1 00:00:00,080 --> 00:00:02,960 Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt, 2 00:00:03,160 --> 00:00:25,319 Speaker 1: and today we're discussing timing this stock market. Joel, you 3 00:00:25,560 --> 00:00:27,920 Speaker 1: and I got to go on a double date recently 4 00:00:28,000 --> 00:00:31,120 Speaker 1: with our wives. It never freaking happens in our wives. 5 00:00:31,120 --> 00:00:34,080 Speaker 1: We've been kind of busy past few weeks and our wives. 6 00:00:34,200 --> 00:00:36,160 Speaker 1: Uh surprised this a little bit at our local group 7 00:00:36,240 --> 00:00:39,600 Speaker 1: hub wrecking bar. That was so sweet, man, that was awesome. 8 00:00:39,680 --> 00:00:41,680 Speaker 1: We we neither of us knew. I don't think until 9 00:00:41,720 --> 00:00:43,640 Speaker 1: a very last second. I thought we were just kind 10 00:00:43,640 --> 00:00:45,720 Speaker 1: of having like a dinner hang at our house. Yeah, 11 00:00:45,920 --> 00:00:49,479 Speaker 1: and uh, and I got home and my wife surprised me, 12 00:00:49,520 --> 00:00:51,280 Speaker 1: like last second, like, hey, we're doing We're doing this. 13 00:00:51,320 --> 00:00:53,680 Speaker 1: We're going out, all four of us, and we're hiring 14 00:00:53,680 --> 00:00:56,160 Speaker 1: a babysitter, which we don't normally do because babysitters are 15 00:00:56,200 --> 00:00:58,760 Speaker 1: crazy expensive. That kind of expensive. But it was so 16 00:00:58,840 --> 00:01:00,640 Speaker 1: worth it, man, it was so to get past that. 17 00:01:01,240 --> 00:01:02,520 Speaker 1: It took me a second as well. I was just like, 18 00:01:02,680 --> 00:01:05,520 Speaker 1: we're doing what I was like, and we're going out? 19 00:01:05,680 --> 00:01:07,840 Speaker 1: Is it in the budget? I don't know, but yeah, 20 00:01:07,840 --> 00:01:09,560 Speaker 1: that was totally worth it. We had a blast. It's 21 00:01:09,560 --> 00:01:11,680 Speaker 1: fun to like reconnect as as adults, you know, like 22 00:01:11,959 --> 00:01:14,360 Speaker 1: we've talked about before, how you guys, how we each 23 00:01:14,360 --> 00:01:16,240 Speaker 1: have a date night. And so one night, you guys, 24 00:01:16,319 --> 00:01:17,440 Speaker 1: you and Emily will go out and then I come 25 00:01:17,440 --> 00:01:20,080 Speaker 1: over and babysit your girls and vice versa. Next week 26 00:01:20,160 --> 00:01:22,000 Speaker 1: will be me and Kate and we go out. But 27 00:01:22,080 --> 00:01:24,080 Speaker 1: it's rare that we Yeah, like you said that we 28 00:01:24,120 --> 00:01:27,240 Speaker 1: all get to get together all for adults and get 29 00:01:27,240 --> 00:01:29,120 Speaker 1: some good hangs in, you know, have a have a 30 00:01:29,160 --> 00:01:31,200 Speaker 1: couple of beers and talk about life and kind of 31 00:01:31,240 --> 00:01:34,440 Speaker 1: catch up without feeling like we have to attend to 32 00:01:34,440 --> 00:01:37,360 Speaker 1: the children right away. It's nice, man, Yeah, man, seriously, 33 00:01:37,440 --> 00:01:39,880 Speaker 1: so great. Loved it. By the way, I wanted to 34 00:01:39,880 --> 00:01:41,800 Speaker 1: tell you that I was like pulling out of work 35 00:01:41,840 --> 00:01:44,800 Speaker 1: the other day on my bike. Uh. And the weirdest 36 00:01:44,840 --> 00:01:47,560 Speaker 1: thing about riding my bike to work is that the 37 00:01:47,600 --> 00:01:50,240 Speaker 1: only place to park at work is this giant, enormous 38 00:01:50,280 --> 00:01:52,240 Speaker 1: parking garage and I have to go through three gates 39 00:01:52,680 --> 00:01:55,640 Speaker 1: in order to like a normal car. Yeah, exactly, it's 40 00:01:55,640 --> 00:01:57,760 Speaker 1: so weird. And uh, I was pulling out the other 41 00:01:57,840 --> 00:02:01,080 Speaker 1: day and taking taking my bike down the amp and 42 00:02:01,800 --> 00:02:04,000 Speaker 1: I pulled up next to a guy in his car. 43 00:02:04,640 --> 00:02:08,480 Speaker 1: Uh one of the sales guys at work, and he said, uh, Joel, 44 00:02:08,600 --> 00:02:10,560 Speaker 1: I don't know if you heard this, but they actually 45 00:02:10,600 --> 00:02:12,960 Speaker 1: make cars now. Um, just like kind of making fun 46 00:02:12,960 --> 00:02:14,880 Speaker 1: of me. Was he joking at all or was he 47 00:02:15,000 --> 00:02:16,959 Speaker 1: just kind of was he actually giving a hard time? 48 00:02:17,080 --> 00:02:18,280 Speaker 1: I think a little bit of both. You know, It's 49 00:02:18,320 --> 00:02:21,359 Speaker 1: kind of one of those jokes that I kind of 50 00:02:21,400 --> 00:02:24,079 Speaker 1: wanted to say something. I just sped off because he 51 00:02:24,120 --> 00:02:25,800 Speaker 1: had to wait for the lift gate to go, but 52 00:02:25,880 --> 00:02:27,560 Speaker 1: I kind of wanted to say something about the fact 53 00:02:27,600 --> 00:02:29,720 Speaker 1: that he Yeah, I kind of wanted to say something 54 00:02:29,720 --> 00:02:31,720 Speaker 1: about the fact that he would be sitting in traffic 55 00:02:31,720 --> 00:02:33,880 Speaker 1: for quite a while wait home. Well, I was completely 56 00:02:33,919 --> 00:02:36,120 Speaker 1: avoiding it, but I did not. I was hoping that 57 00:02:36,160 --> 00:02:37,799 Speaker 1: he would have sped off first, and then you would 58 00:02:37,840 --> 00:02:39,639 Speaker 1: have ridden up and just like punched a slide view 59 00:02:39,639 --> 00:02:42,640 Speaker 1: mirror off, like zoomed off off the sidewalk or something 60 00:02:42,639 --> 00:02:44,560 Speaker 1: like that. I'm not against a little bit of social 61 00:02:44,560 --> 00:02:47,600 Speaker 1: disobedience here and there, but that probably wouldn't be cool 62 00:02:47,600 --> 00:02:49,720 Speaker 1: to a co worker. But I just, you know, I 63 00:02:49,760 --> 00:02:53,120 Speaker 1: wanted to say that not everyone has to be into biking. 64 00:02:53,200 --> 00:02:55,200 Speaker 1: That's totally cool, and I know the guy was probably 65 00:02:55,240 --> 00:02:57,720 Speaker 1: pretty much joking but no offense taken, right, But like, 66 00:02:58,280 --> 00:03:00,800 Speaker 1: you don't have to be into biking, but you know what, 67 00:03:01,320 --> 00:03:04,400 Speaker 1: instead of knocking it, give it a try, think about it. Uh. 68 00:03:04,400 --> 00:03:06,720 Speaker 1: And that was again, Matt, that was the first episode 69 00:03:06,760 --> 00:03:09,080 Speaker 1: we ever recorded, because you and I think biking is 70 00:03:09,200 --> 00:03:12,000 Speaker 1: really important. We think it's important because it's good for 71 00:03:12,360 --> 00:03:15,320 Speaker 1: your health. It's good exercise, right, it's good to get 72 00:03:15,400 --> 00:03:17,320 Speaker 1: you out there in your town. There's like so many 73 00:03:17,360 --> 00:03:20,600 Speaker 1: reasons that biking is a social community aspect of it. Yeah, 74 00:03:20,840 --> 00:03:22,600 Speaker 1: you're more connected with your neighbors. And of course it 75 00:03:22,639 --> 00:03:24,840 Speaker 1: saves you money as well. The cost operate a bike 76 00:03:25,040 --> 00:03:27,760 Speaker 1: as compared to a car. You can't compare the two 77 00:03:27,760 --> 00:03:30,800 Speaker 1: bike contests. Bikes are way more affordable as far as 78 00:03:30,840 --> 00:03:35,600 Speaker 1: that goes. Man, I hope he's listening right now, buddy. Yeah, 79 00:03:35,640 --> 00:03:37,160 Speaker 1: I just I wanted to get that out there. You 80 00:03:37,200 --> 00:03:39,040 Speaker 1: don't have to be a bike lover. But if you're 81 00:03:39,040 --> 00:03:41,560 Speaker 1: not currently riding a bike or and you haven't thought 82 00:03:41,600 --> 00:03:43,960 Speaker 1: about it in a while, and you haven't listened our 83 00:03:43,960 --> 00:03:47,120 Speaker 1: first episode, maybe you're a more recent listener to the show. 84 00:03:47,160 --> 00:03:49,840 Speaker 1: You just kind of started listening. Consider listening to episode 85 00:03:49,840 --> 00:03:53,040 Speaker 1: one and thinking about how great bikes are, because I 86 00:03:53,320 --> 00:03:55,240 Speaker 1: gotta say, I just kind of felt bad for him 87 00:03:55,240 --> 00:03:56,560 Speaker 1: that he had to sit in traffic on the way 88 00:03:56,560 --> 00:03:59,880 Speaker 1: home in this box that like makes your back hurt 89 00:03:59,880 --> 00:04:01,880 Speaker 1: and stuff like that and you kind of hate life. 90 00:04:02,160 --> 00:04:04,000 Speaker 1: And for me, I mean, I was getting fresh air 91 00:04:04,200 --> 00:04:06,920 Speaker 1: and enjoying this ride home without sitting in traffic. And 92 00:04:06,960 --> 00:04:08,760 Speaker 1: so I just want to let people know, think about 93 00:04:08,800 --> 00:04:10,640 Speaker 1: listening to episode one if you haven't heard it yet. 94 00:04:10,760 --> 00:04:13,400 Speaker 1: What if he was driving to his gym to sit 95 00:04:13,480 --> 00:04:17,280 Speaker 1: on a bike station, Like, what's what's the fancy exercise bike? Now? 96 00:04:17,320 --> 00:04:20,560 Speaker 1: You see guys peloton? Yeah, I think it's like folks 97 00:04:20,560 --> 00:04:22,279 Speaker 1: are getting them up for their houses now. It's like 98 00:04:22,279 --> 00:04:24,680 Speaker 1: the new It's like the bow flex of the twenty 99 00:04:25,240 --> 00:04:27,719 Speaker 1: or something like that. But you know, I would be 100 00:04:27,760 --> 00:04:30,000 Speaker 1: willing to guess that maybe half the people from your 101 00:04:30,000 --> 00:04:32,880 Speaker 1: building are leaving too, and maybe going to drive somewhere 102 00:04:32,880 --> 00:04:34,600 Speaker 1: to go work out, going to a gym, or going 103 00:04:34,640 --> 00:04:36,640 Speaker 1: to do cross fit, even which is great, it's awesome, 104 00:04:36,880 --> 00:04:39,400 Speaker 1: but still you're driving there. Why not combine the two 105 00:04:39,640 --> 00:04:42,679 Speaker 1: and save money and do something that's better for your city? 106 00:04:42,800 --> 00:04:44,719 Speaker 1: All right, Matt Beer for the day that you and 107 00:04:44,760 --> 00:04:46,880 Speaker 1: I are going to be drinking was sent in from 108 00:04:46,920 --> 00:04:50,040 Speaker 1: a listener. Kevin in North Carolina sent us a few 109 00:04:50,120 --> 00:04:52,960 Speaker 1: awesome beers that I'm super excited to try, and the 110 00:04:52,960 --> 00:04:56,320 Speaker 1: one that we're drinking on this episode is Heist Brewery 111 00:04:56,720 --> 00:05:02,200 Speaker 1: Uber Quenchal imperial I p a Quenchell quench All. All right, 112 00:05:02,240 --> 00:05:06,400 Speaker 1: so let's keep it a crack, hey, Kevin. Two things, 113 00:05:06,760 --> 00:05:10,640 Speaker 1: First of all, you rock, And second, shoot me a 114 00:05:10,680 --> 00:05:12,440 Speaker 1: message on Twitter to let me know how many beers 115 00:05:12,480 --> 00:05:14,760 Speaker 1: you sent Joel to make sure he doesn't like save 116 00:05:14,880 --> 00:05:17,920 Speaker 1: three or four of these in his beer seller is 117 00:05:17,960 --> 00:05:20,800 Speaker 1: the only one he said. Sorry, yeah, I believe that. 118 00:05:21,560 --> 00:05:23,479 Speaker 1: But bhil, Kevin, thank you so much. We really appreciate it. 119 00:05:23,480 --> 00:05:26,760 Speaker 1: We're gonna enjoy this as we talk about timing the 120 00:05:26,800 --> 00:05:29,080 Speaker 1: stock market. But we're gonna save our tasting notes for 121 00:05:29,120 --> 00:05:31,360 Speaker 1: the end, so stick around for that. That's right, Matt, 122 00:05:31,400 --> 00:05:34,080 Speaker 1: So timing the stock market. The first thing I thought of, 123 00:05:34,120 --> 00:05:36,120 Speaker 1: Matt when I was thinking about timing the stock market 124 00:05:36,480 --> 00:05:39,960 Speaker 1: that timing the market is like the equivalent of being 125 00:05:40,080 --> 00:05:43,360 Speaker 1: a Miami Marlins fan. And you're gonna have to explain 126 00:05:43,400 --> 00:05:44,920 Speaker 1: the sports to me, buddy, because you know, I want 127 00:05:44,960 --> 00:05:46,960 Speaker 1: to watch soccer, So all right, I got you back here. 128 00:05:47,040 --> 00:05:49,760 Speaker 1: So the thing is that Miami Marlins have been essentially 129 00:05:49,880 --> 00:05:52,240 Speaker 1: terrible pretty much got their whole history. They were an 130 00:05:52,240 --> 00:05:55,040 Speaker 1: expansion team that launched in like the nineties, and they 131 00:05:55,080 --> 00:05:58,280 Speaker 1: won a World Series in and I think in two 132 00:05:58,279 --> 00:06:00,880 Speaker 1: thousand three, So they've won two Worlds areas randomly, but 133 00:06:00,880 --> 00:06:03,440 Speaker 1: they're these like super random occurrences. Other than that, they've 134 00:06:03,480 --> 00:06:05,680 Speaker 1: just been really bad and they are always every time 135 00:06:05,720 --> 00:06:07,839 Speaker 1: they do have a good team, they essentially sell off 136 00:06:07,880 --> 00:06:10,280 Speaker 1: all their good players the very following year. And so 137 00:06:10,400 --> 00:06:12,520 Speaker 1: being a Miami Marlins fan, let's say you're jumping on 138 00:06:12,560 --> 00:06:14,279 Speaker 1: the bandwagon, you don't know when to route for them 139 00:06:14,480 --> 00:06:15,800 Speaker 1: because you don't know if they're gonna be good that 140 00:06:15,880 --> 00:06:17,160 Speaker 1: year or not. You don't know if you're gonna pick 141 00:06:17,200 --> 00:06:20,359 Speaker 1: that random good year where they're actually gonna do something meaningful, 142 00:06:20,839 --> 00:06:22,960 Speaker 1: you know, in the sport, or if you're just gonna 143 00:06:22,960 --> 00:06:25,440 Speaker 1: be are along for that terrible ride of many years 144 00:06:25,920 --> 00:06:28,800 Speaker 1: where they're just completely awful. Yeah, So what you're saying 145 00:06:28,839 --> 00:06:32,080 Speaker 1: is that it's completely random, uh, and you can't plan 146 00:06:32,200 --> 00:06:34,080 Speaker 1: for it, right. I guess what I'm trying to say 147 00:06:34,160 --> 00:06:35,839 Speaker 1: is you don't know who the man, what the management 148 00:06:35,839 --> 00:06:37,640 Speaker 1: of the Miami Marlins is gonna do. You don't know 149 00:06:37,680 --> 00:06:39,120 Speaker 1: if it's gonna be a good year or it's gonna 150 00:06:39,120 --> 00:06:41,360 Speaker 1: be a bad year, And so you have to be 151 00:06:41,440 --> 00:06:43,560 Speaker 1: you can't just be a bandwagon fan. And just like 152 00:06:43,560 --> 00:06:46,040 Speaker 1: with the stock market, right, it's really hard to decide 153 00:06:46,080 --> 00:06:48,040 Speaker 1: I'm gonna jump in now. Now is the time? Right? 154 00:06:48,360 --> 00:06:50,040 Speaker 1: So we're gonna kind of go through a thought process 155 00:06:50,040 --> 00:06:53,320 Speaker 1: of why timing the market is actually ultimately more harmful 156 00:06:53,360 --> 00:06:56,200 Speaker 1: to your portfolio. And just like being a Marlins fan, 157 00:06:56,240 --> 00:06:57,279 Speaker 1: you kind of have to be in it for the 158 00:06:57,279 --> 00:06:59,920 Speaker 1: long haul, through thick thin to catch those good years, right, 159 00:07:00,160 --> 00:07:01,440 Speaker 1: And the same thing, you don't know when they're going 160 00:07:01,440 --> 00:07:04,280 Speaker 1: to show up, exactly stock market, similar kind of thing. 161 00:07:04,440 --> 00:07:06,599 Speaker 1: And we'll get into more reasons why all it is 162 00:07:06,600 --> 00:07:09,080 Speaker 1: that our friend Patrick got himself on Marlin's hat when 163 00:07:09,080 --> 00:07:11,080 Speaker 1: they rebranded and kind of did that whole sort of 164 00:07:11,080 --> 00:07:12,800 Speaker 1: South Beach to look with the new colors. Has he 165 00:07:12,840 --> 00:07:15,160 Speaker 1: burned it yet? Was that like five six years ago? Yeah, 166 00:07:15,160 --> 00:07:17,680 Speaker 1: something like that. Had they been good since then? Okay? 167 00:07:18,040 --> 00:07:20,200 Speaker 1: Because I'm pretty sure I remember that year because I 168 00:07:20,200 --> 00:07:22,800 Speaker 1: watched some baseball back then, but I remember there being 169 00:07:23,080 --> 00:07:25,640 Speaker 1: reports and shots from the stadium and it was like 170 00:07:25,680 --> 00:07:29,000 Speaker 1: completely empty. Yeah, that's not about right pretty much. They're 171 00:07:29,000 --> 00:07:31,120 Speaker 1: one of the worst attended teams in all of sports. 172 00:07:32,200 --> 00:07:34,600 Speaker 1: So the stock market is actually kind of like the 173 00:07:34,640 --> 00:07:37,400 Speaker 1: opposite of the Marlins though right Like, so essentially, the 174 00:07:37,440 --> 00:07:39,720 Speaker 1: stock market does well most years and there are only 175 00:07:39,760 --> 00:07:42,080 Speaker 1: a few bad years where the Marlins, right, that's the 176 00:07:42,080 --> 00:07:44,360 Speaker 1: exact opposite. And the question right now is, well, the 177 00:07:44,360 --> 00:07:47,080 Speaker 1: stock market is up, and a lot of people are 178 00:07:47,080 --> 00:07:49,760 Speaker 1: wondering if if it's time to sell, or like it's 179 00:07:49,760 --> 00:07:51,360 Speaker 1: too hot, should get out of the kitchen? And the 180 00:07:51,400 --> 00:07:53,680 Speaker 1: other question people are asking is how can I put 181 00:07:53,720 --> 00:07:55,600 Speaker 1: more money into the stock market because it's had a 182 00:07:55,600 --> 00:07:59,160 Speaker 1: fever pitch and they can only see things continuing to 183 00:07:59,320 --> 00:08:01,320 Speaker 1: go up at the same I'm right. And so another 184 00:08:01,320 --> 00:08:03,680 Speaker 1: reason we're talking about this as well is because you'll 185 00:08:03,760 --> 00:08:06,080 Speaker 1: hear in the news how we're entering this long period 186 00:08:06,080 --> 00:08:08,040 Speaker 1: of growth that the stock market is seen. And what 187 00:08:08,160 --> 00:08:10,520 Speaker 1: you've heard is that we're in a bull market where 188 00:08:10,560 --> 00:08:12,760 Speaker 1: the market has been growing. And so it might be 189 00:08:12,800 --> 00:08:15,680 Speaker 1: worth mentioning to the difference between a bear market in 190 00:08:15,720 --> 00:08:18,480 Speaker 1: a bull market. A bull market means that stuff growing, 191 00:08:18,520 --> 00:08:21,440 Speaker 1: stuff doing awesome, prices are going up. It's a good 192 00:08:21,440 --> 00:08:25,240 Speaker 1: time to own stocks in a bull market, whereas a 193 00:08:25,280 --> 00:08:28,200 Speaker 1: bear market it means things are taking things are going down. 194 00:08:28,640 --> 00:08:31,160 Speaker 1: And the reason behind that too is is they say, 195 00:08:31,480 --> 00:08:33,640 Speaker 1: is that like when a bear fights, like he's got 196 00:08:33,640 --> 00:08:36,000 Speaker 1: the call out, the close up, and he's like swiping down, 197 00:08:36,240 --> 00:08:38,959 Speaker 1: whereas the bowl like lifts up with the horns. There 198 00:08:38,960 --> 00:08:40,520 Speaker 1: we go. So that's like, I guess that's how you're 199 00:08:40,520 --> 00:08:43,280 Speaker 1: supposed to remember it. That's some nice insight. That's why 200 00:08:43,280 --> 00:08:45,040 Speaker 1: I keep you around here, buddy. That's pretty good. It's 201 00:08:45,040 --> 00:08:48,520 Speaker 1: pretty bo bull market versus bear market. Yeah, so people 202 00:08:48,520 --> 00:08:50,280 Speaker 1: have been thinking, right for a few years now at 203 00:08:50,320 --> 00:08:51,920 Speaker 1: this point, and we've been in this bull market, and 204 00:08:51,960 --> 00:08:53,600 Speaker 1: match just explain to you what that is. It's just 205 00:08:53,679 --> 00:08:56,280 Speaker 1: essentially this rise in stock prices, and we've been in 206 00:08:56,280 --> 00:08:59,760 Speaker 1: one of the longest prolonged bull markets in US history. 207 00:09:00,080 --> 00:09:02,360 Speaker 1: But yeah, the longest as of a few weeks ago. Yeah, 208 00:09:02,360 --> 00:09:04,599 Speaker 1: so it's been like ten years almost tonight and a 209 00:09:04,600 --> 00:09:07,240 Speaker 1: half years, and so people are thinking, well, they can't 210 00:09:07,280 --> 00:09:09,560 Speaker 1: markets can't keep going up like this, can they? So 211 00:09:09,679 --> 00:09:12,040 Speaker 1: maybe I should sell or on the other side, there's 212 00:09:12,080 --> 00:09:16,160 Speaker 1: this boundless optimism that what goes up must keep going up, 213 00:09:16,280 --> 00:09:19,640 Speaker 1: which is not scientifically possible. And so the answer is no. 214 00:09:19,760 --> 00:09:23,200 Speaker 1: Corrections are always inevitable. But the answer to whether or 215 00:09:23,240 --> 00:09:26,640 Speaker 1: not you can time the market is also no. And 216 00:09:26,679 --> 00:09:29,520 Speaker 1: so let's go into that. Here's a quote from Peter Lynch, 217 00:09:29,679 --> 00:09:32,400 Speaker 1: uh really savvy investor who worked for Fidelity for a 218 00:09:32,440 --> 00:09:34,839 Speaker 1: lot of years. He said, far more money has been 219 00:09:34,880 --> 00:09:38,920 Speaker 1: lost by investors preparing for corrections or trying to anticipate 220 00:09:38,960 --> 00:09:42,760 Speaker 1: corrections then has been lost in corrections themselves. And I 221 00:09:42,800 --> 00:09:44,959 Speaker 1: think that's really a stoop point. So if you are 222 00:09:45,040 --> 00:09:47,320 Speaker 1: in that place where you're thinking, man, I think things 223 00:09:47,320 --> 00:09:51,079 Speaker 1: are about to drop, and so I should position myself 224 00:09:51,120 --> 00:09:53,320 Speaker 1: a little bit differently in order to time the market 225 00:09:53,360 --> 00:09:55,920 Speaker 1: well so that I can then reallocate after the dip 226 00:09:56,320 --> 00:09:59,600 Speaker 1: and do even better right with my investments. Well, I 227 00:09:59,600 --> 00:10:01,960 Speaker 1: think or Lynch's advice here is something we should all 228 00:10:02,000 --> 00:10:05,000 Speaker 1: take into account that preparing for a correction or trying 229 00:10:05,000 --> 00:10:08,200 Speaker 1: to anticipate one and getting in and out of investments 230 00:10:08,280 --> 00:10:10,840 Speaker 1: is actually going to be a place that will ultimately 231 00:10:10,880 --> 00:10:14,240 Speaker 1: hurt us in all likelihood as opposed to help us. Yeah, 232 00:10:14,280 --> 00:10:16,719 Speaker 1: Man and Peter Lynch. He used the fund manager for 233 00:10:16,800 --> 00:10:22,000 Speaker 1: Fidelity of the most successful mutual fund in the history 234 00:10:22,040 --> 00:10:24,960 Speaker 1: of the world, where for thirteen years he'd be a 235 00:10:24,960 --> 00:10:28,080 Speaker 1: big deal. Yeah, that's huge man. For thirteen years that 236 00:10:28,080 --> 00:10:31,760 Speaker 1: fund was earning over So this guy, he knows the stuff, 237 00:10:31,800 --> 00:10:33,640 Speaker 1: he knows what he's talking about, and even him and 238 00:10:33,679 --> 00:10:35,320 Speaker 1: that's the cool thing. You know. We're gonna refer to 239 00:10:35,400 --> 00:10:37,640 Speaker 1: Peter Lynch and we're gonna refer to Warren Buffett in 240 00:10:37,679 --> 00:10:40,520 Speaker 1: this episode. And those two guys, two of the most 241 00:10:40,559 --> 00:10:44,360 Speaker 1: successful investors of all time. They seem to say the 242 00:10:44,440 --> 00:10:46,640 Speaker 1: same thing about timing the market and about a lot 243 00:10:46,640 --> 00:10:49,679 Speaker 1: of other investing strategies, but in timing the market, they 244 00:10:49,720 --> 00:10:52,959 Speaker 1: both seem to say, no, it's not a good idea. 245 00:10:53,200 --> 00:10:55,240 Speaker 1: That's right, man, you can't time on the market. And honestly, 246 00:10:55,280 --> 00:10:59,120 Speaker 1: that's the opposite of typical behavior. Investors are attempted to 247 00:10:59,160 --> 00:11:02,280 Speaker 1: buy more as the market rises. They'll do that thinking 248 00:11:02,280 --> 00:11:04,240 Speaker 1: it will continue at the same pace. Like we mentioned, 249 00:11:04,240 --> 00:11:09,200 Speaker 1: there's a sort of a fear of missing out fomo effect, 250 00:11:09,559 --> 00:11:12,400 Speaker 1: and this leads to an opportune buying and selling and 251 00:11:12,679 --> 00:11:16,400 Speaker 1: almost always ends with a bad result. So that makes 252 00:11:16,400 --> 00:11:18,000 Speaker 1: me think of this Matt. Back in two thousand nine, 253 00:11:18,040 --> 00:11:20,520 Speaker 1: one of my co workers was super nervous about the 254 00:11:20,520 --> 00:11:23,120 Speaker 1: stock market. Right, we were pretty much bottom of the barrel, 255 00:11:23,559 --> 00:11:25,839 Speaker 1: and oh yeah, things have been taking for for years. 256 00:11:25,840 --> 00:11:29,120 Speaker 1: Completely we lost the stock market had lost its value. 257 00:11:29,160 --> 00:11:31,599 Speaker 1: That's called a bear market, yes, And so my co 258 00:11:31,720 --> 00:11:34,560 Speaker 1: worker was super worried, even though he's relatively young, right, 259 00:11:34,600 --> 00:11:37,160 Speaker 1: he was in his late thirties, and he was nervous 260 00:11:37,559 --> 00:11:39,920 Speaker 1: that what am I gonna do? Man, all my you know, 261 00:11:39,960 --> 00:11:42,840 Speaker 1: investment portfolio. You know it's halfway gone. What am I? 262 00:11:42,880 --> 00:11:45,320 Speaker 1: What should I do? And you know, I told him, 263 00:11:45,400 --> 00:11:47,680 Speaker 1: stick with it, You'll be fine, and we'll post a 264 00:11:47,679 --> 00:11:49,760 Speaker 1: link in the show notes to a graph that kind 265 00:11:49,760 --> 00:11:51,800 Speaker 1: of helps you actually see and visualize. It was really 266 00:11:51,800 --> 00:11:55,480 Speaker 1: helpful for me. The history of bowl markets and bear markets, 267 00:11:55,800 --> 00:11:59,240 Speaker 1: and the bowl markets are usually pretty long with lots 268 00:11:59,240 --> 00:12:01,559 Speaker 1: of growth in the bear markets are usually pretty short 269 00:12:01,920 --> 00:12:05,319 Speaker 1: with you know, certainly an impactful amount of losses, but 270 00:12:05,360 --> 00:12:08,080 Speaker 1: they don't usually occur for all that long, and the 271 00:12:08,120 --> 00:12:10,599 Speaker 1: losses aren't nearly as steep as the gains are in 272 00:12:10,640 --> 00:12:12,400 Speaker 1: the bull market. But so I talked to my friend. 273 00:12:12,400 --> 00:12:14,959 Speaker 1: I was like, no, listen, stick with it. You'll be fine. 274 00:12:15,080 --> 00:12:17,319 Speaker 1: This is a long term play. You know, you shouldn't 275 00:12:17,320 --> 00:12:21,160 Speaker 1: reallocate any investments right now. He didn't listen. He sold 276 00:12:21,160 --> 00:12:24,239 Speaker 1: a fair amount of his equity of his stock investments 277 00:12:24,240 --> 00:12:28,080 Speaker 1: and decided to go into cash. And the tough thing 278 00:12:28,080 --> 00:12:29,920 Speaker 1: about that is you don't know when to put it 279 00:12:29,920 --> 00:12:32,080 Speaker 1: back in as the stock markets going up. Are we 280 00:12:32,120 --> 00:12:33,640 Speaker 1: out of the bear market? Are we in the bull 281 00:12:33,679 --> 00:12:36,000 Speaker 1: market now? I don't know, because it's easy to see 282 00:12:36,040 --> 00:12:38,840 Speaker 1: now right where we what happened, But it's really hard 283 00:12:38,840 --> 00:12:40,839 Speaker 1: in the middle of it in two thousand nine to 284 00:12:41,040 --> 00:12:44,679 Speaker 1: know when to put things back. And so ultimately that 285 00:12:44,720 --> 00:12:46,040 Speaker 1: came back to buy him, and he missed out on 286 00:12:46,080 --> 00:12:47,920 Speaker 1: a lot of the run ups of the bull market. 287 00:12:48,200 --> 00:12:50,120 Speaker 1: And if you pulled out at the bottom, I'm sure 288 00:12:50,160 --> 00:12:52,240 Speaker 1: he was afraid to, like you said, buy in, and 289 00:12:52,280 --> 00:12:54,520 Speaker 1: so he was probably missing out on a huge gains 290 00:12:54,559 --> 00:12:57,040 Speaker 1: and huge growth over the next couple of years. Yeah, completely, 291 00:12:57,080 --> 00:13:00,280 Speaker 1: And just missing out on a few months or even 292 00:13:00,320 --> 00:13:03,080 Speaker 1: a couple of days in a bull market can have 293 00:13:03,200 --> 00:13:06,640 Speaker 1: long term adverse effects on your investment portfolio. And that's 294 00:13:06,640 --> 00:13:08,760 Speaker 1: why we think timing the market is such a bad idea. 295 00:13:09,120 --> 00:13:11,800 Speaker 1: It just has these adverse consequences really if you eat, 296 00:13:11,920 --> 00:13:14,520 Speaker 1: dabble in it, or try it at all. Yeah. Man, 297 00:13:14,559 --> 00:13:17,160 Speaker 1: it makes me think of the thing that like mutual 298 00:13:17,160 --> 00:13:19,600 Speaker 1: funds have to say where they say, like past performance 299 00:13:19,679 --> 00:13:23,480 Speaker 1: is not indicative of future results, because that's the mindset 300 00:13:23,600 --> 00:13:27,040 Speaker 1: that consumers, well I say consumers, but investors. But maybe 301 00:13:27,120 --> 00:13:28,760 Speaker 1: we are kind of going into it with like a 302 00:13:28,760 --> 00:13:32,640 Speaker 1: consumer mentality. But you see something taking or you see 303 00:13:32,640 --> 00:13:34,800 Speaker 1: something skyrocketing, and you think, oh, that's just what's gonna 304 00:13:34,920 --> 00:13:37,600 Speaker 1: always happen, you know, But again, yeah, that's not the case, 305 00:13:37,600 --> 00:13:40,000 Speaker 1: and you can't time it. Warren Buffet has got an 306 00:13:40,000 --> 00:13:44,080 Speaker 1: awesome quote where he says, my favorite time frame is forever. 307 00:13:44,800 --> 00:13:47,360 Speaker 1: And that is so incredibly important to keep in mind, man, 308 00:13:47,360 --> 00:13:49,880 Speaker 1: because we're not just looking for the performance of our 309 00:13:49,880 --> 00:13:53,360 Speaker 1: portfolio of our retirement savings to boost in a particular 310 00:13:53,440 --> 00:13:55,600 Speaker 1: year or like just this year or just next year. 311 00:13:55,640 --> 00:13:57,839 Speaker 1: But we're looking at it with a long view. Our 312 00:13:57,880 --> 00:13:59,719 Speaker 1: goal is for the long term, and what we want 313 00:13:59,720 --> 00:14:02,400 Speaker 1: to see is our overall portfolio and our overall wealth 314 00:14:02,440 --> 00:14:04,760 Speaker 1: to increase. But you know, if there's months here and 315 00:14:04,800 --> 00:14:08,079 Speaker 1: there and even years where there's a decline that's not 316 00:14:08,200 --> 00:14:10,160 Speaker 1: something that you want to try to manipulate and take 317 00:14:10,160 --> 00:14:12,720 Speaker 1: advantage of necessarily because you just don't know what the 318 00:14:12,760 --> 00:14:14,840 Speaker 1: market is going to do. Yeah, Matt, that's great. So 319 00:14:14,880 --> 00:14:17,320 Speaker 1: we've kind of established the fact that we think market 320 00:14:17,320 --> 00:14:20,040 Speaker 1: timing is bad. There's this fear of missing out effect 321 00:14:20,040 --> 00:14:22,680 Speaker 1: that people get, and so they decide, all right, i'm 322 00:14:22,680 --> 00:14:24,800 Speaker 1: gonna try it right, I'm gonna sell or i'm gonna buy, 323 00:14:24,880 --> 00:14:27,600 Speaker 1: or i'm gonna do something. Goofy, Now let's do it exactly. 324 00:14:27,760 --> 00:14:30,160 Speaker 1: So if that's not the answer, what is the answer, 325 00:14:30,240 --> 00:14:40,760 Speaker 1: we'll get into that right after the break, all right, man, 326 00:14:40,800 --> 00:14:42,720 Speaker 1: So well back from the break. So then the next 327 00:14:42,760 --> 00:14:44,400 Speaker 1: thing that we want to talk about is what to 328 00:14:44,520 --> 00:14:47,280 Speaker 1: do next. And the number one thing you can do 329 00:14:47,640 --> 00:14:50,280 Speaker 1: is to not pay attention to the financial news when 330 00:14:50,280 --> 00:14:52,920 Speaker 1: they're talking about the stock market because it doesn't matter. 331 00:14:54,000 --> 00:14:56,720 Speaker 1: The crazy thing is they want to make it seem 332 00:14:56,800 --> 00:15:00,000 Speaker 1: like the stock market and what's happening with earnings or 333 00:15:00,000 --> 00:15:01,840 Speaker 1: it's and all these things they matter and see how 334 00:15:01,880 --> 00:15:04,640 Speaker 1: to exact stay tuned. There's a seven news cycle for 335 00:15:04,920 --> 00:15:07,320 Speaker 1: investment news now you know, Well that's their product, you know, 336 00:15:07,320 --> 00:15:08,800 Speaker 1: and I understand that, like that's what they have to 337 00:15:08,800 --> 00:15:12,240 Speaker 1: push and to them that's important. However, to you, as 338 00:15:12,280 --> 00:15:14,600 Speaker 1: an investor at home, that is not important. And instead, 339 00:15:14,840 --> 00:15:17,400 Speaker 1: what we would recommend that you focus on doing is 340 00:15:17,480 --> 00:15:20,840 Speaker 1: something called dollar cost averaging. If you're not familiar with 341 00:15:20,920 --> 00:15:23,880 Speaker 1: dollar cost averaging, it is an investment technique of buying 342 00:15:24,080 --> 00:15:27,880 Speaker 1: a fixed dollar amounts of a portfolio investment, so either 343 00:15:27,920 --> 00:15:30,400 Speaker 1: a stock or a mutual fund or a bond, but 344 00:15:30,480 --> 00:15:33,200 Speaker 1: to do that on a regular schedule, regardless of the 345 00:15:33,200 --> 00:15:35,480 Speaker 1: share price. And so what that means then in the 346 00:15:35,520 --> 00:15:39,000 Speaker 1: long term is that your dollar purchases more shares when 347 00:15:39,000 --> 00:15:42,240 Speaker 1: prices are low, and then fewer shares when prices are high, 348 00:15:42,600 --> 00:15:46,080 Speaker 1: effectively averaging out the cost. Pretty straightforward, right, Yeah. And 349 00:15:46,080 --> 00:15:48,600 Speaker 1: the great thing, Matt, is that dollar cost averaging actually 350 00:15:49,000 --> 00:15:52,440 Speaker 1: works out most easily for most people. So for most 351 00:15:52,440 --> 00:15:55,000 Speaker 1: of us that get a paycheck through an employer, we 352 00:15:55,120 --> 00:15:57,280 Speaker 1: can have a certain amount taken out of our paycheck 353 00:15:57,360 --> 00:16:00,000 Speaker 1: every two weeks and we can choose the investments inside 354 00:16:00,040 --> 00:16:01,360 Speaker 1: to the four oh one k that we, you know, 355 00:16:01,400 --> 00:16:03,560 Speaker 1: want our money to go into, and we go into 356 00:16:03,600 --> 00:16:06,200 Speaker 1: that just a little bit more. In previous investment episodes, 357 00:16:06,520 --> 00:16:10,040 Speaker 1: in particular, retirement investing is simpler than you think. But 358 00:16:10,120 --> 00:16:12,720 Speaker 1: dollar cost averaging is actually kind of the default easiest 359 00:16:12,760 --> 00:16:14,760 Speaker 1: thing for most people to do, even if you don't 360 00:16:14,760 --> 00:16:16,680 Speaker 1: have a four oh one K through your work, setting 361 00:16:16,720 --> 00:16:20,680 Speaker 1: up a roth IRA through an individual low cost brokerage company, 362 00:16:20,840 --> 00:16:22,880 Speaker 1: and that's pretty simple too. And the easiest way to 363 00:16:22,880 --> 00:16:25,240 Speaker 1: go about contributions to something like an IRA or roth 364 00:16:25,320 --> 00:16:28,360 Speaker 1: ira is to have it automatically deducted from your checking 365 00:16:28,360 --> 00:16:31,560 Speaker 1: account once a month. So, in effect, your dollar cost averaging, 366 00:16:31,600 --> 00:16:33,600 Speaker 1: whether you're getting it taken out of your paycheck or 367 00:16:33,640 --> 00:16:35,560 Speaker 1: whether you're getting it taken out of your checking account 368 00:16:35,600 --> 00:16:38,280 Speaker 1: once a month, you're essentially doing that. You're buying shares 369 00:16:38,320 --> 00:16:40,920 Speaker 1: at the same time every month or every two weeks, 370 00:16:41,120 --> 00:16:43,440 Speaker 1: and so there's no need to overthink it. Your dollar 371 00:16:43,440 --> 00:16:46,960 Speaker 1: cost averaging right there by default, right Definitely. One of 372 00:16:47,000 --> 00:16:49,680 Speaker 1: the benefits of being employed by the man is having 373 00:16:49,720 --> 00:16:54,080 Speaker 1: a steady paycheck. One huge downside being self employed is 374 00:16:54,120 --> 00:16:57,000 Speaker 1: that with income being variable, I can't do that because 375 00:16:57,240 --> 00:16:59,640 Speaker 1: we might have what with my worry being more seasonal. 376 00:16:59,640 --> 00:17:02,160 Speaker 1: There's periods of time, there's months where I'm you know, 377 00:17:02,160 --> 00:17:05,000 Speaker 1: we're raking it in and there's periods of time where 378 00:17:05,760 --> 00:17:07,840 Speaker 1: I don't have hardly any money at all, and so 379 00:17:07,880 --> 00:17:09,760 Speaker 1: it wouldn't really work out if I had an auto 380 00:17:09,800 --> 00:17:11,720 Speaker 1: draft set up. But what I do know is that 381 00:17:11,760 --> 00:17:14,159 Speaker 1: our goal for the year for retirement giving is eleven 382 00:17:14,160 --> 00:17:18,119 Speaker 1: thousand dollars each and so I know that if I 383 00:17:18,119 --> 00:17:20,280 Speaker 1: take that eleven grand and divide it out by twelve months, 384 00:17:20,359 --> 00:17:23,720 Speaker 1: that's n sixteen dollars that we are setting aside. And 385 00:17:24,480 --> 00:17:26,600 Speaker 1: but we still have to manually do that. That's the 386 00:17:26,880 --> 00:17:29,160 Speaker 1: big downside, right, It's it's more of a mental sort 387 00:17:29,200 --> 00:17:32,000 Speaker 1: of step. You know, there's something about actually having to 388 00:17:32,760 --> 00:17:35,639 Speaker 1: make that purchase right as opposed to it automatically happening. 389 00:17:35,640 --> 00:17:37,879 Speaker 1: There's like there's a mental hurdle there that you have 390 00:17:37,960 --> 00:17:40,239 Speaker 1: to overcome. Yeah, you know, somebody who has a four 391 00:17:40,359 --> 00:17:43,320 Speaker 1: one K that they automatically contribute to via their employer. 392 00:17:43,440 --> 00:17:45,520 Speaker 1: They don't have to overcome that mental hurd They just 393 00:17:45,520 --> 00:17:47,879 Speaker 1: have to do it once, essentially, set it up and 394 00:17:47,960 --> 00:17:50,040 Speaker 1: make sure that you know, they're contributing enough to get 395 00:17:50,080 --> 00:17:52,680 Speaker 1: at least the match and hopefully more, and after that 396 00:17:53,080 --> 00:17:55,080 Speaker 1: it's done right. It just happens every two weeks and 397 00:17:55,080 --> 00:17:56,840 Speaker 1: they don't really have to think about it. That's the 398 00:17:56,960 --> 00:17:58,879 Speaker 1: that is the beautiful thing of of the four oh 399 00:17:58,920 --> 00:18:01,439 Speaker 1: one K, And I feel bad for people that are 400 00:18:01,440 --> 00:18:03,000 Speaker 1: self and bloy. It takes a little more discipline to 401 00:18:03,040 --> 00:18:05,320 Speaker 1: make it happen, you know. Yeah, there's a slight temptation 402 00:18:05,359 --> 00:18:07,200 Speaker 1: there to think, oh, maybe I should hold off. Things 403 00:18:07,240 --> 00:18:08,879 Speaker 1: do seem kind of crazy right now, you know, like 404 00:18:08,960 --> 00:18:10,920 Speaker 1: there's like you said, there's that hurdle. Yeah, it just 405 00:18:11,000 --> 00:18:14,000 Speaker 1: kind of sucks. So let's talk about the four biggest 406 00:18:14,160 --> 00:18:16,720 Speaker 1: reasons the potential screw ups that you can make in 407 00:18:16,800 --> 00:18:19,480 Speaker 1: trying to time the market. The first mistake that you 408 00:18:19,520 --> 00:18:22,080 Speaker 1: can make is when you try to time the market, 409 00:18:22,320 --> 00:18:25,240 Speaker 1: you have to get it right, not just once, but twice. 410 00:18:25,600 --> 00:18:28,320 Speaker 1: And that's really difficult. Let's say you've got a hundred 411 00:18:28,359 --> 00:18:30,400 Speaker 1: thousand dollars in your four oh one k right now, 412 00:18:30,760 --> 00:18:32,679 Speaker 1: and you say, man, it looks really hot. I think 413 00:18:32,680 --> 00:18:35,480 Speaker 1: I'm gonna bed on the stock market not doing well 414 00:18:35,520 --> 00:18:37,680 Speaker 1: over the next year, and you decided to put all 415 00:18:37,720 --> 00:18:41,320 Speaker 1: your holdings into cash. Well, let's say the stock market 416 00:18:41,359 --> 00:18:43,359 Speaker 1: does have a little bit of a decline. It's really 417 00:18:43,359 --> 00:18:45,240 Speaker 1: hard to know when you're at the apex or the 418 00:18:45,240 --> 00:18:47,480 Speaker 1: trough of a market. So trying to time it just once, 419 00:18:47,840 --> 00:18:49,560 Speaker 1: but that's really hard to do. But trying to time 420 00:18:49,560 --> 00:18:53,360 Speaker 1: it well twice, man, that's even harder, that's right, Chell. Secondly, 421 00:18:53,920 --> 00:18:56,280 Speaker 1: missing out on certain days, the few days where the 422 00:18:56,320 --> 00:18:58,840 Speaker 1: stock market does make some major gains, you can miss 423 00:18:58,880 --> 00:19:02,440 Speaker 1: out on a huge amount of growth in your portfolio. 424 00:19:02,880 --> 00:19:06,480 Speaker 1: The market doesn't just gradually increase over the course of 425 00:19:06,480 --> 00:19:08,600 Speaker 1: the year. You know, it's not slow and steady. There's 426 00:19:08,800 --> 00:19:10,960 Speaker 1: huge ups and there's huge downs a lot of times 427 00:19:10,960 --> 00:19:13,240 Speaker 1: in over the course of the year. And if you're 428 00:19:13,240 --> 00:19:17,080 Speaker 1: sitting out during those few days where there are pretty 429 00:19:17,160 --> 00:19:19,320 Speaker 1: huge spikes, you're gonna be missing out, like I said, 430 00:19:19,359 --> 00:19:21,000 Speaker 1: on a lot of growth. Yeah. I mean, if you're 431 00:19:21,040 --> 00:19:23,440 Speaker 1: out of the market for just ten days out of 432 00:19:23,480 --> 00:19:25,400 Speaker 1: the year, of the ten days out of that year 433 00:19:25,480 --> 00:19:28,000 Speaker 1: that have the highest gains, you can actually end up 434 00:19:28,080 --> 00:19:31,199 Speaker 1: losing money that year in in the stock market, Like 435 00:19:31,280 --> 00:19:35,680 Speaker 1: if you had the worst timing in the entire world, right, right, right, 436 00:19:35,680 --> 00:19:38,359 Speaker 1: I feel bad for that guy exactly. Yeah, you're the 437 00:19:38,440 --> 00:19:40,639 Speaker 1: dude who backed out on the day before the spike 438 00:19:40,680 --> 00:19:42,119 Speaker 1: and then you put your money back in and then 439 00:19:42,160 --> 00:19:43,800 Speaker 1: it went You know, it's just a terrible if you're 440 00:19:43,800 --> 00:19:46,960 Speaker 1: doing everything wrong man, stop right. It's just amazing though 441 00:19:47,000 --> 00:19:49,280 Speaker 1: that so much of the progress of the stock market 442 00:19:49,320 --> 00:19:51,639 Speaker 1: happens on so few days during the year. And so 443 00:19:51,680 --> 00:19:53,200 Speaker 1: if you decide that you're gonna be cute and try 444 00:19:53,240 --> 00:19:55,360 Speaker 1: to time the stock market, well, if you miss out 445 00:19:55,400 --> 00:19:57,920 Speaker 1: on one or two of those days, well that could 446 00:19:57,920 --> 00:20:00,480 Speaker 1: be a big loser for you and actually have really 447 00:20:00,520 --> 00:20:03,840 Speaker 1: long term implications because of the way money works over time. 448 00:20:04,359 --> 00:20:07,680 Speaker 1: And plus you just feel like a dummy exactly. And 449 00:20:07,720 --> 00:20:10,840 Speaker 1: the third point, Joel is somewhat related to missing out 450 00:20:10,840 --> 00:20:14,320 Speaker 1: on the gains, but the opportunity cost that's associated with that. 451 00:20:14,440 --> 00:20:17,600 Speaker 1: And so the SMP goes up roughly two out of 452 00:20:17,640 --> 00:20:20,520 Speaker 1: every three years. And so if you have sold at 453 00:20:20,680 --> 00:20:23,400 Speaker 1: what you suppose is the top and you're sitting there 454 00:20:23,760 --> 00:20:26,679 Speaker 1: with cash you want it to be liquid for some reason, 455 00:20:27,040 --> 00:20:29,479 Speaker 1: you are losing out. You're missing out on those gains, 456 00:20:29,640 --> 00:20:32,280 Speaker 1: uh those two out of three years. The thing is 457 00:20:32,280 --> 00:20:33,840 Speaker 1: is that you don't know when those two of the 458 00:20:33,880 --> 00:20:35,680 Speaker 1: three years are going to be and so to think 459 00:20:35,720 --> 00:20:37,760 Speaker 1: that you can time it and that you know exactly 460 00:20:37,800 --> 00:20:40,280 Speaker 1: when the market is either going to plateau or when 461 00:20:40,280 --> 00:20:43,640 Speaker 1: it's gonna start dipping again, you're fooling yourself. It's almost 462 00:20:43,680 --> 00:20:46,879 Speaker 1: like thinking that just because Roulette wheel fell on red 463 00:20:47,640 --> 00:20:49,080 Speaker 1: eight times in a row, that it's going to be 464 00:20:49,080 --> 00:20:51,920 Speaker 1: black the next time. Right, there's still a fifty each time. 465 00:20:52,240 --> 00:20:56,320 Speaker 1: And investing in the stock market is not gambling, You're 466 00:20:56,960 --> 00:20:59,560 Speaker 1: you're maybe we should have said at the very beginning, 467 00:21:00,440 --> 00:21:04,360 Speaker 1: it's not gambling. You're investing in American capitalism. You're investing 468 00:21:04,400 --> 00:21:07,119 Speaker 1: in American company, So it's not gambling. But in the 469 00:21:07,160 --> 00:21:10,240 Speaker 1: same vein, you don't really know where the economy as 470 00:21:10,280 --> 00:21:11,920 Speaker 1: a whole is going. None of us do. None of 471 00:21:12,000 --> 00:21:14,359 Speaker 1: us are really smart enough to say, you know what, 472 00:21:14,440 --> 00:21:15,960 Speaker 1: next year, I think is going to be a bad 473 00:21:16,000 --> 00:21:18,280 Speaker 1: year for American capitalism as a whole, And we don't 474 00:21:18,280 --> 00:21:20,360 Speaker 1: really know the things that are actually going to trigger 475 00:21:21,480 --> 00:21:24,000 Speaker 1: decline in the stock market. We could continue to see 476 00:21:24,000 --> 00:21:26,439 Speaker 1: another bowl market for two or three more years. We 477 00:21:26,520 --> 00:21:28,719 Speaker 1: just don't really know. But then all of a sudden, 478 00:21:28,760 --> 00:21:32,800 Speaker 1: something could happen in regards to diplomacy or tax law 479 00:21:33,119 --> 00:21:35,640 Speaker 1: or something else that's like super wonky that I don't 480 00:21:35,640 --> 00:21:39,320 Speaker 1: even understand or that we have zero control over completely. Yeah, 481 00:21:39,320 --> 00:21:41,280 Speaker 1: and so those kind of things can happen and trigger 482 00:21:41,400 --> 00:21:44,320 Speaker 1: a bull market, But I don't know when that's gonna be. 483 00:21:44,359 --> 00:21:45,719 Speaker 1: I don't know what the trigger is going to be, 484 00:21:45,880 --> 00:21:48,399 Speaker 1: and so I just know what history looks like with 485 00:21:48,440 --> 00:21:51,080 Speaker 1: the stock market, and I just see that the opportunity 486 00:21:51,119 --> 00:21:54,080 Speaker 1: cost of potentially sitting out thinking that I know better 487 00:21:54,080 --> 00:21:56,160 Speaker 1: and can time the market is actually a fool's Errand 488 00:21:56,680 --> 00:21:58,000 Speaker 1: I mean, I think it's a good point that you 489 00:21:58,040 --> 00:21:59,960 Speaker 1: brought a gambling because on the flip side of the coin, 490 00:22:00,480 --> 00:22:03,959 Speaker 1: timing the market is gambling. It is speculation because you 491 00:22:04,000 --> 00:22:06,840 Speaker 1: have no clue. I love what you said about investing 492 00:22:06,880 --> 00:22:09,600 Speaker 1: in the stock market is investing in our country essentially, 493 00:22:09,680 --> 00:22:12,879 Speaker 1: Like you believe in the companies and the ingenuity and 494 00:22:12,880 --> 00:22:15,879 Speaker 1: the progress of our nation. And we have ups and 495 00:22:15,920 --> 00:22:18,960 Speaker 1: downs as a country, but overall we're optimistic and we 496 00:22:19,000 --> 00:22:20,960 Speaker 1: believe that we've got great things ahead of us. And 497 00:22:21,000 --> 00:22:22,600 Speaker 1: that's what you invest in when you invest in the 498 00:22:22,600 --> 00:22:26,800 Speaker 1: stock market. Yeah. Completely, last thing on potential screw ups 499 00:22:26,840 --> 00:22:28,760 Speaker 1: when trying to time the market. Timing the market can 500 00:22:28,840 --> 00:22:31,600 Speaker 1: lead to tax triggers. So let's say that you are 501 00:22:31,640 --> 00:22:33,879 Speaker 1: not inside of a retirement account, but you're investing in 502 00:22:33,920 --> 00:22:36,800 Speaker 1: a brokerage account. If you buy and sell stocks inside 503 00:22:36,800 --> 00:22:40,640 Speaker 1: of a brokerage account. Those moves can trigger tax consequences 504 00:22:41,040 --> 00:22:44,520 Speaker 1: whatever vehicle you're using to invest, make sure you know 505 00:22:44,600 --> 00:22:47,919 Speaker 1: the tax consequences of buying or selling stocks and bonds 506 00:22:47,920 --> 00:22:51,760 Speaker 1: inside of that, because rebalancing, selling and buying can actually 507 00:22:52,160 --> 00:22:54,399 Speaker 1: end up generating a tax bill for you at the 508 00:22:54,480 --> 00:22:56,680 Speaker 1: end of the year that you weren't expecting. That's right, man, 509 00:22:56,720 --> 00:22:59,280 Speaker 1: and taxes suck. We're gonna take a quick break, but 510 00:22:59,359 --> 00:23:01,600 Speaker 1: right after that we're gonna touch on how we like 511 00:23:01,720 --> 00:23:12,280 Speaker 1: to invest in the stock market. Alright, so we're back 512 00:23:12,280 --> 00:23:14,960 Speaker 1: from the break, and now let's talk about how we invest. 513 00:23:15,359 --> 00:23:18,640 Speaker 1: A more passive approach is better for your money, it's 514 00:23:18,640 --> 00:23:23,440 Speaker 1: better for your portfolio, and it's way way easier. Try 515 00:23:23,440 --> 00:23:26,080 Speaker 1: to imagine trying to time the market and all the 516 00:23:26,160 --> 00:23:29,280 Speaker 1: time and energy that goes into that versus spending that 517 00:23:29,359 --> 00:23:31,919 Speaker 1: time with your family instead, or if you want to 518 00:23:31,920 --> 00:23:34,600 Speaker 1: be productive, take that time and actually build something. You know, 519 00:23:34,680 --> 00:23:37,520 Speaker 1: like we just talked about side hustles a couple episodes ago. 520 00:23:38,119 --> 00:23:40,600 Speaker 1: Pursue something that you're passionate about, something that you can 521 00:23:40,640 --> 00:23:43,800 Speaker 1: see uh scale, where you're helping people and that you're 522 00:23:43,840 --> 00:23:46,320 Speaker 1: able to provide a service for people that's something I 523 00:23:46,320 --> 00:23:48,879 Speaker 1: would much rather spend my time on versus sort of 524 00:23:48,920 --> 00:23:51,639 Speaker 1: staring at the charts and thinking, Okay, is it time 525 00:23:51,640 --> 00:23:54,760 Speaker 1: to sell? Is it time to buy? Who the heck knows? Yeah? 526 00:23:54,800 --> 00:23:57,280 Speaker 1: And that's the thing, Matt, we don't know, right, and 527 00:23:57,400 --> 00:24:01,640 Speaker 1: Warren Buffett, Peter Lynch, these investors that are essentially like 528 00:24:02,040 --> 00:24:06,200 Speaker 1: the Barry Bonds and Hank Aaron of investing. Sorry another 529 00:24:06,200 --> 00:24:10,080 Speaker 1: sports reference, Um, I know those guys. Okay, alright, good 530 00:24:10,119 --> 00:24:13,520 Speaker 1: say Babe Ruth and Babe Ruth too old old Babe 531 00:24:13,600 --> 00:24:16,000 Speaker 1: Ruth and Mickey Mantle. There we go. Yes, So these 532 00:24:16,000 --> 00:24:18,040 Speaker 1: guys are essentially, you know, the m vps in the 533 00:24:18,040 --> 00:24:21,359 Speaker 1: Hall of Fame of investing, and and they're saying, don't 534 00:24:21,520 --> 00:24:24,919 Speaker 1: time the market. They're saying, do as I say, not 535 00:24:25,040 --> 00:24:28,200 Speaker 1: as I do. Well because they know how unique they are. 536 00:24:28,720 --> 00:24:31,360 Speaker 1: And I think that's why small time investors like us 537 00:24:31,440 --> 00:24:34,920 Speaker 1: right can have a hard time just sticking with dollar 538 00:24:34,960 --> 00:24:37,719 Speaker 1: cost averaging, where you you're just sort of following a schedule, 539 00:24:37,800 --> 00:24:39,359 Speaker 1: or you're not even thinking about it, like you said earlier, 540 00:24:39,359 --> 00:24:41,320 Speaker 1: you sort of you said it and forget it, or 541 00:24:41,359 --> 00:24:43,240 Speaker 1: you just follow this monthly schedule where you know that 542 00:24:43,240 --> 00:24:46,080 Speaker 1: you're setting aside this much money to invest. The reason 543 00:24:46,080 --> 00:24:49,880 Speaker 1: that's not appealing is because it's not appealing, right, It's 544 00:24:49,880 --> 00:24:52,920 Speaker 1: just not exciting. It's not at all sexy. You don't 545 00:24:52,960 --> 00:24:55,040 Speaker 1: strike it rich quick like that, right, Yeah, there's no 546 00:24:55,200 --> 00:24:57,960 Speaker 1: there's no excitement at all, and it's just boring and dull. 547 00:24:58,640 --> 00:25:01,240 Speaker 1: And that kind of flies in the face of the 548 00:25:01,280 --> 00:25:04,520 Speaker 1: American mindset of I'm gonna start this new company, I'm 549 00:25:04,520 --> 00:25:06,480 Speaker 1: gonna have an I p O. Just all these sort 550 00:25:06,520 --> 00:25:09,600 Speaker 1: of fancy financial things that you think, oh, that's how 551 00:25:09,600 --> 00:25:11,399 Speaker 1: you get rich. Oh, real estate, you know, Like we 552 00:25:11,400 --> 00:25:12,960 Speaker 1: talked about real estate a good bit, but it's not 553 00:25:12,960 --> 00:25:16,400 Speaker 1: in the sort of speculations, get rich quick sort of mentality. 554 00:25:16,680 --> 00:25:19,199 Speaker 1: And I think that's why dollar cost averaging suffers is 555 00:25:19,240 --> 00:25:22,480 Speaker 1: because it just doesn't seem like this fun thing to do, 556 00:25:22,920 --> 00:25:25,080 Speaker 1: because it's not it's not cool. It's not cool it's 557 00:25:25,080 --> 00:25:27,719 Speaker 1: all at all. And and so much of America is 558 00:25:27,960 --> 00:25:31,480 Speaker 1: the sort of rugged cowboy of like, I'm gonna figure 559 00:25:31,520 --> 00:25:33,800 Speaker 1: this out on my own, you know, like like going 560 00:25:33,880 --> 00:25:35,840 Speaker 1: and going into it with that mentality. What if we 561 00:25:35,840 --> 00:25:37,920 Speaker 1: can get like Colin Kaepernick to do a commercial for 562 00:25:38,160 --> 00:25:40,240 Speaker 1: dollar cost averaging with that help made me make you cool. 563 00:25:40,280 --> 00:25:42,240 Speaker 1: I don't know. We'll just say, just do it dollar 564 00:25:42,280 --> 00:25:45,359 Speaker 1: cost average. Just do it right. Yeah, I mean, for 565 00:25:45,400 --> 00:25:47,720 Speaker 1: me to one of the best reasons for dollar cost 566 00:25:47,760 --> 00:25:50,479 Speaker 1: averaging is that it's easy. And I'm kind of lazy, 567 00:25:50,760 --> 00:25:52,600 Speaker 1: and so the fact that I can set it up 568 00:25:52,640 --> 00:25:55,680 Speaker 1: once and just kind of let it go right start investing, 569 00:25:55,800 --> 00:25:59,040 Speaker 1: it keeps going. Money gets deducted for my paycheck and 570 00:25:59,080 --> 00:26:01,959 Speaker 1: from my checking account every month or every two weeks, 571 00:26:02,040 --> 00:26:05,280 Speaker 1: and it's gone. Like there's something really nice about that 572 00:26:05,359 --> 00:26:09,520 Speaker 1: about not having to actually do much myself, and for me, 573 00:26:10,000 --> 00:26:12,800 Speaker 1: as a slightly lazy dude, I really enjoy that. I 574 00:26:12,920 --> 00:26:15,000 Speaker 1: really like not having to think about it, and I 575 00:26:15,000 --> 00:26:17,399 Speaker 1: think like that's another really good reason for people to 576 00:26:17,440 --> 00:26:21,000 Speaker 1: consider this do it the easy way. I love the 577 00:26:21,040 --> 00:26:23,440 Speaker 1: idea that you can be building wealth over the long 578 00:26:23,480 --> 00:26:28,040 Speaker 1: haul without actually taking much action, right, without actively having 579 00:26:28,040 --> 00:26:30,520 Speaker 1: to think about it, and without it taking up mental space. Yeah, 580 00:26:30,520 --> 00:26:32,520 Speaker 1: this is something we've talked about, man, Like how the 581 00:26:32,520 --> 00:26:36,520 Speaker 1: more responsibility we have, the more limited bandwidth that we have, 582 00:26:36,640 --> 00:26:38,800 Speaker 1: at least me. You know, I'm speaking for myself for sure, 583 00:26:38,840 --> 00:26:40,879 Speaker 1: but I've just got so many other sort of things 584 00:26:40,880 --> 00:26:43,360 Speaker 1: going on to think that like, okay, I also now 585 00:26:43,400 --> 00:26:45,320 Speaker 1: have to keep in mind with the stock markets doing 586 00:26:45,359 --> 00:26:48,520 Speaker 1: and with the financial news outlets are saying, these aren't 587 00:26:48,560 --> 00:26:50,199 Speaker 1: things that I need to be concerned with, you know. 588 00:26:50,280 --> 00:26:52,560 Speaker 1: And and my energy and my efforts in my time 589 00:26:53,080 --> 00:26:57,000 Speaker 1: are much better spent doing other things, especially the things 590 00:26:57,000 --> 00:26:59,320 Speaker 1: that only I can do, like be a father or 591 00:26:59,320 --> 00:27:03,840 Speaker 1: a husband. You know, I'll take care of your kids. Oh, 592 00:27:03,880 --> 00:27:06,640 Speaker 1: I know you will. Yeah, man, I think too. If 593 00:27:06,720 --> 00:27:11,040 Speaker 1: we've been watching CNBC or these financial channels, reading some 594 00:27:11,080 --> 00:27:13,760 Speaker 1: of these financial outlets enough, we start to think that 595 00:27:13,800 --> 00:27:16,439 Speaker 1: they're discernible patterns that we can make out in the 596 00:27:16,480 --> 00:27:18,560 Speaker 1: stock market, and we start to think that we know 597 00:27:18,640 --> 00:27:21,280 Speaker 1: more than we actually do. And timing the market can 598 00:27:21,359 --> 00:27:24,840 Speaker 1: often be an emotional decision that cloud's good judgment. And 599 00:27:24,920 --> 00:27:28,240 Speaker 1: ultimately the fact is slow and steady wins the race 600 00:27:28,880 --> 00:27:31,600 Speaker 1: and it's a way easier and I love that it, dude, 601 00:27:31,600 --> 00:27:34,240 Speaker 1: what's not to like? It's better results and easier. I 602 00:27:34,280 --> 00:27:36,840 Speaker 1: love it all, right, Matt. Back to the beer. Yea again, 603 00:27:36,840 --> 00:27:39,639 Speaker 1: this is Heist Brewery. Have you ever been been up 604 00:27:39,640 --> 00:27:42,119 Speaker 1: to Charlotte to visit any breweries before? I don't know 605 00:27:42,160 --> 00:27:44,159 Speaker 1: what their beer seems like up there. No, they actually 606 00:27:44,160 --> 00:27:46,199 Speaker 1: have a decent spot in the airport where you can 607 00:27:46,240 --> 00:27:48,560 Speaker 1: buy some beers, and so I do remember like snagging 608 00:27:48,560 --> 00:27:50,240 Speaker 1: a can of something last time I was in the 609 00:27:50,359 --> 00:27:53,440 Speaker 1: Charlotte airport, but I've never actually been to Charlotte to 610 00:27:53,440 --> 00:27:56,240 Speaker 1: do some brewery tour. So I was really really excited 611 00:27:56,280 --> 00:27:59,320 Speaker 1: that Kevin from Charlotte ended up sending us some of 612 00:27:59,320 --> 00:28:03,320 Speaker 1: these beers. And man, this Heist Brewing double I p 613 00:28:03,440 --> 00:28:06,560 Speaker 1: A was really really good. Man. It's a bigger beer 614 00:28:06,600 --> 00:28:09,520 Speaker 1: at eight point two percent. It's got that hazy New 615 00:28:09,520 --> 00:28:12,159 Speaker 1: England style to it, so it's got that sort of 616 00:28:12,160 --> 00:28:14,679 Speaker 1: sharp hop character that I love so much. But at 617 00:28:14,720 --> 00:28:16,960 Speaker 1: the same time, it doesn't finish out too bitter because 618 00:28:16,960 --> 00:28:19,800 Speaker 1: it's kind of got that juicy, juicy freshness to it. 619 00:28:19,840 --> 00:28:23,199 Speaker 1: And it's yeah, most definitely my favorite I p A 620 00:28:23,280 --> 00:28:26,280 Speaker 1: style right now, maybe even my favorite beer style at 621 00:28:26,320 --> 00:28:28,520 Speaker 1: all right now. I feel like it's the beer style 622 00:28:28,600 --> 00:28:32,000 Speaker 1: of which I could drink every night the most of Yeah, exactly. 623 00:28:32,119 --> 00:28:34,480 Speaker 1: I think it's probably not my favorite overall beer style 624 00:28:34,960 --> 00:28:36,879 Speaker 1: because on those occasions where I have one of my 625 00:28:37,000 --> 00:28:39,040 Speaker 1: favorite styles that's hard to come by, I love it, 626 00:28:39,280 --> 00:28:41,080 Speaker 1: but I could drink, you know, one of beer like 627 00:28:41,120 --> 00:28:43,120 Speaker 1: this every night and not get tired of it. This 628 00:28:43,120 --> 00:28:45,680 Speaker 1: this one was no exception. It was really good and 629 00:28:45,760 --> 00:28:47,640 Speaker 1: if they were close to me, I would totally add 630 00:28:47,680 --> 00:28:50,320 Speaker 1: it to my weekly lineup of Hazy I PA most 631 00:28:50,320 --> 00:28:53,200 Speaker 1: definitely thanks a lot, Kevin, We appreciate it. Man. Alright, Matt, 632 00:28:53,240 --> 00:28:57,120 Speaker 1: final thoughts on timing the stock market. I just gotta say, 633 00:28:57,200 --> 00:29:00,760 Speaker 1: there's been so many articles because of this raging bull 634 00:29:00,800 --> 00:29:03,680 Speaker 1: market we've had. It's it's historic history. Right now, we're 635 00:29:03,720 --> 00:29:06,400 Speaker 1: in the longest bull market that there has ever been, 636 00:29:06,480 --> 00:29:08,480 Speaker 1: so there's there's a good reason to pay attention to it, 637 00:29:08,960 --> 00:29:11,640 Speaker 1: and everyone's got an opinion. Everyone's got a reason to 638 00:29:11,680 --> 00:29:13,960 Speaker 1: buy or a reason to sell. And that's kind of 639 00:29:13,960 --> 00:29:16,360 Speaker 1: why we felt the need to make this episode, because 640 00:29:16,400 --> 00:29:18,720 Speaker 1: if you're listening to the financial news and the opinions 641 00:29:18,800 --> 00:29:21,719 Speaker 1: of people on TV, then you might decide now it's 642 00:29:21,720 --> 00:29:24,000 Speaker 1: the time either to buy more stock or to sell 643 00:29:24,040 --> 00:29:26,760 Speaker 1: what you've got. And the answer to that is no, 644 00:29:27,480 --> 00:29:29,960 Speaker 1: you shouldn't be timing the stock market. It's a bad 645 00:29:30,000 --> 00:29:32,560 Speaker 1: idea for a lot of reasons. Instead, you want to 646 00:29:32,560 --> 00:29:35,360 Speaker 1: be focusing on dollar costs averaging and the reason for 647 00:29:35,440 --> 00:29:38,040 Speaker 1: this is because you can't predict the market, and so, 648 00:29:38,120 --> 00:29:39,880 Speaker 1: for instance, if the market is high, you might think 649 00:29:39,920 --> 00:29:41,480 Speaker 1: that you should go ahead and sell because you want 650 00:29:41,480 --> 00:29:44,240 Speaker 1: to buy low and sell high. Right. However, what if 651 00:29:44,320 --> 00:29:46,719 Speaker 1: the market continues to rise, you'd been missing out on 652 00:29:46,760 --> 00:29:49,240 Speaker 1: all of that. You can't predict the market. So the 653 00:29:49,280 --> 00:29:52,560 Speaker 1: easy approach is a passive approach, where you set it 654 00:29:52,560 --> 00:29:55,880 Speaker 1: and forget it. Where you make your contributions recurring thing, 655 00:29:56,280 --> 00:29:58,360 Speaker 1: whether it's in your four oh one K, through your 656 00:29:58,560 --> 00:30:02,160 Speaker 1: employer's paycheck every two weeks, or you have a recurring 657 00:30:02,160 --> 00:30:06,760 Speaker 1: deduction from your checking account into an i RA. Either way, 658 00:30:07,360 --> 00:30:10,440 Speaker 1: the passive approach is the best because you'll be dollar 659 00:30:10,480 --> 00:30:13,360 Speaker 1: cost averaging by default, and you won't be tempted to 660 00:30:14,280 --> 00:30:18,920 Speaker 1: be swayed by the financial news and make an emotional 661 00:30:19,120 --> 00:30:23,160 Speaker 1: decision that could impact your long term wealth building in 662 00:30:23,200 --> 00:30:25,920 Speaker 1: a major way. Slow and steady wins the race. That's 663 00:30:26,040 --> 00:30:28,520 Speaker 1: right man, All right, everyone, thanks so much for listening. 664 00:30:28,520 --> 00:30:31,520 Speaker 1: Our home on the web is how to money dot com. 665 00:30:31,560 --> 00:30:33,200 Speaker 1: And if you are listening right now and you like 666 00:30:33,280 --> 00:30:35,880 Speaker 1: what you here and have found this podcast helpful, please 667 00:30:35,920 --> 00:30:38,160 Speaker 1: let us know. You can give us a review on 668 00:30:38,320 --> 00:30:41,600 Speaker 1: Apple Podcast or wherever it is that you are listening 669 00:30:41,600 --> 00:30:45,360 Speaker 1: to your podcast, and definitely be sure to subscribe. All right, Joel, 670 00:30:45,400 --> 00:30:48,160 Speaker 1: Until next time, Best Friends Out, Best Friends Out,