Speaker 1: Welcome to How the Money. I'm Joel and I and
Speaker 1: Matt and today we're discussing crashes, corrections in your reaction.
Speaker 1: That's right. And from the title of this episode, you
Speaker 1: may have gathered that we are going to talk about
Speaker 1: the stock market. There's been a lot of news lately.
Speaker 1: There's been a lot of movement in the market recently,
Speaker 1: and so we're going to dedicate an entire episode to
Speaker 1: investing specifically. Yeah, and just kind of when things are haywire,
Speaker 1: like how do we react? And um, I'm sure a
Speaker 1: lot of our listeners are are kind of wondering, well, yeah,
Speaker 1: when the stock market is tanking, like what should I
Speaker 1: be doing or how should I even be thinking about investing?
Speaker 1: And so we got a lot to cover today. That's right, man,
Speaker 1: But first I wanted to share with you. I want
Speaker 1: to here with all of our listeners as well, just
Speaker 1: a quick curb Alert score that I picked up the
Speaker 1: other literally yesterday. So this happened yesterday. Okay, You're always
Speaker 1: finding weird stuff, so I'm curious, and so I mean
Speaker 1: here's literally I'm never on Facebook except for if I'm
Speaker 1: looking to sell an item. Kate's rarely on there, as well,
Speaker 1: but I guess she has some sort of alert set
Speaker 1: up so she knows when there's something that's going to
Speaker 1: be free. That is what we're looking for. This happened yesterday.
Speaker 1: So one of our daughters, ever since she kind of
Speaker 1: graduated and moved up from like the toddler bed, she's
Speaker 1: just been sleeping on a mattress on the floor. And we,
Speaker 1: you know, a few months ago, even has to here like, hey,
Speaker 1: you know, do you want like a real, real bed,
Speaker 1: And she was like, no, I like it on the
Speaker 1: floor because she kind of just like rolls out of
Speaker 1: the bed and like plays with the toys, rolls back
Speaker 1: into bed um. But honestly, lately it's kind of been
Speaker 1: a problem because she just has a lot of stuff
Speaker 1: just kind of scattered all around her bed, all on
Speaker 1: her bed as well, and so we've been keeping an
Speaker 1: eye out for a new bed. One came up on Facebook.
Speaker 1: It was free you know, side of the road deal
Speaker 1: that somebody was giving away and so I will know
Speaker 1: where they're picked it up. Specifically, it had drawers underneath
Speaker 1: the bed as well as like a headboard with some
Speaker 1: shells built into it as well. And so that's all great, right,
Speaker 1: I'm sure you're probably down with that. Here's where it
Speaker 1: gets a little bit hairy. There's also a mattress that
Speaker 1: came with it, and so I wasn't planning to walk
Speaker 1: away with that as well, but I threw it in
Speaker 1: the van and brought it home. I want to know
Speaker 1: from you, do you feel that it is frugal or
Speaker 1: cheap to pick up a free mattress on the side
Speaker 1: of the road, And so I'm done the same thing
Speaker 1: I have. And I literally actually just gave away a mattress,
Speaker 1: h an old mattress because I upgraded finally from used
Speaker 1: mattresses for my kids to like a new mattress for
Speaker 1: the first time in a long time. Or you finally
Speaker 1: gave for them. I think you finally gave away old
Speaker 1: bedbug mattress they were still but and yes, just gave
Speaker 1: it away to sweet neighbors who are who are very thankful.
Speaker 1: But um, yeah, no, I am not against old mattresses,
Speaker 1: and I know some people would be, but I distinctly
Speaker 1: remember getting a used ikea bed with the mattress for
Speaker 1: my daughter. You know, I don't know two years ago
Speaker 1: out and there's a recurring pattern here. It seems like
Speaker 1: other people aren't willing to do this, but it's something
Speaker 1: that you and I are totally willing to do. In fact,
Speaker 1: I was with you when we saw that bed on
Speaker 1: the side of the road. We're getting ready to go
Speaker 1: to a future islands, right, and we hadn't gotten far
Speaker 1: from your house, pulled over through all of the boards,
Speaker 1: the bed, all of it on top of were we
Speaker 1: in my car, like the old station wagon with with
Speaker 1: like the wrap. We threw it on top of the
Speaker 1: car and like reverse it back to your house, took
Speaker 1: it inside before we hear I mean, really like everybody's
Speaker 1: got to draw their own line when it comes to
Speaker 1: frugal achieve right, And so so I think some people
Speaker 1: are gonna say I would these are discussed used mattress,
Speaker 1: you know, like mattresses or something that you spend you know,
Speaker 1: eight eight hours a night on, like you know, a
Speaker 1: third of your life is essentially spent on that mattress
Speaker 1: more if you're a kid, your percentage wise, yeah, exactly,
Speaker 1: And so I get it. But at the same time,
Speaker 1: I think you're still sleeping on a used mattress. You
Speaker 1: and Kate are right totally hand me down. We finally
Speaker 1: upgraded to a Costco mattress I don't know, a year
Speaker 1: and a half, two years ago, and it's been lovely.
Speaker 1: But I say, our hand me down used mattress was
Speaker 1: totally fine. And also, yeah, well that's the thing. I mean,
Speaker 1: I'm not I wouldn't. I think it would be cheap
Speaker 1: if I was not willing to do it to myself,
Speaker 1: but I did it to my kids. That's the thing,
Speaker 1: Like we want to be able to make some of
Speaker 1: these upgrades. But like in our case, like you and
Speaker 1: Emily were like, you know what, we're growing up enough,
Speaker 1: we're big kids. Now we're gonna we're gonna buy a
Speaker 1: new mattress. And we bought one of the online phone
Speaker 1: mattresses that shows up yeah puncture the bag and it
Speaker 1: you know, inflates or whatever. We did not like that mattress,
Speaker 1: and so we tried it for a few weeks until
Speaker 1: finally I said, babe, we're gonna pull down the mattress
Speaker 1: that we shoved up into the attic. Uh. And I'm
Speaker 1: so glad that we did, because I wasn't totally sure
Speaker 1: if if we're going to keep that phone mattress. I
Speaker 1: was like, you know, I don't really, I'm not completely
Speaker 1: convinced because it's a lot firmer. Obviously, it's not contort
Speaker 1: to my body like this one, like the old one is,
Speaker 1: since we've been sleeping on it for so long, and
Speaker 1: I guess whoever's body was is baked into that mattress.
Speaker 1: Now anyway, Well, I'm glad you feel the same way. Still,
Speaker 1: I didn't know if you had, you know, moved on
Speaker 1: in your ways. But obviously, like we looked at the mattress,
Speaker 1: there weren't any gross stains on it. It hadn't rained
Speaker 1: or anything like that, and it was a neighbor as well. Still,
Speaker 1: like I picked it up off the side of interstate
Speaker 1: or something like that, I've forgotten run over a couple
Speaker 1: of times. That might be a different story, for sure. Yeah,
Speaker 1: you definitely wanted to make sure that it's still supportive
Speaker 1: and that it's not completely disgusting or something like that.
Speaker 1: But yeah, I'm okay with used mattresses and um and yeah,
Speaker 1: not everyone has to follow suit, but in our book,
Speaker 1: it is frugal. I'm glad you're done with it. Yeah,
Speaker 1: all right. Alice mentioned the beer that we're having on
Speaker 1: today's episode. This one is called a Force for Good.
Speaker 1: It's an Imperial brown ale by Creature Comforts and Sierra
Speaker 1: Nevada donated to us by listener Nathan. So Nathan thinks,
Speaker 1: so it's right. We'll give our thoughts on this one
Speaker 1: at the end of the episode. But onto the topic
Speaker 1: of hand Matt. This one, we are talking about tick
Speaker 1: it off, the stock market crashes, corrections, and how we're
Speaker 1: supposed to react in kind of turbulent times. And yeah,
Speaker 1: I was as I was thinking about this episode and
Speaker 1: made me think about that time. Um, you remember this
Speaker 1: a few years back when I got hit by a
Speaker 1: car when I was on my bike. I do remember.
Speaker 1: That is uh kind of frightening. I haven't actually really
Speaker 1: thought about it. We can laugh about it now, but
Speaker 1: at the time, remember Emily in particular, I mean I
Speaker 1: was upset. It was not I was like, oh no,
Speaker 1: but she was definitely a little worried about you. Yes, yes,
Speaker 1: for sure. But one of my good friends recently relayed
Speaker 1: that he actually got hit on his bike with his
Speaker 1: son on the back. Fortunately, I just dropped my kids
Speaker 1: off at school and my kids were not on the
Speaker 1: bike when I got hit, but I I dropped my
Speaker 1: kid off as well, because that's back when we were
Speaker 1: doing the bike car pool and luckily both of our
Speaker 1: kids were off of your bike. Exactly I would have
Speaker 1: been pissed and so not my fault. But but here's
Speaker 1: basically he, you know, my friend, he didn't get hit
Speaker 1: terribly hard, but I I got I got smacked a
Speaker 1: little bit, and um really just had like some shoulder
Speaker 1: damage for a couple of months, but I'm okay now
Speaker 1: and no long lasting damage. But what it made me
Speaker 1: think is is that like the lesson you take away
Speaker 1: from an incident like that, like, what is it? Um,
Speaker 1: is it that I should never ride my bike again?
Speaker 1: Because there's a chance circle now there there's a certainty
Speaker 1: that I did get hit, but there's a chance that
Speaker 1: could happening in no. Mostly what I took away was like,
Speaker 1: helmets are great, and bike safety isn't worton, and that
Speaker 1: accident has happened sometimes, right, And so it's just that
Speaker 1: actually getting into that accident made me I had that
Speaker 1: firsthand experience now, right. And so yeah, this recent bout
Speaker 1: of stock market volatility, it might have some of our
Speaker 1: listeners stocking away more money for their future, but I
Speaker 1: think it's been unnerving for others. And I think it's
Speaker 1: important folks if they're if they're especially younger, and they
Speaker 1: haven't experienced some of these bouts of market volatility, they've
Speaker 1: kind of seen the stock market just kind of going up,
Speaker 1: it's been on its hair. Um, it's important for us
Speaker 1: to hopefully give them some reassurance, give them some guidance
Speaker 1: in the wake of kind of what's been happening, um
Speaker 1: at least you know since the beginning of January this year,
Speaker 1: that's right. Yeah, so we're gonna give our thoughts on
Speaker 1: how to react when the market is experiencing this extra turbulence,
Speaker 1: because yeah, you know, the same can be true when
Speaker 1: it comes to investing in the stock market. Like we
Speaker 1: know that occasionally they're going to be corrections, but until
Speaker 1: we actually experience those downturns ourselves firsthand, just just like
Speaker 1: you didn't by getting hit with a car firsthand, and
Speaker 1: we're not totally sure how we're going to react until
Speaker 1: we're faced with us situations. Uh. And so, just like
Speaker 1: when it comes to biking, we know that there's a
Speaker 1: chance we could get knocked off our bikes or run
Speaker 1: off the road by a driver, but it's a completely
Speaker 1: different thing to go through an ordeal like that ourselves
Speaker 1: just our emotions are feelings, they are a really complex
Speaker 1: side of our humanity, and we never quite know when
Speaker 1: fear is going to rear its ugly head, causing us
Speaker 1: to potentially doing something that we wouldn't normally consider. Oftentimes,
Speaker 1: when we're not in those situations, we know the right
Speaker 1: things that we should be doing. But again, when we're
Speaker 1: thrust into those situations, when the quartosol levels spike, when
Speaker 1: we feel stressed and our emotions run rampant, that's when
Speaker 1: we can make those poor decisions, right, Yeah, I mean,
Speaker 1: I guess there's the there's the philosophy, the old school
Speaker 1: philosophy of getting right back on the horse after it
Speaker 1: knocks you off right. And I actually felt really similarly
Speaker 1: about getting on back on a bike really quickly after
Speaker 1: my accident. I was like, the longer I wait, the
Speaker 1: longer I let it linger in my brain, the more
Speaker 1: fear is going to build up. And I think the
Speaker 1: same is true for all for all of us, really,
Speaker 1: is that we have to when we experience something you know, difficult,
Speaker 1: potentially even traumatic, it's usually best to get right back
Speaker 1: on the horse so that we can mentally get accustomed
Speaker 1: to the reality that that you know, bike accidents don't
Speaker 1: happen every day, and so yeah, well, how do we
Speaker 1: get past this? Well, part of it at least is
Speaker 1: we would say looking towards the past. You know, just
Speaker 1: like one bike accident doesn't determine how I think about
Speaker 1: the role that my bike plays in my life. I've
Speaker 1: had many hundreds of great bike rides since then. Neither
Speaker 1: does the last month of data, right, just the most
Speaker 1: recent sample size, right, because it's it's too small of
Speaker 1: a sample size to make decisions based on. And this
Speaker 1: is a cognitive psychology term, and it's called recency bias. Basically,
Speaker 1: when we're overly focused on what has just happened as
Speaker 1: opposed to looking at longer term historical facts, reality on
Speaker 1: the ground for decades. We have to take in more
Speaker 1: data and we have to look at what else is true.
Speaker 1: That's a crucial element to not letting headlines and just
Speaker 1: incredibly recent market moves literally what happened in January right
Speaker 1: send us into a panic. To in the fuller picture,
Speaker 1: not just this shortened time frame is really key. It's
Speaker 1: really crucial to helping us make better decisions. Yeah, it's right,
Speaker 1: you can't just look at that truncated timeline. And when
Speaker 1: it comes to investing, oftentimes, what this looks like is momentum. Right,
Speaker 1: we see the market on a t hair it's climbing,
Speaker 1: and we think it's never gonna stop, and so you
Speaker 1: continue to invest because you expect it to continue to
Speaker 1: go up. Or on the opposite side of the coin
Speaker 1: as well, if you see the market tanking, you think, okay, well,
Speaker 1: I'm definitely not gonna invest now because the market is
Speaker 1: only going to continue to drop, and so we might
Speaker 1: be hesitant to get started investing. But once we are
Speaker 1: doing something, that momentum can cause us to continue to
Speaker 1: make decisions that may not be the best and this
Speaker 1: also can look like investing with our hearts instead of
Speaker 1: investing with our heads. Right, when we let our emotions
Speaker 1: control our decisions, that's when we're bound to make more
Speaker 1: mistakes compared to when we use knowledge and data. So
Speaker 1: let's get specific here, Let's talk about some of the data.
Speaker 1: Let's look at what history has to teach us, because
Speaker 1: the short term it couldn't be more different than the
Speaker 1: long term. When we're talking about the stock market downward
Speaker 1: moves of five or timber actually happened almost every year
Speaker 1: in the stock market. And seriously, a market that's down
Speaker 1: five percent from it's high that happens in of all
Speaker 1: years almost always literally, yeah, it literally almost always. Uh,
Speaker 1: and a tim percent drop that actually happens of the time,
Speaker 1: and so this is at least heartening. Downturns like what
Speaker 1: we have recently experienced actually occur pretty regularly. We shouldn't
Speaker 1: be afraid of those. Yeah, I think that is a
Speaker 1: really important thing to recognize. Is well, okay, it is
Speaker 1: it's an aberration. Is this something something that's not normal
Speaker 1: that I'm experiencing. If so, I feel like I'm at
Speaker 1: greater risk. But when we know that this is a
Speaker 1: normal thing that happens regularly, almost every year, it can
Speaker 1: be really helpful from a mental standpoint. And man, I
Speaker 1: liking it to kind of uh, maybe let's say you're
Speaker 1: going in to get a shot, or you're taking your
Speaker 1: kids into get a shot. A you're getting the pep
Speaker 1: talk ahead of time that hey, this shot is gonna hurt.
Speaker 1: So when they go in knowing that this shot is
Speaker 1: going to hurt, it's helpefully. It's supposed to help them
Speaker 1: to freak out less, right, like give them kind of
Speaker 1: like here, here's here's the scenario. Here's how it's gonna happen.
Speaker 1: Here's where you're gonna get the shot in your left
Speaker 1: arm right here, and like it's gonna be painful for
Speaker 1: just a minute and then it's gonna be over. You're
Speaker 1: preparing them for this scenario. And if you just like
Speaker 1: sat them down and you didn't prepare them and you
Speaker 1: just jabbed a needle in their arm, though there's a
Speaker 1: there's a whole lot more likelihood of like an insane
Speaker 1: freak out right, And it doesn't mean that there's not
Speaker 1: gonna be tears, even though you've kind of um, you've
Speaker 1: told your kids exactly what's going to happen in this
Speaker 1: scenario and hurt. Yeah it is. And so but that
Speaker 1: warning and knowing the context for forgetting that shot is
Speaker 1: is gonna help. It's gonna be helpful, and it's gonna
Speaker 1: prevent potentially even worst damage of of a kid freaking
Speaker 1: out by getting a shot in their arm without knowing
Speaker 1: what's coming. I don't want to think about that, like
Speaker 1: if you were to jerk your arm away like when
Speaker 1: you saw the needle, like getting ready to Yeah, I
Speaker 1: want to freak people out right to be some bad
Speaker 1: side effects. I guess the one thing is is if
Speaker 1: that if you were there and you can force your kids, right,
Speaker 1: if they're freaking out and you can force them. But
Speaker 1: here's the thing. We are all adults. We have control
Speaker 1: over our own holdings in our own portfolios. There is
Speaker 1: nobody there necessarily to hold you down and keep you
Speaker 1: from from clicking that cell button. Right. Yeah, but I
Speaker 1: think that knowing that stock market drama is normal. Right,
Speaker 1: It's as normal as for as it being painful when
Speaker 1: you get a shot, but quickly painful. And so yeah,
Speaker 1: as as we're looking at this historical data, right, as
Speaker 1: we as we know the truth going in to to
Speaker 1: get that shot, it's gonna help us better absorb the shot. Well,
Speaker 1: I think it's gonna better be able to help us
Speaker 1: absorb something like what happened in January, where we saw
Speaker 1: stock market experience a whole lot of valatility um and
Speaker 1: we saw, you know a lot of people saw their
Speaker 1: their overall stock holding stop by something like ten percent,
Speaker 1: maybe more, depending on how heavily they were invested in
Speaker 1: let's say um tech companies, right, and so yeah, that
Speaker 1: was them getting a shot like it was painful, and
Speaker 1: it does happen from time to time. But having that
Speaker 1: knowledge and knowing that this is for your ultimate good
Speaker 1: good is what you need to remind yourself of. Just
Speaker 1: like when we see these corrections, we know that ultimately
Speaker 1: these you know, this is going to turn around. Yeah,
Speaker 1: these corrections don't last forever, right, And so some some
Speaker 1: of sometimes we do have a prolonged bear market. We
Speaker 1: might have multiple years in a row where the stock
Speaker 1: market is actually not gaining ground, where where you've actually
Speaker 1: lost money in your investments for multiple years on end.
Speaker 1: But most of the time, much of the time, we
Speaker 1: see these corrections being actually fairly quick. I mean, take
Speaker 1: for instance, we see that I saw that drop in March,
Speaker 1: and how quickly did a rebound that was a V
Speaker 1: shaped recovery, and that was that was almost instantaneous, and
Speaker 1: so I I yeah, But looking to that history and
Speaker 1: seeing what's happened over the past decades, I think can
Speaker 1: can help you realize when you zoom out and look
Speaker 1: at the bigger picture, we can't expect the stock market
Speaker 1: to continue to go up even though there are setbacks
Speaker 1: on the way, That's right. Yeah, And so we share
Speaker 1: this because past is prologue, right, These historical markers and
Speaker 1: data that we can glean from the past, they inform
Speaker 1: what we do today. Knowing the past, it can help
Speaker 1: you understand the present, and it helps us to make
Speaker 1: better choices. Uh, you know, while we're here in the
Speaker 1: here now. But simultaneously, you know, it is important to
Speaker 1: take that with a grain of salt, because who knows
Speaker 1: what the actual future is going to hold. Uh. This
Speaker 1: is why on any prospectus that you see or any investment,
Speaker 1: they always say that past performance is not indicative of
Speaker 1: future results because there's no promise, there's no guarantee that
Speaker 1: your investments will continue to grow at least at the
Speaker 1: rate that you have seen them grow in the past.
Speaker 1: But we are able to make informed decisions with the
Speaker 1: information that we have, and so we're actually going to
Speaker 1: talk more about making these informed decisions in the here now,
Speaker 1: and we're gonna get to that right after this break.
Speaker 1: All right, now that we have some factual information about
Speaker 1: the past, now that we kind of see that these
Speaker 1: corrections are regular, they happen almost every year, and that
Speaker 1: a ten percent drop in the stock market like what
Speaker 1: happened in January, that's not that's an not abnormal, and
Speaker 1: in fact, that is more normal than not. Now that
Speaker 1: we have seen kind of some of what happens in
Speaker 1: the past, I think that can help us better assess
Speaker 1: what's happening in the present. You know, we we believe
Speaker 1: that a big part of making wise decisions is just
Speaker 1: being informed. It's hard to make a smart decision if
Speaker 1: you don't have much information on your side. Right, That's
Speaker 1: where you can get lucky, But that is not a
Speaker 1: solid model or basis for continuing to make smart decisions
Speaker 1: in the future. Right. It makes me think about a
Speaker 1: recent dish washer purchase I had to make, and it was,
Speaker 1: you know, my my old one failed on me. And
Speaker 1: I went to Consumer Reports, which does a great job. Basically,
Speaker 1: they just gather a ton of data from a bunch
Speaker 1: of people and then they provide rankings based on all
Speaker 1: this data they gather. And so it was clear to
Speaker 1: me reading the Consumer Reports rankings that a Bosch dishwasher
Speaker 1: was clearly the way to go, because they rank like
Speaker 1: out of the top twenty. I mean, they're like ten
Speaker 1: of the units basically like the top ten, right, And
Speaker 1: so I was like, well, clearly, this is what I'm
Speaker 1: gonna go with and so, um, yeah, once you have
Speaker 1: some of that data, once you are informed, you can
Speaker 1: make a better decision because if you're flying blind, you know,
Speaker 1: you might pick the worst dishwasher on the shelf and
Speaker 1: it might break in two or three years, um. And
Speaker 1: so yeah, to that end, we're going to define some
Speaker 1: terms real quick, because we try to avoid jargon on
Speaker 1: the show as much as possible. But it's gonna be
Speaker 1: helpful to know just a few things since they're going
Speaker 1: to come up quite a bit in this episode. And yeah,
Speaker 1: it can also be helpful to know some of these
Speaker 1: terms because we will most definitely experience all of these
Speaker 1: at some point during our investing lifetimes. So, for example,
Speaker 1: if you don't know what a bear market is, then
Speaker 1: you might hear that term being thrown around and you
Speaker 1: might think it's the end of the world. You might
Speaker 1: be truly frightened or panics because you hear that term
Speaker 1: not knowing what it actually means. Or or you might
Speaker 1: hear someone say that the stock market is crashing, but
Speaker 1: in reality, what you're experiencing is just a correction. And
Speaker 1: so it might be other people misusing terms and knowing
Speaker 1: what these terms actually mean. Is going to help you
Speaker 1: to filter out the noise from what's actually real exactly. Yeah,
Speaker 1: it can help you to create your own narrative as
Speaker 1: to what is truly happening. And so, yeah, Je, you
Speaker 1: mentioned corrections, So let's start with that. That'll be our
Speaker 1: first term. Uh, And this is when the market drops
Speaker 1: by at least ten percent, that is a correction. Once
Speaker 1: it hits that down by ten percent point, folks say
Speaker 1: that the market has entered into correction territory. That tend
Speaker 1: to you know, nineteen point nine percent, I guess, uh.
Speaker 1: And so that's exactly what we experienced last month when
Speaker 1: the market dropped from highs early in the month down
Speaker 1: to where it bottomed out around January. And also it's
Speaker 1: worth pointing out that this isn't like an officially recognized definition.
Speaker 1: It's what most folks are talking about. But at the
Speaker 1: same time, it's not a term that's like etched in
Speaker 1: stone where somebody, I mean, just like you said, some
Speaker 1: folks might be using this term to describe something else.
Speaker 1: And so it's helpful to understand what most people are
Speaker 1: referring to when they say correction, and it's helpful for
Speaker 1: you to understand what the market is actually going through.
Speaker 1: I think that's actually a really helpful term as well, right,
Speaker 1: because when you a correction seems like something small but meaningful,
Speaker 1: and like, I have to correct my kids things all
Speaker 1: the time. It doesn't mean they're bad kids, but they
Speaker 1: still need to be taught to be civilized humans. So
Speaker 1: I think correct them on little things here and there
Speaker 1: doesn't mean that they're beyond repair. Exactly a little bit
Speaker 1: of guidance, a little correction. That correction is part of,
Speaker 1: you know, helping them grow up into being better citizens.
Speaker 1: And so I think, yeah, a correction is kind of
Speaker 1: one of those things where it's it's a helpful term
Speaker 1: to know because that ten percent drop it doesn't mean
Speaker 1: that stocks or your portfolio are getting slaughtered. It means
Speaker 1: that there's just this like minor thing that happened. And
Speaker 1: knowing that a correction is a timber cent drop can
Speaker 1: help you kind of mentally frame what's happening. And let's
Speaker 1: talk about bear markets too, because there's not like a
Speaker 1: government agency that's defined exactly what constitutes a bear market,
Speaker 1: but generally speaking, it's when the market sees the decline
Speaker 1: of at least from recent highs. This is obviously a
Speaker 1: much larger drop, and so of course we see we
Speaker 1: see fewer of these. But in addition to the cold
Speaker 1: heart facts and the numbers that are associated with a
Speaker 1: bear market, oftentimes investors sent ament is pretty low as well.
Speaker 1: You know, naturally, if investors see their portfolio significantly drop,
Speaker 1: they're likely going to be bummed out. So a bear
Speaker 1: market can be a technical analysis, but it can also
Speaker 1: be used to describe how investors are are feeling. They're
Speaker 1: feeling lacks of daisical, they're feeling like their portfolio. It's
Speaker 1: that overall investor sentiment. Yeah, and so yeah, it goes
Speaker 1: beyond just a correction. It's deeper than that. It's more
Speaker 1: significant than that. That affects not just the numbers on
Speaker 1: the screen you see when you log into to check
Speaker 1: out your investment account, but it also affects how people
Speaker 1: are feeling about the stock market too, exactly. When you
Speaker 1: use it that way, it's more of a squishy term
Speaker 1: as opposed to a quantitative, very measurable term. It's like, like,
Speaker 1: how bad of the is the bear market? It's like, well,
Speaker 1: it's pretty bad. It's like, okay, that's not a very
Speaker 1: technical analysis, which is which is why I think people
Speaker 1: get confused about the terms, and because they are kind
Speaker 1: of confusing and they and there are a lot of
Speaker 1: people who misuse them, and so, um, I think we
Speaker 1: just have to do our best to know what's happening.
Speaker 1: And so, yeah, it can be hard to see the
Speaker 1: headlines when they're not necessarily reflective of what's actually happening exactly.
Speaker 1: And obviously we're going to do our best to make
Speaker 1: sure that we are going to continue to be consistent
Speaker 1: when we use these terms, not only you know, during
Speaker 1: this episode, but just moving forward as well. Uh. And
Speaker 1: then so you mentioned the bear market. Finally we have
Speaker 1: stock market crashes and again there you know, there's not
Speaker 1: a super specific threshold here, because some folks will use
Speaker 1: that term to describe the market just as it's quickly dropping.
Speaker 1: You know, they might say, like, oh, the market has
Speaker 1: down double digits, is crashing. It might be like a
Speaker 1: one day crash. It was down, it was like crash. Yeah,
Speaker 1: But from a again from a technical point of view,
Speaker 1: who we like to say that a market crashes when
Speaker 1: prices have dropped by at least thirty percent, so we
Speaker 1: get ten ten percent correction, bear market, the crash and
Speaker 1: This might sound super scary, you know, it might keep
Speaker 1: some folks from investing, but again, let's get back to
Speaker 1: the data. In the past hundred years, the stock market
Speaker 1: has only experienced a crash of thirty percent or more
Speaker 1: during only ten percent of all years, So relatively speaking,
Speaker 1: they're very rare. Although we did just you know, most
Speaker 1: recently experienced the Corona crash, and so attempting to avoid
Speaker 1: losing of your money in a crash that is going
Speaker 1: to be a bad reason to avoid investing in the
Speaker 1: stock market altogether, especially to when you consider that half
Speaker 1: of the worst draw downs that the market's experienced over
Speaker 1: the past nearly hundred years, half of them happened in
Speaker 1: the thirties around the Great Depression. Yeah. Yeah, no, And
Speaker 1: it's interesting too when you look at things are a
Speaker 1: lot different than they were that long ago. Yes, yes
Speaker 1: they are. Our monetary system in modern society look a
Speaker 1: whole lot different than it did a hundred years ago.
Speaker 1: But yeah, one of the things to note is that
Speaker 1: when when you have a teen percent draw down after
Speaker 1: the run up that we've seen too, it shouldn't shock
Speaker 1: people as as we've had essentially thirteen years of an
Speaker 1: unadulterated bowl run, which is another term I guess we
Speaker 1: we could define where the market has just continued to
Speaker 1: go up with with very few hiccups. And so it's like,
Speaker 1: if your favorite baseball player hits four hundred for the
Speaker 1: first two months of the season, the likelihood that they're
Speaker 1: gonna continue to that. If if their final batting averages
Speaker 1: three sixty, it's like they's not a great season. Right,
Speaker 1: you shouldn't be bummed. That's still some good batting. Yes,
Speaker 1: I don't watch much faceball. You don't have some good
Speaker 1: slugging their slugger, I'll get talking to it. Three year old.
Speaker 1: I think, well, like maybe two or three guys have
Speaker 1: hit four hundred throughout a whole season, so it's like
Speaker 1: almost non existent. But in those acts don't even count
Speaker 1: because of the Royds, Right, But some of those guys
Speaker 1: will actually will will hit four hundred for a month
Speaker 1: or two and it definitely makes a lot of headlines,
Speaker 1: but it's almost impossible for it to stay that way
Speaker 1: for forever. And so yeah, let's talk about maybe the
Speaker 1: present realities of the stock market and what's happening right now.
Speaker 1: You're bound to hear at least someone say that it's
Speaker 1: different this time when we're in a volatile stretch, and
Speaker 1: some of those folks would encourage you to sell your stocks,
Speaker 1: would encourage you to convert to cash because of the
Speaker 1: coming apocalypse. We've talked about Robert Kyosaki. He is one
Speaker 1: of those guys who he's written a best selling book
Speaker 1: and he's given people a lot of good advice about
Speaker 1: money over the years. But on Twitter, he seems to
Speaker 1: always be predicting a market crash and he has basically
Speaker 1: always been wrong. And so yeah, we would fund him
Speaker 1: elite disagree with someone like him who is saying, like,
Speaker 1: get out because the crash is coming this time. It's difference.
Speaker 1: And yeah, his history doesn't necessarily repeat, but it does
Speaker 1: rhyme as it said, And so we believe that nothing
Speaker 1: is ever truly all that different. And that's the same
Speaker 1: old story man, right, And we've gone through when you
Speaker 1: look at the history of the United States and the
Speaker 1: history of the stock market together, we've gone through world
Speaker 1: wars and now pandemics, and we have gone through just
Speaker 1: so many horrifying world stage events. And at the same time,
Speaker 1: American capitalism continues to chug along. And so yeah, in
Speaker 1: the moment, it can feel like everything's about to collapse,
Speaker 1: but staying the course is the thing to do, of course.
Speaker 1: And so yeah, one thing worth mentioning is that inflation
Speaker 1: is one thing that we're battling right now. And some
Speaker 1: people would point to that as a new phenomenon, but
Speaker 1: we would say that's not the case either. It's not
Speaker 1: that as new, it's just it is, you know that
Speaker 1: all time highs, the highest has been over the past
Speaker 1: forty years, probably the highest has been since any of
Speaker 1: most of our listeners have been alive, right, Yeah, inflation
Speaker 1: is at something like seven percent right now, where we've
Speaker 1: been used to seeing it between one and two percent.
Speaker 1: And although there are some people listening to this podcast
Speaker 1: who have been alive long enough that they remember the
Speaker 1: seventies and eighties where inflation was basically out of control,
Speaker 1: ramping like the average was seven percent, like not just
Speaker 1: you know, one one marker of year year over year
Speaker 1: at seven percent where we hit it for the first time.
Speaker 1: Literally it was like the average over like a couple
Speaker 1: of decades. We're experiencing like a blip in inflation, especially
Speaker 1: when you compared to that. But for us, for for
Speaker 1: many of us, for many of our listeners, this feels
Speaker 1: like something abnormal, something new, but it's important to remember
Speaker 1: that it's not, and that this is something that we
Speaker 1: as a society have experienced before. Yeah. And the other
Speaker 1: thing too, is just because inflation is up, that doesn't
Speaker 1: mean that we're not going to see good returns from
Speaker 1: the market in the coming years. Right. So the friend
Speaker 1: of the show, Ben Carlson, he loves his data, and
Speaker 1: he actually crunched the numbers on inflation in relation to
Speaker 1: market returns and there is no clear pattern. And so
Speaker 1: the volatility that we're experiencing today in the market, it's
Speaker 1: likely not being cause by inflation. You know the reason,
Speaker 1: you know why this is happening. This, this volatility is
Speaker 1: something that gets talked about ad nauseum. Everyone's got to
Speaker 1: take you know, whether it's the Fed raising rates, like
Speaker 1: that's why it is. Everybody wants to sound smart and
Speaker 1: be like this is why stocks are suffering, or maybe
Speaker 1: like some folks were like, oh, it's you a political right,
Speaker 1: it's Russia, it's Ukraine. I mean maybe, like maybe that's
Speaker 1: the case, but the stock market is incredibly complex and
Speaker 1: it's really hard for us to point to a single
Speaker 1: root cause for how it is that the market is
Speaker 1: reacting on any given day of the week. So what
Speaker 1: are we saying. We're I think we're basically telling you
Speaker 1: not to worry about volatility or inflation from an investing standpoint, right,
Speaker 1: And there might be some listeners who are thinking easy
Speaker 1: for you to say, you've got years, even even decades
Speaker 1: to go before you have to start selling investments, which
Speaker 1: which is true, Matt, Like you and we are in
Speaker 1: our late thirties and and hopefully we won't be tapping
Speaker 1: those uh four o one case for decades to come.
Speaker 1: But yeah, your timeline is an important thing, an important
Speaker 1: part of this conversation, and when you need to draw
Speaker 1: on funds absolutely has an impact on your approach to
Speaker 1: a market town turn. And so when you're younger, as
Speaker 1: most of our listeners are, they are in their twenties
Speaker 1: and thirties, you should see the market plunging and immediately
Speaker 1: equate that too. When your favorite store is having its
Speaker 1: annual sale, like if you're in your twenties and thirties,
Speaker 1: you should be buying more, loading up on those off
Speaker 1: sneakers or sweaters or whatever it is. And so basically, yeah,
Speaker 1: you knew you were going to get some new sneakers
Speaker 1: at some point this year, and if you hadn't already
Speaker 1: purchased them, it's like, all, right, now is the time?
Speaker 1: Why not? Yeah, you get when the getting is good,
Speaker 1: sunshines exactly all those phrases, and so, of course it's
Speaker 1: a it's a tougher pill to swallow if you're no
Speaker 1: longer in the wealth building phase of your life. But
Speaker 1: we would say that's why the portfolio that you have
Speaker 1: you need to be able to stomach these downturns, and
Speaker 1: especially if you are in your fifties and sixties, if
Speaker 1: you're getting closer to that age where you're gonna start
Speaker 1: drawing on those retirement funds, your portfolio can and should
Speaker 1: reflect a real risk tolerance that you have. Most folks
Speaker 1: in the wealth preserve a stage should not have exposure
Speaker 1: to stocks because it puts them at too much, too
Speaker 1: much risk to their actual money, but also the emotional
Speaker 1: risk that comes alongside of that. When you can see
Speaker 1: your portfolio in like literally one month dropped by six digits,
Speaker 1: like that's a scary scenario when you're getting closer to
Speaker 1: the point where you're gonna need that money, so you
Speaker 1: have to be careful and make sure that how you're
Speaker 1: invested reflects your specific situation. Although you could easily argue
Speaker 1: that the best way to preserve your money is by
Speaker 1: growing it, right, Like the best defense is a is
Speaker 1: a good offense. That's another sports reference, is that baseball
Speaker 1: as well? Well? I think that's true. But like, let's
Speaker 1: say you're you're retiring next month and you're you know,
Speaker 1: you need to make sure that your portfolio could withstand
Speaker 1: what we just called a bear market, right that if
Speaker 1: if the stocks went down, you probably don't want your
Speaker 1: portfolio going down, and so you need to be more
Speaker 1: conservatively invested to make sure that you can handle just
Speaker 1: an eight percent correction or something like that instead of
Speaker 1: that full on twenty percent correction that folks like you
Speaker 1: and I are willing to experience. Exactly, And this is
Speaker 1: where psychology in our behavior is so much more important
Speaker 1: than understanding the fundamentals of how to invest. And so
Speaker 1: let's let's talk about why we should be optimistic about
Speaker 1: the stock market. Uh. Tyler Cowen, he had a great
Speaker 1: article about why American pessimism how you know why it
Speaker 1: doesn't extend to short selling the market? Uh? And basically
Speaker 1: he argued that if you know you've got a pessimistic viewpoint,
Speaker 1: if that was your actual long term point of view,
Speaker 1: you would likely be making some drastic moves right now,
Speaker 1: like selling off most or all of your stock portfolio,
Speaker 1: or maybe just like holding short positions in the market
Speaker 1: in order to make money since decline is inevitable in
Speaker 1: those pessimists opinion. Right. But the thing is is that
Speaker 1: those pessimists, they rarely go to that extreme. The best
Speaker 1: line from that article was that apparently selling previously acquired
Speaker 1: assets and lost too much work even with a pending apocalypse,
Speaker 1: which isn't I mean, it is so true because if
Speaker 1: there truly is opending apocalypse, you do the work, You
Speaker 1: take the steps necessary to basically reinforce what it is
Speaker 1: that you are saying. But the fact is there's a
Speaker 1: lot of people saying that, but they don't truly believe it.
Speaker 1: I try, you sell out of stocks and then you
Speaker 1: go to Costco and you buy one of those like
Speaker 1: you buy a prefab bunker food supplies, you know, like
Speaker 1: hunker down exactly if you really believe that. Yeah, And
Speaker 1: there's a lot of people who will tweet pessimistic thoughts,
Speaker 1: that will write pessimistic headlines, but it comes to how
Speaker 1: they handle their money. They're not changing very they're still investing. Yeah, yeah, exactly.
Speaker 1: So it's not that pessimism is never warranted, but they
Speaker 1: just won't take you that far when it comes to
Speaker 1: your investing journey. You need to stay in the market.
Speaker 1: Makes me think of literally one of maybe my all
Speaker 1: time favorite money quote from Morgan Household. He said, save
Speaker 1: like a pessimist, invest like an optimist, And I think
Speaker 1: that is always true because you should have cash on hand, right,
Speaker 1: that's what your emergency fund. And then on top of that,
Speaker 1: you're the money that's in your savings account is supposed
Speaker 1: to do, supposed to help you get through those times
Speaker 1: that you couldn't have planned, times where you do lose
Speaker 1: a job or a transmission goes out on your car. Investing, though, like,
Speaker 1: you should pay less attention to the headlines. You should
Speaker 1: invest like an optimist, and you should continue doing so
Speaker 1: because ultimately that is what's going to make you wealthy's
Speaker 1: And so yeah, there's this Jack Bobble quote math that's
Speaker 1: worth sharing here too. And we got a lot of
Speaker 1: quotes this for this episode, as we do. And he said,
Speaker 1: Jack Bobble. Obviously, he's the founder of Vanguard, which is
Speaker 1: a low cost brokerage firm who we think are are
Speaker 1: wonderful and we encourage people to look to Vanguard as
Speaker 1: one of the places where they might invest their money.
Speaker 1: He said the stock market is a giant distraction to
Speaker 1: the business of investing, and which sounds like a paradox, right,
Speaker 1: because obviously the market is incredibly necessary in order to invest.
Speaker 1: Like it literally, it's called a stock market. It's it's
Speaker 1: a market that you go to where you invest in stocks.
Speaker 1: It's like going to a meat market. You want to
Speaker 1: buy meat, you go to the market. You want to
Speaker 1: buy stocks and invest, you go to the stock market.
Speaker 1: But yeah, obviously he's talking about the volatility that can
Speaker 1: so often distract us from our ultimate goals. Yeah, exactly,
Speaker 1: exactly where where we just get to beholden to what
Speaker 1: the prices on a given day or the percentage draw
Speaker 1: down in a specific week. And he's saying that like
Speaker 1: that is the stuff that is going to prevent you
Speaker 1: from being able to actually take it vantage of the
Speaker 1: wealth building mechanism that is the stock market. It's just
Speaker 1: it's just too easy to get pessimistic when stocks are
Speaker 1: falling to see all the negative potential that the upcoming
Speaker 1: weeks and months could hold, that a war between Russia
Speaker 1: and Ukraine and then the US getting involved could potentially present.
Speaker 1: But we have experienced worse in you know, in our
Speaker 1: in our history, in the history of the world, and
Speaker 1: in the history of our country. And so yeah, let's
Speaker 1: let's take that pessimism with a grain of salts um.
Speaker 1: And so yeah, really you should be looking more towards
Speaker 1: future potential for those dollars to grow, not kind of
Speaker 1: what's been happening in the past month or even the
Speaker 1: past year or two. And so yeah, if you're casting
Speaker 1: your gaye decades down the road, it's gonna help you
Speaker 1: develop real optimism in the present as opposed to taking
Speaker 1: on the identity of all the pessimistic voices that are
Speaker 1: kind of predominant these days. All Right, So we've covered
Speaker 1: a lot when it comes to like definitions, when it
Speaker 1: comes to kind of how you should think about staying
Speaker 1: the course the mindset. Yeah, but but there's there's more
Speaker 1: we have to get to you mat so that how
Speaker 1: the money listeners can be successful investors, not just now
Speaker 1: but well into the future. Some guidelines some pieces of
Speaker 1: advice that they should cling to, uh, in order to
Speaker 1: continue building wealth. And we'll get to our thoughts on
Speaker 1: that right after this break. All right, we are back
Speaker 1: from the break, and you know, we kind of broke
Speaker 1: this up into what's happened in the past, what we're
Speaker 1: experiencing right now. It is now time to talk about
Speaker 1: the future in the year. It makes me think about
Speaker 1: that old Conan O'Brien's kit and now it's two where
Speaker 1: the flying cars man? Right? Uh? So, yeah, that's that's
Speaker 1: what we're talking about now. Like what do you do now?
Speaker 1: Like where do we go from here? Staying the course
Speaker 1: We believe that that is the best option, and it's
Speaker 1: not even close. There are, of course going to be
Speaker 1: some folks who are nearing retirement, like we said earlier,
Speaker 1: who would benefit from taking some money out of stocks
Speaker 1: and having a less risky portfolio overall. But that shouldn't
Speaker 1: be in reaction to what the market is currently doing.
Speaker 1: It should be in reaction into the reality that you're
Speaker 1: just getting older. Right, is this innevitable process that we
Speaker 1: all go through? Uh? And you are drawing closer to retirement, uh,
Speaker 1: and so for you than maybe rebalancing and coming up
Speaker 1: with a different plan is what you need to do.
Speaker 1: But it's not because of what you are currently experiencing
Speaker 1: with the market. And so for virtually everyone else, sticking
Speaker 1: to your current strategy, even in the midst of market corrections, uh,
Speaker 1: bear markets, or even crashes, that is the right path
Speaker 1: to take from here, that's right, Matt. Yeah, one one
Speaker 1: helpful article from seeing in Business. I really appreciated the
Speaker 1: headline this past week. They literally encourage folks to forget
Speaker 1: their four own K password, and I was like, that's
Speaker 1: really good advice because there's probably a lot of people
Speaker 1: logging in there right now. They see a bunch of
Speaker 1: red on the screen, how much money they are down
Speaker 1: in the past, in the past weeks or month, and
Speaker 1: they're wanted to do something, and so maybe not logging
Speaker 1: in is actually the best thing for you your psyche,
Speaker 1: but then also the best thing for your investments. And
Speaker 1: so yeah, we would suggest that that's accurate. Uh, don't
Speaker 1: log in and look at the numbers and um at.
Speaker 1: It kind of reminded me of this fabled Fidelity study
Speaker 1: that didn't actually happen, which supposedly found the people who
Speaker 1: had the best investment performance were dead. Do you ever
Speaker 1: hear about that? Yeah? Okay, but apparently it's not Actually
Speaker 1: it was not a real study. Yeah, even if you
Speaker 1: could run a study like that, which I mean, how
Speaker 1: many dead people are there, whether their accounts are still
Speaker 1: growing where probate hasn't kicked in and right and government
Speaker 1: hasn't swooped in or whatever. But like, even though it's
Speaker 1: a fictitious study, like if you take the facts and
Speaker 1: run a study like that like a hypothetical, it's still
Speaker 1: true exactly, which is just kind of fascinating to see that.
Speaker 1: You know, not making changes in times of turmoil is
Speaker 1: of course easier if you don't have a pulse, right
Speaker 1: if you're dead, because you're not susceptible to the whims
Speaker 1: of the market or the headline writers. But I think
Speaker 1: it's you know, a good thing for us to remember
Speaker 1: that when we are experiencing abouts of volatility, it's best
Speaker 1: to kind of think like a dead person. Really, maybe
Speaker 1: that should be our new slogan. Invest like you're dead.
Speaker 1: It's like we can we get a burden's right, prop
Speaker 1: yourself up, party like you're dead. One other thing to
Speaker 1: mention here, too, is the great thing is that most
Speaker 1: how the money listeners are probably going with the dollar
Speaker 1: cost averaging approach to investing, and that's when you're putting
Speaker 1: money in regularly, you know, often like every two weeks,
Speaker 1: whenever you get paid. The excellent thing about this is
Speaker 1: when these dips do happen, you are buying stocks at
Speaker 1: a discount without even having to think about it. Right,
Speaker 1: it's automatic ensure. Right, your portfolio has taken a bit
Speaker 1: of a hit. But since you're buying more stocks while
Speaker 1: prices are depressed, it creates more of a benefit for
Speaker 1: you over the long run. That's dollar cost averaging. However,
Speaker 1: if you find yourself in a situation where you have
Speaker 1: a lump sum to invest, we wanted to mention that
Speaker 1: the data shows that it makes most sense to invest
Speaker 1: that money as soon as possible because on average, the
Speaker 1: market grows more often than a shrinks. And so just
Speaker 1: keep that in mind. If you are dollar cost averaging,
Speaker 1: as the market tanks, you're getting a deal. But if
Speaker 1: that's not you, if you do happen to have a
Speaker 1: chunk of cash sitting around, don't overthink it. Invest that
Speaker 1: money as soon as possible. Uh, time in the market
Speaker 1: always is gonna beat timing the market. Yes, yes, it will.
Speaker 1: It's a classic old phrase. I don't know who said it,
Speaker 1: but I don't know. Pretty true, I like it. Yeah,
Speaker 1: And uh, the weird thing, Matt, is that, for some reason,
Speaker 1: when the stock market seems to be the only place
Speaker 1: where people run for the exit when the sales starts,
Speaker 1: when Amazon Prime Day comes along, everybody should be shopping
Speaker 1: on Amazon. Nobody's freaking out. No, everybody's loving it. And
Speaker 1: let's say you're saying, oh, the value of my air
Speaker 1: air fryer just went down in value. Thinking about it
Speaker 1: from this day point, you know, they're like, yeah, I'm
Speaker 1: gonna get three air fryers because they're cheaper than they
Speaker 1: ever were, and I'm gonna start stocking up for Christmas
Speaker 1: gifts air friers for everyone. And but it's interesting how
Speaker 1: the exact opposite thing happens in the stock market. And
Speaker 1: and so, yeah, the crucial thing to remember is that
Speaker 1: you don't actually lose money unless you sell. It's just
Speaker 1: numbers going down on a screen until you turn the
Speaker 1: abstract into reality. So when you're faced with the correction
Speaker 1: or a crash, don't lock in those losses by selling it.
Speaker 1: The exact wrong time to sell. At the same time,
Speaker 1: don't assume that it's a bad time to buy as
Speaker 1: things are going down. But think of it just like
Speaker 1: Amazon Prime Day. But for your investing future, for the
Speaker 1: future of your stockholdings, of of your ultimate wealth building
Speaker 1: goals future, you is who you want to keep in
Speaker 1: mind when it comes when the markets taking buy those
Speaker 1: stocks on sale for Yeah, and the thing is, you
Speaker 1: don't get big gains without volatility, right Like, if you
Speaker 1: like certain do you just stick his savings accounts c
Speaker 1: d s. Those have obviously not been kind to your
Speaker 1: dollars recently, but there's a real purpose behind having savings
Speaker 1: on hand. But you've ultimately got to take risks if
Speaker 1: you want to earn returns on your money. And I
Speaker 1: think one more important thing really worth mentioning is some
Speaker 1: people might need help. Some people might feel like they
Speaker 1: can't go it alone or might feel to disheartened by
Speaker 1: stock market corrections where they feel like they have to
Speaker 1: take a move because it's a frightening scenario. And yeah,
Speaker 1: if you're final full, you don't feel that way. Because
Speaker 1: you're listening to this episode right now exactly. We're kind
Speaker 1: of trying to be your coaches like podcast, but if
Speaker 1: you feel like you need an actual human being can
Speaker 1: personal trader, yeah, where they can actually like look at
Speaker 1: you in the eye and talk to you about how
Speaker 1: you're feeling. Well, that that person would be a financial advisor,
Speaker 1: and that can make sense for some people, Matt who
Speaker 1: you know, financial advisors aren't cheap, but they're definitely cheaper
Speaker 1: than selling at the wrong time, right and so uh,
Speaker 1: if you know yourself and you've toyed with the idea
Speaker 1: of selling, let's say in the midst of recent volatility,
Speaker 1: hiring someone who can help you develop and stick to
Speaker 1: a plan can be well worth the cost. X Y
Speaker 1: Planning Network is one of our favorite places for folks
Speaker 1: to start if they feel like they absolutely need an
Speaker 1: advisor on their side and they can't go it alone.
Speaker 1: We think you can invest without the help of someone
Speaker 1: else in order to build wealth for your future. But
Speaker 1: if you are getting nervous and you don't think you
Speaker 1: can well, then that might be the time where you
Speaker 1: need to hire someone who can come alongside you and
Speaker 1: help ensure that you stay the course. And that person
Speaker 1: is in all likelihood going to be a financial planner
Speaker 1: or even somebody like an accredited financial coach. That's right.
Speaker 1: You might know yourself really well and know that someone
Speaker 1: like that guiding you you through some turbulent times would
Speaker 1: be completely worth it. It's like a higher NASA. You
Speaker 1: might not need one, you might be able to get
Speaker 1: there on your own, but you might also find that
Speaker 1: you in particular, that's something you need. Yeah. Plus it
Speaker 1: probably doesn't hurt you know it stice having some company
Speaker 1: on the road on the path up Mount Everest. But
Speaker 1: you know, I mean at the end of the day,
Speaker 1: like discipline, the ability to endure a risk, these are
Speaker 1: the things that you'll need to develop as an investor
Speaker 1: because the stock market it doesn't always go up. It's
Speaker 1: not just a high yield savings account that pays, you know,
Speaker 1: like a hundred times more than what your bank is paying.
Speaker 1: That's what people started to feel like though the last
Speaker 1: like ten twelve years. Yeah, and it's understandable too because
Speaker 1: like a lot of young professionals who started investing in
Speaker 1: twenty ten or later, Uh, they've only for the most
Speaker 1: part seeing the market just on the rise. But it
Speaker 1: is important to know that corrections occur regularly. Aside from
Speaker 1: you know, the novel global pandemic that we experienced back
Speaker 1: in that took the markets down. But bear markets, even crashes,
Speaker 1: they're going to pop up every now and then. But
Speaker 1: if you know your risk tolerance, if you know your timeline,
Speaker 1: you don't have to spend much time or energy thinking
Speaker 1: about it. Yeah, again, going back to corrections, bear markets,
Speaker 1: they're gonna happen regularly. They're gonna happen enough to where
Speaker 1: you shouldn't freak out when percent of the time so happen.
Speaker 1: If you know that those things are headed our way,
Speaker 1: um and that they're inevitable, I think it's gonna help
Speaker 1: bolster you to continue to make the right decisions even
Speaker 1: when tough times go along. And the cool thing is
Speaker 1: when those tough times come along, you're able to continue
Speaker 1: buying more and in fact enhancing your ability to grow
Speaker 1: your wealth for your future. So that's actually the best
Speaker 1: way I think to think about these these corrections is
Speaker 1: to steal your resolve and then also continue doing what
Speaker 1: you were doing, continue buying more, but because it's only
Speaker 1: going to put you in a better financial position in
Speaker 1: the future. All Right, Matt, let's love it. Let's get
Speaker 1: back to the beer that we had for this episode,
Speaker 1: which is also love. Yeah, this one's really love investing
Speaker 1: and I love the What is this called doing good?
Speaker 1: A force for good? A force for good? Yeah, which
Speaker 1: is a great name for a beer. And this one
Speaker 1: came from two breweries that you and I really like,
Speaker 1: Creature Comforts and Sierra Nevada. This was an Imperial Brown Ale.
Speaker 1: What were your What were your thoughts on this one? Well,
Speaker 1: I will tell you, but first I wanted to mention. So, yeah,
Speaker 1: this is a collaboration. Uh. And it's called a force
Speaker 1: for Good because one of the profits from this beer
Speaker 1: go towards charities there in Athens, Georgia, And so it's
Speaker 1: always nice to come across the beer that also has
Speaker 1: a good mission. But yeah, so this is a rum
Speaker 1: barrel aged beer with am Burana would, which I believe
Speaker 1: I remember reading was a Brazilian would. Uh. It's first
Speaker 1: aged in Jamaican rum barrels, which obviously you can totally smell.
Speaker 1: As soon as we poured this beer, it smelt like
Speaker 1: we were I mean, it smelt like we had like
Speaker 1: a little sniff ter of Jamaican rum. At least it
Speaker 1: did for me. Yeah, no, I agree, incredibly strong from
Speaker 1: that standpoint, it definitely picked up a lot of those
Speaker 1: rum characteristics but then aged on whatever exotic would This
Speaker 1: is from Brazil, but it gave it this incredibly rich
Speaker 1: depth of this umplex flavor profile for a style of
Speaker 1: beer that we don't often have here on the show. Jill,
Speaker 1: this is an Imperial brown, and so it has a
Speaker 1: lot of those dark qualities that you get out of
Speaker 1: the stout, but with some nuance, right like kind of
Speaker 1: like a almost picture like a brown oatmeal cookie with
Speaker 1: raisins as opposed to kind of like dark chocolate and
Speaker 1: roasted coffee, which is typically what you get with like
Speaker 1: a Russian Imperial. But it's a nice way to incorporate
Speaker 1: some of those flavors without completely going off the deep
Speaker 1: end when it comes to kind of the roasty toastiness. Yeah, no,
Speaker 1: I agree, And and I think it had a lot
Speaker 1: of like rum sweetness going on to write it was,
Speaker 1: which I know you're not a huge fan of. No,
Speaker 1: I like, I like rum, and I don't mind some sweetness,
Speaker 1: and and honestly, like I love a good brown ale,
Speaker 1: but there aren't many great ones being made. There's aren't
Speaker 1: many brown ailes out there in general. Needs to happen more.
Speaker 1: I feel like brown Ales were like probably you know,
Speaker 1: one of the absolute first craft beer styles that I
Speaker 1: got into. Now with ip as being all the rage,
Speaker 1: they don't make this kind of nobody makes them. They've
Speaker 1: kind of taken over. Did you ever drink I think
Speaker 1: it was called turbot Dog by a Beda. I'm sure
Speaker 1: I did. That was like a beta back in the
Speaker 1: I mean, they probably still do, but they have like
Speaker 1: Purple Haze and some of these other beers. But Turbo
Speaker 1: Dog was a beer when I once I graduated college,
Speaker 1: I was living with a buddy of mine up in
Speaker 1: North Carolina in the woods. That was a beer that
Speaker 1: I found myself gravitating towards. Uh, And that's when I
Speaker 1: discovered shower beers, and so I would have a I
Speaker 1: would have a nice Turbo Dog. They're up in the
Speaker 1: mountains of North Carolina with snow on the ground outside,
Speaker 1: and we would crack open the window to our There's
Speaker 1: an actual window in our shower and you could open
Speaker 1: it up and literally see the snow falling. I'm in
Speaker 1: a hot shower and I've got my cold beer. It's
Speaker 1: kind of like the perfect and the perfect mix, like
Speaker 1: the simple pleasures in life, right, there, man, everybody needs
Speaker 1: a good shower beer every day. And then yeah, well
Speaker 1: I would I would say I think this one was
Speaker 1: truly great beer from two great breweries, and I'm so
Speaker 1: glad to have another Brown Ale because yeah, it's like
Speaker 1: a blast from the past. But this is like way
Speaker 1: better than the Brown Nails I was drinking when I
Speaker 1: was like, I don't know, like ten years ago. So
Speaker 1: the Rednols would use a drink or like, you know,
Speaker 1: they got their high school diploma. This Brown Hiles got
Speaker 1: like his PhD. It's a whole another level exactly. Yeah,
Speaker 1: but huge thanks to friends of the show Nathan for
Speaker 1: picking up some of these and sending them our away.
Speaker 1: Thank you, all right, Matt, that's gonna do it for
Speaker 1: today's episode. For listeners who want more information about this
Speaker 1: episode and just kind of more information about what we're
Speaker 1: up to here at how the Money, you can check
Speaker 1: out our website at how to money dot com. That's right, man,
Speaker 1: and that's gonna be it. So until next time, Best
Speaker 1: Friends Out, Best Friends Out.