Why Are Markets Falling (and How Did We Get Here)
Stay Wealthy Retirement Podcast
Taylor Schulte, CFP®
4.7 • 678 Ratings
🗓️ 4 October 2022
⏱️ 25 minutes
🧾️ Download transcript
Summary
Today I'm breaking down the current state of the markets and economy.
Specifically, I'm sharing:
- Why markets are falling (and how we got here)
- How things could get worse before they get better
- Four (4) reasons for investors to be optimistic right now
If you're feeling worried or concerned and want to learn more about the current downturn, this episode is for you.
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✏️ Grab the Episode Show Notes
Transcript
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| 0:00.0 | Since the very beginning of this podcast, I've repeated over and over again how critical it is to regularly evaluate your asset allocation to ensure that it is appropriate. |
| 0:15.0 | Not because I'm an alarmist or trying to scare you, but because it's normal for markets to go through difficult time periods. |
| 0:22.1 | And making material changes to our investments or our asset allocation while we're in the |
| 0:27.6 | middle of a downturn is not typically the most ideal time. The analogy that I've long used is to |
| 0:33.1 | think about and to treat your retirement investments like you would your primary home. That if the value |
| 0:38.9 | of your home dropped by 20, 30, 40% or more, you probably wouldn't race out to hire a realtor |
| 0:44.9 | and put your home up for sale. You would probably buckle down, maybe make some changes to |
| 0:49.2 | other areas of your financial life if needed, and stay committed to the home that you purchased. |
| 0:54.6 | When the home values finally recovered, you might then consider making some big changes. |
| 0:59.3 | Maybe at that time you decide it's time to downsize or move to a different city or maybe ditch |
| 1:03.6 | homeownership altogether. |
| 1:05.4 | Those decisions are not small. |
| 1:07.3 | And so we want to try to avoid making them during a challenging time period, which can |
| 1:11.7 | sometimes lead to us making irrational or emotional decisions that can be harmful to our long-term |
| 1:17.6 | goals. The same can be said about our retirement investments. Now is not the time to race out |
| 1:23.7 | and put our portfolios up for sale. Now is the time to buckle down, to stay the course |
| 1:28.5 | and stay committed to the plan that you and maybe your trusted advisors have worked so hard |
| 1:33.1 | to put into place. In some cases, you might have to make changes to other areas of your financial |
| 1:38.3 | life in order to do that in order to stay the course. For example, if you're in the withdrawal phase |
| 1:42.9 | of life and you follow a dynamic distribution strategy like a lot of our clients, those changes might mean taking a smaller |
| 1:49.5 | withdrawal from your investments for a short period of time. It might also mean delaying that home |
| 1:54.8 | remodel or maybe scaling back on that annual vacation. In other cases, you might not need to make |
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