1 00:00:00,080 --> 00:00:02,400 Speaker 1: Welcome to How the Money. I'm Joel and I and 2 00:00:02,480 --> 00:00:05,640 Speaker 1: Matt and today we're discussing investing in a volatile market. 3 00:00:24,440 --> 00:00:27,600 Speaker 1: That's right, man, we are talking about investing, And honestly, 4 00:00:27,640 --> 00:00:29,280 Speaker 1: before we even dive into this, I feel like it's 5 00:00:29,280 --> 00:00:31,840 Speaker 1: worth mentioning how we understand that not everybody is in 6 00:00:31,880 --> 00:00:34,320 Speaker 1: a position to where they can invest lots of money 7 00:00:34,400 --> 00:00:36,120 Speaker 1: right now in a volatile market to take advantage of 8 00:00:36,159 --> 00:00:38,800 Speaker 1: these downswings that we're seeing and so, but but that 9 00:00:38,840 --> 00:00:40,879 Speaker 1: being said, there are a lot of hang ups that 10 00:00:40,960 --> 00:00:44,040 Speaker 1: people have when it comes to investing in the market 11 00:00:44,040 --> 00:00:46,240 Speaker 1: when there are lots of fluctuations, and so that's what 12 00:00:46,280 --> 00:00:48,280 Speaker 1: we're gonna talk about today, Werena. We're gonna talk about 13 00:00:48,280 --> 00:00:51,280 Speaker 1: how to actually go about investing in a volatile market, 14 00:00:51,560 --> 00:00:53,519 Speaker 1: as well as ways that we can kind of control 15 00:00:53,600 --> 00:00:56,360 Speaker 1: some of our emotions as well, because honestly, isn't that 16 00:00:56,440 --> 00:00:58,280 Speaker 1: the biggest hang up that we have? Like we know 17 00:00:58,360 --> 00:01:01,120 Speaker 1: what we should be doing, but are emotions that keep 18 00:01:01,200 --> 00:01:03,480 Speaker 1: us from doing the right thing. So I'm excited that 19 00:01:03,520 --> 00:01:06,080 Speaker 1: we're gonna talk about that. How do you control your emotions? Matt, 20 00:01:06,400 --> 00:01:09,800 Speaker 1: I bottled them up, I tamped them down. Uh, and 21 00:01:09,880 --> 00:01:13,319 Speaker 1: then when no one's looking, I just break something off 22 00:01:13,440 --> 00:01:15,760 Speaker 1: the corner. Watched, like, where the why is this dish broken? 23 00:01:15,760 --> 00:01:17,720 Speaker 1: I don't have no idea how. I don't know what happened. Yeah, 24 00:01:17,720 --> 00:01:19,800 Speaker 1: I don't know. These are randomly breaking all around the house. 25 00:01:19,920 --> 00:01:24,240 Speaker 1: And that's one way. Yeah, that's one of the Hulk method. 26 00:01:25,400 --> 00:01:26,960 Speaker 1: As Kate and I have been catching up on our 27 00:01:27,000 --> 00:01:29,720 Speaker 1: Marvel movies as you know, yes, yeah, I know, I know. Yeah, 28 00:01:29,760 --> 00:01:31,399 Speaker 1: you've been doing that all right. Yeah, Well, I'm looking 29 00:01:31,400 --> 00:01:33,760 Speaker 1: forward to to tackling this topic Matt and there. Yeah, 30 00:01:33,760 --> 00:01:36,680 Speaker 1: there's so much to say for people in all different 31 00:01:36,720 --> 00:01:40,319 Speaker 1: areas of their investing lifetime. And I think in particular 32 00:01:40,400 --> 00:01:43,440 Speaker 1: for our listeners who are younger, the ones who didn't 33 00:01:43,480 --> 00:01:45,320 Speaker 1: necessarily go through the Great Recession. They were in middle 34 00:01:45,319 --> 00:01:47,480 Speaker 1: school or high school or something like that ten years ago, 35 00:01:47,760 --> 00:01:49,360 Speaker 1: and they didn't have any sort of money on the table. 36 00:01:49,360 --> 00:01:52,320 Speaker 1: They weren't investing at that point in time. Well, this 37 00:01:52,520 --> 00:01:54,880 Speaker 1: feels like new territory for people like them. And so yeah, 38 00:01:54,880 --> 00:01:57,200 Speaker 1: I think it's important to address this topic for sure. 39 00:01:57,400 --> 00:01:59,560 Speaker 1: But before we get to that, Matt, you recently got 40 00:01:59,600 --> 00:02:03,040 Speaker 1: scammed on Facebook marketplace, got scammed? How much money did 41 00:02:03,080 --> 00:02:05,880 Speaker 1: you lose. No, I did not get scammed. So previously, 42 00:02:05,960 --> 00:02:07,920 Speaker 1: we know we've talked about the stimulus money, and you know, 43 00:02:07,920 --> 00:02:10,400 Speaker 1: I we we discussed what we should do with that 44 00:02:10,520 --> 00:02:12,760 Speaker 1: stimulus money. How some of that money, maybe ten percent, 45 00:02:12,880 --> 00:02:16,079 Speaker 1: it's good and even healthy to spend on yourselves as 46 00:02:16,120 --> 00:02:19,440 Speaker 1: a sort of splurge. And I mentioned treat yourself exactly, 47 00:02:19,520 --> 00:02:22,320 Speaker 1: treat yourself. And I mentioned that I was looking at 48 00:02:22,360 --> 00:02:25,000 Speaker 1: a bike. Well, I got my bike, by the way, 49 00:02:25,120 --> 00:02:27,720 Speaker 1: I got my Salsa Journeyman, which is a sweet bike. 50 00:02:28,000 --> 00:02:29,960 Speaker 1: I'm not being paid to say this. I love it 51 00:02:30,040 --> 00:02:33,160 Speaker 1: that much. But I did want to be responsible, and 52 00:02:33,200 --> 00:02:35,400 Speaker 1: so I made sure to sell a bike. You know, 53 00:02:35,440 --> 00:02:37,080 Speaker 1: we kind of have a little bike shop going on 54 00:02:37,120 --> 00:02:39,400 Speaker 1: in our in our basement. So I listed that bike 55 00:02:39,480 --> 00:02:42,680 Speaker 1: on Facebook via the marketplace, and it went within a 56 00:02:42,720 --> 00:02:45,240 Speaker 1: day or two, it was gone. And I am on 57 00:02:45,320 --> 00:02:46,840 Speaker 1: top of that kind of stuff, and so I marked 58 00:02:46,880 --> 00:02:49,320 Speaker 1: it as sold, right, And so that's how I knew 59 00:02:49,360 --> 00:02:51,519 Speaker 1: that when I received a text message on my phone 60 00:02:51,960 --> 00:02:54,400 Speaker 1: that said, hey, is this item still available? And it 61 00:02:54,440 --> 00:02:56,840 Speaker 1: had a Facebook link to a marketplace. You know, you 62 00:02:56,840 --> 00:02:58,639 Speaker 1: could see it in the U R L. And I 63 00:02:58,680 --> 00:03:01,360 Speaker 1: almost clicked it, but I thought, wait a minute, that 64 00:03:01,400 --> 00:03:03,880 Speaker 1: listing shouldn't be live at all, because I remembered that 65 00:03:03,919 --> 00:03:05,840 Speaker 1: I had marked it a sould right uh, And so 66 00:03:05,880 --> 00:03:07,760 Speaker 1: I looked at the u r L a little bit closer, 67 00:03:08,040 --> 00:03:10,799 Speaker 1: and I saw that it was not a legitimate Facebook 68 00:03:10,919 --> 00:03:13,320 Speaker 1: u r L. I thought it had like a subdomain 69 00:03:13,320 --> 00:03:15,679 Speaker 1: going on, because it had like secure what I thought 70 00:03:15,720 --> 00:03:18,079 Speaker 1: was a dot right. I thought it said secure dots 71 00:03:18,160 --> 00:03:20,440 Speaker 1: Facebook dot com or whatever, but in fact it had 72 00:03:20,480 --> 00:03:23,480 Speaker 1: a dash, which means it is not a subdomain. It's 73 00:03:23,480 --> 00:03:27,119 Speaker 1: a separate u r L actually, or specifically, it's a subdomain, 74 00:03:27,360 --> 00:03:30,240 Speaker 1: but not a Facebook of some fraudulent site. So I 75 00:03:30,320 --> 00:03:33,280 Speaker 1: was that close to actually clicking that link, but I 76 00:03:33,320 --> 00:03:34,680 Speaker 1: was a little curious to see what they would say, 77 00:03:34,680 --> 00:03:35,880 Speaker 1: and so I did reply back, and I was like, 78 00:03:35,920 --> 00:03:38,640 Speaker 1: what's the item? Obviously I did not hear from them 79 00:03:38,680 --> 00:03:41,640 Speaker 1: after that, but I wanted to mention that because a 80 00:03:41,720 --> 00:03:45,080 Speaker 1: lot of us have experienced with scams via Craigslist, but 81 00:03:45,120 --> 00:03:46,760 Speaker 1: this is the first time I had ever received a 82 00:03:47,280 --> 00:03:50,960 Speaker 1: scamy right or a spamy message from a Facebook listing. 83 00:03:51,080 --> 00:03:52,880 Speaker 1: So I wanted to mention that just to make our 84 00:03:52,880 --> 00:03:55,680 Speaker 1: listeners aware that make sure that you're being careful with 85 00:03:55,800 --> 00:03:57,400 Speaker 1: you know, with the links that you're clicking, even if 86 00:03:57,440 --> 00:04:00,360 Speaker 1: it's a message through Facebook. I mean that link could 87 00:04:00,360 --> 00:04:02,480 Speaker 1: have been, since I'm guessing, through messenger or something like that. 88 00:04:02,480 --> 00:04:04,680 Speaker 1: But the fact that it was sent to me outside 89 00:04:04,680 --> 00:04:07,720 Speaker 1: of Facebook via text messages that definitely raised a red flag. 90 00:04:07,800 --> 00:04:08,920 Speaker 1: And so a lot of folks might be in a 91 00:04:08,920 --> 00:04:11,720 Speaker 1: similar situation as me. Just make sure that you're being careful. Yeah, man, 92 00:04:11,720 --> 00:04:13,080 Speaker 1: it's like, I don't know, four or five months ago, 93 00:04:13,120 --> 00:04:16,120 Speaker 1: I saw Consumer Reports wrote an article on, you know, 94 00:04:16,120 --> 00:04:19,560 Speaker 1: the expansion of Facebook messenger scams. They've really really proliferated. 95 00:04:19,600 --> 00:04:21,600 Speaker 1: So that's a that's a good warning, and I'm glad 96 00:04:21,640 --> 00:04:23,360 Speaker 1: you didn't click on the link. Who knows what sort 97 00:04:23,400 --> 00:04:26,080 Speaker 1: of personal info they're trying to mind or And I 98 00:04:26,080 --> 00:04:28,520 Speaker 1: feel like too. Right now, the scams are just abounding, 99 00:04:28,880 --> 00:04:32,159 Speaker 1: with coronavirus, stimulus checks, p p P loans, They're just 100 00:04:32,320 --> 00:04:34,320 Speaker 1: all sorts of scamsters trying to get in the mix. 101 00:04:34,760 --> 00:04:37,960 Speaker 1: It's highly unfortunate. It's terrible to watch. But we have 102 00:04:38,000 --> 00:04:40,159 Speaker 1: to look out for ourselves and be careful not to 103 00:04:40,160 --> 00:04:42,760 Speaker 1: click on errant links and not to have conversations with 104 00:04:42,760 --> 00:04:44,560 Speaker 1: people that we don't know at all. And yeah, so 105 00:04:44,640 --> 00:04:46,719 Speaker 1: that's a good warning to to share with people. But yeah, 106 00:04:46,720 --> 00:04:48,840 Speaker 1: I didn't get scammed. I wasn't gonna give Janie any 107 00:04:48,880 --> 00:04:52,160 Speaker 1: of my information. Well, Jane, it's that's a classic scammer 108 00:04:52,240 --> 00:04:55,680 Speaker 1: name too obvious, so obvious. Sorry to any listeners out 109 00:04:55,680 --> 00:04:57,840 Speaker 1: of their name. Chance. Alright, ma, let's talk about the 110 00:04:57,839 --> 00:04:59,440 Speaker 1: beer we're having on the show today. This is a 111 00:04:59,520 --> 00:05:02,240 Speaker 1: Theena Pair dso from Creature Comforts Brewing Company. They're right 112 00:05:02,279 --> 00:05:04,760 Speaker 1: around the corner from us in Athens, Georgia. This is 113 00:05:04,800 --> 00:05:08,040 Speaker 1: a fruited Berliner Vice. It's got cherries, raspberries and cranberries 114 00:05:08,080 --> 00:05:10,000 Speaker 1: in it, and I'm looking forward to having this one 115 00:05:10,120 --> 00:05:12,040 Speaker 1: on the show with you today, my friend, man, this 116 00:05:12,080 --> 00:05:13,640 Speaker 1: is a seasonal beer. This is something that they really, 117 00:05:13,800 --> 00:05:16,720 Speaker 1: I guess, pretty much every spring, like early spring. And 118 00:05:16,720 --> 00:05:18,680 Speaker 1: this is one that you picked up recently to donate 119 00:05:18,720 --> 00:05:22,160 Speaker 1: to the show, So thank you, Joel. Well do every spring. 120 00:05:22,440 --> 00:05:24,039 Speaker 1: I ended up buying like three six packs of this 121 00:05:24,080 --> 00:05:26,600 Speaker 1: one because I love this beer so much. A good one. 122 00:05:27,120 --> 00:05:28,520 Speaker 1: So all right, we'll talk about that one at the 123 00:05:28,600 --> 00:05:30,760 Speaker 1: end of the episode. But I think people know I'm 124 00:05:30,760 --> 00:05:33,360 Speaker 1: gonna like it, all right, Matt Well let's get onto 125 00:05:33,400 --> 00:05:35,680 Speaker 1: the subject at hand. Today. We're talking about investing in 126 00:05:35,680 --> 00:05:38,800 Speaker 1: a volatile market, and volatile markets in particular bring out 127 00:05:39,000 --> 00:05:41,200 Speaker 1: the worst in investors, or they can bring out the 128 00:05:41,200 --> 00:05:44,520 Speaker 1: worst in investors, because we're Austin guilty of overreacting to 129 00:05:44,560 --> 00:05:46,839 Speaker 1: the good news and the bad news alike. If the 130 00:05:46,839 --> 00:05:49,160 Speaker 1: news is good, we get invigorated and we think it's 131 00:05:49,160 --> 00:05:50,720 Speaker 1: going to continue to be good, and if it's bad, 132 00:05:50,920 --> 00:05:52,800 Speaker 1: we get pessimistic and it's hard to looking at the 133 00:05:52,800 --> 00:05:55,240 Speaker 1: future and see when things could turn around. Right. So, 134 00:05:55,320 --> 00:05:58,640 Speaker 1: investing while the market is experiencing volatility like he is 135 00:05:58,720 --> 00:06:01,640 Speaker 1: right now takes some amount of nerve on our part. 136 00:06:01,960 --> 00:06:04,400 Speaker 1: Right people are out there selling off their steak in 137 00:06:04,440 --> 00:06:07,440 Speaker 1: particular companies right now for a reason. Some sectors are 138 00:06:07,440 --> 00:06:09,880 Speaker 1: suffering in a big way right now, like, for instance, 139 00:06:09,880 --> 00:06:12,720 Speaker 1: who knows how long airlines are going to suffer profit 140 00:06:12,760 --> 00:06:15,159 Speaker 1: declines because of COVID. Are people going to continue to 141 00:06:15,160 --> 00:06:18,240 Speaker 1: fly in the same way even as restrictions continue to 142 00:06:18,240 --> 00:06:20,520 Speaker 1: get lifted in different cities and parts of the country. 143 00:06:20,839 --> 00:06:22,800 Speaker 1: Is flying ever gonna be the same That's kind of 144 00:06:22,920 --> 00:06:25,760 Speaker 1: question that investors have to tackle right now, and that's 145 00:06:25,800 --> 00:06:27,800 Speaker 1: why some of the airlines stocks have had a massive hit, 146 00:06:27,960 --> 00:06:30,000 Speaker 1: and it's important to note that the market is more 147 00:06:30,080 --> 00:06:32,760 Speaker 1: volatile based on a confluence of factors at the moment too, 148 00:06:33,040 --> 00:06:36,599 Speaker 1: many many of which are based in economic reality. That 149 00:06:36,800 --> 00:06:38,760 Speaker 1: lots of American businesses are going to have a tougher 150 00:06:38,800 --> 00:06:41,800 Speaker 1: time moving forward because of the pandemic we've experienced. But 151 00:06:42,360 --> 00:06:44,640 Speaker 1: as long term buy and hold investors, Matt Right, buying 152 00:06:44,640 --> 00:06:47,680 Speaker 1: in a down market is crucial to our wealth building efforts. 153 00:06:47,720 --> 00:06:49,560 Speaker 1: It's something we have to do, we have to get 154 00:06:49,600 --> 00:06:51,920 Speaker 1: comfortable with, and that's why we felt like we really 155 00:06:51,960 --> 00:06:54,120 Speaker 1: had to cover this topic today on the show. Yeah, 156 00:06:54,160 --> 00:06:56,040 Speaker 1: I guess you know, it's sort of not unlike us 157 00:06:56,240 --> 00:06:58,640 Speaker 1: having to get used to living with COVID nineteen as 158 00:06:58,680 --> 00:07:00,760 Speaker 1: as part of our lives now. But I agree man, 159 00:07:00,800 --> 00:07:04,320 Speaker 1: continuing to buy and hold they are both far more 160 00:07:04,320 --> 00:07:07,240 Speaker 1: difficult to do in a volatile market for most investors. 161 00:07:07,560 --> 00:07:09,400 Speaker 1: And then on top of that, when we hear terms 162 00:07:09,440 --> 00:07:12,920 Speaker 1: like bear market and recession and being thrown around, it 163 00:07:12,960 --> 00:07:16,000 Speaker 1: makes it even harder for many of us to to 164 00:07:16,040 --> 00:07:19,400 Speaker 1: continue to invest. But it is crucial that we continue 165 00:07:19,440 --> 00:07:22,080 Speaker 1: investing when the market is in a state of turmoil 166 00:07:22,280 --> 00:07:24,360 Speaker 1: because it can give us a big boost to our 167 00:07:24,520 --> 00:07:27,520 Speaker 1: overall net worth. You know, it is, as we've said before, 168 00:07:27,840 --> 00:07:31,200 Speaker 1: buying a stake in a variety of American businesses on sale. 169 00:07:31,680 --> 00:07:34,240 Speaker 1: And although it always feels good to buy, you know, 170 00:07:34,360 --> 00:07:37,240 Speaker 1: a consumer good, maybe an item of clothing or a 171 00:07:37,240 --> 00:07:40,000 Speaker 1: new bike like I just got at a steep discount, 172 00:07:40,000 --> 00:07:43,600 Speaker 1: we have a much harder time feeling good about buying 173 00:07:43,640 --> 00:07:46,520 Speaker 1: stocks that are on sale, or even buying them at all. Yeah, 174 00:07:46,520 --> 00:07:49,160 Speaker 1: it is amazing, how the inverse is not true. How 175 00:07:49,200 --> 00:07:51,240 Speaker 1: that's the one thing in our lives that we have 176 00:07:51,280 --> 00:07:53,880 Speaker 1: the hardest time buying on sale is is the American 177 00:07:53,920 --> 00:07:57,040 Speaker 1: stock market or the world stock market, but almost anything else, 178 00:07:57,080 --> 00:08:00,120 Speaker 1: we're like super pumped. Yeah, so true man. Uh. But still, 179 00:08:00,120 --> 00:08:02,800 Speaker 1: it's so crucial that we do this, and this has 180 00:08:02,800 --> 00:08:04,880 Speaker 1: a big benefit to our future self. Yeah, for sure, 181 00:08:04,920 --> 00:08:06,920 Speaker 1: it totally does, Matt. I was impressed to you. I 182 00:08:06,920 --> 00:08:10,120 Speaker 1: I recently saw a study from Vanguard that showed that 183 00:08:10,160 --> 00:08:13,400 Speaker 1: a majority of Vanguard investors in particular didn't make any 184 00:08:13,480 --> 00:08:16,800 Speaker 1: changes to their portfolio in in the recent wild down swing, 185 00:08:16,960 --> 00:08:21,720 Speaker 1: in particular in decline that mostly happened incredibly quickly in March, 186 00:08:22,040 --> 00:08:26,320 Speaker 1: and of us Vanguard investors stayed the course. They weren't 187 00:08:26,360 --> 00:08:29,040 Speaker 1: doing any buying or selling apart from their regular dollar 188 00:08:29,080 --> 00:08:32,079 Speaker 1: cost averaging that happens out of every paycheck, and so 189 00:08:32,120 --> 00:08:34,800 Speaker 1: that was pretty cool to see, right, Vanguard investors might 190 00:08:34,800 --> 00:08:37,280 Speaker 1: not be the norm, though I haven't seen more studies 191 00:08:37,360 --> 00:08:41,040 Speaker 1: necessarily showing that customers of other companies are doing something differently. 192 00:08:41,280 --> 00:08:44,840 Speaker 1: But but Vanguard investors are by nature because of the founder, 193 00:08:44,920 --> 00:08:47,920 Speaker 1: Jack Bogel and his philosophy in buying and holding, they 194 00:08:47,920 --> 00:08:49,960 Speaker 1: are probably a little different than the average person. I mean, 195 00:08:50,080 --> 00:08:54,400 Speaker 1: Vanguard investors in particular subscribe to that Bogel uh investing 196 00:08:54,400 --> 00:08:57,080 Speaker 1: philosophy where you buy for the long haul, and you 197 00:08:57,120 --> 00:09:00,080 Speaker 1: buy super diversified funds yep, cheap index funds that are 198 00:09:00,120 --> 00:09:02,880 Speaker 1: widely diversified. And there's even people, Yeah, the Bogel investing 199 00:09:02,880 --> 00:09:05,080 Speaker 1: philosophy man has taken on such a life of its own. 200 00:09:05,320 --> 00:09:08,160 Speaker 1: There's a website called Bogel Heads, and they're basically these 201 00:09:08,200 --> 00:09:11,199 Speaker 1: followers that are so in love with Jack Bogel, his philosophy, 202 00:09:11,200 --> 00:09:13,800 Speaker 1: what he started. That there are forums where people discuss 203 00:09:13,840 --> 00:09:15,600 Speaker 1: how great it is. But I think we can learn 204 00:09:15,679 --> 00:09:17,880 Speaker 1: from those investors. Right that the resolved to do very 205 00:09:17,920 --> 00:09:20,360 Speaker 1: little or nothing in a market like this where they 206 00:09:20,360 --> 00:09:22,800 Speaker 1: are willing to stay the course even in the midst 207 00:09:22,840 --> 00:09:25,400 Speaker 1: of a lot of turbulence. You know, what's important here 208 00:09:25,600 --> 00:09:28,520 Speaker 1: is that they didn't do the biggest sin, which is 209 00:09:29,120 --> 00:09:32,040 Speaker 1: actually sell some of their portfolio as the market was 210 00:09:32,040 --> 00:09:34,679 Speaker 1: going to decline. Because on one hand, this seems like 211 00:09:34,720 --> 00:09:37,560 Speaker 1: good news, right if investors stayed the course, that means 212 00:09:37,600 --> 00:09:40,200 Speaker 1: they didn't lock in those losses by selling. But on 213 00:09:40,240 --> 00:09:41,960 Speaker 1: the other hand, maybe this is bad news, right, Like 214 00:09:42,000 --> 00:09:44,560 Speaker 1: there are a lot of missed opportunities if you didn't 215 00:09:44,600 --> 00:09:47,280 Speaker 1: purchase more funds during that recent plunge in the market. 216 00:09:47,559 --> 00:09:50,080 Speaker 1: A lot of this depends on your temperament and your 217 00:09:50,120 --> 00:09:52,760 Speaker 1: ability to withstand losses, and it also depends to on 218 00:09:52,800 --> 00:09:55,120 Speaker 1: the phase of investing that you're in as well. Right, 219 00:09:55,160 --> 00:09:58,000 Speaker 1: if you're in the growth stage of investing, you're gonna 220 00:09:58,000 --> 00:10:00,640 Speaker 1: be able to withstand some of these turbulent times, right, 221 00:10:00,679 --> 00:10:03,880 Speaker 1: because the more turbulence you experience, that means you're exposed 222 00:10:03,920 --> 00:10:05,959 Speaker 1: to risk, and that risk is crucial when it comes 223 00:10:05,960 --> 00:10:08,720 Speaker 1: to growing your portfolio. But if you happen to be 224 00:10:08,760 --> 00:10:12,080 Speaker 1: in the preservation stage of investing, it's it's a lot tougher, 225 00:10:12,240 --> 00:10:14,280 Speaker 1: So whether these ups and downs like that as you're 226 00:10:14,320 --> 00:10:16,520 Speaker 1: drawing on that money, as you have a need for 227 00:10:16,559 --> 00:10:19,400 Speaker 1: your portfolio where the there's also a big difference in 228 00:10:19,840 --> 00:10:24,320 Speaker 1: seeing an actual numerical decline. Let's say the same investor 229 00:10:24,559 --> 00:10:27,319 Speaker 1: at age twenty five at age fifty five have the 230 00:10:27,360 --> 00:10:30,360 Speaker 1: same exact allocation in a total stock market fund, but 231 00:10:30,480 --> 00:10:33,000 Speaker 1: one has been investing for thirty more years. They've got 232 00:10:33,240 --> 00:10:35,880 Speaker 1: so much more at stake. A twenty five year old 233 00:10:35,880 --> 00:10:38,680 Speaker 1: has been investing probably for two or three years in 234 00:10:38,720 --> 00:10:40,719 Speaker 1: all likelihood, and the fifty year old has been doing 235 00:10:40,720 --> 00:10:43,280 Speaker 1: it for close to thirty. So there's something psychological about 236 00:10:43,280 --> 00:10:45,880 Speaker 1: seeing a massive number drop, even if the percentage is 237 00:10:45,920 --> 00:10:48,160 Speaker 1: the same amount. Right, Sure, Yeah, I'm sure seeing a 238 00:10:48,880 --> 00:10:51,880 Speaker 1: drop on a million dollars feels a lot different than 239 00:10:52,720 --> 00:10:55,840 Speaker 1: percent drop on ten thousand dollars, even though, like you said, 240 00:10:55,840 --> 00:10:57,920 Speaker 1: the percentage is the same. Yeah. Well, before we get 241 00:10:57,920 --> 00:11:00,120 Speaker 1: into the specifics on investing in volt the mark it, 242 00:11:00,160 --> 00:11:02,120 Speaker 1: I want to quickly talk about kind of some investor 243 00:11:02,200 --> 00:11:05,920 Speaker 1: sentiment right now, in particular individual investors like our listeners, 244 00:11:05,920 --> 00:11:08,760 Speaker 1: like you and I. There is kind of this belief 245 00:11:08,800 --> 00:11:11,920 Speaker 1: to a certain extent that the stock market is ignoring reality. 246 00:11:12,160 --> 00:11:14,920 Speaker 1: The bear market obviously happened really quickly. Stocks took a 247 00:11:14,920 --> 00:11:19,280 Speaker 1: pretty sharp rebound, and despite a lot of hard unemployment news, 248 00:11:19,720 --> 00:11:22,439 Speaker 1: despite a lot of hard medical news coming out, the 249 00:11:22,440 --> 00:11:24,400 Speaker 1: stock market just kind of continued to rise. And it 250 00:11:24,480 --> 00:11:26,680 Speaker 1: was freaking people out, like why is the stock market 251 00:11:26,760 --> 00:11:29,320 Speaker 1: not reflecting what's happening right now? So I thought that 252 00:11:29,320 --> 00:11:31,000 Speaker 1: was kind of important to cover, and I got just 253 00:11:31,040 --> 00:11:32,600 Speaker 1: a couple of thoughts. I think, you know, one thing 254 00:11:32,600 --> 00:11:35,640 Speaker 1: that we experienced in this downturn, in particular, what we 255 00:11:35,679 --> 00:11:38,520 Speaker 1: experience just a lot of government intervention in the market 256 00:11:38,559 --> 00:11:41,200 Speaker 1: that's been taken to like an extreme that we've never 257 00:11:41,240 --> 00:11:43,400 Speaker 1: seen before. So I think that's one reason that the 258 00:11:43,400 --> 00:11:46,480 Speaker 1: stock market has actually been performing better than it probably 259 00:11:46,520 --> 00:11:48,880 Speaker 1: otherwise would have. Injecting that kind of money into this 260 00:11:49,000 --> 00:11:54,079 Speaker 1: system that supports unemployed Americans, direct payments to almost all Americans, 261 00:11:54,240 --> 00:11:57,000 Speaker 1: and grants to sustain small businesses as well. It's the 262 00:11:57,040 --> 00:11:59,440 Speaker 1: massive actions that the FED took to show up the 263 00:11:59,440 --> 00:12:01,760 Speaker 1: main street of eonomy. It's created a lot of solvency, 264 00:12:01,960 --> 00:12:04,240 Speaker 1: and it's also created a lot more optimism than than 265 00:12:04,320 --> 00:12:07,240 Speaker 1: we would typically see for investors. Just to know that 266 00:12:07,240 --> 00:12:10,960 Speaker 1: the government is there and has the backup of the economy. 267 00:12:11,240 --> 00:12:13,680 Speaker 1: And granted, a lot of those programs haven't gone quite 268 00:12:13,760 --> 00:12:15,800 Speaker 1: quite according to plan, some of them have been really 269 00:12:15,840 --> 00:12:18,640 Speaker 1: poorly implemented. But I feel like we have seen companies 270 00:12:18,679 --> 00:12:21,240 Speaker 1: that otherwise might have gone bust, might have had a 271 00:12:21,400 --> 00:12:24,040 Speaker 1: really really hard time climbing out of the COVID trough 272 00:12:24,120 --> 00:12:26,000 Speaker 1: that they've been put in. I think it's no wonder 273 00:12:26,000 --> 00:12:29,120 Speaker 1: that we're seeing actually a more positive sentiment from investors 274 00:12:29,120 --> 00:12:32,160 Speaker 1: then would normally be the case in a typical recession 275 00:12:32,160 --> 00:12:35,000 Speaker 1: of years past. Yeah, and you know, to specifically address 276 00:12:35,040 --> 00:12:38,400 Speaker 1: to just the the difference between what we're seeing in 277 00:12:38,440 --> 00:12:40,080 Speaker 1: the stock market and what we're seeing in our day 278 00:12:40,120 --> 00:12:42,199 Speaker 1: to day lives. Right, the difference between Wall Street and 279 00:12:42,200 --> 00:12:45,760 Speaker 1: the difference between Main Street is that investors are optimistic 280 00:12:45,800 --> 00:12:48,839 Speaker 1: because of all this money that has been injected into 281 00:12:48,880 --> 00:12:51,920 Speaker 1: the economy, and you can see that optimism daily and 282 00:12:51,960 --> 00:12:55,200 Speaker 1: by the minute based on stock tickers. Right. I think 283 00:12:55,280 --> 00:12:58,080 Speaker 1: investors do have reason to be optimistic. But then the 284 00:12:58,160 --> 00:13:00,400 Speaker 1: question is why do we see what whate is like 285 00:13:00,440 --> 00:13:05,120 Speaker 1: our lives trailing that optimism in the stock market. And 286 00:13:05,160 --> 00:13:07,199 Speaker 1: I think that comes down to the nature of what 287 00:13:07,240 --> 00:13:10,520 Speaker 1: we've experienced, right, I mean, there's been government mandates that 288 00:13:10,559 --> 00:13:12,599 Speaker 1: we need to stay home. Businesses have been forced to 289 00:13:12,600 --> 00:13:15,360 Speaker 1: shut down for you know, over a month, you know, 290 00:13:15,440 --> 00:13:17,600 Speaker 1: some close to two months, and it takes a long 291 00:13:17,640 --> 00:13:20,079 Speaker 1: time to start that machine back up, right. It's like 292 00:13:20,160 --> 00:13:23,920 Speaker 1: this massive freight train that, uh, it's pretty hard to 293 00:13:23,920 --> 00:13:25,640 Speaker 1: stop on a dime. But we pretty much did that, 294 00:13:25,679 --> 00:13:28,280 Speaker 1: which is crazy, But it takes even longer to get 295 00:13:28,320 --> 00:13:30,400 Speaker 1: that train rolling again. It takes a lot of energy 296 00:13:30,400 --> 00:13:32,200 Speaker 1: and a lot of time. And so I think that's 297 00:13:32,320 --> 00:13:34,680 Speaker 1: kind of the difference between what we're seeing on Wall 298 00:13:34,720 --> 00:13:37,400 Speaker 1: Street and what we're seeing on Main Street. Then overall, 299 00:13:37,440 --> 00:13:38,560 Speaker 1: you know, I think a lot of folks might be 300 00:13:38,559 --> 00:13:41,560 Speaker 1: asking the question, should the government have intervened that much? 301 00:13:41,600 --> 00:13:44,320 Speaker 1: Should the FED head stepped in like they did? And 302 00:13:44,440 --> 00:13:45,560 Speaker 1: you know, I think you and I would say that 303 00:13:45,559 --> 00:13:48,760 Speaker 1: it was largely necessary in order to prevent our economy 304 00:13:48,760 --> 00:13:51,560 Speaker 1: and businesses and just the markets from taking even more. 305 00:13:51,880 --> 00:13:53,480 Speaker 1: You know, we we've yet to see the long term 306 00:13:53,480 --> 00:13:56,840 Speaker 1: effects of that involvement, But this is an explanation as 307 00:13:56,880 --> 00:13:59,320 Speaker 1: to why we are seeing the stock market recover, but 308 00:13:59,559 --> 00:14:01,679 Speaker 1: at the same time we're seeing our local businesses and 309 00:14:01,679 --> 00:14:04,320 Speaker 1: and even national companies lag behind when it comes to 310 00:14:04,600 --> 00:14:07,480 Speaker 1: their ability to conduct business, but then obviously when it 311 00:14:07,520 --> 00:14:10,160 Speaker 1: comes to their earnings as well. Yeah, we don't really 312 00:14:10,160 --> 00:14:12,960 Speaker 1: get a whole lot into macroeconomics map. This is kind 313 00:14:13,000 --> 00:14:16,199 Speaker 1: of a big situation where macro economics has impacted us 314 00:14:16,200 --> 00:14:19,080 Speaker 1: in a microway with stimulus checks, with the need to 315 00:14:19,160 --> 00:14:21,760 Speaker 1: take on these government loans if you can get one 316 00:14:21,960 --> 00:14:24,760 Speaker 1: through the PPP program, through the s b A, and 317 00:14:24,800 --> 00:14:26,480 Speaker 1: also too, we saw some of these big companies, the 318 00:14:26,480 --> 00:14:29,360 Speaker 1: big airlines, Carnival cruise lines get money from the government. 319 00:14:29,800 --> 00:14:31,440 Speaker 1: Was that the right move? I mean, it's really hard 320 00:14:31,480 --> 00:14:33,080 Speaker 1: to say, and a lot of smart people come down 321 00:14:33,120 --> 00:14:35,320 Speaker 1: on different sides of that issue. So it's not something 322 00:14:35,360 --> 00:14:37,320 Speaker 1: that we're gonna cover too much here. But that was 323 00:14:37,520 --> 00:14:39,280 Speaker 1: an interesting question because I think a lot of people 324 00:14:39,320 --> 00:14:42,240 Speaker 1: are seeing the stock market doing really well in a 325 00:14:42,320 --> 00:14:44,400 Speaker 1: time where they're not doing really well, and it's hard 326 00:14:44,440 --> 00:14:46,360 Speaker 1: to see. But that's also kind of the way it 327 00:14:46,400 --> 00:14:49,000 Speaker 1: happens sometimes. That's kind of what happened after the Great Recession. 328 00:14:49,160 --> 00:14:51,680 Speaker 1: The stock market almost led the recovery. There were a 329 00:14:51,680 --> 00:14:53,400 Speaker 1: lot of people predicting the stock market was going to 330 00:14:53,480 --> 00:14:55,240 Speaker 1: go lower and lower, it was going to continue to 331 00:14:55,280 --> 00:14:57,920 Speaker 1: sink in a time when it started to rebound. That 332 00:14:58,040 --> 00:15:00,120 Speaker 1: was hard for people to fathom in the after at 333 00:15:00,280 --> 00:15:02,760 Speaker 1: the banking scandals in the foreclosure crisis, but it happened. 334 00:15:02,800 --> 00:15:04,360 Speaker 1: So yeah, I'm glad we touched on that a little bit. 335 00:15:04,360 --> 00:15:07,000 Speaker 1: But okay, well, we're gonna get to some personal considerations 336 00:15:07,040 --> 00:15:09,240 Speaker 1: and how people need to think about investing right now, 337 00:15:09,280 --> 00:15:11,440 Speaker 1: in particular in a volatile market. We're gonna get to 338 00:15:11,520 --> 00:15:22,560 Speaker 1: our thoughts on that right after the break, all right, 339 00:15:22,600 --> 00:15:24,320 Speaker 1: so we are back from the break. We're talking about 340 00:15:24,280 --> 00:15:27,920 Speaker 1: investing in a volatile market. And when we say investing 341 00:15:27,960 --> 00:15:30,800 Speaker 1: in a volatile market, we actually mean putting your money 342 00:15:31,040 --> 00:15:33,520 Speaker 1: into a volatile market. Uh, and we also mean it 343 00:15:33,560 --> 00:15:36,280 Speaker 1: from the standpoint of how to do it right now. Right, 344 00:15:36,520 --> 00:15:38,240 Speaker 1: So that's what we're gonna talk about right now. We're 345 00:15:38,240 --> 00:15:40,240 Speaker 1: gonna talk about how to actually go about doing that. 346 00:15:40,640 --> 00:15:43,720 Speaker 1: But first we want to point out that your own 347 00:15:43,760 --> 00:15:47,200 Speaker 1: personal finances that is going to dictate whether or not 348 00:15:47,280 --> 00:15:50,080 Speaker 1: you should be investing right now. Your your personal finances, 349 00:15:50,160 --> 00:15:53,120 Speaker 1: like that's gonna actually take priority over investing right now, 350 00:15:53,200 --> 00:15:55,400 Speaker 1: because investing in a bear market is a great thing, 351 00:15:55,600 --> 00:15:57,920 Speaker 1: right if you are not trying to time the market. 352 00:15:57,960 --> 00:16:00,240 Speaker 1: And if you're investing for the long haul, and if 353 00:16:00,240 --> 00:16:03,479 Speaker 1: you have steady income but you don't once to prioritize 354 00:16:03,480 --> 00:16:06,600 Speaker 1: investing if your paycheck isn't secure and you don't also 355 00:16:06,680 --> 00:16:09,520 Speaker 1: have a solid savings back up. Also, if you are 356 00:16:09,680 --> 00:16:12,200 Speaker 1: close or if you are in retirement, you know, there 357 00:16:12,200 --> 00:16:14,000 Speaker 1: are other impacts you need to consider as well. If 358 00:16:14,040 --> 00:16:15,920 Speaker 1: if its downswing has you freaking out a little bit 359 00:16:15,960 --> 00:16:18,880 Speaker 1: because of the portfolio erosion that you've suffered, you may 360 00:16:18,880 --> 00:16:21,120 Speaker 1: not be properly allocated, and that's something that you can 361 00:16:21,240 --> 00:16:23,800 Speaker 1: change as well. And also you might need to maybe 362 00:16:23,840 --> 00:16:27,680 Speaker 1: rethink some certain financial levels that you have, perhaps you know, 363 00:16:27,720 --> 00:16:30,360 Speaker 1: pairing backs and you're spending or even working a little 364 00:16:30,360 --> 00:16:33,920 Speaker 1: bit longer. There is more to our personal finances and 365 00:16:33,960 --> 00:16:36,600 Speaker 1: our money than just investing, and so make sure that 366 00:16:36,600 --> 00:16:39,480 Speaker 1: you have those kind of basics squared away first before 367 00:16:39,520 --> 00:16:42,440 Speaker 1: you kind of continue with our conversation today. Yeah, and 368 00:16:42,720 --> 00:16:45,960 Speaker 1: everybody right now, I think has to have a written 369 00:16:46,040 --> 00:16:48,960 Speaker 1: investing plan. That's such a crucial part of being able 370 00:16:48,960 --> 00:16:52,000 Speaker 1: to actually continue to invest when the market's down, when 371 00:16:52,040 --> 00:16:54,680 Speaker 1: it's volatile, when it's up and down, right, and it's 372 00:16:54,720 --> 00:16:57,240 Speaker 1: I think randomly buy and selling can can lead to 373 00:16:57,280 --> 00:16:59,120 Speaker 1: financial loss for people, but it can also lead to 374 00:16:59,280 --> 00:17:02,120 Speaker 1: higher levels of stress. The results can be catastrophic for 375 00:17:02,160 --> 00:17:05,320 Speaker 1: people in their retirement accounts, and it can also just 376 00:17:05,440 --> 00:17:07,320 Speaker 1: raise their blood pressure at the same time. So it's 377 00:17:07,359 --> 00:17:11,000 Speaker 1: important for people to make decisions before of all the 378 00:17:11,080 --> 00:17:13,480 Speaker 1: market occurs, to kind of have that written investing plan 379 00:17:13,560 --> 00:17:16,360 Speaker 1: in place, So start to make some of those decisions. Now, 380 00:17:16,440 --> 00:17:19,840 Speaker 1: see how you've reacted to the current market volatility, and 381 00:17:19,880 --> 00:17:22,280 Speaker 1: I think that can help you write your investing plan 382 00:17:22,560 --> 00:17:25,280 Speaker 1: based on your own personal tendencies, right, And a couple 383 00:17:25,320 --> 00:17:27,440 Speaker 1: of questions that you need to ask yourself are do 384 00:17:27,520 --> 00:17:30,719 Speaker 1: I ever invest in individual stocks? And if so, how 385 00:17:30,800 --> 00:17:33,800 Speaker 1: much and then when? And what are the metrics that 386 00:17:33,840 --> 00:17:36,440 Speaker 1: you need to see in order to make buying that 387 00:17:36,520 --> 00:17:39,160 Speaker 1: stock or or that e t F a smart move? 388 00:17:39,480 --> 00:17:41,120 Speaker 1: Do you start to pour extra money into your four 389 00:17:41,119 --> 00:17:42,960 Speaker 1: O one K and roth ira when the stock market 390 00:17:42,960 --> 00:17:45,080 Speaker 1: dips to a certain point. You make sure that you 391 00:17:45,160 --> 00:17:47,800 Speaker 1: have these things in writing so you can know exactly 392 00:17:48,080 --> 00:17:50,840 Speaker 1: how you're planning to invest when the market does have 393 00:17:50,880 --> 00:17:52,960 Speaker 1: a dip in particular, and that so much of this 394 00:17:53,000 --> 00:17:56,080 Speaker 1: comes down to, like a rules based approach to investing, 395 00:17:56,359 --> 00:17:59,639 Speaker 1: having a checklist or clearly defined process of how and 396 00:17:59,680 --> 00:18:02,080 Speaker 1: when we buy and sell investments. That can help us 397 00:18:02,080 --> 00:18:05,320 Speaker 1: to avoid irrational and exuberant decisions and can provide some 398 00:18:05,400 --> 00:18:08,880 Speaker 1: consistency to our approach that can really be difficult to muster. Otherwise, 399 00:18:08,920 --> 00:18:11,560 Speaker 1: it's really hard to stay consistent, especially in the face 400 00:18:11,640 --> 00:18:14,119 Speaker 1: of uncertainty and difficulty, And so I think those those 401 00:18:14,240 --> 00:18:17,399 Speaker 1: rules that you always follow and then sets of questions 402 00:18:17,400 --> 00:18:19,840 Speaker 1: that you have to ask yourself before you decide to 403 00:18:19,880 --> 00:18:23,600 Speaker 1: invest more are super helpful as we seek to become 404 00:18:23,920 --> 00:18:27,320 Speaker 1: good long term investors that don't fret too much about 405 00:18:27,400 --> 00:18:29,520 Speaker 1: the ups and downs of the market. That rules based 406 00:18:29,520 --> 00:18:32,600 Speaker 1: approach can provide a good deal of clarity, and it 407 00:18:32,640 --> 00:18:35,680 Speaker 1: can make it easier to follow through to continue investing 408 00:18:36,000 --> 00:18:39,000 Speaker 1: even in a time where you are feeling uncertain about 409 00:18:39,040 --> 00:18:41,280 Speaker 1: where the market is and where it's going. And at 410 00:18:41,320 --> 00:18:42,960 Speaker 1: the same time, those rules can make it a whole 411 00:18:42,960 --> 00:18:45,640 Speaker 1: lot easier on your brain to prevent you from thinking 412 00:18:45,640 --> 00:18:48,800 Speaker 1: about all the possible what if scenarios, because there are 413 00:18:48,800 --> 00:18:50,520 Speaker 1: so many of those. If you have your rules and 414 00:18:50,600 --> 00:18:52,480 Speaker 1: your approach and you stick to it, it's it's just 415 00:18:52,520 --> 00:18:56,639 Speaker 1: so much easier to continue going at that specific pace. Yeah. Man, Essentially, 416 00:18:56,680 --> 00:18:59,199 Speaker 1: what we're talking about here is creating some routine in 417 00:18:59,240 --> 00:19:02,520 Speaker 1: our lives, specifically in our financial lives. In our day 418 00:19:02,560 --> 00:19:05,399 Speaker 1: to day you know, regular lives, we have routines. Uh, 419 00:19:05,520 --> 00:19:07,120 Speaker 1: A lot of us wake up at the same time 420 00:19:07,160 --> 00:19:09,440 Speaker 1: every single morning. We don't, you know, the night before. 421 00:19:09,440 --> 00:19:11,720 Speaker 1: We're not looking at the clock thinking, okay, what time 422 00:19:11,720 --> 00:19:13,320 Speaker 1: should I wake up in the morning. It's just it's 423 00:19:13,359 --> 00:19:15,560 Speaker 1: kind of on autopilot. And so that's what we're talking 424 00:19:15,560 --> 00:19:18,800 Speaker 1: about doing here with our finances as well. So for instance, 425 00:19:18,800 --> 00:19:21,760 Speaker 1: like dollar cost averaging, this could be a great approach, 426 00:19:21,840 --> 00:19:23,960 Speaker 1: a great rule for you. If you can dollar cost 427 00:19:23,960 --> 00:19:26,720 Speaker 1: average into your FRO one k every single paycheck and 428 00:19:26,760 --> 00:19:29,240 Speaker 1: also into your I RA every month, then you're going 429 00:19:29,280 --> 00:19:30,919 Speaker 1: to be off to a great start. And then in 430 00:19:30,920 --> 00:19:33,920 Speaker 1: addition to that, with excess cash that you then once 431 00:19:34,000 --> 00:19:36,199 Speaker 1: invest you can ask yourself maybe a series of questions 432 00:19:36,200 --> 00:19:38,760 Speaker 1: like well I need this money in the next few years, 433 00:19:38,760 --> 00:19:42,359 Speaker 1: like do I know what I am investing in? Generally speaking, 434 00:19:42,400 --> 00:19:45,679 Speaker 1: the simplier strategy is that's going to make this process 435 00:19:45,680 --> 00:19:47,840 Speaker 1: far easier and so one of the easiest ways to 436 00:19:47,960 --> 00:19:50,879 Speaker 1: simplify your strategy in your approach is to look at 437 00:19:50,920 --> 00:19:53,560 Speaker 1: target date retirement funds, or just as easily you can 438 00:19:53,560 --> 00:19:56,439 Speaker 1: look at total stock market funds or SMP five hundred funds. 439 00:19:56,720 --> 00:19:59,680 Speaker 1: And we know that this approach has proven and it's 440 00:19:59,680 --> 00:20:01,879 Speaker 1: effect and this is a way for for you to 441 00:20:02,040 --> 00:20:05,880 Speaker 1: stick with something versus kind of constantly having to grapple 442 00:20:05,960 --> 00:20:08,080 Speaker 1: with it mentally, right and so like on the other 443 00:20:08,200 --> 00:20:10,200 Speaker 1: end of the spectrum, you might be asking yourself, you know, 444 00:20:10,240 --> 00:20:12,200 Speaker 1: should I be investing in a sector that I maybe 445 00:20:12,200 --> 00:20:15,399 Speaker 1: know nothing about. Recently, man, there's a story about a 446 00:20:15,400 --> 00:20:18,280 Speaker 1: lot of folks deciding to start trading this cheap oil 447 00:20:18,359 --> 00:20:21,280 Speaker 1: e t F on Robin Hood. But the fund actually 448 00:20:21,280 --> 00:20:22,800 Speaker 1: it wasn't what they thought it was. They thought that 449 00:20:22,840 --> 00:20:26,040 Speaker 1: they were buying actual barrels of oil essentially, but in fact, 450 00:20:26,200 --> 00:20:29,240 Speaker 1: in reality, they're actually looking at futures contracts and it's 451 00:20:29,320 --> 00:20:32,800 Speaker 1: much more sophisticated financial products, and it's it's not going 452 00:20:32,840 --> 00:20:35,120 Speaker 1: to reflect the cost of oil, you know, Like folks 453 00:20:35,160 --> 00:20:37,159 Speaker 1: thought that, oh, it's it's cratering right now, now now is 454 00:20:37,200 --> 00:20:38,480 Speaker 1: the time to buy. I want to buy it low. 455 00:20:38,680 --> 00:20:40,760 Speaker 1: But unfortunately they didn't do the due diligence to know 456 00:20:40,840 --> 00:20:43,960 Speaker 1: that this wasn't actually the cost of oil. Uh yeah, 457 00:20:43,960 --> 00:20:45,879 Speaker 1: it was on the contracts instead, yea. And then the 458 00:20:45,880 --> 00:20:49,000 Speaker 1: e t F had to make fundamental changes to kind 459 00:20:49,000 --> 00:20:51,560 Speaker 1: of how it did business, how it structured itself, and 460 00:20:51,600 --> 00:20:53,760 Speaker 1: some of these individual investors, depending on how much money 461 00:20:53,760 --> 00:20:56,320 Speaker 1: they put in, that that money could be wiped out. 462 00:20:56,640 --> 00:20:58,680 Speaker 1: And and that's something that probably wasn't on a lot 463 00:20:58,800 --> 00:21:02,439 Speaker 1: of their radar. Oh yeah, knowing your strategy, keeping it simple, 464 00:21:02,760 --> 00:21:05,000 Speaker 1: not investing in a certain E t F or sector 465 00:21:05,080 --> 00:21:08,720 Speaker 1: because you saw one hot tip or a story touting 466 00:21:08,760 --> 00:21:10,920 Speaker 1: how great it was gonna be. That can a make 467 00:21:10,960 --> 00:21:13,400 Speaker 1: it so much easier to continue to invest if you're 468 00:21:13,440 --> 00:21:15,959 Speaker 1: going about it in a way that's just incredibly simple 469 00:21:16,080 --> 00:21:18,399 Speaker 1: and easy to understand, and at the same time, it 470 00:21:18,440 --> 00:21:20,440 Speaker 1: prevents you from investing in things that you don't really 471 00:21:20,440 --> 00:21:23,679 Speaker 1: know anything about. So, Matt, one of my favorite financial writers, 472 00:21:23,680 --> 00:21:25,640 Speaker 1: his name is Ben Carlson. He writes at a site 473 00:21:25,680 --> 00:21:27,920 Speaker 1: called a Wealth of common Sense dot com. He wrote 474 00:21:27,920 --> 00:21:30,920 Speaker 1: about how he's handling additional funds as the market goes 475 00:21:31,000 --> 00:21:33,960 Speaker 1: through some volatile times, and he's got some stage advice. Man, 476 00:21:34,200 --> 00:21:36,919 Speaker 1: It's important to note that not everyone is in his position, right, 477 00:21:36,920 --> 00:21:39,840 Speaker 1: he's saved up enough money to tackle it in this manner. 478 00:21:39,960 --> 00:21:42,520 Speaker 1: But we'll post a link to his plan in the 479 00:21:42,520 --> 00:21:44,960 Speaker 1: show notes. It's pretty similar to kind of what I 480 00:21:45,040 --> 00:21:47,560 Speaker 1: like to use as well. First, he's dollar cost averaging, 481 00:21:47,720 --> 00:21:49,480 Speaker 1: and that's something that you just talked about, Matt. He's 482 00:21:49,480 --> 00:21:52,000 Speaker 1: putting money in every single pay period or every single month. 483 00:21:52,280 --> 00:21:54,399 Speaker 1: Basically he's taking time in the market off the table, 484 00:21:54,560 --> 00:21:57,040 Speaker 1: and he's just doing it consistently, which is an excellent 485 00:21:57,080 --> 00:21:59,600 Speaker 1: way to be an investor. And he said that his 486 00:21:59,760 --> 00:22:03,200 Speaker 1: in frequent income goes directly into investments. So let's say 487 00:22:03,440 --> 00:22:06,359 Speaker 1: he gets some birthday money or Christmas money out or whatever, 488 00:22:06,640 --> 00:22:08,280 Speaker 1: he is going to put that money in the market, 489 00:22:08,400 --> 00:22:11,960 Speaker 1: money that he didn't see coming. Uh, that infrequent infusion 490 00:22:11,960 --> 00:22:13,879 Speaker 1: of cash, that's where he's gonna put it. That's what 491 00:22:13,920 --> 00:22:16,280 Speaker 1: he prioritizes. And then he said he's ready to quote 492 00:22:16,359 --> 00:22:19,200 Speaker 1: unquote back up the truck when the market hit certain benchmarks. 493 00:22:19,320 --> 00:22:21,520 Speaker 1: And so he's got a certain amount of cash on 494 00:22:21,560 --> 00:22:24,040 Speaker 1: hand that when the market does go down a certain amount, 495 00:22:24,280 --> 00:22:27,280 Speaker 1: he's ready to to put that cash to use in 496 00:22:27,359 --> 00:22:30,959 Speaker 1: his portfolio. And so, yeah, his rules based approach his 497 00:22:31,320 --> 00:22:34,359 Speaker 1: clear definition of his rules is is so helpful in 498 00:22:34,680 --> 00:22:37,560 Speaker 1: keeping the course and continuing to invest no matter what 499 00:22:37,640 --> 00:22:40,400 Speaker 1: the market looks like. Yeah. Man, you know what's important here, though, 500 00:22:40,480 --> 00:22:43,200 Speaker 1: is to define what your rules are, and so depending 501 00:22:43,240 --> 00:22:45,800 Speaker 1: on your income and your savings rate, like backing up 502 00:22:45,800 --> 00:22:48,160 Speaker 1: the truck, that could mean contributing maybe just a little 503 00:22:48,160 --> 00:22:50,360 Speaker 1: bit more to your following k at work, it could 504 00:22:50,400 --> 00:22:52,520 Speaker 1: mean maybe completely maxing out your wrath I ra A, 505 00:22:53,080 --> 00:22:55,720 Speaker 1: or that might be investing even more in a taxable 506 00:22:55,720 --> 00:22:58,400 Speaker 1: brokerage account. We still want to make sure that we're 507 00:22:58,440 --> 00:23:01,520 Speaker 1: keeping enough cash on hand in an emergency fund. But 508 00:23:01,560 --> 00:23:04,000 Speaker 1: then having rules, you know, in addition to that to 509 00:23:04,080 --> 00:23:07,240 Speaker 1: guide you during uncertain times, it's gonna be really valuable. 510 00:23:07,480 --> 00:23:08,960 Speaker 1: We talked about your plan a little bit. We talked 511 00:23:09,000 --> 00:23:12,439 Speaker 1: about Ben's plan. Let's talk about my plancin. Oh you 512 00:23:12,480 --> 00:23:15,560 Speaker 1: know me so well. Bitcoin and gold look at you 513 00:23:15,640 --> 00:23:17,720 Speaker 1: all the way, but only physical goal that goes underneath 514 00:23:17,720 --> 00:23:21,400 Speaker 1: your mattress, I like the actual bullion that you hold. Man. 515 00:23:21,400 --> 00:23:23,280 Speaker 1: For me, I found it was really important to to 516 00:23:23,359 --> 00:23:26,159 Speaker 1: actually write out a plan. So for Kate and I, 517 00:23:26,359 --> 00:23:28,320 Speaker 1: we have a variable income, so we found that it 518 00:23:28,320 --> 00:23:31,280 Speaker 1: was important for us to be super nerdy here and 519 00:23:31,520 --> 00:23:33,199 Speaker 1: lay out some of these rules, like we're just like 520 00:23:33,200 --> 00:23:35,960 Speaker 1: we're discussing and we did this years ago. So what 521 00:23:36,040 --> 00:23:38,119 Speaker 1: that means for us is that at the beginning of 522 00:23:38,160 --> 00:23:40,880 Speaker 1: the year, we try to fully fund and max out 523 00:23:41,160 --> 00:23:44,040 Speaker 1: our roth iras as soon as possible. That doesn't necessarily 524 00:23:44,119 --> 00:23:46,040 Speaker 1: mean that we purchase funds yet, but we make sure 525 00:23:46,080 --> 00:23:48,119 Speaker 1: we go ahead and transfer that money from our day 526 00:23:48,160 --> 00:23:51,399 Speaker 1: to day checking and savings account over to our brokerage company, 527 00:23:51,480 --> 00:23:54,919 Speaker 1: specifically Vanguard. And right now, the roth Ira contribution limits 528 00:23:54,920 --> 00:23:57,120 Speaker 1: are six thousand dollars, so it's really easy to chop 529 00:23:57,160 --> 00:23:59,120 Speaker 1: that up into twelve months. You've got these little bite 530 00:23:59,119 --> 00:24:02,120 Speaker 1: size piece is of five bucks. I love that. By 531 00:24:02,119 --> 00:24:04,399 Speaker 1: the way, once they up the maximum to the six k, 532 00:24:04,720 --> 00:24:06,000 Speaker 1: made it a whole lot easier for me to wrap 533 00:24:06,000 --> 00:24:09,240 Speaker 1: my brain around that, right. Yeah, a year cap was 534 00:24:09,520 --> 00:24:11,359 Speaker 1: so hard because you couldn't come up with an even 535 00:24:11,400 --> 00:24:13,679 Speaker 1: amount that you would you put in every month. Yeah, man, 536 00:24:13,720 --> 00:24:15,000 Speaker 1: I can't do that kind of math in my head. 537 00:24:15,480 --> 00:24:17,920 Speaker 1: Exactly me neither. I like, I like the five dollars. 538 00:24:18,119 --> 00:24:19,800 Speaker 1: So basically we know that every single month we have 539 00:24:19,880 --> 00:24:22,160 Speaker 1: we have five hundred bucks to purchase some of our 540 00:24:22,280 --> 00:24:25,400 Speaker 1: favorite retirement funds, specifically VOO like v o Oh, that's 541 00:24:25,400 --> 00:24:27,760 Speaker 1: my favorite, and so like you, like Ben, every single 542 00:24:27,760 --> 00:24:30,600 Speaker 1: month word dollar cost averaging. However, one thing I like 543 00:24:30,680 --> 00:24:32,600 Speaker 1: to keep an eye out for, though, like Ben mentioned 544 00:24:32,600 --> 00:24:35,040 Speaker 1: those benchmarks specifically, what I like to keep an out 545 00:24:35,040 --> 00:24:37,520 Speaker 1: for is that if the market ever drops, you know, 546 00:24:37,680 --> 00:24:40,679 Speaker 1: close to ten percent within a thirty day period, that 547 00:24:40,720 --> 00:24:42,760 Speaker 1: means I'm not just gonna buy a single month's worth 548 00:24:42,880 --> 00:24:45,280 Speaker 1: of vo I'm buying three months worth, So that means 549 00:24:45,280 --> 00:24:48,560 Speaker 1: we're going in. So that doesn't happen often, but you know, 550 00:24:48,600 --> 00:24:51,840 Speaker 1: maybe like once or twice a year or something like that. Um. 551 00:24:51,880 --> 00:24:55,480 Speaker 1: But then beyond that, another benchmark is if I ever 552 00:24:55,480 --> 00:24:59,080 Speaker 1: see the market get close to you on sale, that 553 00:24:59,119 --> 00:25:00,879 Speaker 1: means we're putting a lot more and like closer to 554 00:25:00,960 --> 00:25:02,879 Speaker 1: six months. And I can only really remember this happening 555 00:25:02,880 --> 00:25:05,680 Speaker 1: like once or twice in the past ten years, where 556 00:25:05,680 --> 00:25:08,200 Speaker 1: we were looking at buying six months worth of VOO 557 00:25:08,400 --> 00:25:11,280 Speaker 1: right three thousand dollars. However, Man one other benchmark that 558 00:25:11,359 --> 00:25:13,680 Speaker 1: we had never really set because this had never happened before. 559 00:25:13,920 --> 00:25:16,320 Speaker 1: But recently, back in March, you know, the markets dip 560 00:25:16,400 --> 00:25:19,119 Speaker 1: close to thirty percent and although we didn't have this 561 00:25:19,160 --> 00:25:20,840 Speaker 1: written out to worry. Okay, any time in the market 562 00:25:20,880 --> 00:25:23,160 Speaker 1: will drop by we will buy, you know, we will 563 00:25:23,200 --> 00:25:26,120 Speaker 1: completely buy everything. We we saw this as a great 564 00:25:26,119 --> 00:25:29,679 Speaker 1: opportunity because for us, in our adults lifetime basically of 565 00:25:29,720 --> 00:25:33,359 Speaker 1: investing in the market, we've never seen a discount this dramatic. 566 00:25:33,640 --> 00:25:36,080 Speaker 1: And we completely depleted the rest of the money that 567 00:25:36,119 --> 00:25:38,199 Speaker 1: we had sitting there waiting to dollar cost average for 568 00:25:38,200 --> 00:25:40,879 Speaker 1: the rest of the year because it was on sale 569 00:25:40,920 --> 00:25:43,119 Speaker 1: so drastically. I will say, we were a little bit 570 00:25:43,160 --> 00:25:44,840 Speaker 1: nervous and we still are because we don't know where 571 00:25:44,840 --> 00:25:46,840 Speaker 1: the bottom is. We you know, it might continue to 572 00:25:46,920 --> 00:25:49,480 Speaker 1: drop some more. But given the rules that we had 573 00:25:49,560 --> 00:25:52,440 Speaker 1: laid out with ten, we just saw this as an 574 00:25:52,440 --> 00:25:54,920 Speaker 1: extension of our rules. So because of that, we went ahead, 575 00:25:54,920 --> 00:25:57,359 Speaker 1: and Man, we went all in. We wanted to make 576 00:25:57,400 --> 00:25:59,680 Speaker 1: sure that we're taking advantage of the market being on sale, 577 00:26:00,000 --> 00:26:01,840 Speaker 1: and we made the rest of our purchases for the 578 00:26:01,840 --> 00:26:04,639 Speaker 1: remainder of the year, for the remainder of you know, 579 00:26:04,680 --> 00:26:07,320 Speaker 1: it's good to have these rules set in place dollar 580 00:26:07,320 --> 00:26:09,680 Speaker 1: cost averaging, but over the years, Man, I've also seen 581 00:26:09,720 --> 00:26:12,760 Speaker 1: the advantage of there being some flexibility when it does 582 00:26:12,880 --> 00:26:15,640 Speaker 1: come to making sure that you are able to purchase 583 00:26:15,840 --> 00:26:18,040 Speaker 1: some of these funds while they're on sale. Well, it's 584 00:26:18,080 --> 00:26:19,680 Speaker 1: interesting to hear you plan, Matt. Yeah, it sounds like 585 00:26:19,720 --> 00:26:21,560 Speaker 1: it's similar to bend, but it's got a couple of caveats, 586 00:26:21,640 --> 00:26:23,879 Speaker 1: so you know, yeah, again, I like to overcomplicate stuff 587 00:26:24,320 --> 00:26:26,280 Speaker 1: over things stuff as well. Yeah, Well, we've got some 588 00:26:26,320 --> 00:26:28,400 Speaker 1: other tips we want to share for people that want 589 00:26:28,440 --> 00:26:31,120 Speaker 1: to take advantage of a volatile market, and in many 590 00:26:31,119 --> 00:26:33,600 Speaker 1: ways it's gonna involve raining in your emotions. So we'll 591 00:26:33,600 --> 00:26:35,440 Speaker 1: get to some of those thoughts right after the break, 592 00:26:44,560 --> 00:26:46,160 Speaker 1: aren't Att. We're back from the break, and we're gonna 593 00:26:46,200 --> 00:26:49,960 Speaker 1: talk about, yeah, the emotional aspect of investing in a 594 00:26:50,040 --> 00:26:52,199 Speaker 1: volatile market. But the one of the main things that 595 00:26:52,200 --> 00:26:55,240 Speaker 1: we need to talk about before that is the idea 596 00:26:55,280 --> 00:26:58,280 Speaker 1: of rebalancing your portfolio, and that in particular can be 597 00:26:58,280 --> 00:27:00,760 Speaker 1: a powerful thing to do in a down market. So 598 00:27:00,840 --> 00:27:03,200 Speaker 1: let's say you don't have all of your long term 599 00:27:03,240 --> 00:27:06,200 Speaker 1: investments in a total stock market index fund like Matt 600 00:27:06,200 --> 00:27:08,440 Speaker 1: and I tend to do, or target retirement fund, which 601 00:27:08,440 --> 00:27:10,400 Speaker 1: we also think is a great option. But you've got 602 00:27:10,400 --> 00:27:13,240 Speaker 1: a mix of different funds, including stocks, bonds, maybe even 603 00:27:13,440 --> 00:27:15,600 Speaker 1: reads real estate investment trust, which we've talked about on 604 00:27:15,600 --> 00:27:18,120 Speaker 1: the show before. Well, based on the movement that we've seen, 605 00:27:18,640 --> 00:27:21,600 Speaker 1: now is probably a really good time to rebalance your 606 00:27:21,600 --> 00:27:24,720 Speaker 1: portfolio because your allocation has changed in a big way 607 00:27:24,720 --> 00:27:28,040 Speaker 1: because of the volatility that the stock market has experienced, right, 608 00:27:28,040 --> 00:27:31,960 Speaker 1: and so moving money from for example, bonds two stocks 609 00:27:32,080 --> 00:27:34,320 Speaker 1: right now, it helps you get back to your former 610 00:27:34,440 --> 00:27:37,160 Speaker 1: level of portfolio balance, like kind of how you had things, 611 00:27:37,560 --> 00:27:39,679 Speaker 1: you know, maybe three or four months ago. Well, at 612 00:27:39,680 --> 00:27:42,320 Speaker 1: the same time, it allows you to take more advantage 613 00:27:42,440 --> 00:27:45,360 Speaker 1: of the recovery that's inevitably going to happen. So, yeah, 614 00:27:45,440 --> 00:27:49,000 Speaker 1: volatile market times are a perfect time to think about 615 00:27:49,000 --> 00:27:53,000 Speaker 1: rebalancing your portfolio and bringing that portfolio back into kind 616 00:27:53,040 --> 00:27:55,800 Speaker 1: of that ideal alignment that you have, whether it's sixty 617 00:27:55,880 --> 00:27:58,960 Speaker 1: forty stocks and bonds seventy thirty, like, however you think 618 00:27:59,000 --> 00:28:02,080 Speaker 1: about it, make sure that you are thinking about rebalancing 619 00:28:02,160 --> 00:28:05,080 Speaker 1: when the market is going through some tough times. Another 620 00:28:05,200 --> 00:28:07,439 Speaker 1: perspective for us to keep in mind, to help us 621 00:28:07,440 --> 00:28:10,680 Speaker 1: to keep from freaking outs when the market is supervolatile, 622 00:28:11,040 --> 00:28:13,000 Speaker 1: is to make sure that we're keeping our retirement account 623 00:28:13,000 --> 00:28:15,760 Speaker 1: in perspective right Like, so right now, we're just looking 624 00:28:15,760 --> 00:28:17,879 Speaker 1: at the trees, like we are seeing the ups and 625 00:28:17,920 --> 00:28:20,400 Speaker 1: downs of the market. We're seeing it tank not too 626 00:28:20,400 --> 00:28:22,800 Speaker 1: long ago. But what we need to do, though, is 627 00:28:22,920 --> 00:28:25,560 Speaker 1: to step back and see the entire forest. It is 628 00:28:25,600 --> 00:28:28,840 Speaker 1: shocking to lose such a large portion of your retirement 629 00:28:29,040 --> 00:28:31,119 Speaker 1: in such a short period of time. But Joe, it's 630 00:28:31,160 --> 00:28:33,119 Speaker 1: also important for us to remind ourselves though, that the 631 00:28:33,160 --> 00:28:35,760 Speaker 1: greater the risk, the greater the reward. And that is 632 00:28:35,800 --> 00:28:37,760 Speaker 1: really important for us to keep in mind when we're 633 00:28:37,760 --> 00:28:40,360 Speaker 1: in the growth phase of investing, right like, we don't 634 00:28:40,360 --> 00:28:42,080 Speaker 1: need to be looking at our balances right now. Like 635 00:28:42,120 --> 00:28:44,200 Speaker 1: I literally don't even know what my balances are right now, 636 00:28:44,200 --> 00:28:46,080 Speaker 1: because it's not important. All I know is that I'm 637 00:28:46,120 --> 00:28:49,000 Speaker 1: going to invest every single month. So Emily just got 638 00:28:49,000 --> 00:28:51,800 Speaker 1: her four O one K balanced from a previous employer 639 00:28:52,040 --> 00:28:54,520 Speaker 1: in the mail, and I opened it four and and 640 00:28:54,560 --> 00:28:56,600 Speaker 1: kind of told her what had happened. And I told 641 00:28:56,600 --> 00:28:58,920 Speaker 1: her that that her balance had dropped three thousand dollars 642 00:28:58,960 --> 00:29:00,520 Speaker 1: because it's a pretty small for one K, there's not 643 00:29:00,560 --> 00:29:02,080 Speaker 1: a whole lot in there. And she was like, what, 644 00:29:02,280 --> 00:29:04,320 Speaker 1: Oh my gosh, it's terrible. And I was like, no, 645 00:29:04,400 --> 00:29:06,440 Speaker 1: that's not bad at all. I told her how much 646 00:29:06,480 --> 00:29:08,760 Speaker 1: I assumed mine had dropped because I haven't logged in lately, 647 00:29:09,080 --> 00:29:10,800 Speaker 1: and she was like, oh, that's a lot too, and 648 00:29:10,840 --> 00:29:13,560 Speaker 1: so she just starts freaking out. But really, when it 649 00:29:13,600 --> 00:29:15,520 Speaker 1: comes down to it, I'm not freaking out in the 650 00:29:15,560 --> 00:29:18,520 Speaker 1: slightest because I have a perspective of kind of the 651 00:29:18,920 --> 00:29:22,040 Speaker 1: overall forest of what the stock market does throughout the years, 652 00:29:22,080 --> 00:29:25,240 Speaker 1: throughout its lifetime, what the American economy tends to do, 653 00:29:25,520 --> 00:29:27,880 Speaker 1: and so yeah, thirty percent drop in one month just 654 00:29:27,920 --> 00:29:30,000 Speaker 1: doesn't really freak me out, honestly. But yeah, it was 655 00:29:30,040 --> 00:29:31,840 Speaker 1: interesting to kind of get her take and hear what 656 00:29:31,960 --> 00:29:34,479 Speaker 1: she thought about that three thousand dollar drop. That can 657 00:29:34,520 --> 00:29:36,920 Speaker 1: be disheartening to see, I think when you open a statement, 658 00:29:37,320 --> 00:29:39,160 Speaker 1: and for her it was, But that's the kind of 659 00:29:39,200 --> 00:29:42,479 Speaker 1: thing having that sort of other perspective can make opening 660 00:29:42,520 --> 00:29:44,960 Speaker 1: that statement a whole lot less dramatic and hard. Yeah, 661 00:29:44,960 --> 00:29:46,920 Speaker 1: it's so important for us to zoom out and to 662 00:29:46,960 --> 00:29:49,880 Speaker 1: pull back a little bit. Right. So, for example, stock 663 00:29:49,920 --> 00:29:53,520 Speaker 1: portfolio was down roughly from the peak, like we you know, 664 00:29:53,520 --> 00:29:56,160 Speaker 1: we're talking about earlier, not that long ago. But then 665 00:29:56,280 --> 00:29:59,000 Speaker 1: stocks shot back up, right, but over the past ten 666 00:29:59,080 --> 00:30:01,320 Speaker 1: years still take I'm going to account the most recent 667 00:30:01,320 --> 00:30:06,200 Speaker 1: crash equity portfolio, so all stocks still have performs any 668 00:30:06,240 --> 00:30:09,240 Speaker 1: other diversification strategy, and you're gonna be up a hundred 669 00:30:09,240 --> 00:30:12,720 Speaker 1: and forty two percent over that same time period. Yeah, Matt, 670 00:30:12,720 --> 00:30:14,520 Speaker 1: Like you said, the greater the risk, the greater reward. 671 00:30:14,560 --> 00:30:18,000 Speaker 1: But it does come with volatility, even more volatility if 672 00:30:18,040 --> 00:30:21,200 Speaker 1: you're less balanced and and more heavily invested in stocks. 673 00:30:21,400 --> 00:30:23,320 Speaker 1: And I think one of the reasons that people are 674 00:30:23,440 --> 00:30:26,840 Speaker 1: so hesitant though, to to continue to invest in times 675 00:30:26,840 --> 00:30:29,959 Speaker 1: of volatility is because of loss aversion, and that can 676 00:30:30,000 --> 00:30:33,720 Speaker 1: be a really powerful behavioral mechanism that prevents us from 677 00:30:33,760 --> 00:30:36,480 Speaker 1: becoming good investors. Right, none of us want to lose money, 678 00:30:36,640 --> 00:30:38,360 Speaker 1: and the surest way to not lose money is to 679 00:30:38,400 --> 00:30:41,040 Speaker 1: not put any at risk. But that's not a great 680 00:30:41,040 --> 00:30:43,520 Speaker 1: solution either. Right. We've talked about this on the show before. 681 00:30:43,640 --> 00:30:46,440 Speaker 1: But because taking calculator risks is the only way to 682 00:30:46,560 --> 00:30:50,040 Speaker 1: ensure that we reap inevitable future rewards. Well, when we 683 00:30:50,120 --> 00:30:52,520 Speaker 1: let our aversion to loss cause us to sit on 684 00:30:52,560 --> 00:30:55,320 Speaker 1: the investing sidelines, were actually locking in the greatest risk 685 00:30:55,400 --> 00:30:58,160 Speaker 1: to our money, which is inflation. So yeah, people freak 686 00:30:58,200 --> 00:31:00,520 Speaker 1: out about the potential for lost in this stock market, 687 00:31:00,760 --> 00:31:04,480 Speaker 1: but you don't actually lose anything unless you sell your shares, 688 00:31:04,560 --> 00:31:07,360 Speaker 1: unless you sell positions. And so if you're able to 689 00:31:07,360 --> 00:31:10,040 Speaker 1: to stay invested and you look at that forest of 690 00:31:10,080 --> 00:31:12,280 Speaker 1: what the stock market does over the years, well you're 691 00:31:12,320 --> 00:31:14,840 Speaker 1: not gonna actually incur any sort of losses. You're gonna 692 00:31:14,840 --> 00:31:17,280 Speaker 1: incur create gains. But it's that loss of version, that 693 00:31:17,400 --> 00:31:20,000 Speaker 1: mental loss of version that prevents us from actually staying 694 00:31:20,000 --> 00:31:23,560 Speaker 1: the course. Usually, Yeah, avoiding this perceived risk altogether, like 695 00:31:23,600 --> 00:31:25,600 Speaker 1: that is the risk is move that we can make, right. 696 00:31:25,640 --> 00:31:28,880 Speaker 1: We talked about this back in episode sixty nine. Investing 697 00:31:28,920 --> 00:31:31,880 Speaker 1: in the stock market does have an element of risk involved, 698 00:31:32,120 --> 00:31:34,880 Speaker 1: but it's just completely different than the kind of risk 699 00:31:35,000 --> 00:31:38,200 Speaker 1: that you would incur gambling in Vegas. Like our friend 700 00:31:38,480 --> 00:31:40,760 Speaker 1: five Am Joel likes to do once a year, was 701 00:31:40,800 --> 00:31:42,240 Speaker 1: to go to Vegas. That's just what he does. I 702 00:31:42,360 --> 00:31:45,080 Speaker 1: understand that. But keeping your money under your mattress like 703 00:31:45,120 --> 00:31:47,200 Speaker 1: that is a sure fire away to make sure that 704 00:31:47,280 --> 00:31:49,560 Speaker 1: you don't lose any of it. But inflation is going 705 00:31:49,600 --> 00:31:52,120 Speaker 1: to steadily march on, ensuring that the money you stood 706 00:31:52,120 --> 00:31:55,600 Speaker 1: away will lose purchasing power with each growing year. That's 707 00:31:55,600 --> 00:31:59,080 Speaker 1: why investing, whether in a volatile market or not, is 708 00:31:59,240 --> 00:32:01,000 Speaker 1: so important. So this kind of makes me think of 709 00:32:01,000 --> 00:32:02,840 Speaker 1: Seth Goden as well. He talks about the lizard brain 710 00:32:03,160 --> 00:32:06,360 Speaker 1: and how like we kind of have this prehistoric, you know, 711 00:32:06,440 --> 00:32:08,280 Speaker 1: lobe in our brain that all it wants us to 712 00:32:08,320 --> 00:32:10,800 Speaker 1: do is to be safe, to not take risks and 713 00:32:10,840 --> 00:32:13,920 Speaker 1: just survive essentially, So like in prehistoric times that meant 714 00:32:14,080 --> 00:32:15,800 Speaker 1: like making sure that we get enough food to eat 715 00:32:16,360 --> 00:32:18,600 Speaker 1: and to make sure that we're not eaten by something else. 716 00:32:19,440 --> 00:32:21,800 Speaker 1: But what that means for us today is that we 717 00:32:21,880 --> 00:32:23,959 Speaker 1: just sit on our money, right, and we don't put 718 00:32:24,000 --> 00:32:26,360 Speaker 1: it at risk, which is the exact opposite of what 719 00:32:26,400 --> 00:32:28,880 Speaker 1: we need to do. So, like he talks about that 720 00:32:29,000 --> 00:32:32,520 Speaker 1: in the context of like launching businesses and delivering products, 721 00:32:32,560 --> 00:32:36,000 Speaker 1: taking risks, things like that, but it completely applies to 722 00:32:36,200 --> 00:32:38,680 Speaker 1: investing as well, Like it essentially takes this sort of 723 00:32:38,720 --> 00:32:42,200 Speaker 1: act of defiance to you know, actually invest, right, we 724 00:32:42,240 --> 00:32:44,440 Speaker 1: have to quiet that lizard brain, and it takes action 725 00:32:44,520 --> 00:32:47,040 Speaker 1: actually investing your money. Yeah, and and these are risks 726 00:32:47,080 --> 00:32:49,480 Speaker 1: I would say that we're taking with our money that 727 00:32:49,520 --> 00:32:53,760 Speaker 1: are based on a factual reality and historical reality of 728 00:32:53,800 --> 00:32:56,640 Speaker 1: what the free market does, of what innovative businesses tend 729 00:32:56,680 --> 00:33:00,600 Speaker 1: to do. And so, yeah, this is not just aimless risk, right, 730 00:33:00,680 --> 00:33:03,280 Speaker 1: These are These are calculated risks, and so that's I 731 00:33:03,280 --> 00:33:06,320 Speaker 1: think an important distinction to this doesn't have, like you said, 732 00:33:06,360 --> 00:33:10,120 Speaker 1: any correlation to putting your money on the crafts table 733 00:33:10,240 --> 00:33:12,680 Speaker 1: or at the roulette wheel. It's altogether different from that. 734 00:33:12,920 --> 00:33:16,400 Speaker 1: And Matt, I think ultimately market volatility is the source 735 00:33:16,600 --> 00:33:19,960 Speaker 1: of enhanced future returns for us. The overall American stock 736 00:33:19,960 --> 00:33:23,560 Speaker 1: market has returned roughly nine percent over the past ninety years. 737 00:33:23,920 --> 00:33:27,040 Speaker 1: In those ninety years have had their share of difficult events, Matt. 738 00:33:27,040 --> 00:33:28,920 Speaker 1: If you go back and look at American history, there's 739 00:33:28,920 --> 00:33:33,640 Speaker 1: a lot of tough stuff that happened over those years, right, wars, depressions, inflation, deflation, 740 00:33:33,920 --> 00:33:36,840 Speaker 1: politicians of all sorts, of different stripes. And so while 741 00:33:36,880 --> 00:33:39,080 Speaker 1: it feels a lot better to be buying as the 742 00:33:39,120 --> 00:33:41,880 Speaker 1: market is rising, at least on our inn tives, right, 743 00:33:41,880 --> 00:33:43,880 Speaker 1: it's like, oh cool, I keep seeing it go up. 744 00:33:44,120 --> 00:33:47,560 Speaker 1: We'll know that American capitalism has continued to produce results 745 00:33:47,600 --> 00:33:51,520 Speaker 1: for decades on end, despite real challenges in our face 746 00:33:51,880 --> 00:33:55,600 Speaker 1: foreign enemies, uh wars on foreign soil. I mean, these 747 00:33:55,800 --> 00:33:59,880 Speaker 1: sorts of things have affected returns, they've affected the stock market, 748 00:34:00,000 --> 00:34:02,720 Speaker 1: but they've also created opportunities for people at the same time. 749 00:34:02,960 --> 00:34:06,280 Speaker 1: So investing in an economic tailspan, although it feels a 750 00:34:06,360 --> 00:34:09,200 Speaker 1: bit counterintuitive, I think it's the best thing that people 751 00:34:09,239 --> 00:34:10,880 Speaker 1: could be doing over the long term. So at a 752 00:34:10,920 --> 00:34:13,560 Speaker 1: minimum dollar cost averaging, right, that's the first rule I 753 00:34:13,560 --> 00:34:15,880 Speaker 1: think that most of our listeners should be implementing if 754 00:34:15,880 --> 00:34:17,880 Speaker 1: they want to be good investors through thick and through thin. 755 00:34:18,239 --> 00:34:20,399 Speaker 1: And then you know, they can add rules onto their 756 00:34:20,400 --> 00:34:23,720 Speaker 1: investing plan that go on top of that that help create, 757 00:34:24,040 --> 00:34:26,080 Speaker 1: uh an even more efficient system for them to become 758 00:34:26,120 --> 00:34:29,160 Speaker 1: an investor that invests in a volatile market and that 759 00:34:29,280 --> 00:34:32,920 Speaker 1: is building well through thick through thin for the long term. 760 00:34:33,120 --> 00:34:34,520 Speaker 1: And so I don't want to like discount all that 761 00:34:34,560 --> 00:34:36,480 Speaker 1: we just said, but maybe the too long didn't read 762 00:34:36,520 --> 00:34:39,520 Speaker 1: it is just keep investing like that. That's all you 763 00:34:39,520 --> 00:34:41,400 Speaker 1: really need to do. Just make sure that you continue 764 00:34:41,440 --> 00:34:43,880 Speaker 1: to put money into the market. Yeah, boil a thirty 765 00:34:43,920 --> 00:34:46,400 Speaker 1: five minute podcast episode down into into like, you know, 766 00:34:46,560 --> 00:34:49,600 Speaker 1: one sentence. I like it. It's probably should have done. 767 00:34:49,719 --> 00:34:53,280 Speaker 1: We'll keep investing. Yeah, no matter what, whether things are volatile, 768 00:34:53,320 --> 00:34:55,600 Speaker 1: things are down, it shouldn't be a warning flag to 769 00:34:55,680 --> 00:34:58,239 Speaker 1: not invest. It should actually make you more excited to 770 00:34:58,239 --> 00:35:00,440 Speaker 1: continue to do so. I agree, all man, let's go 771 00:35:00,440 --> 00:35:02,920 Speaker 1: ahead and quickly take it back to the beer. This episode, 772 00:35:02,960 --> 00:35:06,520 Speaker 1: we enjoyed a beer from Creature Comforts out of Athens, Georgia, 773 00:35:06,719 --> 00:35:10,040 Speaker 1: and it's called Athena Paradiso. What were your thoughts on 774 00:35:10,040 --> 00:35:11,719 Speaker 1: this one, buddy. As I said at the beginning of 775 00:35:11,719 --> 00:35:14,160 Speaker 1: the episode, I love this beer. Lots of fruit, super 776 00:35:14,200 --> 00:35:17,359 Speaker 1: fruit heavy out of those red tart fruits going on 777 00:35:17,760 --> 00:35:19,680 Speaker 1: and and so yeah. I love kind of the way 778 00:35:19,719 --> 00:35:21,520 Speaker 1: those fruits play together and kind of create a nice 779 00:35:21,560 --> 00:35:23,760 Speaker 1: little medley. I'm gonna say it pours a nice pinkish 780 00:35:23,800 --> 00:35:27,120 Speaker 1: red color. It's tart, it's fruity, it's just thirst quenching. 781 00:35:27,160 --> 00:35:29,279 Speaker 1: It's a perfect beer, especially for summer, as we get 782 00:35:29,320 --> 00:35:31,600 Speaker 1: closer and closer to the really warm months. I love 783 00:35:31,640 --> 00:35:33,719 Speaker 1: a beer like this. I mean, I wonder if they 784 00:35:34,000 --> 00:35:36,840 Speaker 1: choose the color on the can, uh, if they sample 785 00:35:36,880 --> 00:35:38,960 Speaker 1: it from the actual beer color, because it is so 786 00:35:39,160 --> 00:35:42,440 Speaker 1: spot on and like the colors of beer, it varies 787 00:35:42,480 --> 00:35:44,279 Speaker 1: from you to year. But I feel like it's the 788 00:35:44,280 --> 00:35:47,319 Speaker 1: exact same color this year. But yeah, so this is 789 00:35:47,560 --> 00:35:50,640 Speaker 1: a German style wheat and so it's it's a wheat beer, 790 00:35:50,840 --> 00:35:54,200 Speaker 1: but it's a super sour tart wheat ale. But then 791 00:35:54,239 --> 00:35:56,840 Speaker 1: on top of that you add the tart, cherry, raspberry 792 00:35:56,840 --> 00:35:59,000 Speaker 1: and cranberry to it makes it a lot more interesting. 793 00:35:59,280 --> 00:36:01,040 Speaker 1: In particular, I like this year it had a lot 794 00:36:01,120 --> 00:36:03,800 Speaker 1: more of that chair we're going on, which is really delicious. 795 00:36:04,120 --> 00:36:06,120 Speaker 1: And yes, so we're finishing up my stock for this year, 796 00:36:06,160 --> 00:36:08,359 Speaker 1: but but it's really good. Close it. Yeah, we'll glad, 797 00:36:08,360 --> 00:36:09,560 Speaker 1: glad we get to share it on the on the 798 00:36:09,560 --> 00:36:13,359 Speaker 1: show today, the last two until next year exactly. All right, man, 799 00:36:13,400 --> 00:36:15,520 Speaker 1: that's gonna do it for this episode. For folks at once, 800 00:36:15,520 --> 00:36:17,680 Speaker 1: show notes, well, they can get to our website how 801 00:36:17,719 --> 00:36:19,879 Speaker 1: to money dot com get more info there. If you're 802 00:36:19,880 --> 00:36:22,480 Speaker 1: listening to this episode and you have not yet subscribed 803 00:36:22,520 --> 00:36:24,759 Speaker 1: to our show, we would ask you to go ahead 804 00:36:24,760 --> 00:36:27,040 Speaker 1: and mash that subscribe button wherever it is that you 805 00:36:27,040 --> 00:36:29,319 Speaker 1: listen to your podcasts. And then also if you've been 806 00:36:29,320 --> 00:36:31,600 Speaker 1: a long time listener but haven't yet left us a review, 807 00:36:31,640 --> 00:36:33,560 Speaker 1: we would love for you to head over to Apple 808 00:36:33,640 --> 00:36:36,239 Speaker 1: Podcasts leave us a solid five star review over there, 809 00:36:36,320 --> 00:36:38,200 Speaker 1: as that helps us to get the word out, help 810 00:36:38,239 --> 00:36:40,279 Speaker 1: others to find our show who need to be doing 811 00:36:40,320 --> 00:36:42,880 Speaker 1: smarter things with their money as well. Yeah, some people 812 00:36:42,880 --> 00:36:44,719 Speaker 1: need some more encouragement, need some more help, and that's 813 00:36:44,760 --> 00:36:46,759 Speaker 1: what we're here for. Yeah, buddy, all right, Well that's 814 00:36:46,760 --> 00:36:49,000 Speaker 1: gonna be a dude. Until next time. Best Friends Out, 815 00:36:49,080 --> 00:36:49,959 Speaker 1: Best Friends Out.