Costa Rica Ping Pong

You may have noticed that I have not written anything in two weeks. My wife and I took granddaughter number three, Noelle, to Costa Rica. We stayed at a Westin Resort. Everything, and I mean everything was included: the room, the meals, drinks, gratuities, transportation on the resort grounds and several excellent restaurants. All were included.

We tried several different places for breakfast, lunch and dinner. Then we stopped bouncing around and went to our granddaughter’s favorite spot for most of the meals.

One of the fun things Noelle and I did was to play bean bag toss. We also played dozens of Ping Pong rounds. Initially it was easy to win. Then, her youthful energy, hand/eye coordination, fast reflexes and natural volleyball talents kicked in, and I lost as many as I won. The key to both games was to “keep your eye on” the ball or the bag.

The same is true in the world of investing. Of course, you need to define your “ball” and the “game” plan. For me the investing ball may bounce in crazy ways, but I can keep from doing dumb things with reminders of the game plan. The game plan is easy income. It includes buying quality investments over time and buying more when the market falls.

YTD 2026 Stock Market Results

If you have been paying attention, the month of March has been a difficult one for investors with a short-term focus. All three major indices are down. The S&P 500 index is down seven percent. The DOW is down six percent. The NASDAQ is down a painful 9.9%.

March Madness Context (why all are negative)

•   Markets have entered a correction phase (≈10% off highs)

•  Geopolitical tensions and rising oil prices are pressuring equities

• Tech stocks (Nasdaq-heavy) have been hit the hardest

Big Picture Overview

A 5–10% drawdown is normal and happens roughly every 1–2 years. There is something going on this year that is a significantly different. There is the geopolitical shock caused by the war with Iran. This has resulted in a spike in the price of oil and the resultant inflation impacts. Finally, tech stock values were very inflated, and the market eventually adjusts for ridiculous valuations.

Reality Check

It helps to keep your eye on reality. One way to do that is to remember that quality investments that pay a dividend are highly likely to continue paying a dividend. I’ve seen this before and it has worked each time the market goes into a freefall. The dividends just keep bouncing into our accounts. Based on our current investment mix, our current yield is 6.04%. There is no reason to sell investments when I think about the easy income that rolls in every week.

Estimated Annual Tax-Free Income

Note that our EAI for the ROTH IRA accounts this year will easily reach $108.9K. This is significant, as income taxes are not likely to go down. Remember this reality when you think about where you put your investments. I highly recommend the ROTH IRA or the ROTH 401(k) – if your employer offers that as an option.

Remind Yourself Why You Are Investing

This table makes it very clear that most of our 2026 YTD income comes from dividends. I also trade options, and so that comes in as number two. When the market is going down, trading covered call options becomes less attractive and it also introduces some potential undesirable “risks.”

If you look at the total income for the first quarter (although some dividends are still coming for March 31), the total is $79.5K. I can tell you the trip to Costa Rica was far less than that. In fact, $23,401 of our YTD income has gone to charitable giving. We don’t need the cash that is generated using the easy income approach. It is best to invest it in eternal treasure where it will always be valuable.

Closing Thoughts

If you are terrified or unnerved by the recent market events, then you probably don’t have a very good investment plan or you are letting emotions and fears control your thinking and behaviors. Goals and reminders about the long-term focus are important ways to keep your eye on the investing ball.

Always start with a goal, including your options trading adventure. Successful investing starts with a goal, followed by a strategy, that is then supported  by tactical decisions. My primary goal has two elements: 1) To grow our dividend income and options income with minimal work and 2) to have sufficient income in my traditional IRA to cover each year’s RMD withdrawal. One additional goal helps keep income taxes low: I use QCD giving (Qualified Charitable Distributions) to minimize the income taxes on my IRA RMD withdrawals. I want everything to be “easy.”

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