Volatile Markets Make Bad Decisions Seem Rational, Don’t Fall For It!, Ep #83

2022-05-18

What's up! It's episode 83 of Payne Points of Wealth and volatility is insane right now. We're teetering on a bear market, crypto markets have melted down. Meanwhile, all of those disruptive technology stocks are down 70-80%, and you've got more recession talk with every passing week as pessimism rules the day. What's really going on in the economy and in the stock market? We're gonna give you our view on how to play it. We've got the plan you just have to listen to it. On the Tipping Point today, we're going to talk about all those burning...

You will want to hear this episode if you are interested in...

Has the FED done a good job? [3:09]
Volatile markets make bad decisions seem rational [7:20]
The Tipping Point [10:14]
Why are stocks and bonds down at the same time? [10:47]
Is this a correction or the beginning of a big bear market? [13:04]
What influence will change of the majority party have on the stock market? [15:38]
What percentage should be in a conservative vehicle if I retire in a year? [17:21]
Hidden Facts of Finance [20:36]

Rationally irrational

The whole problem with these volatile markets is it feels so rational. It sounds rational to sit in something that doesn't go down until the volatility is over and then you can just kind of work your way back in. That sounds so rational but you know what? It's irrational. It means you have to make two perfect timing decisions. Just think about it guys, a week ago we had a market that was up 900 one day and down 1000 the next. Are you going to tell me that somebody is smart enough to time that perfectly? I don't think so.

This week on the tipping point: Conference call Q&A

We did our conference call for clients recently (we will drop the link down below so you can check it out if you'd like) and we had a lot of questions come in. We have over a thousand clients and a lot of them had the same concerns so in this episode we will discuss some of the bigger concerns that they had that most of you probably have too.

Here are some of the questions we got. The first question that came in was why are stocks and bonds both down right now at the same time in this crazy market? Should we maintain a 60% stock, 40% fixed income/bond ratio, or move to a 70/30 ratio or something else?

The next question that came in was assuming a global recession is inevitable does it make sense for a retiree to sell stocks in advance of the train hitting the wall, in other words, is this a correction or the beginning of a big bear market?

Another good question that came in on our conference call was as the midterm elections approach, what influence will the change of the majority party in the House and Senate have on the stock market?

Another question was at 64 years old and retiring in another year, what percentage of my portfolio should be in a very conservative vehicle?

If you’re curious about our take on any of these questions check out the episode!

This week’s hidden facts of finance

From 1965 to 2021 Berkshire Hathaway shares generated a compound annual return of 20.1% vs the S & P 500's 10.5% a year return.
Some forecasters look for gold to reach $3000 an ounce in the next two years.
…Baby, One More Time by Britney Spears has now sold 25 million copies around the world making it the biggest selling album ever recorded by a teenage girl.
The Reddit crowd who jumped in when the lockdown began have now given back all their once tremendous gains.

Resources & People Mentioned

Check out the conference call we talked about here.

See if you qualify for a complimentary financial review from the Paynes

Connect With Ryan, Bob, and Chris