This Investing Mistake Cuts Returns in Half

The Money with Katie Show

Money with Katie

Investing, How To, Self-improvement, Business, Education

4.8 • 1.3K Ratings

🗓️ 5 July 2023

⏱️ 20 minutes

🔗️ Recording | iTunes | RSS

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Summary

Ignore the advice to buy and hold at your own peril. This research-rich deep dive unpacks the ways in which your biggest investing hurdle…is yourself (and 3 tangible tactics for overcoming!). Transcripts can be found at podcast.moneywithkatie.com. — Mentioned in the Episode Money with Katie on how the average 10% might not happen in the future due to overpriced assets: https://moneywithkatie.com/blog/why-do-people-say-stocks-are-overvalued-right-now Dalbar's Quantitative Analysis of Investor Behavior: https://wealthwatchadvisors.com/wp-content/uploads/2020/03/QAIB_PremiumEdition2020_WWA.pdf Money with Katie 2023 Wealth Planner: https://moneywithkatie.com/new-2023-wealth-planner How to Diversify Outside of the Total Stock Market: https://podcast.moneywithkatie.com/how-to-construct-a-diversified-stock-portfolio-of-major-index-funds/ Why You Shouldn't Try to Time The Market: https://moneywithkatie.com/blog/why-you-shouldnt-try-to-time-the-market JP Morgan Asset Management Analysis Graph on Impact of Being Out of the Market: https://am.jpmorgan.com/us/en/asset-management/adv/insights/retirement-insights/guide-to-retirement/guide-to-retirement-slides/guide-to-retirement-investing/gtr-impact/ — Follow Along at Money with Katie: https://moneywithkatie.com/ Watch on YouTube: https://www.youtube.com/@MoneywithKatie Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie Subscribe to The Money with Katie Newsletter - Sign up for free today: https://www.morningbrew.com/money-with-katie/subscribe/2 Follow the Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome back to The Money With Katie Show Rich Girls and Boys Where The Rules Are Made
0:13.0	Up And The Points Don't Matter.
0:14.5	At least that's how things feel right now in Hashtag This Economy, where the stock
0:20.7	market seems utterly unperturbed by the absolute shit storm that is raging around it.
0:27.6	We narrowly avoided a looming debt crisis, we have rising rates, we have record high
0:43.7	unaffordability of everything from blueberries to homes, and yet it's hard to believe.
0:50.6	But as of the time of this recording, we are recording on June 21st, the S&P 500 is
0:57.0	up 14% year-to-date, 14.5% to be precise, which defies all expectations and frankly all
1:05.6	common sense about what the stock market should be doing in 2023, given, well, I'm wildly
1:13.4	gesticulating to everything around us right now, and I think therein lies the lesson.
1:19.6	When you ignore the advice to buy and hold, you are doing so at your own peril.
1:25.1	Those who jumped ship in 2022, they looked at the world around them, and they figured,
1:29.6	you know what, I'm going to wait out the bleeding, and then I'll hop back in.
1:32.9	They're now looking at prices that are 14% higher than when they dipped out.
1:38.1	Unless you think that these folks don't exist or that only those who have not been inoculated
1:43.2	by the sound of my droning voice every week would make such a silly mistake, consider
1:48.7	this.
1:50.0	While the stock market returns about 10% per year on average before adjusting for inflation,
1:55.5	the average investor will only get about half that.
1:58.8	Let me say that again.
2:00.2	The average investor's returns will be roughly half of what the S&P 500 returns over the
2:06.3	long term.
	...

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