So here we are again with markets soaring like there’s no tomorrow, and the NASDAQ actually posting record highs.

Administration economic advisers are giddy with optimism. Larry Kudlow said on June 30 that he was confident we are definitely in a strong V recovery with the markets up by 40%. It’s almost like none of what we’ve been through this year has actually happened.

Except it did. It all happened. We have lost more than 125,000 souls to a raging virus that shows no sign of slowing. Cities and other jurisdictions that were reopening at rapid rates are now slowing or even reversing reopening. And while the market’s up 40% from its low of 18,213, it’s still off its high of 29,568 by 14%.

That’s weird. The market fell by 38.5% in March. Since then it has gained back 40.5%, and yet it still has another 14% to go before it fully recovers. How does that work? It’ simple math, really: 29,568 is a larger number (38.5%, actually) than 18,213, so multiplying 18,213 times 38.5% will be a smaller number than multiplying 29,568 by 38.5%, once again demonstrating that losses hurt more than gains help.

On top of that, the economy has actually not recovered. Even though there has been a push to reopen and pretend like this is all behind us, it’s not. All over the country, the virus is spreading again. It’s made worse by the lack of discipline in social distancing and face coverings, as well as the large “super-spreader” events such as the BLM demonstrations and political events held by the president and VP (no judgment implied; simply stating facts).

So why the bulging markets? As reported in a June 21 posting on MarketWatch by its markets editor, Mark DeCambre, legendary investor Jeremy Grantham, co-founder and chief investment strategist at Boston-based money-manager Grantham, Mayo, Van Otterloo & Co., the situation is grim.

“This is really the real McCoy. This is crazy stuff,” said Grantham during a Wednesday afternoon interview on CNBC. “It is a rally without precedence,” he added, then pointed out that millions of people are still out of work and bankruptcies are likely to continue to rise.

According to DeCambre, when asked what level of exposure investors should be willing to take, Grantham said, “I think a good number now is zero and less than zero might not be a bad idea if you can stand that. My confidence is rising quite rapidly that this is, in fact, becoming the fourth real McCoy bubble of my investment career. The great bubbles can go on a long time and inflict a lot of pain, but at least I think we know now that we’re in one.”

On my Free Money Radio Show this past week (airing noon Sundays on WCAP Lowell and 8 a.m., Saturdays on WFEA Manchester), I was asked by my co-host what I thought of the Grantham quote. I said at the time that it doesn’t matter. On reflection, I think I should restate that. It’s not that it doesn’t matter; it matters to a whole lot of people who are buying into the notion that the chaos is all behind us and are just conducting business as usual. What I should have said was that it shouldn’t matter, and won’t, if you are structured properly.

That’s the crux of planning, after all. When we do a plan, we work to anticipate everything that can go wrong and attempt to construct a plan that makes allowances for as many such instances as possible without compromising the effectiveness and integrity of the plan. Certainly, big market bubbles are examples of that.

We know we are going to get these bubbles. We also know there is going to be inflation, taxes, fees, routine market volatility, health care and, quite likely, long-term care issues, as well as the lollapalooza — how long you live and need money. Every single one of these things, as well as any market bubbles that may come along, in addition to countless things that happen in daily life, must be accounted for and planned for.

But how do you do that? How do you plan for dozens of knowns and unknowns? Saving more, while certainly necessary and helpful, won’t do it. In the same way you cannot save your way out of other disasters like fires, floods and catastrophic health events, you cannot save your way out of the next bubble or long-term care event. You must plan for and insure your way out. It’s the only solution.

We know these things will happen, so we want to be out of the traffic pattern. In other words, we need to get off the railroad track, where life is treacherous and difficult to navigate, and onto the train, where life is much easier and progress more certain.

Start by having enough money set aside to handle things that are unknown but predictable. A new roof or septic tank, or a tree falling on your house, a car repair. These things, while each being relatively infrequent, together create a relatively routine and predictable need for liquid assets that are available at a moment’s notice. CDs, treasuries and cash work well.

Next, we know we are going to need money to live. We need a regular stream of new income every single month. That income must be predictable, stable and durable so that we don’t outlive it. So, it’s necessary to establish sources of regular income.

We start by structuring Social Security and pensions, but if we need more, we must have other assets that produce steady cash flow. It absolutely cannot be subject to market ups and downs, and it especially cannot be subject to these bubbles. This is why we recommend annuities for income.

Finally, we know we need growth, and for this money we have our market resources. But it doesn’t stop there. We also need an investment policy statement that lets us anticipate, and know how to deal with, routine market volatility and “really real McCoy bubbles.”

Stephen Kelley is a recognized leader in retirement income planning. Located in Nashua, NH, he services Greater Boston and the New England areas. He is author of five books, including “Tell Me When You’re Going to Die and I’ll Tell You How Well You Can Live,” which deals with the problem that unknown lifespans create for retirement planning. It and his other books are available on His radio program, The Free Money Guys, can be heard every Saturday at 8 AM on WFEA and each Sunday at noon on WCAP. He also conducts planning workshops at his New England Adult Learning Center, located in Nashua. Initial consultations are always free. You can reach Steve at 603-881-8811 or at