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War, Market Volatility, and Your Money: What Investors Need to Know Right Now · Retire and Thrive

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  Welcome back to another edition of Retire and Thrive, where we
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  help you build your life with purpose, wealth, and confidence.
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  I'm Tammy alongside Dan, and we are so thankful that you're
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  joining us today. We are going to talk about the
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  markets reacting to the conflict overseas and how this could
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  impact you and how you should be reacting and how most people
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  maybe do react in times like this.
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  But first, Dan, how are you? Yeah, everything's good.
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  Yeah, no, no complaints. I think we got a little bit of a
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  happens every year in March. We get excited because we have
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  this break of warm weather and then all of a sudden it gets
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  cold again. And I know that it's around the
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  corner. But yeah, overall it's pretty
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  good. But I think more importantly,
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  you gave us a little bit of a teaser when you referred to you
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  and Ryder doing a baby moon. Oh yes.
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  Tell us what's going on in your world.
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  Yes, So we had a beautiful baby boy, Elijah Jacob.
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  We're calling him AJ or Elijah, whatever he wants to go by once
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  he gets older. AJ was my favorite baseball
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  player growing up. AJ Pierzynski was a catcher for
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  the Twins. So that's where AJ comes from.
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  But he is doing great. He's sleeping well, eating well,
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  cannot complain. He's about four months or about,
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  excuse me, about four weeks. He's just three weeks yesterday.
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  So we're we're going on a month. With the newborn, great after
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  four weeks. Yeah.
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  Thank you. Yeah, things have.
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  Been good. You're meant to be a mother,
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  obviously. Oh, I guess things are going
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  well. I have a wonderful husband
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  that's very helpful so. When when when I broke it to the
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  team that you named your boy AJ abbreviated.
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  Someone said boy, that must be like tied into some baseball.
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  Was it a Twins thing? And you just revealed there was,
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  Yes. Yes, definitely baseball themed
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  names. We didn't know if it was going
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  to be a boy or girl, so had a little boy.
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  Well. Congratulations, very happy.
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  For you. Thank you.
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  Appreciate it. So let's get into money tax.
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  So we are dealing with a lot of things going on globally.
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  There is some conflict overseas. So Dan, we have to talk about
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  what happens when we see this when it comes to the markets.
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  How do people typically respond when they see something like a
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  war happening? Yeah, it's for sure.
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  It's been very, very challenging in terms of the overall markets.
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  The economy seems to be just still on solid ground.
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  But yes, this, this has been a challenging couple of weeks to
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  be honest. And I think this is a great
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  topic for us to talk about because I think the overall
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  theme is there's a lot of panic out there.
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  And so I, I think this will be a great discussion specifically
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  centered around the war and what we're seeing in terms of the
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  markets and volatility. And when it deals with folks who
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  have their money invested in various places, they probably
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  are a bit concerned and some might not know what exactly
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  they're supposed to do at a time like this.
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  So what advice do you have for folks who are taking a look at
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  some of those numbers that might be going in places they don't
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  want to see? Yeah, I think the first advice I
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  would say is go back and revisit your financial plan.
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  In other words, if you're in your 40s or even in your early
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  50s, in our opinion, this is a blip on the radar.
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  It's it's not long term and I don't feel like this is
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  something that's going to have a massive impact in your overall
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  financial plan. But I, I don't disagree that it
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  is scary. But overall, what often times we
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  hear is when we have these events and it doesn't
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  necessarily have to be war. I mean, it could have been, if
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  you recall back in, in 2020 with the COVID, I mean, that was
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  pretty scary also. And so we look back on those
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  events. We do have these ups and downs
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  that do occur. But I feel like both investors
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  as well as the markets do not like uncertainty.
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  I mean, there's just a lot of global uncertainty.
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  And as you went, as you alluded to Cami, just political
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  instability, geopolitical tensions, and that goes not just
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  in the US, but obviously we're talking abroad now.
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  And you know, we're not here today to say whether it made
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  sense for us to invade Iran or not.
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  But it is an event that happened and it did disrupt the markets.
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  How quickly do the markets react when something like this occurs?
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  A war, for instance. Great, Great question.
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  And I feel like the the markets tend to react really quickly.
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  But if you maybe don't recall, but we went in over the weekend
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  and then on Monday morning, the markets went down, but they
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  didn't come crashing down. And then it wasn't until a few
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  days later when the President announced that this is going to
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  be longer than they anticipated. The Dow Jones industrials
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  dropped over 1000 points intraday because people were
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  panicking. O what's interesting is when you
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  start looking at your long term objective, your long term plan,
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  all of these events are very short term.
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  I mean, they can go on longer, but the markets move very much
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  In Sync with the news of what's current.
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  It doesn't necessarily factor into the long term plan.
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  OK, so when folks look at their accounts and they see something
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  drastic happening, should they be doing something right now?
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  The instinct probably is to do something.
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  Or should they wait it out? What advice do you have?
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  Yeah. And obviously that's going to
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  vary from individual to individual.
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  I mean, if you're 62 years old and you are dependent on your
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  portfolio for a monthly income, that's going to be different
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  than the 45 year old who is still in that accumulation
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  phase. And again, I know we've talked
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  about some previous episodes. We've got the accumulators,
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  people that aren't retired yet, they're still trying to
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  accumulate. And then we got the people that
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  are retired and they're in that distribution phase.
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  But I would say even with us, probably 3/4 of our clients are
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  retired. I would say even with us, we
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  haven't made significant changes because we do do view this as an
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  event, but also we've kind of built into our some of our
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  portfolios a little bit of a, of a, of a cushion there to
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  protect. So the that was a little bit of
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  a long with an answer. But generally speaking, no, we
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  don't recommend making major changes on events.
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  That cushion is so important and COVID-19 is so fresh on our
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  minds where people needed that cushion.
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  So let's touch on that. You touched on the pandemic and
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  different times where we've seen something like this happen.
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  You've been advising folks for Do you have?
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  To keep reminding the audience that I'm that old.
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  That just shows wisdom and it shows how experienced you are
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  and how much you know what you're doing.
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  Can you take us back to some of those other times where we've
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  dealt with something like this and how you've handled it with
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  your clients? Yeah.
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  I, I think if you don't talk about war specifically, the last
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  time we saw something of significance was back in
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  February of 2022 when if you remember, Russia went into
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  Ukraine and invaded. And the day that that happened,
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  the market dropped I think 2 1/2 to 3%.
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  So it's kind of a big deal. And so if we go back, you know,
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  here we are in, in the first part of 2022, first quarter
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  ending the end of the first quarter 2020, I'm sorry, 2026.
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  So that was in 2000 and in February 2022.
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  So we're talking four years, four years ago.
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  And I look at what the markets have done since then.
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  I mean, definitely was a scary time when Russia invaded
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  Ukraine, but I look at the market since then and and it has
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  gone up drastically. And so we've had double digit
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  returns almost every year other than, you know, in 2022.
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  It was kind of a rough time, which wasn't necessarily try
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  tied directly to Russia and Ukraine.
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  While that did have an impact, again, I want to talk focus more
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  on current times, but that was the year in 2022 when the Fed
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  aggressively raised interest rates to combat inflation.
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  So that was the main reason for the 22 downturn.
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  But 2020, three, 2425 were were very, very positive returns.
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  So the point being is that specific events as it pertains
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  to war kind of the same thing. The market dropped quite a bit
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  in the very short term and then ultimately it came back.
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  What is the biggest mistake you see some of your clients making?
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  Or anyone in general, I guess, during a time like this when we
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  are dealing with a war. And I don't even know if it's
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  just war, but that's obviously what's what's front and center
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  on on the news today. And it is relevant.
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  Don't get me wrong. I mean, it's a relevant thing
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  and it is scary. But I think the biggest mistake
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  I see is when people abandoned their long term plan.
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  And I know that's been kind of my, you know, kind of
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  reiterating the same thing here. But I think the mistake is, is,
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  is when people abandoned their long term plan, whether they're
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  60 years old or whether they're 50 years old or they're 30 years
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  old. In fact, if you're in your 30s
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  and your 40s, you should really look at this as an opportunity
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  to take advantage of the downturn because as things come
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  down and you're able to buy things at, at, at lower prices,
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  the only way you lose out and that is if it never comes back.
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  And, you know, we've never been in a scenario in in U.S. history
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  where eventually didn't come back.
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  Sometimes it comes back again. We'll touch maybe briefly on
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  Covic, but that came back in a very quick period of time.
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  And other times it does take years like like we did see in
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  the housing crisis and 08 No 9. But I would say the biggest
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  mistake people do make is they abandoned their long term plan
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  because they get caught up in the headline news.
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  Sure, sure. So news does play a big role in
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  this and what we're seeing in the news right now, you touched
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  on it, We typically talk about retirement age and folks who are
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  entering retirement. But you touched on if you're
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  30-40 years old, this could be a positive time for you and your
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  finances. What advice do you have for
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  folks who are in that age range that do have that time to see
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  potentially the markets go back up and benefit them?
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  The advice I would give them, if you have cash on the sidelines,
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  I mean, I've got extra money sitting aside, put it to work.
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  Now some may look at this and say I'm going to wait for the
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  ultimate bottom. But one of the things I've
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  learned in those three plus decades is it's very difficult
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  to try to time when to go in. And certainly it's very
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  difficult to know when to go out.
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  But at the end of the day, it doesn't really matter.
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  I mean, if if the markets are off seven 810% and you go in and
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  they drop another six 7% and you're in your 40s and you're
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  not going to access that money for the next 20 years, it
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  doesn't really matter. But if you don't have cash on
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  the side, you don't have cash to move into the markets. 1 advice
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  I would probably give someone is if they're putting in 5% into
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  their retirement account, be it a four O 1K or 4-O3B, if you're
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  in a position financially, bump it up to 10, sure.
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  I mean, most plans allow you some flexibility to put it in
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  and and increase it and decrease it.
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  So if you're in a position, I think now would be great time
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  and it doesn't even have to be going from 5 to 10%.
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  It could be from 5 to 7%. Sure, sure.
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  All right. As we deal with these times of
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  uncertainty as you mentioned, do you have any final words of
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  wisdom for folks at home? I I don't have any words of
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  wisdom other than to say that don't press the panic button.
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  I want to make it very clear this is not even my opinion.
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  But ultimately what moves the market up and down over long
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  periods of time is, is the economy.
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  If the economy continues to grow over long periods of time, the
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  markets respond to that. If the economy goes down over
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  long periods of time, the market responds to that.
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  So what is happening now is more of a short term emotional
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  reaction, just like I was making reference to, you know, Russia
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  invading Ukraine. Just like we saw with COVID.
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  COVID was a little bit different because that was a real event.
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  I mean, that was the first time in American history that, you
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  know, the US government shut down pretty much the entire
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  economy other than, you know, staples that were necessary.
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  But that was the first time in U.S. history, and you can kind
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  of look at it this way. We shut everything down.
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  In other words, Cammy, we intentionally put ourselves in a
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  recession. Now, again, I'm not here to say
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  that was right or that was wrong.
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  So that was a little bit of a different animal.
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  Like there was definitely some unknowns about what's going to
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  happen here. I think today as we look at
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  what's going on in Iran, I think the uncertainties are, is this
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  thing going to take two weeks or is it going to take six months?
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  And obviously you can turn on your your news and you can get
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  all different kinds of opinions, but that's exactly what it is.
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  It's opinions. So when the President comes out
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  and says, OK, this might last a little bit longer, that really
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  has an impact on the market. Yeah.
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  And that's what happened when we saw the the Dow drop over 1000
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  points. And again, it's so short term,
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  it's just crazy to me. And that's why I'm saying when
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  you're younger, take advantage of those drops because just
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  because it takes an extra 3 weeks or an extra month or so,
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  it shouldn't impact your long term plan for your retirement.
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  Some good advice? Anything else you'd like?
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  To add, no, I just again, don't focus just on the headline news,
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  look at the overall state of the economy and probably most
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  importantly, and this is one of the things I have lived by true
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  and true with all of our clients is don't try to time this thing.
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  In other words, I, I, I get that it's scary.
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  It's scary for me, it's scary for you, It's scary for anybody
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  that has money. If your portfolio is allocated
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  properly and you're periodically looking at it and rebalancing.
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  If you're younger, look at this as an opportunity.
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  If you're older and it's not going to have a major impact on
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  the long term plan that you have, you know, focus on
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  something else other than the headline news.
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  Do you ever advise people to maybe not look at it for a short
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  period of time? That's not my role to say you
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  can't, shouldn't look at your statement, but.
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  If it really impacts them. But it happens.
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  Frantic where it's like, just take a breath, maybe focus on
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  something else for a little bit. We literally in during Covic.
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  I mean it was scary. I admit it was scary.
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  We had people come in and they're like, I don't look at my
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  statement in six months and I just smile.
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  They're like, I'm like, so if you don't look at it, it doesn't
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  exist. And they're like, I just don't
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  want to see the news And, and it's okay.
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  I mean, we have clients we try to say, you know, take the long
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  term view and and I think for the most part once we build out
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  the a solid financial plan, you know, whether your portfolio is
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  down 2% this year or it's up 7% over the long term, it doesn't
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  really affect. But yeah, we never advise, don't
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  look, but oftentimes we say don't get caught up in this is
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  really what we're saying. Yeah.
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  All right, Dan, thank you so much.
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  Great advice as always and thanks to you for joining us
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  this week. We really appreciate it.
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  Thanks for following us along wherever you get your podcasts.
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  new episode. Thanks so much for joining us.
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  Hope you have a great week. Interest Financial Group, LLC is
• 14:07
  a registered investment advisor. Advisory services are only
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  offered to clients or prospective clients where
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