I completely agree that the best thing in a bear market is often to do nothing, as I describe in the following articles.
I also agree that getting advice from people who themselves are no experts (and even following pundit advice) is most often counter-productive. Given that you write, “Right now my investment portfolio is down 40%. Across all my investments, I’ve lost more than 50%” when the S&P 500 total return is currently down less than 23% from its February 19 peak, I’m not sure you don’t fall into that category yourself, no offense intended.
With the current mid-bear rally happening, one might wonder if the bear is over. Here are my thoughts on that:
One significant error in your piece (at least for US banks) is this:
“If the bank has a financial problem, similar to the one we faced in the 2008 Global Financial Crisis, you become an unsecured creditor of the bank. If they go down, some or all of your money could be used to bail them out.”
That’s what the Federal Deposit Insurance Corporation (FDIC) is for. Quoting from the FDIC site:
“Since 1933, no depositor has ever lost a penny of FDIC-insured funds. Today, the FDIC insures up to $250,000 per depositor per FDIC-insured bank. An FDIC-insured account is the safest place for consumers to keep their money.”
