Wall Street Wants You Scared

Talking Real Money - Investing Talk

Don McDonald

Business, Education, Investing, How To

4.2 • 680 Ratings

🗓️ 21 April 2025

⏱️ 26 minutes

🔗️ Recording | iTunes | RSS

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Summary

In this episode of Talking Real Money, Don McDonald and Tom Cock discuss practical strategies for navigating recessions without panic or unnecessary market timing. They critique the constant, fear-driven speculation around economic downturns and emphasize maintaining a disciplined, long-term approach. Highlighting actual investor behavior from Dalbar studies, they explain why market timing almost always results in poorer returns. Tom humorously criticizes aggressive pickup truck drivers and touches on avoiding common recession-investing mistakes, advocating instead for careful asset allocation, understanding emotional risk tolerance, and maintaining a sensible emergency fund. Listener questions prompt discussions on treasury ladders versus bond funds, the impact of expense ratios, and effective short-term cash management. 0:10 Surviving and thriving during recessions 0:26 Probability of recession discussions 1:04 Don criticizes recession scare tactics 1:46 Humorous digression about pickup trucks 2:49 Audience wants solutions, not problems 3:48 Avoiding common recession investing mistakes 4:39 Wall Street Journal example of market timing errors 5:29 Importance of emergency cash for retirees 6:04 Risk versus loss in investing 6:28 Understanding emotional risk tolerance 8:01 Critique of Wall Street's short-term focus 8:36 Long-term investing approach regardless of recession 9:01 Dalbar study reveals poor market-timing results 10:51 Long-term Dalbar investor returns vs. market returns 13:09 Humorous tangent on global population 13:44 Listener questions segment begins 14:33 Discussing asset allocation and bond fund concerns 16:18 Bond ladder vs. bond fund debate 17:20 Examining long-term bond fund returns 18:09 Benefits and drawbacks of bond funds 19:28 Comparing money market fund options (DTAXX) 21:06 Expense ratios significantly impact returns Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Rated T for Teen.
0:02.0	Each year, thousands of adults lose their shred.
0:05.0	It's an epidemic simply known as shred loss, but it doesn't have to be this way.
0:09.0	Because rekindling your shred is as easy as playing the new Tony Hawk's Pro Skater 3 and 4.
0:14.0	With new parks, cross-platform multiplayer, and sick new game modes,
0:19.0	we can put an end to shred loss everywhere.
0:21.6	Hit the new Tony Hawk's Pro Skater 3 and 4 and show the world that the shred's not dead.
0:25.6	Pre-order Tony Hawk's Pro Skater 3 and 4 and play the Foundry demo. I'm telling you this is so important because here is everything you need to do as an investor
0:48.0	to survive and thrive in a recession here on Talking Real Money.
0:53.5	I'm Don McDonald along along with Tom Cock.
0:56.0	And Tom, how do we manage to not end up in the poor house in a recession?
1:02.0	Well, I think first you should get the numbers from the fund managers, strategists,
1:06.5	and analysts who were pulled for a recent CNBC Fed survey.
1:11.1	Should we do that?
1:11.9	Why should we do that?
1:12.6	Do we really care?
1:13.4	I'm going to give you the probability of an economic downturn because it went up by about a third in March to 36%.
1:22.6	Now, 36% that's up from 23%.
1:25.5	And if we have to believe Deutsche's bank, they peg the odds at
1:29.7	50, 50. Wait, hold on a minute. Yeah. I got, I did that whole big buildup for a 64 percent chance
1:39.2	that we won't have a recession. Well, it's a little like the weather. They, like, you got me going.
1:44.0	You are just as bad as
	...

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