Speaker 1: Let's say good morning now to the host of How
Speaker 1: to Money on KFI. It's Joel Larsgard. Okay, Joel, Yeah,
Speaker 1: markets for you and me, what is the practical effect
Speaker 1: of these wild swings and drops that we're seeing heartburn.
Speaker 2: I'm going to say, is at least one of them, right?
Speaker 2: I think the like the whip sawing nature. If you're
Speaker 2: the kind of person who pays attention to what's happening
Speaker 2: with the stock market most days, it probably has you
Speaker 2: kind of pulling your hair out a little bit, which
Speaker 2: I totally get, which is why one of the suggestions
Speaker 2: I make to people who are in the wealth building
Speaker 2: phase of their life. They are sticking money in like
Speaker 2: clockwork every two weeks dollar cost averaging or maybe even
Speaker 2: more than that. But if you are kind of on
Speaker 2: the front end of your investing timeline, don't pay attention.
Speaker 2: Like I have not looked at my portfolio balance because
Speaker 2: I know that if I do, then it's just going
Speaker 2: to unnerve me in a way that I don't need
Speaker 2: to be unnerved because I have so much time on
Speaker 2: my side before I need to access those funds. So yes,
Speaker 2: it is frustrating as an investor to see but in
Speaker 2: particular for people who are, hey, I've got a decade
Speaker 2: plus before I start tapping my retirement funds, then I
Speaker 2: think this is more noise that you don't need to incorporate.
Speaker 2: You don't really need to do anything with it as
Speaker 2: an investor, You don't need to make any changes.
Speaker 1: Okay, so stay the course.
Speaker 2: Yes, I mean, it's easier said than done. I think right,
Speaker 2: it's because when you see market strop as much as
Speaker 2: they have. The end of last week was insane, and
Speaker 2: then you see even what happened yesterday, where a tweet
Speaker 2: can send the stock market soaring by eight percent, and
Speaker 2: then it's like, wait a second, that was fake news,
Speaker 2: and then the stock market considers investors start pulling out again.
Speaker 2: All of that stuff kind of if you're riding the wave,
Speaker 2: the day to day wave, the minute to minute wave,
Speaker 2: you are going to be freaking out and you're going
Speaker 2: to be making changes. And the truth is, when we're
Speaker 2: just doing the boring, slow and steady passive investing approach
Speaker 2: in index fund just what I talk about most of
Speaker 2: the time, or target date funds, then all those little machinations,
Speaker 2: the minute to minute moves shouldn't matter very much to
Speaker 2: you at all, and in fact, you don't have to
Speaker 2: pay attention to any of it.
Speaker 1: Okay, so just just ignore it. This is we're in
Speaker 1: this for the long term. Yeah, okay, So I know
Speaker 1: I'm going to get that an answer to this question.
Speaker 1: But we were talking with Courtney Donaho from Bloomberg a
Speaker 1: minute ago, and one of the topics we didn't get
Speaker 1: to was that people are rating their four oh one
Speaker 1: k's for emergency cash. I think I know your answer,
Speaker 1: but is that okay?
Speaker 2: Well, so now there's recent legislation that allows people to
Speaker 2: take a thousand dollars out of their four to oh
Speaker 2: one k, you know, essentially no questions asked. And I
Speaker 2: you know, a thousand bucks is one thing, I guess,
Speaker 2: But when we're talking about taking more than that out
Speaker 2: of our four oh one k, I don't think it's
Speaker 2: a good idea. And what happens so often in crazy
Speaker 2: market spells like this. I still remember in two thousand
Speaker 2: and eight talking to friends that I worked with right
Speaker 2: who were like, I'm really scared about how much the
Speaker 2: market stopping. I am going to take some money out
Speaker 2: put it on the sidelines. Well, that has multiple impacts. One,
Speaker 2: it's hard to know or you take like, if you're
Speaker 2: taking money out now after a big drop, you're locking
Speaker 2: in those losses and then you have a really hard
Speaker 2: time to know when you should be putting that money
Speaker 2: back in, on top of the potential tax consequences of
Speaker 2: pulling money out of a four roh one k early.
Speaker 2: And so I think your best to leave your retirement
Speaker 2: accounts alone. And if at the end of this whole saga,
Speaker 2: when the market has steadied a little bit, you say
Speaker 2: I don't I was emotionally incapable of handling that, then
Speaker 2: you need to have a different approach to your investments.
Speaker 2: Let's say you're eighty percent invested in stocks, Well, you
Speaker 2: probably need to smooth out the right a little bit
Speaker 2: and have a more diversified portfolio, because you realize, at
Speaker 2: least for yourself emotionally, it's too difficult to handle that
Speaker 2: much stock exposure in your life. So that's one thing
Speaker 2: to consider. But you don't want to make any massive
Speaker 2: changes kind of when all the turmoil is happening.
Speaker 1: Okay, So yeah, I think that's kind of the message
Speaker 1: that I'm hearing from a lot of people is, you know,
Speaker 1: don't have a knee jerk reaction to this, because I
Speaker 1: know that we all feel like, oh my god, what's
Speaker 1: happening to all my money? But just it's gonna We're
Speaker 1: gonna have to write it out. It might be a
Speaker 1: little tough, but eventually we should be okay, we hope.
Speaker 2: Yeah, And we're starting to see signs at least that
Speaker 2: hopefully this tariff regime isn't going to stick around long term,
Speaker 2: that this is a negotiation tactic. It's hard to tell though, right,
Speaker 2: Like it's hard to know what the end game is
Speaker 2: here and how this all shakes out and what sort
Speaker 2: of you know, deals we come to with trading partners
Speaker 2: around the world. But I think the great thing is
Speaker 2: American capitalism of any place in the world, Like we
Speaker 2: are the most resilient country. We have incredible businesses that
Speaker 2: will find ways to prosper even in a tough environment
Speaker 2: like this.
Speaker 1: All Right, the host of how to Money on KFI
Speaker 1: Jewel Guard. You can listen to him every Sunday from
Speaker 1: noon to two, and just like this morning, he's gonna
Speaker 1: have more great financial advice for you. Thank you so much, Joel.
Speaker 2: Thanks Amy,