Buy High, Sell Low? | Series 7.2 - Enjoy More 30s: Family Finance

Episode 2

Buy High, Sell Low? | Series 7.2

Published on: 14th March, 2022

Set your expectations for how often downs do occur and hold it together when emotions run high.

  • ...declines are normal and you should absolutely expect them to happen and mentality and emotionally prepare for that to occur. (02:55)
  • Remember recoveries whether they take six months, 12 months, 18 months, that's also normal. (04:55)
  • Finally, this is why we have talked about diversification before, so not owning just one or a few individual stocks, but rather having a professional advisor or at the very least using an Allocation Fund, as mentioned in the last episode, to spread your money out across many areas of the market to try and smooth out those rides. (05:26)

Quote for the episode: "If you think about your kids or your job or some other experience in your life, you can likely think of where it was maybe stressful at the time but now with the knowledge that you've learned, it's really not a big deal anymore." (02:54)

Securities offered through TFS Securities, Inc., and Advisory Services through TFS Advisory Services, an SEC Registered Investment Advisor Member FINRA/SIPC. TFS Securities, Inc., is located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcript
Voiceover Audio:

Welcome to the Enjoy More 30s Family Finance

Voiceover Audio:

podcast. The only podcast dedicated to making life more

Voiceover Audio:

enjoyable for young families. By hitting on the financial topics

Voiceover Audio:

that tend to weigh on us, stress us out, and distract our focus

Voiceover Audio:

from simply enjoying life.

Joseph Okaly:

Hello, and welcome to the 2nd episode of this

Joseph Okaly:

Raising Your Investment Mindset series. This series we're

Joseph Okaly:

wanting to help you reframe how you may view the scary unknown

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out there that is known as investments, and therefore be

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able to utilize them in a more constructive way, better reach

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your goals, and make life more enjoyable.

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As always, if you do like what you're hearing, please please

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please make sure to subscribe, follow us on Apple podcasts.

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Wherever you listen clicking the stars leaving the reviews, it

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really helps us reach literally millions of other young families

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out there.

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Last week, we discussed how we don't want to ask if our

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investments do good. We want to ask if our investments are 1) on

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the path that get us to a specific goal and 2) are they

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doing so effectively when compared to their peers? So if

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you haven't checked out that episode yet, definitely do that

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soon. Today's episode is titled Buy High Sell Low, which is an

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easy self explanatory title really, but something way too

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many people are actually doing out there. We don't want to buy

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high and sell low. The goal for today's episode so the if you

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can say this at the end of the episode, then you have succeeded

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statement is "I now better understand what normal is for

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how often downs do occur and I'm better equipped to not

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emotionally sell low when that happens."

Joseph Okaly:

Recently, my son Noah being the lovely boy he is was not

Joseph Okaly:

listening and was pulling away to go play in the mud. And as he

Joseph Okaly:

did this, his elbow popped out. So this quickly became super

Joseph Okaly:

scary and stressful as your two year old is not able to move his

Joseph Okaly:

hand or his arm, is crying hysterically and looking at you

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for help as you try to soothe him, calm him, as you freak out

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on the inside, shouting you know, "oh my god, what am I

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supposed to do?" So we take Noah to the pediatric urgent care

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right away all panicky, they take him in and in about five

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seconds, pop it back. They say it's called nursemaid's elbow

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and since he's so young, the ligaments aren't, you know, set

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enough, but he'll grow out of there. Here's a lollipop, we'll

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see you later. It was one of those, well, I really wish that

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somebody you know, told me about this ahead of time that this

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could happen, like, hey, if this happens, and the elbow pops out

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for a two year old, don't worry about it, bring him to the

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doctor, it's okay, they'll pop right back in, he'll be on his

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way. And you know, knowledge is power, right? If I knew that

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ahead of time, it would have made the situation much less

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stressful. For so much of what we do that is the case.

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If you think about your kids or your job or some other

Joseph Okaly:

experience in your life, you can likely think of where it was

Joseph Okaly:

maybe stressful at the time but now with the knowledge that

Joseph Okaly:

you've learned, it's really not a big deal anymore. It's easy.

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This is the same thing when it comes to investments. This is

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the 'why didn't anyone just tell me that' kind of a thing. So

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here's the knowledge, investments go up and down, they

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will always go up and down. Do not expect your investments to

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never go down. Unless you are parking all your money in a bank

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account, basically guaranteeing little to no real return after

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inflation. Ups and downs should be part of your expectations

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from the start. And statistically, and this may be

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surprising to hear, you should expect a correction meaning a

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10% or more decline in the stock market every 18 months on

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average. So if you are listening to this right now as a 30 year

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old with maybe 30 years ago until retirement, that means you

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should expect roughly 20 10% drops over the course before you

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get to retirement and then when you're in retirement is going to

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keep happening. So maybe another you know 40-50 10% drops in your

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lifetime. Just like the kids getting you know nursemaid's

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elbow, this would be the normal thing to happen along the way.

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The problem that most people have is that they either are not

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told that this is normal, or despite knowing it's normal,

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they say this time is different. And they sell during the drop.

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They bought high, then they sell low out of fear. And I get it I

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really do. I mean you see your hard earned money declining in

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value. You see your goal is getting further away. But at the

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same time declines are normal and you should absolutely expect

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them to happen and mentality and emotionally prepare for that to

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occur. Remember recoveries whether they take six months, 12

Joseph Okaly:

months, 18 months, that's also normal.

Joseph Okaly:

So again, if we go back up to the top, if you expect your

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investments to never go down, then we're saying that something

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that should have happened another 50 times on average

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throughout the rest of your life would never happen again,

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supposed to on average happened 50 more times, but would happen

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never again. So again, that it doesn't add up right the

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knowledge that it that the normal is what we should be

Joseph Okaly:

Finally, this is why we have talked about diversification

Joseph Okaly:

before, so not owning just one or a few individual stocks, but

Joseph Okaly:

rather having a professional advisor or at the very least

Joseph Okaly:

using an Allocation Fund, as mentioned in the last episode,

Joseph Okaly:

to spread your money out across many areas of the market to try

Joseph Okaly:

and smooth out those rides. Likewise, having funds invested

Joseph Okaly:

for when you need them. So money needed in six months should not

Joseph Okaly:

be invested kind of thing.

Joseph Okaly:

As we move to the end of this episode, let's circle back

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around to the goal statement. If you can say I now better

Joseph Okaly:

understand what normal is for how often downs do occur and I'm

Joseph Okaly:

better equipped to not emotionally sell low when that

Joseph Okaly:

happens, then you have succeeded in the main takeaway from today.

Joseph Okaly:

Thanks for tuning in today and join us for next week's episode

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called The Stock Market Doesn't Care About Political Parties,

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where we're going to speak to one of the main items that seems

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expecting.

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to drive peoples' sentiments and investment decisions, despite

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long term evidence pointing against it even being considered

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a factor.

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So overall, if you're able to implement what we cover today,

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then that's fantastic. You have less to worry about than before.

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Go out, focus more on enjoying life. Do something fun today. If

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you're wanting help with these things, though, if you have

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questions you need help in answering, check out the ASK JOE

Joseph Okaly:

section on the show's website. EnjoyMore30s.com That's

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EnjoyMore30s.com and you can also connect with me directly by

Joseph Okaly:

visiting my wealth management firm's site. New Horizons Wealth

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Management at nhwmllc.com. Until next week. Thanks for joining me

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today and I look forward to connecting with you again soon.

Voiceover Audio:

The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal, tax, or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer, or other professional before acting upon

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any content or information found here first. Joe is affiliated

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with New Horizons Wealth Management LLC, a branch office

Voiceover Audio:

of TFS Securities, Inc., and TFS Advisory Services an SEC

Voiceover Audio:

Registered Investment Advisor, Member FINRA/SIPC.

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About the Podcast

Enjoy More 30s: Family Finance
Family Finance for Young Professionals.
Young families receive little to no personal finance help. We all grow up to have jobs and money, yet our education system focuses on Shakespeare and Algebra. Even professional advice can be hard to come by, with the majority of the industry chasing retirees and existing wealth.

Joe Okaly's podcast is aiming to change this, providing personal financial advice geared specifically to professionals with young families. This podcast is dedicated to making life more enjoyable for young families, by hitting on the financial topics that tend to weigh on us, stress us out, and distract our focus from simply enjoying life.

Joseph P Okaly is a CFP Certified Financial Advisor who fits directly in with who this podcast is focused on - a young professional with a family. With over a decade of experience as an advisor, there is passion and knowledge to make a difference.

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.