Episode 160
Why Investing is Boring - EP. 160
Would you like your investments to have more good days than bad days? Are you tired of logging in and seeing your investment account balances dropping? Why does the stock market feel like an emotional teenager throwing tantrums and making drama? Well, that's what we're diving into today!
We’re breaking down how the ups and downs of your investments mirror the wild mood swings of adolescence—think mood swings but with dollar signs. Between the media's sensational headlines and our natural urge to know “why,” we often find ourselves spiraling into panic mode.
We’re here to dish out some wisdom on how to remain calm and steadfast amidst the chaos and why, sometimes, sticking to the boring, steady path is the real way to win the investment game.
Takeaways:
- The stock market behaves like an emotional teenager, having temper tantrums that leave investors questioning their choices.
- Investing isn't about quick gains; it's a long-term journey requiring discipline and patience, much like mastering a new skill.
- People often panic during market volatility due to the fear of losing money, missing the fact that markets naturally fluctuate over time.
- Understanding what you're invested in can help alleviate anxiety; many investors don't even know the details of their own portfolios.
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About Your Co-Hosts:
Travis Maus has been in financial services for over fifteen years. He is a Senior Wealth Manager and Chief Executive Officer at S.E.E.D. Planning Group. Travis also hosts the Unleashing Leadership Podcast, where he dissects some of his favorite books on leadership and how you can apply it to your business or life.
Steve Campbell has over a decade of industry experience and is a Senior Marketing Director at S.E.E.D. Planning Group. Steve also hosts the One Big Thing Podcast, an interview-style show meant to inspire and encourage 30 and 40-year-olds going through difficult seasons of navigating marriage, raising kids, and growing personally.
Transcript
Foreign.
Speaker B:Welcome to Ditch the Suits podcast, where we share insights nobody in the financial services industry wants you to know about.
Speaker B:We're here to help you get the most from your money in life.
Speaker B:So buckle up and welcome to Ditch the Suits.
Speaker A:What are we talking about today, Steve?
Speaker B:Why the stock market is like an emotional teenager.
Speaker A:Oh, yeah.
Speaker A:And maybe why real investing is really just kind of boring.
Speaker A:Interesting.
Speaker A:So I think a lot of people would like to know why their investments seem to have less good days.
Speaker A:You know, why there's so many bad days.
Speaker A:And I think most people would like to have more good days and less bad days.
Speaker A:Sure, but how do you actually do that?
Speaker A:I think people are tired of logging in and seeing their investments, especially early this year so far.
Speaker A:You know, it's new administration, everything going on, lots of changes.
Speaker A:You kind of expect to go in and hopefully see the investments going up, and then all of a sudden they're going down.
Speaker A:And what's happening with that?
Speaker A:I think a lot of people are concerned for their investments when they talk to their friends or the news and all the changes that are going on.
Speaker A:And regardless of if people think the changes are good or bad, it's causing volatility in the market.
Speaker A:It's causing your investment accounts to do things that, you know, is a little bit.
Speaker A:A little bit normal, it's a little bit volatile.
Speaker A:I kind of feel like the stock market is an emotional teenager.
Speaker A:And if we go back, if we turn back the clock four years, that's pretty much what it's been doing for a long time now, actually, if you go back eight years and.
Speaker A:And it's.
Speaker A:It's.
Speaker A:Or even further, it's just.
Speaker A:It's an emotional teenager.
Speaker A:Every now and then it froze.
Speaker A:A hissy fit or a tantrum, and you're like, what's your problem?
Speaker A:And, you know, somebody didn't give them something they wanted or something like that.
Speaker A:So the.
Speaker A:The kids are kind of being brats.
Speaker A:And that's kind of exactly how the market's acting or has been acting now for quite a while.
Speaker A:And so over the next three episodes, we wanted to talk about what you can actually do about that.
Speaker A:You know, just like in parenting, there's things you can do so that you're, you know, your emotional teenager doesn't wreck your day.
Speaker A:We want to kind of do that for our investments, too.
Speaker A:And we've got a couple of syndromes just to kind of make this a little bit playful or really make it kind of hit home.
Speaker A:In the first syndrome that we're going to talk about is the YYY syndrome.
Speaker A:So this is like the spoiled person out there going, why, why, why, why?
Speaker A:No matter what answer you give them, it's like, why?
Speaker A:I need to know why?
Speaker A:I need all the answers right now.
Speaker B:Sounds like kids.
Speaker A:Okay, maybe not quite teenagers, but, you know, so this could be like the emotional pre teenager.
Speaker A:Yeah, but so we have the YYY syndrome and how the financial market and really the.
Speaker A:The media machine.
Speaker A:So the financial marketing machine and the media, which, you know it, we pick on the media a lot, but it's not really the media's fault.
Speaker A:People react to investments going up and down very emotionally, and so they'll turn in and the media can.
Speaker A:Can run news shows that really don't even understand the principles of investing.
Speaker A:I'm sure they understand it behind the scenes, but they dummy them so far down for the average viewer that the average viewer is thinking certain principles exist that aren't real, where they're not getting the whole picture.
Speaker A:And so.
Speaker A:And they're trying to give you the why.
Speaker A:So every time, if you've noticed, when you go to the news, they tell you why the market went up or down today.
Speaker A:And it's just not.
Speaker A:I mean, that's like you trying to placate a child who's saying, why is the sky blue?
Speaker A:And you have to come up with a reason, you know, why.
Speaker A:Why is dad mad?
Speaker A:Or why is mom mad?
Speaker A:You got to come up with a reason and give it to them.
Speaker A:Right.
Speaker A:And sometimes the answer isn't quite as clear as you're actually giving, but you feel kind of obligated to give an answer.
Speaker A:So we're going to unpack the marketing machines a little bit.
Speaker A:They really get you addicted to some of this vicious cycle and what I would call the emotional roller coaster.
Speaker A:We wrote a piece a couple of years ago about the emotional roller coaster of the market.
Speaker A:I think back during COVID and just that ride and what the market feels like to people.
Speaker A:And you know, you're on, you're.
Speaker A:You're in the seat of a roller coaster.
Speaker A:You're strapped in and you're going up this big incline, you know it's going to come back down.
Speaker A:So do you go up to the top of the incline and just jump off or when it starts to go down and starts to pick up speed, you go, okay, I guess I better get off now.
Speaker A:Or do you go, I can't believe this roller coaster would do this to me?
Speaker A:No, you signed up for the ride.
Speaker B:Yep.
Speaker A:So we want to maybe talk about how to Put this in context and how to simmer down a little bit and maybe even take advantage of it.
Speaker B:Well, and even just to help people.
Speaker B:I mean, it's now been four and a half years since we started Ditch the Suits.
Speaker B:I'm going to refer to you as Uncle Travis and I'm Uncle Steve.
Speaker B:Our emotional teenagers are like the nieces and nephews.
Speaker B:It's been four and a half years of us recording.
Speaker B:We've done multiple series on the stock market and what happens, We've talked people off the ledge.
Speaker B:We've talked through market cycles and through these four and a half years of doing this, we've seen that over time, you know, you have market corrections, things happen.
Speaker B:And so you can go back through the litany of Ditch the Suits and hear all the different series that you and I have done on the stock market and how Covid and China and all these things of it.
Speaker B:So this isn't just our first conversation talking about the markets, right?
Speaker B:So to try to, it's like looking at people's kids and say you're going to get through it, right?
Speaker B:Because they're just experiencing the pain of the unruliness.
Speaker B:But we're coming at it from an uncle viewpoint to be like, hey, we've seen this before with the kids.
Speaker B:Don't forget last time.
Speaker B:This is what happened.
Speaker B:So this is Ditch the Suits.
Speaker B:He's really not Uncle Travis.
Speaker B:I'm not Uncle Steve.
Speaker B:I am Steve Campbell, your senior marketing director at Seed Planning Group.
Speaker B:Travis co hosts the Ditch the Suits is our CEO and Seed is a fee only financial planning firm where we have a fiduciary obligation to put our clients best interest first.
Speaker B:And Ditch the Suits is all about us bringing our collective experience working with clients to help you and them get the most from your money in life.
Speaker B:And so this is going to be a great conversation as we talk about why the stock market feels like an emotional teenager.
Speaker B:Let's take a quick break to hear a word from your sponsor.
Speaker B:This episode is brought to you by Seed Planning Group.
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Speaker A:Yes.
Speaker A:Think about for a quick second.
Speaker A:You have a teenager and they have their first love.
Speaker A:They come home and they're in love with this other person.
Speaker A:And you as a parent, you're excited for them, but you're also a little bit nervous.
Speaker A:And then a couple weeks later, their first love has a new boy or girlfriend and has decided to dump your child or whatever.
Speaker A:Somebody is moving on.
Speaker A:What do you tell your child when their heart is broken?
Speaker A:It's going to be okay.
Speaker A:You're going to have lots of loves in your life.
Speaker A:Your life is going to continue.
Speaker A:This is not the end, right?
Speaker A:Yep.
Speaker A:Life will go on.
Speaker A:There will be better days ahead of you.
Speaker A:But for some reason, when we see the financial news, you know, we, we give that advice to kids, but we don't take that advice for ourselves.
Speaker A:It's like, this time is different.
Speaker A:We're ruined.
Speaker A:There'll never be another good day over and over and over again.
Speaker A:And it always shocks me, too.
Speaker A:I would think that investors who have been around the block a while, those who have been investing for 30, 40, 50 years, would be a lot more confident and comfortable with the fact that what goes up comes down and what goes down goes up.
Speaker A:And it's like this giant cycle.
Speaker A:But.
Speaker A:And they've seen the news cycles over and over again about, okay, we're all doomed.
Speaker A:But still we keep falling for this cycle.
Speaker A:We keep thinking this is the last great relationship and our life is forever going to be dull after this and it's never going to be okay.
Speaker A:And that gets us to that YYY syndrome.
Speaker A:And, you know, let's think about it from a perspective of investing everything.
Speaker A:For some reason, we have to have the answer to why.
Speaker A:Why does it hurt like this?
Speaker A:Why does it feel like this?
Speaker A:Why did the market go down?
Speaker A:Right?
Speaker A:Why?
Speaker A:You know, why?
Speaker A:This is where you just get to why, why, why?
Speaker A:Like, everything's a why.
Speaker A:We have to, for some reason, have an answer for everything.
Speaker A:And you know what?
Speaker A:Frankly, sometimes you just won't get the answer or you won't know the answer.
Speaker A:Or sometimes the answer comes well down the road, or sometimes, you know, there's things that move.
Speaker A:Everybody thinks that the market just moves on, just simply based on supply and demand, and that there's other people out there going, good investment or bad investment.
Speaker A:They don't take into account the fact that there's also algorithms and other things that are buying and selling investments, not on the merit of the investment, but just on price movements and just trying to take advantage of a price movement, not because they think the price is good or bad, but they think it's going to go the other way.
Speaker A:They can make a couple pennies on it, and if they trade enough shares, they make a lot of pennies.
Speaker A:And so we're going in there and we're like, why the market go down?
Speaker A:Oh, because, you know, Trump said this on tv or because the treasury did this with interest rates, or because this happened or that happened.
Speaker A:And sometimes the real answer is much, much either much, much more complicated or much, much simpler than what's actually being said.
Speaker B:Yeah.
Speaker B:And for you as a listener, we're not necessarily saying that this is your mindset, so we're trying to give you a course correction.
Speaker B:This could be colleagues that.
Speaker B:That wear you out with negativity every day.
Speaker B:This could be family members.
Speaker B:Why do you even invest?
Speaker B:The market is some of the stuff we talked about.
Speaker B:But you and I have also talked about how our lives.
Speaker B:It's very hard for us to disconnect all the moving pieces in our life.
Speaker B:So everything seems to have a cause and effect.
Speaker B:We're blending social and moral issues with the stock market, when sometimes those things have nothing to do with each other.
Speaker B:So you read a headline on the news, that's a moral issue of the day, and you go check your 401k balance.
Speaker A:But it's.
Speaker A:It's like our addiction to gambling as a country.
Speaker A:You know, gambling's everywhere.
Speaker A:And I would say, you know, we've done episodes in crypto, too.
Speaker A:Crypto's a lot like gambling.
Speaker A:It's this dream that I can get rich overnight, that I'm going to win big over overnight.
Speaker A:We're so addicted to needing an answer and needing to win immediately.
Speaker A:Like, that's.
Speaker A:Gambling's all about the short term.
Speaker A:If you're buying an investment, I think Warren Buffett says it, if you're buying an investment, you can't hold it for 10 years.
Speaker A:You can't stomach holding this investment for 10 years.
Speaker A:You have no business buying the investment in the first place because you are gambling, you are betting on a price movement.
Speaker A:Yep.
Speaker A:And that's part of the problem.
Speaker A:Our, our whole financial marketing machine has kind of turned into this.
Speaker A:Like when you watch E Trade commercials and all that kind of stuff and they talk about options and how you can do all this stuff yourself and things.
Speaker A:They're talking about short term purchases, they're talking about short term trades, which is akin to gambling.
Speaker A:I'm just going to make a bet on where the price movement's going to be.
Speaker A:It's not about investing because you understand the company that you're buying.
Speaker A:And I think that that's where it gets to kind of what you're talk is, it's just, you know, when you gamble, you don't look long term, you look short term.
Speaker A:And that's where people are kind of sitting right now with investing.
Speaker B:Well, and even as a parent, I think we all love some sense of control.
Speaker B:You don't want to be controlling over your kids, but you want to have a sense of control.
Speaker B:You want to know where they go, who they hang out with, who they talk to so that you can parent them correctly.
Speaker B:I think it's the same thing when it comes to our investments.
Speaker B:We all as human beings like to know that we're in control.
Speaker B:And so I guess, you know, you talked about this yyy but Travis, where does the need for control, stability and having all of our question answers come from or what does it seem to do for people?
Speaker A:Well, it gives people confidence, right?
Speaker A:Most people are just running around in this world and they're trying to figure out how they belong and what they should be doing next.
Speaker B:That's deep.
Speaker A:And so when you don't have answered questions, when things seem like they're chaotic around you, and let's face it, money is one of those things that we rely on.
Speaker A:So, you know, we like to know what we have.
Speaker A:And a lot of people identify how they're doing based on how much money they have.
Speaker A:And so if that money is moving all over the place, we want to know why we want to control it.
Speaker A:We want to know, you know, if your kids are sad, you want to know why they're sad, and you want to know what you could do to help them.
Speaker A:So if the investments are down, we want to know why they're down and should we be panicking, should we be doing something different, that type of thing.
Speaker A:So first and foremost, I think it's for confidence so that we can feel like we're doing the right things.
Speaker A:Most people want to do the Right.
Speaker A:Things.
Speaker A:And when something doesn't work or doesn't appear to be working, you know, and that's a paradigm issue because when we look at investments, if you're making an investment for 10 years and you look at what it's doing in year one, if it's down, that doesn't mean it's not working.
Speaker A:Right.
Speaker A:That means that there could be a system kind of if you, if you get injured and you start to heal as you're healing, that doesn't mean you don't have any pain.
Speaker A:Right.
Speaker A:There's still a progression that you're going through.
Speaker A:The body is healing.
Speaker A:If you go and have surgery to have something fixed, Right.
Speaker A:You may not have pain with that thing that you had fixed, but now you have pain, a different kind of pain, because you know, your muscles were cut and bones were shaved and stuff like that, right.
Speaker A:So when you think about the, how the body recovers, you know, it's a long term thing.
Speaker A:It's like, okay, we went in and we fixed it, but now we have to recover and we're still going to have pain as we go.
Speaker A:So I think, I think with investing, we're looking at it sometimes and we're thinking, you know, it's going to give me confidence if I know why this thing is not working.
Speaker A:And the typical answer to something that's not working is just to get rid of it.
Speaker A:If you can get rid of it, right.
Speaker A:Like if you broke your arm and you could just chop it off and grow a new one, you wouldn't have to, you know, worry about healing and intended damage and all that kind of stuff.
Speaker A:That'd be a good answer, right.
Speaker A:But you can't.
Speaker A:But with your investments, you can go in and you can just chop it off.
Speaker A:You can say, get rid of that one and it's gone.
Speaker A:And now that source of discontent or anxiety is gone.
Speaker A:It's not on there.
Speaker A:When you log into your account on Monday, you won't see something in the red and so you'll feel better about it.
Speaker B:Yep.
Speaker A:So you're doing it based on your feelings, which is based on your desire to control something.
Speaker A:And you're not controlling anything.
Speaker A:What you're doing is misunderstanding what you're, you're doing.
Speaker A:You're actually hurting yourself.
Speaker A:It's like overdoing painkillers to heal, you know, like, like hiding pain doesn't mean that you're healing, you know, and being afraid of pain doesn't mean that you're strong.
Speaker A:You know what I mean?
Speaker A:Or covering it up and you need to deal with it.
Speaker A:You need to face it sometimes.
Speaker A:And so, you know, and I think it hurts people.
Speaker A:I think, I think people, because they don't understand the fact that they can't control everything, the fact that they can't have an answer to everything.
Speaker A:Have you ever had with your kids where you're like, jesus, no answer to this question they're asking, or you don't know, you're like, hey, dad, why are there waves in the ocean?
Speaker B:Or not even that.
Speaker B:Just as a parent, the parallels to investing, you try to gather enough information to be a good parent.
Speaker B:We're going to do certain things a certain way, raise our kids a certain way, and you can put all those practices into play and then life just, it doesn't go the way you thought.
Speaker B:And so your question is, am I a bad parent?
Speaker B:When it's like you did all the right things.
Speaker B:Sometimes there are things that are beyond your control and you're dealing with human beings when you're dealing with children who are not going to respond the way that I think every parent wants their kids to respond the way they are at their current age.
Speaker B:And sometimes we have this dissonance where it's like, man, my kid's 8 years old, he's 9 years old, he's not me.
Speaker B:Same thing with investing.
Speaker B:It's like, I did my due diligence, I thought I made a good investment.
Speaker B:Why is this thing, quote unquote, losing me money or not doing what it's supposed to do and fear sets in and so do you kind of want to talk about.
Speaker B:We've talked about the why.
Speaker B:Why, why, Right.
Speaker B:Maybe being a symptom.
Speaker A:But before, before we go to where you're going, though.
Speaker A:But I think what the financial industry is doing to people and what the media is doing to people is they're putting really fancy people out in front of them.
Speaker A:Well spoken people, nice suits, good pedigrees, PhDs, and that kind of stuff.
Speaker A:And they're saying, this person is going to give you a well articulated why or why from a place of authority, right?
Speaker A:You get people running some of these afternoon or early evening shows talking about the economy and they sound very convincing.
Speaker A:And that's a major, major issue because they're feeding you a bunch of bull.
Speaker A:Most of the time they don't know why something's happening.
Speaker A:Right?
Speaker A:There could be some volatility in one area.
Speaker A:So they pass a bill and it causes a disruption in a particular industry and then that causes a disruption in other industries and then something else happens over here that causes a sell off of certain of a portfolio and that causes an upset and then it's a compounding effect.
Speaker A:So it's not the one, the first thing that happened that caused the market to go down by X.
Speaker A:It's the combination of the first thing plus the second thing plus the third thing, you know, and then kind of multiplied because of, you know, the amplification of everything happening at the same time and you're not getting that much information.
Speaker A:And a lot of times that they came out and said this is just a price hit, this isn't a value hit, meaning companies haven't lost value on this.
Speaker A:We're not seeing deflation.
Speaker A:What we're really seeing is that, you know, a bunch of money left the market today because XYZ went bankrupt and they had to liquidate portfolios or whatever and then that caused this sell off over here.
Speaker A:But there should be an ebb and flow with that where that's likely to recover because now there's incredible value.
Speaker A:I mean, bonds are one of the best places you can look at that.
Speaker A:Bonds have a finite life to them.
Speaker A:They're going to mature at a certain date.
Speaker A:So when there's a sell off in the bond market and you can buy $1,000 bond for 900 bucks or $950, instead of the media and the financial machine coming out and saying, oh my gosh, bonds are down so bad, it's horrible.
Speaker A:Run for your lives.
Speaker A:If they turned that and said, oh my gosh, you could buy a thousand dollar bond for $900 or $950 today, you'd be like, oh this is great versus oh my gosh, I'm so afraid of what's happening.
Speaker A:The financial companies do it because they want you to think that they have all the answers.
Speaker A:So you're gonna go to the financial company with the Ph.D.
Speaker A:and with and the CFAs and all this other stuff because they will provide the answers to you about what you should be doing next.
Speaker A:And then when you look at their performance, it's like, well, there's consistently underperformance here.
Speaker A:So how are they?
Speaker A:And the real answer is you're trying to tell the future and what's going to happen in the future.
Speaker A:You're talking about investing like you're gambling and you're trying to give short answers on very complicated things without putting any research into it, without really overanalyzing the situation.
Speaker A:Like just simply what was the biggest headline today?
Speaker A:That's the reason.
Speaker B:Well, and you think about it too, right?
Speaker B:When you turn on the news at night, you've had a full day of work.
Speaker B:Now you're turning on the news and you hear an anchor say, another bad day in the market.
Speaker B:What does that mean?
Speaker B:Right.
Speaker B:If your wife goes to the grocery store and you go, how's the grocery store?
Speaker B:It's a bad day in the market.
Speaker A:Well, why was it a rotten.
Speaker B:The cost of eggs were really high today.
Speaker B:Okay, so there was one thing, but.
Speaker A:Did you get a discount on.
Speaker B:Did you get a sale on other stuff?
Speaker B:When you hear stuff like this, we don't always apply that same, and that's a very elementary analogy.
Speaker B:But when you're putting in time, you're building your career, and you hear it's a bad day in the market, the assumption is that everything is bad, which creates a lot of fear.
Speaker B:So.
Speaker A:So talk about, if I create fear, you're going to take action.
Speaker A:Fear sells.
Speaker A:If I want to get you to call me, if I want to get you to buy the book, if I want to get you to tune into my radio station or my TV channel, what am I going to do?
Speaker A:I'm going to make you afraid, and then I'm going to make you think that I have the answer.
Speaker A:That's what I'm going to do.
Speaker A:But this is like you were alluding to where you wanted to go with this.
Speaker A:I think is this is a symptom, right?
Speaker A:The root cause of all this is fear and uncertainty.
Speaker A:And that's human nature.
Speaker A:Human nature is to survive.
Speaker A:Right.
Speaker A:And what do you do?
Speaker A:The basic instinct of survival is when you don't know something, it's a danger.
Speaker A:And so you should be cautious about it or you should.
Speaker A:It's fight or flight, right?
Speaker A:And so everybody's got a personality profile.
Speaker A:Some of us, you know, if there's something we don't know or something that, that, that's dangerous, we'll put our heads down and barrel right into it.
Speaker A:And some of us will say, nope, I'm going to avoid that at all costs.
Speaker A:But it's going to trigger this type of emotional reaction to it that then is behavioral.
Speaker A:And, you know, we're conditioned to try to control everything.
Speaker A:We're convinced we can control everything.
Speaker A:There's an answer to everything.
Speaker A:You go online, you web.
Speaker A:I mean, talk to a doctor.
Speaker A:I, I know for a fact I cannot stand it when people WebMD, everybody's got cancer.
Speaker A:No, you don't.
Speaker A:Right?
Speaker A:Everybody's got this problem.
Speaker A:No, you don't go in, go through the task, get it done.
Speaker A:Don't convince yourself you have something and then you make yourself sick and actually manifest real disease into yourself because of stress.
Speaker A:But we're so conditioned because we can get the answers.
Speaker A:I can just Google it and get the artificial intelligence.
Speaker A:I'm telling you what, I'm still, I still look up stuff on, you know, I'll go on Google now and you know, because of Microsoft, they've built it and Google, they've all built AI into your search browser.
Speaker A:I'm still finding incorrect stuff all the time.
Speaker B:Travis is a huge fan of AI.
Speaker A:Well, I think AI, it serves a.
Speaker B:Purpose but there's an over reliance on it.
Speaker A:But we're ignorant to the fact that it's still reliant on information man has already created and put out there.
Speaker A:And the problem is that we created so much information, which information is actually the right information.
Speaker A:That's the hard part.
Speaker A:And you're telling a computer to figure that out.
Speaker A:Well, the computer doesn't have real life experiences.
Speaker A:So we're so conditioned that we can just go out there and get the answers and we can blindly follow whatever somebody tells us because it's easier.
Speaker A:And then what do we do?
Speaker A:We panic.
Speaker A:Yep.
Speaker A:Because it doesn't happen the way that these experts or the way artificial intelligence or somebody else tells us it's supposed to happen.
Speaker A:Well, was supposed to happen like this because that's what the suit said.
Speaker A:And then it doesn't happen.
Speaker A:We go, oh my gosh, it is, this is it.
Speaker A:This is the end.
Speaker A:I mean I go on YouTube and I followed all spectrum of people.
Speaker A:The end has, has come and gone about 50 times in the last two years.
Speaker A:Like the complete collapse of China has happened 15 times over.
Speaker A:According to them, Europe has already clapped 5 times, the United States has clapped 10 times.
Speaker A:The markets are gone.
Speaker A:Like, like it's over and over and over again.
Speaker A:And it, you know, if you're buying into this stuff, you're, that's kind of like the stress that is going into your life has got to be horrible.
Speaker A:Why?
Speaker B:Well, and also just the, the competing agendas.
Speaker A:Right.
Speaker B:For you.
Speaker B:You're, you're trying to build your career, you're trying to raise your family, you're trying to make good decisions, you're trying to put yourself in the best position.
Speaker B:You have all these competing, not agendas, but things competing for your time and your attention that the AI, the Google, sometimes that seems like in the easier want an instant answer to a problem.
Speaker B:But like we've talked about, sometimes we ask very simple questions in the financial world that have very complex answers.
Speaker B:And then because we don't understand, we say, well, screw it, this is too hard.
Speaker B:Nobody can figure out this whole thing is rigged, and we push it away.
Speaker B:So there is a balance between.
Speaker B:You've survived more than you even thought you could because of everything that's happened in the news and taking place.
Speaker B:But again, then how.
Speaker B:For the need for control, panic sets in.
Speaker B:And this is one of the things that I know we were talking about too.
Speaker B:When it comes to finances, investments, financial planning, it's kind of boring.
Speaker A:Yeah.
Speaker B:Right.
Speaker B:And so, like, how do you also help bring some light, especially from your work with clients over the years?
Speaker B:The boring things are the things we don't want to pay attention to, and the sensational things are the things that we're drawn to but actually cause some of the most pain.
Speaker A:That's one of the hardest things with.
Speaker A:With financial planning and working with people.
Speaker A:90% of the noise out there is just no ways.
Speaker A:And so everybody comes in with, like, a baggage full of what people have told them.
Speaker B:Yep.
Speaker A:Right.
Speaker A:Or what they've seen on TV or something like that.
Speaker A:And even clients we've been working with for a long time, they get very worked up with the politics and the social issues.
Speaker A:Not understanding the difference between politics and social issues and how a company is making money someplace.
Speaker A:Right.
Speaker A:Like, you can.
Speaker A:You can literally have the social issues and the politics falling all apart all around you.
Speaker A:You can have it burning down.
Speaker A:But Company XYZ is still making a ton of money.
Speaker B:Yeah.
Speaker A:Your job as an investor is to find company XYZ that's making a ton of money and figure out how to get a cut of that money for a good price.
Speaker A:That's your goal, you know, be damned.
Speaker A:About the social and the political issues, that's a whole separate issue.
Speaker A:But people come in with that baggage because it's been pushed on them and it's been commingled and it's been dishonestly put, put forth as though it's all the same issue.
Speaker A:And they're really separate issues.
Speaker A:So the first thing that we try to do or that we really have to do is we have to look at knowledge level.
Speaker A:And this happens with people coming with investments that don't.
Speaker A:I mean, we worked with incredibly brilliant engineers and educators and people like that that come in and don't know what mutual funds are and how they work.
Speaker A:So somewhere along the line in the education system, our financial literacy system is broken.
Speaker A:And it does promote gambling.
Speaker A:I mean, a lot of the.
Speaker A:A lot of the kids that come in that we interview about financial planning and investments.
Speaker A:Their experience has been a stock picking contest at college, you know, over a very limited amount of time where they were rated for results over that limited amount of time.
Speaker A:That's again pushing the kind of this gambling aspect of it.
Speaker A:Not that necessarily making long term investments because the long term return is going to be there.
Speaker A:When you look at most great companies, they were long term in the making.
Speaker A:They didn't just become great overnight.
Speaker A:It took them 10 or 20 years to get there.
Speaker A:Well, that means it takes your investment time to mature.
Speaker A:I mean, even small companies like local restaurants and things like that, a lot of times take time to get going.
Speaker A:So 90% of whatever everybody's coming in with is just noise.
Speaker A:And it's just, it's there to fill your head because we need entertainment and something to do when we get home at night.
Speaker A:You know, it used to be in the old days, you'd get home and you'd go out and work in your garden and you know, do stuff outside with the family.
Speaker A:And you had a lot more.
Speaker A:You got to split wood and carry the coal in and all that.
Speaker A:I mean, that's how I grew up.
Speaker A:You had to do all that kind of stuff.
Speaker A:Now you go in and you watch the news and you watch, you know, whoever your favorite talking head is.
Speaker A:Either every.
Speaker A:And you know, the issue is that, that either, either no one knows and you're.
Speaker A:So you're going to be helpless.
Speaker A:Basically.
Speaker A:This is the polarization that you have wherever you tune in.
Speaker A:No one knows anything, so you're helpless.
Speaker A:So you should come to me and I'll save you from being helpless.
Speaker A:Or everyone knows everything and all the answers, all the questions have already been answered.
Speaker A:So you're basically, there's nothing you can do about it and you just need to just trust us, we'll just run it for you.
Speaker A:Or you could do it yourself and the answer really is, is somewhere in between.
Speaker A:And I, and I preface it kind of like this.
Speaker A:If you track the price of every single house in every single neighborhood across the country, right?
Speaker A:So you got millions and millions of houses, but you're going to track it literally every single day.
Speaker A:How the price moves on that house would kind of like Wazilla does.
Speaker A:Yep.
Speaker A:Right.
Speaker A:You're just going to track that price moving, but of every single house.
Speaker A:You could not consume that data in any way that makes sense.
Speaker A:If I went down millions of houses and told you exactly how the price moved yesterday, it would mean nothing to you.
Speaker A:You could not comprehend what that means.
Speaker A:Your brain cannot handle It.
Speaker A:It won't be able to create patterns or anything.
Speaker A:So what do you do?
Speaker A:You plot it out in the spreadsheet.
Speaker A:And I say to you something like, hey, the price of housing across the country is up 5% or down 5%.
Speaker A:And you go, okay, well, that sucks.
Speaker A:It's up 5%, and I wanted to buy a house, or it's down 5% and I wanted to sell a house.
Speaker A:And I'm really worried about the price of housing.
Speaker A:But that's generally what you do.
Speaker A:But the reality is, is that it should be something more.
Speaker A:Like, if you're considered concerned about the price of housing, what did the price of the houses in your neighborhood do?
Speaker A:Not all the houses, the houses that are make mean something to you?
Speaker A:What did those.
Speaker A:The price of those houses do?
Speaker A:And remember, price goes up and down.
Speaker A:So the price is down this week because there's no buyers trying to move to your street.
Speaker A:Next week, the price goes up because buyers are trying to move to your street.
Speaker A:I mean, that's.
Speaker A:That's how that works.
Speaker A:So you want to look at that and say, oh, my gosh, you know, the price of houses is down across the country, but on my street, the prices are up because there's people that want to move to my street.
Speaker A:I guess I should panic because the price of housing is down.
Speaker A:You know, it's just kind of like this weird.
Speaker A:We're getting macro data and we're making micro decisions with it.
Speaker A:You know, like, we're making very personal decisions with it, which are.
Speaker A:It's just really kind of silliness.
Speaker A:Average means that when I say average, if somebody says the average price of housing is down 5% and you should be very worried.
Speaker A:Well, remember, average means that there's a bunch above the line and a bunch below the line.
Speaker A:If I say that, the market is down 5%, but there's Nvidia, which happens to be one of the largest companies in the world right now, is down 20%.
Speaker A:Nvidia has pulled the average way down.
Speaker A:So you could own a whole bunch of other investments that might be doing just fine.
Speaker A:But that one investment, if you own everything, that one investment pulled your average way down.
Speaker A:So the question there is, did you even have that on your street?
Speaker A:Right.
Speaker A:Or didn't you?
Speaker A:And so if that went down and you didn't own it, yes, you might have gone down a little bit, but you certainly didn't do as bad as everything else.
Speaker A:That's just the average.
Speaker A:Right?
Speaker A:So I would just look at it like that.
Speaker A:If you have to ask what the reason is, Realize that there might be more than one reason, and it might be nuanced.
Speaker A:It's almost always nuanced.
Speaker A:And if housing is down in your neighborhood, it could be that the houses on your street aren't being kept very nice.
Speaker A:It could be that people aren't moving into your neighborhood.
Speaker A:It could be that property taxes are high.
Speaker A:It could be that there's a special tax because they're going to have to put in, you know, new sewage lines on your street.
Speaker A:And it could be a combination of all those issues.
Speaker A:If one of those issues was fixed, prices would be coming back up.
Speaker A:But if you just look at it as prices are down because nobody likes living here.
Speaker A:Well, where does that go?
Speaker B:Well, and, you know, we've worked with new people, we've done speaking engagements in communities, and I think sometimes you hear people that are concerned.
Speaker B:Concerned about the stock market, but the irony is that they don't even know what they're actually invested in.
Speaker B:Yeah, right.
Speaker B:So when we speak more times, they're like, what should I do with my investments?
Speaker B:And then you say, well, let's talk about your investments.
Speaker B:And they pull out their statements.
Speaker B:And if this is you, you're just like everybody else.
Speaker B:People don't actually know what they're invested in, whether it's mutual funds, whether it's stocks, whether it's their or what the.
Speaker A:Mutual funds invested in.
Speaker A:They'll say, this great mutual fund, you'll say, well, what kind of mutual fund is it?
Speaker A:I don't know.
Speaker B:So you'll have people that'll say, I'm very concerned, but yet they don't know what they own and how it works.
Speaker B:And so that's also, I think, some of the things that we've noticed just over the years and you guys have.
Speaker B:And I'm excited for the next two episodes that we're going to do.
Speaker B:And I'll let you close here because I think you and the planners do a really nice job of.
Speaker B:Of helping our people understand the importance of understanding what you own, why you own it, and how your investment fits into the larger story that is constantly taking place around you so that you really do have a filtering system, too.
Speaker B:Is this crap or do I need to actually understand this information?
Speaker B:If that's you get from listening to Ditch the Suits is a mindset and a filter that allows you to know, does this information I'm receiving today from the media that clearly has an agenda and a story to tell.
Speaker B:When I hear things, how do I know if this is really applicable to My life to my family's life to our money, to our, our well being.
Speaker B:Or is this just what Travis and Steve talked about?
Speaker B:I can let this go so I can go.
Speaker B:What did you say?
Speaker B:Go carry more coal.
Speaker B:Was that part of split some wood?
Speaker B:Split some wood and carry coal.
Speaker B:Our goal for you folks.
Speaker B:Let's go split some coal dirty Uncle Travis and Uncle Steve.
Speaker B:Carry some coal.
Speaker B:So any final thoughts?
Speaker A:Yeah.
Speaker A:Good investing is like anything else if you want to get good at any.
Speaker A:What would you tell your kids if your kids want to, want to be, you know, so you have a daughter in dance or son who's playing baseball or something like that and you want them to and they really want to be.
Speaker A:Well, what you going to say?
Speaker A:You're going to say practice and have discipline.
Speaker A:Right.
Speaker A:And so good investing is like anything else.
Speaker A:You have to have a lot of discipline and that means you don't easily get distracted and make knee jerk reactions to things you can't do.
Speaker A:Control.
Speaker A:So 90% of that noise out there is designed to get you to take action.
Speaker A:That does not benefit you, it benefits somebody else.
Speaker A:So you have to have the discipline to say that's entertaining, but it's not for me.
Speaker A:Or you know what, I'm going to go down that rabbit hole, but I'm not going to take action on it.
Speaker A:Right.
Speaker A:I want to see where it goes and why people are talking like that.
Speaker A:But it doesn't mean that I'm going to take action or panic myself.
Speaker A:Yep.
Speaker B:And so for this, this is a three part series.
Speaker B:We got two more episodes as a little teaser to get you ready.
Speaker B:So this first one was talking about how investing is kind of like an emotional teenager.
Speaker B:But next you might be interested in this if you're somebody who does it yourself or you have curiosity.
Speaker B:The next episode we're going to talk about a guide to buying investments.
Speaker B:Travis is going to give you insights as to how he sees things over his profession, how you can actually look at buying investments.
Speaker B:And then the last episode two weeks from now, are the markets rigged?
Speaker B:You might be saying this to yourself, you might hear others saying it.
Speaker B:So these are the two things that we're going to help address in the next two episodes.
Speaker B:But until then, thanks for stopping by.
Speaker B:Ditch the Suits.
Speaker B:Thanks for checking out Ditch the Suits.
Speaker B:Be sure to write a review or drop a comment about this episode.
Speaker B:And if you want more like this, head over to ditchesuits.com you can send us a message and get in touch.
Speaker B:Let us know how we can help and be sure to share any topics you'd be interested in having us cover on the show.
Speaker B:We're here to help you get the most from your money in life.
Speaker B:Thanks for being our guest and checking out.
Speaker B:Ditch the suits.
