Mike on the Money: The emotional rollercoaster of investing

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STRONG STOMACH, IS ROLLER COASTER SEASON OFTEN? RIGHT. AND SO WE ARE HERE TO TALK ABOUT AN EMOTIONAL ROLLER COASTER INVESTING. MIKE IS GOING TO HELP US LEARN HOW TO GET MORE OUT OF OUR RIDE. OUR FRIEND MIKE GIORDANO, FINANCIAL ADVISOR WITH WILLIAMS WEALTH MANAGEMENT HERE, HOSTING EXPERT. BY THE WAY. NO, NO, NO, I HAD A WINDOW THERE ON MY STOMACH. COULD HANDLE IT, BUT I THINK I PASSED THAT. WE’RE OLD NOW. YES. ALL RIGHT. SO, MIKE, FIRST TALK US THROUGH THE EMOTIONAL ROLLER COASTER THAT MANY INVESTORS TEND TO RIDE. ONE OF THE BEAUTIFUL THINGS ABOUT THE STOCK MARKET AND WHY IT CAN PRODUCE SUCH GREAT RETURNS, IS BECAUSE YOU HAVE TO BE ABLE TO DEAL WITH THAT VOLATILITY, THAT ROLLER COASTER RIDE UP AND DOWN. AND BECAUSE OF THAT ROLLER COASTER RIDE, IT DRIVES PEOPLE SOMETIMES OUT OF THE MARKETS AT THE WRONG TIME AND DRIVES THEM INTO MARKETS AT THE WRONG TIME. AND SO WHEN THE MARKET, WHEN THE ROLLER COASTER IS AT ITS PEAK, PEOPLE ARE FEELING REALLY YOU KNOW, JUBILANT AND THEY FEEL GREAT AND THEY WANT TO PUT ALL THEIR MONEY IN, UM, BECAUSE IT DOESN’T FEEL LIKE THERE’S GOING TO BE ANY DOWNSIDE. AND THEN WHEN THE MARKETS ARE ALL THE WAY AT THE BOTTOM, THEY FEEL LIKE I GOT TO GET OUT. YOU KNOW, THE WORLD IS COMING TO AN END. ALL THOSE KINDS OF STORIES START PERCOLATING. AND SO THE KEY IS ACTUALLY COUNTERING THOSE EMOTIONS WHEN THINGS ARE REALLY DOING WELL, YOU WANT TO START THINKING ABOUT RISK MANAGEMENT. WHEN THINGS ARE DOING REALLY POORLY, YOU WANT TO THINK ABOUT GROWING. LET’S TALK ABOUT HOW THINGS ARE RIGHT NOW. THE RIDE FEELS CALM RIGHT NOW, RIGHT? WE’RE JUST SORT OF CHUGGING HIGHER. BUT CAN THAT BE A BAD THING? IT CAN BE DEPENDING ON WHERE YOU ARE ON THE RIDE. YEAH, I MEAN, RIGHT NOW IT’S LIKE THAT ROLLER COASTER JUST KEEPS GOING UP, UP, UP. YOU’RE GETTING MUCH BETTER VIEWS OF EVERYTHING OUT THERE. AND YOU DON’T HAVE THAT PIT IN YOUR STOMACH AS, AS AS YOU’RE GOING DOWN THOSE LOOPS AND TURNS. UM, SO THAT’S WONDERFUL. THE PROBLEM IS, IS WHEN IT SUCKS YOU IN TO GETTING A LITTLE BIT TOO AGGRESSIVE WITH YOUR INVESTMENTS, IT’S NOT A IT’S NOT A BAD THING. IF YOU’RE YOUNGER, YOU GOT TIME ON YOUR SIDE YEARS AND YEARS AND YEARS. BUT IF YOU’RE GETTING CLOSER TO A MAJOR GOAL LIKE RETIREMENT, THEN YOU HAVE TO START THINKING ABOUT THE RISK MANAGEMENT PARTS BECAUSE THOSE DIPS ARE THERE. IT’S ALL PART OF THE RIDE AND IT’S ALL PART OF THE EXPERIENCE. SO YOU JUST NEED TO BE PREPARED FOR THEM. AND WE KNOW THE MARKETS HAVE HISTORICALLY BEEN ROLLER COASTERS. THEY KEEP GROWING TO THE SKY. SO HOW CAN HISTORY, LOOKING BACK, MISLEAD US. RIGHT. AND THAT, YOU KNOW, THE HISTORICAL THING THAT IT’S RIGHT. THE MARKETS GO UP AND DOWN, UP AND DOWN, UP AND DOWN. BUT THEY’RE MUCH HIGHER TODAY THAN THEY WERE TEN YEARS AGO. 20 YEARS AGO, 50 YEARS AGO, 100 YEARS AGO. SO ALL THAT’S GREAT. THAT’S WHY YOU INVEST IN THE MARKETS. BUT YOU HAVE TO REALIZE IS WHEN THOSE DIPS HAPPEN, THOSE DIPS CAN LAST MONTHS. THEY CAN LAST YEARS, AND SOMETIMES THEY CAN BE A DECADE OR MORE. SO YOU JUST HAVE TO RECOGNIZE THAT IF YOU’RE EARLY IN YOUR JOURNEY OF INVESTING, YOU GOT LOTS MORE MONEY TO COME. THOSE DIPS ARE YOUR FRIEND. UM, IF YOU’RE LATER IN YOUR INVESTING JOURNEY, YOU DON’T HAVE A LOT MORE MONEY GOING INTO THE MARKETS THEN YOU REALLY HAVE TO START THINKING ABOUT THE FACT THAT, AM I GOING TO BE OKAY IF WE HAVE A DIP THAT LASTS TWO, THREE, 4 OR 5 YEARS? WELL, I STILL FEEL SO FINANCIALLY SECURE. CAN I STILL DO ALL THE THINGS I WANT TO DO WITH MY LIFE, RETIRE WHEN I WANT TO RETIRE, OR SPEND THE MONEY, HOW I WANT TO SPEND IT, OR WILL YOU START FEELING SOME YOU KNOW, UNCERTAINTY? WHY IS NOW THE BEST TIME TO ADJUST? THEN? BECAUSE IF YOU TAKE THIS THING ALL FULL CIRCLE, THIS IS GREAT BECAUSE RIGHT NOW IN THE ROLLER COASTER RIDE, THINGS ARE CALM, RIGHT? PEOPLE HAVE A LITTLE BIT OF FOMO. THEY DON’T WANT TO MISS OUT ON. MAYBE SOME FUTURE RETURNS, BUT OTHER THAN THAT, PEOPLE CAN FEEL LIKE I CAN. I CAN DIAL MY INVESTMENTS BACK, I CAN, I CAN MANAGE SOME OF THE RISK. I CAN TRY TO ELIMINATE SOME OF THE RISKS. UM, RIGHT NOW VERSUS IF THE MARKETS GO DOWN A LITTLE BIT, YOU’RE LIKE, OH, I’M $100,000 LOWER THAN I WAS. I DON’T WANT TO SELL NOW BECAUSE I’M SELLING $100,000 LOWER AND THEN 200, AND THEN 300, AND THEN 400,000. AND ALL OF A SUDDEN THAT EMOTIONAL COMPONENT JUST GETS IN THERE WHERE IT’S LIKE, I FEEL LIKE I CAN’T MAKE A MOVE AT THIS POINT. SO RIGHT NOW, WHEN THINGS ARE CALM, THIS IS THE TIME TO ACTUALLY MAKE THE ADJUSTMENTS. ALL RIGHT. MAKE THE ADJUSTMENTS AND ENJOY THE RIDE. ENJOY THE RIDE. YES. AND NOW I’M GOING TO GO GET ON A ROLLER COASTER. I’M HEADING TO CAROWINDS. A ROAD TRI