WEBVTT - Investing In a Volatile Market #200 0:00:00.080 --> 0:00:02.400 Welcome to How the Money. I'm Joel and I and 0:00:02.480 --> 0:00:05.640 Matt and today we're discussing investing in a volatile market. 0:00:24.440 --> 0:00:27.600 That's right, man, we are talking about investing, And honestly, 0:00:27.640 --> 0:00:29.280 before we even dive into this, I feel like it's 0:00:29.280 --> 0:00:31.840 worth mentioning how we understand that not everybody is in 0:00:31.880 --> 0:00:34.320 a position to where they can invest lots of money 0:00:34.400 --> 0:00:36.120 right now in a volatile market to take advantage of 0:00:36.159 --> 0:00:38.800 these downswings that we're seeing and so, but but that 0:00:38.840 --> 0:00:40.879 being said, there are a lot of hang ups that 0:00:40.960 --> 0:00:44.040 people have when it comes to investing in the market 0:00:44.040 --> 0:00:46.240 when there are lots of fluctuations, and so that's what 0:00:46.280 --> 0:00:48.280 we're gonna talk about today, Werena. We're gonna talk about 0:00:48.280 --> 0:00:51.280 how to actually go about investing in a volatile market, 0:00:51.560 --> 0:00:53.519 as well as ways that we can kind of control 0:00:53.600 --> 0:00:56.360 some of our emotions as well, because honestly, isn't that 0:00:56.440 --> 0:00:58.280 the biggest hang up that we have? Like we know 0:00:58.360 --> 0:01:01.120 what we should be doing, but are emotions that keep 0:01:01.200 --> 0:01:03.480 us from doing the right thing. So I'm excited that 0:01:03.520 --> 0:01:06.080 we're gonna talk about that. How do you control your emotions? Matt, 0:01:06.400 --> 0:01:09.800 I bottled them up, I tamped them down. Uh, and 0:01:09.880 --> 0:01:13.319 then when no one's looking, I just break something off 0:01:13.440 --> 0:01:15.760 the corner. Watched, like, where the why is this dish broken? 0:01:15.760 --> 0:01:17.720 I don't have no idea how. I don't know what happened. Yeah, 0:01:17.720 --> 0:01:19.800 I don't know. These are randomly breaking all around the house. 0:01:19.920 --> 0:01:24.240 And that's one way. Yeah, that's one of the Hulk method. 0:01:25.400 --> 0:01:26.960 As Kate and I have been catching up on our 0:01:27.000 --> 0:01:29.720 Marvel movies as you know, yes, yeah, I know, I know. Yeah, 0:01:29.760 --> 0:01:31.399 you've been doing that all right. Yeah, Well, I'm looking 0:01:31.400 --> 0:01:33.760 forward to to tackling this topic Matt and there. Yeah, 0:01:33.760 --> 0:01:36.680 there's so much to say for people in all different 0:01:36.720 --> 0:01:40.319 areas of their investing lifetime. And I think in particular 0:01:40.400 --> 0:01:43.440 for our listeners who are younger, the ones who didn't 0:01:43.480 --> 0:01:45.320 necessarily go through the Great Recession. They were in middle 0:01:45.319 --> 0:01:47.480 school or high school or something like that ten years ago, 0:01:47.760 --> 0:01:49.360 and they didn't have any sort of money on the table. 0:01:49.360 --> 0:01:52.320 They weren't investing at that point in time. Well, this 0:01:52.520 --> 0:01:54.880 feels like new territory for people like them. And so yeah, 0:01:54.880 --> 0:01:57.200 I think it's important to address this topic for sure. 0:01:57.400 --> 0:01:59.560 But before we get to that, Matt, you recently got 0:01:59.600 --> 0:02:03.040 scammed on Facebook marketplace, got scammed? How much money did 0:02:03.080 --> 0:02:05.880 you lose. No, I did not get scammed. So previously, 0:02:05.960 --> 0:02:07.920 we know we've talked about the stimulus money, and you know, 0:02:07.920 --> 0:02:10.400 I we we discussed what we should do with that 0:02:10.520 --> 0:02:12.760 stimulus money. How some of that money, maybe ten percent, 0:02:12.880 --> 0:02:16.079 it's good and even healthy to spend on yourselves as 0:02:16.120 --> 0:02:19.440 a sort of splurge. And I mentioned treat yourself exactly, 0:02:19.520 --> 0:02:22.320 treat yourself. And I mentioned that I was looking at 0:02:22.360 --> 0:02:25.000 a bike. Well, I got my bike, by the way, 0:02:25.120 --> 0:02:27.720 I got my Salsa Journeyman, which is a sweet bike. 0:02:28.000 --> 0:02:29.960 I'm not being paid to say this. I love it 0:02:30.040 --> 0:02:33.160 that much. But I did want to be responsible, and 0:02:33.200 --> 0:02:35.400 so I made sure to sell a bike. You know, 0:02:35.440 --> 0:02:37.080 we kind of have a little bike shop going on 0:02:37.120 --> 0:02:39.400 in our in our basement. So I listed that bike 0:02:39.480 --> 0:02:42.680 on Facebook via the marketplace, and it went within a 0:02:42.720 --> 0:02:45.240 day or two, it was gone. And I am on 0:02:45.320 --> 0:02:46.840 top of that kind of stuff, and so I marked 0:02:46.880 --> 0:02:49.320 it as sold, right, And so that's how I knew 0:02:49.360 --> 0:02:51.519 that when I received a text message on my phone 0:02:51.960 --> 0:02:54.400 that said, hey, is this item still available? And it 0:02:54.440 --> 0:02:56.840 had a Facebook link to a marketplace. You know, you 0:02:56.840 --> 0:02:58.639 could see it in the U R L. And I 0:02:58.680 --> 0:03:01.360 almost clicked it, but I thought, wait a minute, that 0:03:01.400 --> 0:03:03.880 listing shouldn't be live at all, because I remembered that 0:03:03.919 --> 0:03:05.840 I had marked it a sould right uh, And so 0:03:05.880 --> 0:03:07.760 I looked at the u r L a little bit closer, 0:03:08.040 --> 0:03:10.799 and I saw that it was not a legitimate Facebook 0:03:10.919 --> 0:03:13.320 u r L. I thought it had like a subdomain 0:03:13.320 --> 0:03:15.679 going on, because it had like secure what I thought 0:03:15.720 --> 0:03:18.079 was a dot right. I thought it said secure dots 0:03:18.160 --> 0:03:20.440 Facebook dot com or whatever, but in fact it had 0:03:20.480 --> 0:03:23.480 a dash, which means it is not a subdomain. It's 0:03:23.480 --> 0:03:27.119 a separate u r L actually, or specifically, it's a subdomain, 0:03:27.360 --> 0:03:30.240 but not a Facebook of some fraudulent site. So I 0:03:30.320 --> 0:03:33.280 was that close to actually clicking that link, but I 0:03:33.320 --> 0:03:34.680 was a little curious to see what they would say, 0:03:34.680 --> 0:03:35.880 and so I did reply back, and I was like, 0:03:35.920 --> 0:03:38.640 what's the item? Obviously I did not hear from them 0:03:38.680 --> 0:03:41.640 after that, but I wanted to mention that because a 0:03:41.720 --> 0:03:45.080 lot of us have experienced with scams via Craigslist, but 0:03:45.120 --> 0:03:46.760 this is the first time I had ever received a 0:03:47.280 --> 0:03:50.960 scamy right or a spamy message from a Facebook listing. 0:03:51.080 --> 0:03:52.880 So I wanted to mention that just to make our 0:03:52.880 --> 0:03:55.680 listeners aware that make sure that you're being careful with 0:03:55.800 --> 0:03:57.400 you know, with the links that you're clicking, even if 0:03:57.440 --> 0:04:00.360 it's a message through Facebook. I mean that link could 0:04:00.360 --> 0:04:02.480 have been, since I'm guessing, through messenger or something like that. 0:04:02.480 --> 0:04:04.680 But the fact that it was sent to me outside 0:04:04.680 --> 0:04:07.720 of Facebook via text messages that definitely raised a red flag. 0:04:07.800 --> 0:04:08.920 And so a lot of folks might be in a 0:04:08.920 --> 0:04:11.720 similar situation as me. Just make sure that you're being careful. Yeah, man, 0:04:11.720 --> 0:04:13.080 it's like, I don't know, four or five months ago, 0:04:13.120 --> 0:04:16.120 I saw Consumer Reports wrote an article on, you know, 0:04:16.120 --> 0:04:19.560 the expansion of Facebook messenger scams. They've really really proliferated. 0:04:19.600 --> 0:04:21.600 So that's a that's a good warning, and I'm glad 0:04:21.640 --> 0:04:23.360 you didn't click on the link. Who knows what sort 0:04:23.400 --> 0:04:26.080 of personal info they're trying to mind or And I 0:04:26.080 --> 0:04:28.520 feel like too. Right now, the scams are just abounding, 0:04:28.880 --> 0:04:32.159 with coronavirus, stimulus checks, p p P loans, They're just 0:04:32.320 --> 0:04:34.320 all sorts of scamsters trying to get in the mix. 0:04:34.760 --> 0:04:37.960 It's highly unfortunate. It's terrible to watch. But we have 0:04:38.000 --> 0:04:40.159 to look out for ourselves and be careful not to 0:04:40.160 --> 0:04:42.760 click on errant links and not to have conversations with 0:04:42.760 --> 0:04:44.560 people that we don't know at all. And yeah, so 0:04:44.640 --> 0:04:46.719 that's a good warning to to share with people. But yeah, 0:04:46.720 --> 0:04:48.840 I didn't get scammed. I wasn't gonna give Janie any 0:04:48.880 --> 0:04:52.160 of my information. Well, Jane, it's that's a classic scammer 0:04:52.240 --> 0:04:55.680 name too obvious, so obvious. Sorry to any listeners out 0:04:55.680 --> 0:04:57.840 of their name. Chance. Alright, ma, let's talk about the 0:04:57.839 --> 0:04:59.440 beer we're having on the show today. This is a 0:04:59.520 --> 0:05:02.240 Theena Pair dso from Creature Comforts Brewing Company. They're right 0:05:02.279 --> 0:05:04.760 around the corner from us in Athens, Georgia. This is 0:05:04.800 --> 0:05:08.040 a fruited Berliner Vice. It's got cherries, raspberries and cranberries 0:05:08.080 --> 0:05:10.000 in it, and I'm looking forward to having this one 0:05:10.120 --> 0:05:12.040 on the show with you today, my friend, man, this 0:05:12.080 --> 0:05:13.640 is a seasonal beer. This is something that they really, 0:05:13.800 --> 0:05:16.720 I guess, pretty much every spring, like early spring. And 0:05:16.720 --> 0:05:18.680 this is one that you picked up recently to donate 0:05:18.720 --> 0:05:22.160 to the show, So thank you, Joel. Well do every spring. 0:05:22.440 --> 0:05:24.039 I ended up buying like three six packs of this 0:05:24.080 --> 0:05:26.600 one because I love this beer so much. A good one. 0:05:27.120 --> 0:05:28.520 So all right, we'll talk about that one at the 0:05:28.600 --> 0:05:30.760 end of the episode. But I think people know I'm 0:05:30.760 --> 0:05:33.360 gonna like it, all right, Matt Well let's get onto 0:05:33.400 --> 0:05:35.680 the subject at hand. Today. We're talking about investing in 0:05:35.680 --> 0:05:38.800 a volatile market, and volatile markets in particular bring out 0:05:39.000 --> 0:05:41.200 the worst in investors, or they can bring out the 0:05:41.200 --> 0:05:44.520 worst in investors, because we're Austin guilty of overreacting to 0:05:44.560 --> 0:05:46.839 the good news and the bad news alike. If the 0:05:46.839 --> 0:05:49.160 news is good, we get invigorated and we think it's 0:05:49.160 --> 0:05:50.720 going to continue to be good, and if it's bad, 0:05:50.920 --> 0:05:52.800 we get pessimistic and it's hard to looking at the 0:05:52.800 --> 0:05:55.240 future and see when things could turn around. Right. So, 0:05:55.320 --> 0:05:58.640 investing while the market is experiencing volatility like he is 0:05:58.720 --> 0:06:01.640 right now takes some amount of nerve on our part. 0:06:01.960 --> 0:06:04.400 Right people are out there selling off their steak in 0:06:04.440 --> 0:06:07.440 particular companies right now for a reason. Some sectors are 0:06:07.440 --> 0:06:09.880 suffering in a big way right now, like, for instance, 0:06:09.880 --> 0:06:12.720 who knows how long airlines are going to suffer profit 0:06:12.760 --> 0:06:15.159 declines because of COVID. Are people going to continue to 0:06:15.160 --> 0:06:18.240 fly in the same way even as restrictions continue to 0:06:18.240 --> 0:06:20.520 get lifted in different cities and parts of the country. 0:06:20.839 --> 0:06:22.800 Is flying ever gonna be the same That's kind of 0:06:22.920 --> 0:06:25.760 question that investors have to tackle right now, and that's 0:06:25.800 --> 0:06:27.800 why some of the airlines stocks have had a massive hit, 0:06:27.960 --> 0:06:30.000 and it's important to note that the market is more 0:06:30.080 --> 0:06:32.760 volatile based on a confluence of factors at the moment too, 0:06:33.040 --> 0:06:36.599 many many of which are based in economic reality. That 0:06:36.800 --> 0:06:38.760 lots of American businesses are going to have a tougher 0:06:38.800 --> 0:06:41.800 time moving forward because of the pandemic we've experienced. But 0:06:42.360 --> 0:06:44.640 as long term buy and hold investors, Matt Right, buying 0:06:44.640 --> 0:06:47.680 in a down market is crucial to our wealth building efforts. 0:06:47.720 --> 0:06:49.560 It's something we have to do, we have to get 0:06:49.600 --> 0:06:51.920 comfortable with, and that's why we felt like we really 0:06:51.960 --> 0:06:54.120 had to cover this topic today on the show. Yeah, 0:06:54.160 --> 0:06:56.040 I guess you know, it's sort of not unlike us 0:06:56.240 --> 0:06:58.640 having to get used to living with COVID nineteen as 0:06:58.680 --> 0:07:00.760 as part of our lives now. But I agree man, 0:07:00.800 --> 0:07:04.320 continuing to buy and hold they are both far more 0:07:04.320 --> 0:07:07.240 difficult to do in a volatile market for most investors. 0:07:07.560 --> 0:07:09.400 And then on top of that, when we hear terms 0:07:09.440 --> 0:07:12.920 like bear market and recession and being thrown around, it 0:07:12.960 --> 0:07:16.000 makes it even harder for many of us to to 0:07:16.040 --> 0:07:19.400 continue to invest. But it is crucial that we continue 0:07:19.440 --> 0:07:22.080 investing when the market is in a state of turmoil 0:07:22.280 --> 0:07:24.360 because it can give us a big boost to our 0:07:24.520 --> 0:07:27.520 overall net worth. You know, it is, as we've said before, 0:07:27.840 --> 0:07:31.200 buying a stake in a variety of American businesses on sale. 0:07:31.680 --> 0:07:34.240 And although it always feels good to buy, you know, 0:07:34.360 --> 0:07:37.240 a consumer good, maybe an item of clothing or a 0:07:37.240 --> 0:07:40.000 new bike like I just got at a steep discount, 0:07:40.000 --> 0:07:43.600 we have a much harder time feeling good about buying 0:07:43.640 --> 0:07:46.520 stocks that are on sale, or even buying them at all. Yeah, 0:07:46.520 --> 0:07:49.160 it is amazing, how the inverse is not true. How 0:07:49.200 --> 0:07:51.240 that's the one thing in our lives that we have 0:07:51.280 --> 0:07:53.880 the hardest time buying on sale is is the American 0:07:53.920 --> 0:07:57.040 stock market or the world stock market, but almost anything else, 0:07:57.080 --> 0:08:00.120 we're like super pumped. Yeah, so true man. Uh. But still, 0:08:00.120 --> 0:08:02.800 it's so crucial that we do this, and this has 0:08:02.800 --> 0:08:04.880 a big benefit to our future self. Yeah, for sure, 0:08:04.920 --> 0:08:06.920 it totally does, Matt. I was impressed to you. I 0:08:06.920 --> 0:08:10.120 I recently saw a study from Vanguard that showed that 0:08:10.160 --> 0:08:13.400 a majority of Vanguard investors in particular didn't make any 0:08:13.480 --> 0:08:16.800 changes to their portfolio in in the recent wild down swing, 0:08:16.960 --> 0:08:21.720 in particular in decline that mostly happened incredibly quickly in March, 0:08:22.040 --> 0:08:26.320 and of us Vanguard investors stayed the course. They weren't 0:08:26.360 --> 0:08:29.040 doing any buying or selling apart from their regular dollar 0:08:29.080 --> 0:08:32.079 cost averaging that happens out of every paycheck, and so 0:08:32.120 --> 0:08:34.800 that was pretty cool to see, right, Vanguard investors might 0:08:34.800 --> 0:08:37.280 not be the norm, though I haven't seen more studies 0:08:37.360 --> 0:08:41.040 necessarily showing that customers of other companies are doing something differently. 0:08:41.280 --> 0:08:44.840 But but Vanguard investors are by nature because of the founder, 0:08:44.920 --> 0:08:47.920 Jack Bogel and his philosophy in buying and holding, they 0:08:47.920 --> 0:08:49.960 are probably a little different than the average person. I mean, 0:08:50.080 --> 0:08:54.400 Vanguard investors in particular subscribe to that Bogel uh investing 0:08:54.400 --> 0:08:57.080 philosophy where you buy for the long haul, and you 0:08:57.120 --> 0:09:00.080 buy super diversified funds yep, cheap index funds that are 0:09:00.120 --> 0:09:02.880 widely diversified. And there's even people, Yeah, the Bogel investing 0:09:02.880 --> 0:09:05.080 philosophy man has taken on such a life of its own. 0:09:05.320 --> 0:09:08.160 There's a website called Bogel Heads, and they're basically these 0:09:08.200 --> 0:09:11.199 followers that are so in love with Jack Bogel, his philosophy, 0:09:11.200 --> 0:09:13.800 what he started. That there are forums where people discuss 0:09:13.840 --> 0:09:15.600 how great it is. But I think we can learn 0:09:15.679 --> 0:09:17.880 from those investors. Right that the resolved to do very 0:09:17.920 --> 0:09:20.360 little or nothing in a market like this where they 0:09:20.360 --> 0:09:22.800 are willing to stay the course even in the midst 0:09:22.840 --> 0:09:25.400 of a lot of turbulence. You know, what's important here 0:09:25.600 --> 0:09:28.520 is that they didn't do the biggest sin, which is 0:09:29.120 --> 0:09:32.040 actually sell some of their portfolio as the market was 0:09:32.040 --> 0:09:34.679 going to decline. Because on one hand, this seems like 0:09:34.720 --> 0:09:37.560 good news, right if investors stayed the course, that means 0:09:37.600 --> 0:09:40.200 they didn't lock in those losses by selling. But on 0:09:40.240 --> 0:09:41.960 the other hand, maybe this is bad news, right, Like 0:09:42.000 --> 0:09:44.560 there are a lot of missed opportunities if you didn't 0:09:44.600 --> 0:09:47.280 purchase more funds during that recent plunge in the market. 0:09:47.559 --> 0:09:50.080 A lot of this depends on your temperament and your 0:09:50.120 --> 0:09:52.760 ability to withstand losses, and it also depends to on 0:09:52.800 --> 0:09:55.120 the phase of investing that you're in as well. Right, 0:09:55.160 --> 0:09:58.000 if you're in the growth stage of investing, you're gonna 0:09:58.000 --> 0:10:00.640 be able to withstand some of these turbulent times, right, 0:10:00.679 --> 0:10:03.880 because the more turbulence you experience, that means you're exposed 0:10:03.920 --> 0:10:05.959 to risk, and that risk is crucial when it comes 0:10:05.960 --> 0:10:08.720 to growing your portfolio. But if you happen to be 0:10:08.760 --> 0:10:12.080 in the preservation stage of investing, it's it's a lot tougher, 0:10:12.240 --> 0:10:14.280 So whether these ups and downs like that as you're 0:10:14.320 --> 0:10:16.520 drawing on that money, as you have a need for 0:10:16.559 --> 0:10:19.400 your portfolio where the there's also a big difference in 0:10:19.840 --> 0:10:24.320 seeing an actual numerical decline. Let's say the same investor 0:10:24.559 --> 0:10:27.319 at age twenty five at age fifty five have the 0:10:27.360 --> 0:10:30.360 same exact allocation in a total stock market fund, but 0:10:30.480 --> 0:10:33.000 one has been investing for thirty more years. They've got 0:10:33.240 --> 0:10:35.880 so much more at stake. A twenty five year old 0:10:35.880 --> 0:10:38.680 has been investing probably for two or three years in 0:10:38.720 --> 0:10:40.719 all likelihood, and the fifty year old has been doing 0:10:40.720 --> 0:10:43.280 it for close to thirty. So there's something psychological about 0:10:43.280 --> 0:10:45.880 seeing a massive number drop, even if the percentage is 0:10:45.920 --> 0:10:48.160 the same amount. Right, Sure, Yeah, I'm sure seeing a 0:10:48.880 --> 0:10:51.880 drop on a million dollars feels a lot different than 0:10:52.720 --> 0:10:55.840 percent drop on ten thousand dollars, even though, like you said, 0:10:55.840 --> 0:10:57.920 the percentage is the same. Yeah. Well, before we get 0:10:57.920 --> 0:11:00.120 into the specifics on investing in volt the mark it, 0:11:00.160 --> 0:11:02.120 I want to quickly talk about kind of some investor 0:11:02.200 --> 0:11:05.920 sentiment right now, in particular individual investors like our listeners, 0:11:05.920 --> 0:11:08.760 like you and I. There is kind of this belief 0:11:08.800 --> 0:11:11.920 to a certain extent that the stock market is ignoring reality. 0:11:12.160 --> 0:11:14.920 The bear market obviously happened really quickly. Stocks took a 0:11:14.920 --> 0:11:19.280 pretty sharp rebound, and despite a lot of hard unemployment news, 0:11:19.720 --> 0:11:22.439 despite a lot of hard medical news coming out, the 0:11:22.440 --> 0:11:24.400 stock market just kind of continued to rise. And it 0:11:24.480 --> 0:11:26.680 was freaking people out, like why is the stock market 0:11:26.760 --> 0:11:29.320 not reflecting what's happening right now? So I thought that 0:11:29.320 --> 0:11:31.000 was kind of important to cover, and I got just 0:11:31.040 --> 0:11:32.600 a couple of thoughts. I think, you know, one thing 0:11:32.600 --> 0:11:35.640 that we experienced in this downturn, in particular, what we 0:11:35.679 --> 0:11:38.520 experience just a lot of government intervention in the market 0:11:38.559 --> 0:11:41.200 that's been taken to like an extreme that we've never 0:11:41.240 --> 0:11:43.400 seen before. So I think that's one reason that the 0:11:43.400 --> 0:11:46.480 stock market has actually been performing better than it probably 0:11:46.520 --> 0:11:48.880 otherwise would have. Injecting that kind of money into this 0:11:49.000 --> 0:11:54.079 system that supports unemployed Americans, direct payments to almost all Americans, 0:11:54.240 --> 0:11:57.000 and grants to sustain small businesses as well. It's the 0:11:57.040 --> 0:11:59.440 massive actions that the FED took to show up the 0:11:59.440 --> 0:12:01.760 main street of eonomy. It's created a lot of solvency, 0:12:01.960 --> 0:12:04.240 and it's also created a lot more optimism than than 0:12:04.320 --> 0:12:07.240 we would typically see for investors. Just to know that 0:12:07.240 --> 0:12:10.960 the government is there and has the backup of the economy. 0:12:11.240 --> 0:12:13.680 And granted, a lot of those programs haven't gone quite 0:12:13.760 --> 0:12:15.800 quite according to plan, some of them have been really 0:12:15.840 --> 0:12:18.640 poorly implemented. But I feel like we have seen companies 0:12:18.679 --> 0:12:21.240 that otherwise might have gone bust, might have had a 0:12:21.400 --> 0:12:24.040 really really hard time climbing out of the COVID trough 0:12:24.120 --> 0:12:26.000 that they've been put in. I think it's no wonder 0:12:26.000 --> 0:12:29.120 that we're seeing actually a more positive sentiment from investors 0:12:29.120 --> 0:12:32.160 then would normally be the case in a typical recession 0:12:32.160 --> 0:12:35.000 of years past. Yeah, and you know, to specifically address 0:12:35.040 --> 0:12:38.400 to just the the difference between what we're seeing in 0:12:38.440 --> 0:12:40.080 the stock market and what we're seeing in our day 0:12:40.120 --> 0:12:42.199 to day lives. Right, the difference between Wall Street and 0:12:42.200 --> 0:12:45.760 the difference between Main Street is that investors are optimistic 0:12:45.800 --> 0:12:48.839 because of all this money that has been injected into 0:12:48.880 --> 0:12:51.920 the economy, and you can see that optimism daily and 0:12:51.960 --> 0:12:55.200 by the minute based on stock tickers. Right. I think 0:12:55.280 --> 0:12:58.080 investors do have reason to be optimistic. But then the 0:12:58.160 --> 0:13:00.400 question is why do we see what whate is like 0:13:00.440 --> 0:13:05.120 our lives trailing that optimism in the stock market. And 0:13:05.160 --> 0:13:07.199 I think that comes down to the nature of what 0:13:07.240 --> 0:13:10.520 we've experienced, right, I mean, there's been government mandates that 0:13:10.559 --> 0:13:12.599 we need to stay home. Businesses have been forced to 0:13:12.600 --> 0:13:15.360 shut down for you know, over a month, you know, 0:13:15.440 --> 0:13:17.600 some close to two months, and it takes a long 0:13:17.640 --> 0:13:20.079 time to start that machine back up, right. It's like 0:13:20.160 --> 0:13:23.920 this massive freight train that, uh, it's pretty hard to 0:13:23.920 --> 0:13:25.640 stop on a dime. But we pretty much did that, 0:13:25.679 --> 0:13:28.280 which is crazy, But it takes even longer to get 0:13:28.320 --> 0:13:30.400 that train rolling again. It takes a lot of energy 0:13:30.400 --> 0:13:32.200 and a lot of time. And so I think that's 0:13:32.320 --> 0:13:34.680 kind of the difference between what we're seeing on Wall 0:13:34.720 --> 0:13:37.400 Street and what we're seeing on Main Street. Then overall, 0:13:37.440 --> 0:13:38.560 you know, I think a lot of folks might be 0:13:38.559 --> 0:13:41.560 asking the question, should the government have intervened that much? 0:13:41.600 --> 0:13:44.320 Should the FED head stepped in like they did? And 0:13:44.440 --> 0:13:45.560 you know, I think you and I would say that 0:13:45.559 --> 0:13:48.760 it was largely necessary in order to prevent our economy 0:13:48.760 --> 0:13:51.560 and businesses and just the markets from taking even more. 0:13:51.880 --> 0:13:53.480 You know, we we've yet to see the long term 0:13:53.480 --> 0:13:56.840 effects of that involvement, But this is an explanation as 0:13:56.880 --> 0:13:59.320 to why we are seeing the stock market recover, but 0:13:59.559 --> 0:14:01.679 at the same time we're seeing our local businesses and 0:14:01.679 --> 0:14:04.320 and even national companies lag behind when it comes to 0:14:04.600 --> 0:14:07.480 their ability to conduct business, but then obviously when it 0:14:07.520 --> 0:14:10.160 comes to their earnings as well. Yeah, we don't really 0:14:10.160 --> 0:14:12.960 get a whole lot into macroeconomics map. This is kind 0:14:13.000 --> 0:14:16.199 of a big situation where macro economics has impacted us 0:14:16.200 --> 0:14:19.080 in a microway with stimulus checks, with the need to 0:14:19.160 --> 0:14:21.760 take on these government loans if you can get one 0:14:21.960 --> 0:14:24.760 through the PPP program, through the s b A, and 0:14:24.800 --> 0:14:26.480 also too, we saw some of these big companies, the 0:14:26.480 --> 0:14:29.360 big airlines, Carnival cruise lines get money from the government. 0:14:29.800 --> 0:14:31.440 Was that the right move? I mean, it's really hard 0:14:31.480 --> 0:14:33.080 to say, and a lot of smart people come down 0:14:33.120 --> 0:14:35.320 on different sides of that issue. So it's not something 0:14:35.360 --> 0:14:37.320 that we're gonna cover too much here. But that was 0:14:37.520 --> 0:14:39.280 an interesting question because I think a lot of people 0:14:39.320 --> 0:14:42.240 are seeing the stock market doing really well in a 0:14:42.320 --> 0:14:44.400 time where they're not doing really well, and it's hard 0:14:44.440 --> 0:14:46.360 to see. But that's also kind of the way it 0:14:46.400 --> 0:14:49.000 happens sometimes. That's kind of what happened after the Great Recession. 0:14:49.160 --> 0:14:51.680 The stock market almost led the recovery. There were a 0:14:51.680 --> 0:14:53.400 lot of people predicting the stock market was going to 0:14:53.480 --> 0:14:55.240 go lower and lower, it was going to continue to 0:14:55.280 --> 0:14:57.920 sink in a time when it started to rebound. That 0:14:58.040 --> 0:15:00.120 was hard for people to fathom in the after at 0:15:00.280 --> 0:15:02.760 the banking scandals in the foreclosure crisis, but it happened. 0:15:02.800 --> 0:15:04.360 So yeah, I'm glad we touched on that a little bit. 0:15:04.360 --> 0:15:07.000 But okay, well, we're gonna get to some personal considerations 0:15:07.040 --> 0:15:09.240 and how people need to think about investing right now, 0:15:09.280 --> 0:15:11.440 in particular in a volatile market. We're gonna get to 0:15:11.520 --> 0:15:22.560 our thoughts on that right after the break, all right, 0:15:22.600 --> 0:15:24.320 so we are back from the break. We're talking about 0:15:24.280 --> 0:15:27.920 investing in a volatile market. And when we say investing 0:15:27.960 --> 0:15:30.800 in a volatile market, we actually mean putting your money 0:15:31.040 --> 0:15:33.520 into a volatile market. Uh, and we also mean it 0:15:33.560 --> 0:15:36.280 from the standpoint of how to do it right now. Right, 0:15:36.520 --> 0:15:38.240 So that's what we're gonna talk about right now. We're 0:15:38.240 --> 0:15:40.240 gonna talk about how to actually go about doing that. 0:15:40.640 --> 0:15:43.720 But first we want to point out that your own 0:15:43.760 --> 0:15:47.200 personal finances that is going to dictate whether or not 0:15:47.280 --> 0:15:50.080 you should be investing right now. Your your personal finances, 0:15:50.160 --> 0:15:53.120 like that's gonna actually take priority over investing right now, 0:15:53.200 --> 0:15:55.400 because investing in a bear market is a great thing, 0:15:55.600 --> 0:15:57.920 right if you are not trying to time the market. 0:15:57.960 --> 0:16:00.240 And if you're investing for the long haul, and if 0:16:00.240 --> 0:16:03.479 you have steady income but you don't once to prioritize 0:16:03.480 --> 0:16:06.600 investing if your paycheck isn't secure and you don't also 0:16:06.680 --> 0:16:09.520 have a solid savings back up. Also, if you are 0:16:09.680 --> 0:16:12.200 close or if you are in retirement, you know, there 0:16:12.200 --> 0:16:14.000 are other impacts you need to consider as well. If 0:16:14.040 --> 0:16:15.920 if its downswing has you freaking out a little bit 0:16:15.960 --> 0:16:18.880 because of the portfolio erosion that you've suffered, you may 0:16:18.880 --> 0:16:21.120 not be properly allocated, and that's something that you can 0:16:21.240 --> 0:16:23.800 change as well. And also you might need to maybe 0:16:23.840 --> 0:16:27.680 rethink some certain financial levels that you have, perhaps you know, 0:16:27.720 --> 0:16:30.360 pairing backs and you're spending or even working a little 0:16:30.360 --> 0:16:33.920 bit longer. There is more to our personal finances and 0:16:33.960 --> 0:16:36.600 our money than just investing, and so make sure that 0:16:36.600 --> 0:16:39.480 you have those kind of basics squared away first before 0:16:39.520 --> 0:16:42.440 you kind of continue with our conversation today. Yeah, and 0:16:42.720 --> 0:16:45.960 everybody right now, I think has to have a written 0:16:46.040 --> 0:16:48.960 investing plan. That's such a crucial part of being able 0:16:48.960 --> 0:16:52.000 to actually continue to invest when the market's down, when 0:16:52.040 --> 0:16:54.680 it's volatile, when it's up and down, right, and it's 0:16:54.720 --> 0:16:57.240 I think randomly buy and selling can can lead to 0:16:57.280 --> 0:16:59.120 financial loss for people, but it can also lead to 0:16:59.280 --> 0:17:02.120 higher levels of stress. The results can be catastrophic for 0:17:02.160 --> 0:17:05.320 people in their retirement accounts, and it can also just 0:17:05.440 --> 0:17:07.320 raise their blood pressure at the same time. So it's 0:17:07.359 --> 0:17:11.000 important for people to make decisions before of all the 0:17:11.080 --> 0:17:13.480 market occurs, to kind of have that written investing plan 0:17:13.560 --> 0:17:16.360 in place, So start to make some of those decisions. Now, 0:17:16.440 --> 0:17:19.840 see how you've reacted to the current market volatility, and 0:17:19.880 --> 0:17:22.280 I think that can help you write your investing plan 0:17:22.560 --> 0:17:25.280 based on your own personal tendencies, right, And a couple 0:17:25.320 --> 0:17:27.440 of questions that you need to ask yourself are do 0:17:27.520 --> 0:17:30.719 I ever invest in individual stocks? And if so, how 0:17:30.800 --> 0:17:33.800 much and then when? And what are the metrics that 0:17:33.840 --> 0:17:36.440 you need to see in order to make buying that 0:17:36.520 --> 0:17:39.160 stock or or that e t F a smart move? 0:17:39.480 --> 0:17:41.120 Do you start to pour extra money into your four 0:17:41.119 --> 0:17:42.960 O one K and roth ira when the stock market 0:17:42.960 --> 0:17:45.080 dips to a certain point. You make sure that you 0:17:45.160 --> 0:17:47.800 have these things in writing so you can know exactly 0:17:48.080 --> 0:17:50.840 how you're planning to invest when the market does have 0:17:50.880 --> 0:17:52.960 a dip in particular, and that so much of this 0:17:53.000 --> 0:17:56.080 comes down to, like a rules based approach to investing, 0:17:56.359 --> 0:17:59.639 having a checklist or clearly defined process of how and 0:17:59.680 --> 0:18:02.080 when we buy and sell investments. That can help us 0:18:02.080 --> 0:18:05.320 to avoid irrational and exuberant decisions and can provide some 0:18:05.400 --> 0:18:08.880 consistency to our approach that can really be difficult to muster. Otherwise, 0:18:08.920 --> 0:18:11.560 it's really hard to stay consistent, especially in the face 0:18:11.640 --> 0:18:14.119 of uncertainty and difficulty, And so I think those those 0:18:14.240 --> 0:18:17.399