comprehensive process can help you feel more confident about your money.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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