Avoiding Bad Decisions During a Bear Market – Episode #343

When the stock market looks to be spiraling down, should you stop investing then watch from the sidelines and start investing again when things recover? With today’s unsettled economy, it’s a question many people are asking. On this Dentist Money™ Show, Ryan and Matt welcome Will Gochnour, CFP® to talk about investor behavior and strategies for investing during turbulent times.

 

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Podcast Transcript

Ryan Isaac:
Hello everybody, and welcome back to another episode of the Dentist Money Show brought to you by Dentist Advisors, a no commission fiduciary fully comprehensive financial advisor just for dentists like you all over the country. Check us out at dentistadvisors.com. Today on the show, Matt and I welcome into the studio a fan favorite, a Dentist Advisor’s favorite, Will Gochnour, advisor with Dentist Advisors. And the three of us today are talking about something that’s hard to do but is maybe the main secret ingredient to investing success. I won’t spoil the surprise, but it is, it’s the main ingredient, folks.

Ryan Isaac:
And many thanks to Will for joining us and prepping for today’s episode and being a guest on the show. We love Will, grateful for his time and the wisdom that he shared with us. And for all of you listening, thank you for being here. If you have any questions for us, as always, please go to dentistadvisors.com, click on the Free Consultation link and we’d be glad to chat with you anytime about your situation and point you in the right direction. Once again, thanks for being here and enjoy the show.

Announcer:
Consult an advisor or conduct your own due diligence when making financial decisions. General principles discussed during this program do not constitute personal advice. This program is furnished by Dentist Advisors a registered investment advisor. This is Dentist Money. Now here’s your host, Ryan Isaac.

Ryan Isaac:
Welcome to the Dentist Money Show where we help dentists make smart financial decisions. I am your moderator/panel host/bald guy, Ryan, and I’m here of course, with the trustee Hollywood Mountain, Matt Mulcock. What’s up, Matty?

Matt Mulcock:
You’re right. I thought you were gonna say… When you said balding, I thought you were gonna say baller, [laughter] and I was gonna agree with that. But we do have the baller here.

Ryan Isaac:
Balding isn’t accurate either because I’m already fully… It’s balded. It’s done.

Matt Mulcock:
Yeah you’re balded. You’re you’re there.

Ryan Isaac:
Also here in studio today is a special treat. We got a panel, Will Gochnour, advisor extraordinaire with Dentist Advisors. Will, thanks for being here, buddy.

Will Gochnour:
Thank you guys.

Ryan Isaac:
What’s happening?

Matt Mulcock:
It feels good to be alive.

Ryan Isaac:
Yeah.

Matt Mulcock:
It feels so…

Will Gochnour:
It’s great.

Matt Mulcock:
To be in person…

Ryan Isaac:
It feels…

Will Gochnour:
In person.

Matt Mulcock:
Feel your breath again… I mean, what?

Will Gochnour:
Yeah.

[laughter]

Ryan Isaac:
We were joking about this, but the middle seat, no one can see this, we have three seats, Will is in the middle and it’s the most awkward one by far because me and Matt are on the outsides kind of turned in, looking.

Matt Mulcock:
Staring.

Will Gochnour:
Yeah…

Ryan Isaac:
And then Will.

Will Gochnour:
Our knees are like almost touching.

Ryan Isaac:
Almost touching. [chuckle] And Will, he wants to look at us left and right to respond as we’re talking.

Matt Mulcock:
You gotta have your head on a swivel.

Ryan Isaac:
But you can’t because you gotta speak into the microphone directly. So you’re kinda like staring at the wall, talking to either one of us while we’re staring at you.

Will Gochnour:
Yeah, it feels like I’m in trouble and you guys are talking at me.

Matt Mulcock:
Yeah.

[laughter]

Ryan Isaac:
Yeah, we kind of… Actually, this feels like you’re getting reprimanded for something.

Matt Mulcock:
Yeah you’re in the principal’s office.

Ryan Isaac:
Many people know Will. They work with Will. And I have nicknamed him “Brain” for a long time, for various reasons besides being really smart, but that is also true. Will, you have a brand new baby at home?

Will Gochnour:
Yes, we do.

Ryan Isaac:
One week, two?

Will Gochnour:
One and a half weeks old.

Ryan Isaac:
Okay. What’s the sleep situation?

Will Gochnour:
It sucks.

[laughter]

Will Gochnour:
That’s the truth.

Ryan Isaac:
And to be clear, we have no sympathy for you at all and all for your wife.

Will Gochnour:
Yeah and that’s okay.

Ryan Isaac:
It’s none for you.

Matt Mulcock:
Yes.

Will Gochnour:
Yes. That’s just the reality of it. So she’s a super sweet baby and we love her a ton, but she is a terrible sleeper at night and we’re grinding.

Matt Mulcock:
So are you on older kid duty while Olivia’s on…

Will Gochnour:
Yeah something like that.

Ryan Isaac:
All hands on deck, you just do whatever you have to.

Will Gochnour:
It’s just a… Yeah.

Ryan Isaac:
And this is number three?

Will Gochnour:
Uh-huh.

Ryan Isaac:
That was crazy time for us.

Will Gochnour:
Yeah.

Matt Mulcock:
But have you felt… I’ve heard from one to two, some people say one to two is harder than two to three, and others say two to three is the real…

Ryan Isaac:
I mean we’re men talking about the difficulty of…

Matt Mulcock:
But from our perspective, we used to have a…

Ryan Isaac:
Growing, bearing and raising children.

Matt Mulcock:
No, no, no, no, no, I’m not saying that. I’m saying the kid, once the kid’s here.

Will Gochnour:
Yeah it’s hard. Two to three’s been way harder than one to two.

Ryan Isaac:
I thought that was harder.

Matt Mulcock:
That scares me, bro. I don’t want to experience that.

Will Gochnour:
Way harder. Way harder.

Matt Mulcock:
I only have two. I wanted you to go the other way. I wanted you to go the other way but whatever. It’s okay.

Will Gochnour:
Yeah, and I think it depends on the kids too. Like our second guy is like a Tasmanian devil.

Matt Mulcock:
Yeah.

Will Gochnour:
Crazy child.

Ryan Isaac:
It is what it is.

Will Gochnour:
And our oldest daughter is super sweet and nice.

Matt Mulcock:
Yeah.

Ryan Isaac:
So this wasn’t planned, but you’ve kind of done a perfect intro for today’s topic, which is the ups and downs and how to participate and deal with and have optimism for the stock market.

Will Gochnour:
Yes.

Ryan Isaac:
Because children are like the stock market in a way. You’ve got a little bit…

Matt Mulcock:
You have no control. [laughter]

Ryan Isaac:
You have zero control. There’s only a few things you can actually do.

Matt Mulcock:
Yeah.

Will Gochnour:
Yes.

Ryan Isaac:
You know over the long run, if you do some basics consistently for a very long period of time, it should probably end well.

Will Gochnour:
It should work out hopefully, yeah.

Ryan Isaac:
But you have some wild ones.

Will Gochnour:
Yeah.

Ryan Isaac:
You have some tamed ones. You might have a boring one.

Will Gochnour:
And you’re gonna have a stretch where you lose a lot of sleep.

[laughter]

Matt Mulcock:
Oh, yes.

Ryan Isaac:
Dude, so…

Matt Mulcock:
Good call.

Ryan Isaac:
This really…

Will Gochnour:
A handful of stretches.

Ryan Isaac:
This really worked out perfectly. I think one of the places to kick this off would be… Well, let’s just give some context. I don’t know exactly when this will come out and people listen to these later anyway. So we’re in the middle of… Well, Matt, how about you tell where are we at in the year, what’s going on in the economy, what are we seeing, what are we dealing with when people are listening to this in the year 2052?

Matt Mulcock:
Oh wow, that year.

Ryan Isaac:
Yeah, and they’re pulling this up from the archive. How do you wanna remind them about 2022?

Matt Mulcock:
COVID is still fresh on the minds, but also in the rear view right?

Ryan Isaac:
Okay.

Will Gochnour:
Yeah.

Matt Mulcock:
I feel like COVID is old, we’re not even talking about it anymore. Now we’re all talking about inflation, pending recession…

Will Gochnour:
The repercussions of COVID.

Matt Mulcock:
The repercussions of COVID, which are supply chain issues causing inflation, the fed raising rates aggressively to try to stop inflation…

Ryan Isaac:
Almost like purposely causing a recession.

Matt Mulcock:
Yeah and like we’ve talked about before, it’s like the most… If it does turn into a recession, it’s the most obvious recession of all times.

Ryan Isaac:
‘Cause it’s kind of planned.

Matt Mulcock:
‘Cause everyone’s calling for it.

Ryan Isaac:
Yeah.

Matt Mulcock:
Everyone. Yeah. And basically planned, yeah.

Ryan Isaac:
What are you paying for gas right now per gallon?

Matt Mulcock:
In Utah, it’s now like $5.10 or something. It’s not like in California.

Ryan Isaac:
That’s really high for here. That’s nuts.

Matt Mulcock:
Really high, yeah, yeah. Really high.

Ryan Isaac:
We’re only in the three’s right?

Matt Mulcock:
Yeah I think like as of even two months ago, we were in the three’s.

Ryan Isaac:
Oh, no way.

Matt Mulcock:
Yeah.

Ryan Isaac:
Eww.

Matt Mulcock:
Like high three’s.

Will Gochnour:
That’s depressing.

Ryan Isaac:
Yeah it’s expensive. Okay. So that’s what we’re dealing with. Tell us about the S&P 500 right now, middle of 2020 or 2022. That’s where we’re at.

Matt Mulcock:
As of today we are 21% down on the S&P, so…

Ryan Isaac:
Which is a…

Matt Mulcock:
Bear market.

Ryan Isaac:
Yeah, which happens about every four to five years on average for the last century. So in terms of the percentage that it’s gone down, not uncommon.

Matt Mulcock:
Nope.

Ryan Isaac:
Not un… Not like wildly unexpected. The news surrounding the… Every time it happens, every four to five years always feels a little bit different and new, always feels a little bit scary, but it’s kind of what it does. It does its thing. So that’s the context. So when someone’s listening to this in the future, the topic for today that perfectly coincides with children…

Will Gochnour:
Yes.

[chuckle]

Ryan Isaac:
Is how to interact and participate with stocks, how to view them, how to keep going with them during times that are a little stressful like this. And it is…

Matt Mulcock:
How to keep going with parenting. Oh, stocks. [laughter] What about stocks? Okay, sorry.

Ryan Isaac:
Where’s the… Well that could get…

Matt Mulcock:
How to not pull the rip-cord and eject.

Ryan Isaac:
Yeah. Yeah.

Will Gochnour:
Shoutout to Top Gun.

Matt Mulcock:
Yeah, shoutout…

Ryan Isaac:
Shoutout to Top Gun.

Matt Mulcock:
It is fresh on the brain. It’s so good.

Ryan Isaac:
Yeah. Old Rooster tail.

Matt Mulcock:
We should have started with that like what’s happening right now? Well, Top Gun is out.

Will Gochnour:
Uh-huh.

Ryan Isaac:
Yeah, what…

Matt Mulcock:
It’s incredible.

Ryan Isaac:
Yeah, yeah. Okay. The ’90s are… Well, that wasn’t the ’90s. It was the ’80s.

Matt Mulcock:
’86.

Ryan Isaac:
That was ’86. That was a good year.

Matt Mulcock:
It was a solid year. I was born that year.

Ryan Isaac:
So the question… The clients are emailing about this.

Will Gochnour:
Yes.

Ryan Isaac:
Now, I have to give a shoutout to 400, maybe almost 450 people across the country we work with. If I’m in their shoes, I’d be all of them emailing all the time, but most people are not asking about it.

Matt Mulcock:
Yeah.

Ryan Isaac:
Some are, which is awesome too.

Matt Mulcock:
Yeah.

Ryan Isaac:
Because I would much rather… I’m sure you guys feel the same way. I would much rather a client email or voice a concern than not and just kind of sit on it.

Matt Mulcock:
Yeah.

Ryan Isaac:
Right?

Matt Mulcock:
And be freaking out in silence and…

Ryan Isaac:
Yeah, why do that? You have an advisor to bounce ideas in, even just say the inside thing out loud sometimes.

Matt Mulcock:
Yeah, exactly.

Will Gochnour:
Right.

Matt Mulcock:
Not every inside thing. There’s some things you should probably not say. But yeah, most things.

Ryan Isaac:
We have filters as we get older.

Matt Mulcock:
Yeah.

Ryan Isaac:
But that’s a common question. Will, what’s the question I think you… I wanna start off, I guess, with a recent question you had from a client. What was the question?

Will Gochnour:
Yeah. So I got an email and it’s a good and valid question and in no way, are we saying that this is a question that you shouldn’t be asking.

Ryan Isaac:
No, not at all. It’s a natural thing to wonder.

Will Gochnour:
It’s definitely a question that you should be wondering. So it was a client that said, “I have a question about the money we are saving and investing.” This dentist practice is doing really well. She’s investing a lot of money monthly and we’re on the schedule if it goes in every month and gets invested in the market. So she says, “Is it still advisable to continue to invest more money right now, or should we hold the cash until the market goes up again? I’m concerned if the money we’re investing we end up losing it at the same time. I don’t wanna waste money. What do you think?”

Ryan Isaac:
Yeah.

Matt Mulcock:
Again, valid question. We hear some version of that quite a bit.

Ryan Isaac:
Yeah, during times like this. And I mean, what are they thinking? Like put this in dollar terms. So they’re saying “I’m gonna invest $100 today but the market could go down. It’s already gone down 20%, like you just said. What if it goes down another 10% and my $100 turns into $90 tomorrow?”

Will Gochnour:
Yeah.

Ryan Isaac:
Well, should we just wait until it’s for sure gonna bounce back and go back up? So it only goes up when we put in money.

Will Gochnour:
Right.

Ryan Isaac:
The part that’s being missed because it is so emotional, it’s very scary, is that because it already has gone down this much. We’re talking about a 20% drop since six months ago. It’s kind of like a built-in discount already. It’s 20% less than what it was. And when you look at the chart of the stock market from left to right over long periods of time, it’s this zig-zaggy little staircase that’s going up from left to right. So we’re in one of those tiny blips that looks like a little downward staircase, but it doesn’t matter if you put in your money today and it goes down another 20% because you’re already buying it 20% cheaper than it was a few months ago.

Will Gochnour:
Right. Which it’s counterintuitive because…

Ryan Isaac:
Very.

Will Gochnour:
Let’s say you have like a beater car and it keeps breaking down on you and the value keeps going down and down. In your mind, you’re like, “I don’t wanna keep trying to… ”

Ryan Isaac:
Sinking money into this.

Will Gochnour:
“Put money into this car.” And you could say the same thing about like a dental practice post-COVID when everyone was shut down for a certain amount of time and everyone’s collections dropped. If you were to be purchasing a practice post-COVID, you would wonder if that practice ever is gonna come back to what it was doing before.

Matt Mulcock:
That’s a good point, yeah.

Will Gochnour:
And so it’s counterintuitive because it seems, you’re asking yourself, “Is it ever gonna go… Like is it ever gonna be what it was?”

Matt Mulcock:
We get caught, like prisoner of the moment type thing, yeah.

Ryan Isaac:
That’s such a good analogy Will, because we’re trying to illustrate the fact that it’s merely a discount in a long string of price increases.

Will Gochnour:
Right.

Ryan Isaac:
‘Cause that’s what the stock market… Until it ends one day, that’s what it does. But people view it as a declining liability…

Will Gochnour:
Right.

Ryan Isaac:
That’s never going to recover.

Will Gochnour:
Sure.

Ryan Isaac:
‘Cause that’s how it feels.

Will Gochnour:
But you would be stocked if you bought a practice out of huge discount in May of 2020, and then had it… Have the door…

Ryan Isaac:
Yeah. Well, what if that practice that was selling for a million bucks six months ago is now down to 800, but it’s only due because a few people were scared and they backed out of the deal, but it’s still the same practice.

Will Gochnour:
Right.

Ryan Isaac:
Like you’re still buying the same practice…

Will Gochnour:
Yeah.

Ryan Isaac:
With the same future.

Will Gochnour:
There was some external factors that were pushing, yeah.

Ryan Isaac:
In the city.

Matt Mulcock:
That’s a good example. And I would dare say that…

Ryan Isaac:
Dare.

Matt Mulcock:
I would dare.

Ryan Isaac:
A triple dog dare.

Matt Mulcock:
I’m gonna triple dog dare say that… [laughter] Kill me. Well, I would dare say, triple dog dare say that the mindset a dentist would have on buying a practice, they’re looking at that as an actual business… An asset right?

Will Gochnour:
Right.

Ryan Isaac:
Yeah.

Matt Mulcock:
So they would look at that as an opportunity. What you’re saying, what we see this all the time is they’re not looking at the stock market the same way.

Ryan Isaac:
Yeah it’s the only thing that matters.

Matt Mulcock:
They’re looking at it as the beater car. They’re looking at it as this dollar amount that’s going down. But what are you really… And this is what we always try to tell people, is shift your mindset around the dollar amount and shift it more towards accumulation of shares. Like the shares that you are buying are the same amount yesterday as you have today and tomorrow, and if you keep buying them, you’re gonna keep buying these shares of these businesses. So to your point, Will, a dentist might think of a practice as that opportunity but for some reason, they look at the market as something completely different.

Ryan Isaac:
And it’s the only thing we look at that way.

Matt Mulcock:
It’s the only thing.

Ryan Isaac:
We literally buy depreciating assets that will be worth zero for sure…

Matt Mulcock:
Yeah.

Ryan Isaac:
On sale excitedly all the time.

Matt Mulcock:
Yeah it’s the only thing that… Just take that email. It’s the only thing you walk up to a store and it says 20% off everything this month, and you’re like “I’m gonna come back next month. I wanna wait.”

Ryan Isaac:
You’re like, “When is this gonna be more?”

Will Gochnour:
Yeah I’ll wait till it’s full price, yeah.

Ryan Isaac:
When are you raising prices?

Matt Mulcock:
Yeah, yeah. “Hey, excuse me. Can I talk to your manager? When are you gonna raise prices? I wanna come back that day.”

Ryan Isaac:
And this isn’t… This is just to say that it’s just a weird asset.

Matt Mulcock:
Yeah.

Ryan Isaac:
And it’s probably because you can buy and sell it so easy. We don’t think about real estate this way.

Matt Mulcock:
Nope.

Ryan Isaac:
Prices are so high right now. If things went down 20% in the real estate market, people would be so excited to buy.

Matt Mulcock:
Yeah.

Ryan Isaac:
Demand would be even crazier than it is right now. It’s just stocks are just one of those things, it probably has to do with the news and how…

Matt Mulcock:
The transparency of it.

Will Gochnour:
The liquidity and the transparency, yeah.

Ryan Isaac:
Yeah there’s just a market pricing those things, and then how many news channels, blogs and websites that just talk about it 24 hours a day?

Matt Mulcock:
Well, how many people are selling courses on how to beat the market or how to… Learning strategy…

Ryan Isaac:
Well if you open a stocks app right now, I guarantee there’s an article that says “How to Trade the Post-lunch Session”.

Matt Mulcock:
Yeah, of course.

Ryan Isaac:
Every day there’s an article about how to trade after lunch…

Matt Mulcock:
Yep.

Ryan Isaac:
As if it was different than breakfast.

Matt Mulcock:
It’s different than before lunch of course. How heavy was your lunch? It might change your strategy.

Ryan Isaac:
So the whole point of this to begin is just to say, this is a common question that happens every single time there’s market turmoil, and it’s funny whether it’s like a 5% decline… Well, actually, I will say there have been many times in my career where I’ll receive an email like this because there’s some worrisome news, but the stocks are actually crushing. They’re climbing like crazy. And people think they’ve been down. What I’ve asked people like, “Well, what do you think actually happened?” They’ll be like, “I don’t know, I’m probably down like 25% or something.” Like the market’s up like 60%.

Matt Mulcock:
Yeah, like April, May of 2020. Right?

Ryan Isaac:
Yeah, insane. So perception is often different than reality and that’s just to say that this is a normal kind of recurring thing and we wanna address that today. And I think today, the point is to address some of the fundamentals about how to interact with this thing that is the stock market during times like this. And if we went back 12 months ago, it’s funny because 12 months ago, the thing is just climbing like crazy and people are like, “Maybe I should wait until it’s gonna go down a little bit.”

Matt Mulcock:
Yeah.

Ryan Isaac:
It’s funny when it’s gone up for a long enough period of time, people start to worry about investing and they start asking if they should wait until it gets cheaper ’cause it’s too expensive. But then it gets cheaper and then we wait until it should get expensive again. It messes with our minds.

Matt Mulcock:
Never short of reasons why you can trick yourself into waiting.

Will Gochnour:
Right.

Ryan Isaac:
It’s really tough. Will, you had a tweet that I thought was… Was it from a tweet or was it like a blog post? I thought it was so cool to kind of set this whole thing up.

Matt Mulcock:
And very pertinent with what just happened as well, right?

Will Gochnour:
Yes. Shoutout to Golden State Warriors. Shoutout to Steph Curry.

Ryan Isaac:
Yes.

Matt Mulcock:
So cool.

Will Gochnour:
NBA champions, if we wanna talk about current events, that just happened.

Matt Mulcock:
Yeah, 2052, Steph Curry is still the greatest shooter of all time.

Will Gochnour:
Yeah, Warriors just won the ship.

Matt Mulcock:
Yep.

Will Gochnour:
Okay, so this is a tweet that…

Ryan Isaac:
Sorry. Greatest shooter of all times.

Matt Mulcock:
Not even debatable.

Will Gochnour:
Like statistically though.

Matt Mulcock:
Yeah.

Ryan Isaac:
Okay.

Matt Mulcock:
Yeah.

Will Gochnour:
Yeah.

Matt Mulcock:
I mean just eye test and numbers, he has about every three-point record you can think of.

Ryan Isaac:
This is so cool. This was number four for him?

Matt Mulcock:
Number four.

Ryan Isaac:
Four rings?

Will Gochnour:
Yeah.

Matt Mulcock:
Yep.

Ryan Isaac:
Gotta get him a full hand. Let’s go.

Matt Mulcock:
We gotta get him the hand.

Ryan Isaac:
And even the hand. That’s the…

Matt Mulcock:
Gotta get him that thumb ring.

Ryan Isaac:
No, who’s the guy from the Avengers?

Will Gochnour:
The fist on Thanos, yeah.

Matt Mulcock:
Thanos.

Ryan Isaac:
Thanos. We gotta get him Thanos status.

Matt Mulcock:
Gotta give him the full power, yeah.

Ryan Isaac:
Okay. Alright carry on.

Will Gochnour:
Okay, so the tweet is “In investing culture, simple is pejorative.” Did I say that right?

Matt Mulcock:
Yeah.

Ryan Isaac:
Yeah.

Will Gochnour:
Pejorative.

Ryan Isaac:
Simple is pejorative.

Will Gochnour:
Which, to explain for those that may not know what pejorative means…

Matt Mulcock:
Yeah like negative.

Ryan Isaac:
Yeah it’s simple as like a…

Will Gochnour:
Simple as that.

Ryan Isaac:
Yeah, it’s like a bad thing.

Will Gochnour:
So, and then it says… This is a quote, like a theoretical quote. It says “Sure, simple solutions are great for people getting started, but now that I’m wealthy, I need more advanced techniques.” And then the point that they make is, “Note that Steph Curry still practices lay-ups and dribbling. He’s not trying to shoot between the legs now.”

Ryan Isaac:
Yeah.

Matt Mulcock:
So true.

Ryan Isaac:
The lay-ups…

Matt Mulcock:
To be fair, he is shooting from half-court all the time. Yeah. [chuckle]

Will Gochnour:
Yeah, he can do that.

Ryan Isaac:
As he comes out of the…

Matt Mulcock:
Yeah.

Will Gochnour:
So I think just to summarize, and this is where bringing it all back around to what do you do about this thing that is the stock market that’s tricky and complicated and…

Ryan Isaac:
Always moving.

Will Gochnour:
Always moving and you gotta keep up with it, I think that the tagline or the bumper sticker would be, keep it simple and keep it going.

Ryan Isaac:
Ooh.

Matt Mulcock:
Boom.

Ryan Isaac:
Did you… Was that yours?

Will Gochnour:
Yeah.

Ryan Isaac:
Woah!

[laughter]

Ryan Isaac:
Brain, coined it here.

Matt Mulcock:
You know what I just… That’s actually a good thing. Real quick. We should do a bumper sticker segment every episode.

Ryan Isaac:
Oh, what’s today’s bumper?

Matt Mulcock:
That. Will, that was genius.

Will Gochnour:
What’s today’s bumper sticker?

Ryan Isaac:
Today’s bumper sticker is, say it again.

Will Gochnour:
Keep it simple, keep it going.

Matt Mulcock:
We should be doing this.

Ryan Isaac:
Today’s bumper sticker. We used to… We should end it.

Matt Mulcock:
Yeah call it.

Ryan Isaac:
Thanks for listening, everybody.

Matt Mulcock:
Thanks everybody.

Ryan Isaac:
We’ll catch you next time. Okay, so yeah, I wanna go back to that tweet a little bit, where it started with saying “In the investing world, investing culture, the term or the idea of simplicity is pejorative.” It’s like a negative thing. And we hear this a lot from people… The misconception is yes, when you become wealthier, you have the opportunity to do more complex stuff, but you do not… You don’t require… There’s no necessity to do it. If anything, you might even be able to push some stuff off your table, like clean up the thing a little bit. It can sometimes get even more simple.

Jess Reynolds:
Hey everyone, this is Jess Reynolds with Dentist Advisors. As you know, we are passionate about giving dentists the education and resources they need to make smart financial decisions. We’ve brought you the Dentist Money Show Podcast, which has been downloaded over a million times, and we’ve been providing dentists with a premier private wealth management experience for 15 years. Honestly, it’s been great. And now we’re adding to our lineup to help even more dentists get the financial guidance they need. Now, not every dentist is looking for the cadillac experience that comes with our private wealth management service. So we have introduced a self-paced subscription based planning service called the Dentist Money membership. For a monthly fee, Dentist Money members get access to a suite of planning tools, including the innovative Elements app, an investing portal, CE-approved content, and a lot of other cool members-only benefits.

Jess Reynolds:
Plus, as a Dentist Money member, you can pay for one-on-one coaching sessions with a CFP advisor on an as-needed basis. To learn more about these features, visit dentistadvisors.com. You can get started right from the website or book a 15-minute demo just to see how it all works. That’s dentistadvisors.com.

Ryan Isaac:
Will, there was some other statistics in here that I thought were really fascinating about… This mentioned what Steph Curry does. That was kind of said like a little jokingly, but I’m sure he dribbles and does lay-ups all the time, I’m assuming.

Matt Mulcock:
Yeah.

Ryan Isaac:
I’m a big sports guy, so I’m on top of all this.

Matt Mulcock:
Totally, over under.

Ryan Isaac:
Yeah, we did have Over Under on the studio.

Matt Mulcock:
We did.

Ryan Isaac:
Oh, Will, by the way, that’s Jake’s new nickname.

Matt Mulcock:
Yes Over Under.

Ryan Isaac:
Yeah, it’s Over Under. It was mentioned, but there’s some quite a few statistics about high level, top level, I think, yeah, Olympic athletes, the way that they train. Tell us about that.

Will Gochnour:
So yeah, there’s a study that was done to figure out how Olympic athletes train, and these are like the Alpine skiers, the rowers, the cyclists, the swimmers, these are like the best…

Matt Mulcock:
The most extreme endurance, yeah…

Will Gochnour:
The most extreme, the people that are in the best shape of anyone on our whole planet. And so they’re kind of…

Matt Mulcock:
Outside of Ryan, clearly.

Ryan Isaac:
Yeah, that’s true. Yeah you’ve seen me jump.

Matt Mulcock:
Yeah.

Will Gochnour:
Yeah. [laughter]

Ryan Isaac:
I can’t jump. I really have a very surprising limited ability and jumping skills. It actually surprises myself quite often when I need to jump.

Matt Mulcock:
How low your jump is.

Ryan Isaac:
And I’m not gonna name names here, but one of my children also acquired this. She’s fairly athletic in other areas and I watch her jump sometimes and I’m like, “I’m so sorry, honey.”

Matt Mulcock:
She’s not playing volleyball. [laughter]

Ryan Isaac:
We’re not good jumpers. That came from me. And I just… Now that you said that. Go ahead, continue.

Will Gochnour:
I still think you’re an athlete.

Ryan Isaac:
Thank you I appreciate that.

Will Gochnour:
I still think you’re built like one.

Ryan Isaac:
Oh thank you.

Will Gochnour:
So Ryan and the skiers and the rowers and the swimmers.

Ryan Isaac:
Looks can be deceiving.

Will Gochnour:
So what the study found is they were trying to figure out of the hours that they spend exercising during the day, which hours were done at high intensity, medium intensity and low intensity, they kind of like… They did a max heart rate, like a…

Ryan Isaac:
Oh yeah.

Will Gochnour:
Heart rate that they were trying to target in those…

Ryan Isaac:
Like that VO2 max stuff they do, yeah.

Will Gochnour:
Basically they said the max heart rate was huffing and puffing, the medium was heavy breathing and the low was like, you can probably carry on a conversation.

Ryan Isaac:
Okay.

Will Gochnour:
So…

Matt Mulcock:
Right now we are participating in low intensity. [laughter]

Will Gochnour:
I’m huffing and puffing a little bit.

Ryan Isaac:
Yeah, it depends on the topic.

Matt Mulcock:
Yeah.

Will Gochnour:
Right.

Ryan Isaac:
If I say Matt, I want passive income…

Matt Mulcock:
Don’t even… I’m gonna be huffing and puffing.

Ryan Isaac:
You’ll be in that 5% category.

Will Gochnour:
So they found of the cross-country skiers who they were studying after a year, the training schedule broke out like this, they found that 88.7% of training hours were light intensity, 6.4% were medium intensity and 4.8% were high intensity.

Ryan Isaac:
Wait, so 80-what percent?

Will Gochnour:
88. So 89% of training hours were like…

Matt Mulcock:
That is wild.

Ryan Isaac:
It is… It doesn’t… Yeah. And I mean I have… Despite my small knowledge of the sports, I have followed some athletes and have been very surprised at what a very rigorous training schedule actually looks like for a lot of these people. It’s not what you… Even high-intense sports that they’re in, the training schedules are boring, boring actually, like low intensity, slow, very deliberate, very measured and boring. It’s kinda…

Matt Mulcock:
Yeah, a lot of stretching.

Ryan Isaac:
Yeah, honestly, a lot of… I’m feeling it now, but yeah, almost 90% of their training is low intensity. And what were these athletes again? These were…

Will Gochnour:
So like Olympic cross-country skiers. And then they found the same thing with cyclists and rowers and swimmers and…

Ryan Isaac:
Wow.

Will Gochnour:
So these are the actual, in the… Probably the best cardiological shape.

Ryan Isaac:
Oh yeah. Oh yeah.

Will Gochnour:
So then they interviewed… In this article, they interviewed a exercise physiologist and he said professional endurance athletes go for a long time at low intensity where they can recover and repeat it day after day, and that’s what really brings success. For the highest levels to be attainable over time, the training process has to be sustainable. At higher levels of intensity, chronic levels of stress lead to burnout and stagnation.

Ryan Isaac:
And you think about today and the question clients ask which is, “What do we do… ” And this is… To give some context, this would be a client who’s still mid-career, they’re still safe, they don’t need the money tomorrow or in the next few years. And they’re asking, “What do we do during these times of market ups and downs? And how does this principle apply to that then?” ‘Cause we’re telling them the same things.

Matt Mulcock:
Yeah, but the word that stuck out to me in that quote and this whole concept is, it has to be sustainable.

Ryan Isaac:
Yeah.

Matt Mulcock:
The most important part of any strategy you have is one that you can stick with. So that to me is…

Will Gochnour:
Simple strategies are the easiest.

Matt Mulcock:
Yeah…

Ryan Isaac:
I heard people relay that in exercise, like “What’s the best, what’s the most optimal exercise to whatever, lose weight, gain muscle?”

Matt Mulcock:
One you can stick…

Ryan Isaac:
Which one are you gonna do for more than two months?

Matt Mulcock:
Yeah exactly.

Ryan Isaac:
Yeah, which one will you stick to?

Matt Mulcock:
Yeah, so you might have the best exercise regimen of all time, that’s like the secret to everything, but if you only do it one day and you quit…

Ryan Isaac:
Yeah you’re not gonna get anywhere.

Matt Mulcock:
You’re not gonna get anywhere.

Ryan Isaac:
And it’s like when people ask, “Well, what’s the best investment?” It’s always a fun question. We talked about this in other shows, you have basically three categories of investments. You have private business, public business, which is stocks, and then real estate.

Matt Mulcock:
Yep.

Ryan Isaac:
And is real estate better than stocks? Is building a big practice better than real estate? And it’s like, well any three of those are gonna take you multiple decades to make anything meaningful out of it, so which one can you do for multiple decades?

Matt Mulcock:
Yep.

Will Gochnour:
Right.

Ryan Isaac:
Or what combination of all three can you handle? ‘Cause most dentists will probably have a combination of those things. And yeah, sustainability is everything. When you save money in the stock market, it’s not this magical thing in the clouds that might someday give you some money back. You’re buying physical shares of companies that are actual companies just like yours that have every motivation in the entire world to grow, produce profit and increase in value. And you’re buying actual physical shares of these things. When the market’s cheaper, your same dollar amount, you say 1000 bucks a month, you’re saying 10 grand a month, whatever, it’s just buying bigger portions of those companies when the market goes down. That’s what’s happening. So I wanna make sure that that’s clear. You’re buying something…

Will Gochnour:
These are maybe the best purchases you’ll make it in a long time.

Ryan Isaac:
Oh my gosh, yeah.

Will Gochnour:
Yeah.

Ryan Isaac:
That’s totally true, besides surfboards. [laughter] But I wanna make that clear, but let’s go back to your client question, because the root of that question is, well, Will, we’ve seen this market, you said it’s gone down 20% now. I don’t wanna put in and then tomorrow it’s gone. There’s this concept of…

Will Gochnour:
Losing money.

Ryan Isaac:
I’m gonna lose money. Can you guys speak to that? What does that actually mean in a stock market context of losing money? Is that even possible? When is that possible? And how do you avoid… ‘Cause she’s talking about permanent loss of money when investing. What’s the context of that?

Will Gochnour:
The only… So the context of it is you only lose money if you sell. So that’s how you lock in a loss.

Ryan Isaac:
So you mean I put in 100 bucks, it goes down to 80 tomorrow, and then I can take my 80 back out.

Will Gochnour:
Yeah, right.

Ryan Isaac:
Woah.

Will Gochnour:
That is cool.

Ryan Isaac:
Take my 80 back out, then I lost my 20 bucks. I lost it.

Will Gochnour:
Right, ’cause you guaranteed yourself the $20 loss.

Ryan Isaac:
Loss, okay.

Will Gochnour:
But if you… Like we were talking about with a devalued practice, if you have a terrible collections year, let’s say you take one too many weeks of vacation or you got sick and you had to sit out on the sidelines for a couple months of the year. If your collections go down, technically your practice becomes devalued. If you were to sell your practice that year, you’re gonna get a lot less out of it than you would if you waited for your collections…

Ryan Isaac:
Yeah, you locked in a loss.

Will Gochnour:
To go back up, you lock in a loss. Same thing with the stock market. So these assets that you own, you’re just waiting for them to go back up. And it would be one thing if you purchased an asset that doesn’t have… Might not go back up, some random cryptocurrency that maybe is never gonna go back up or something like that.

Ryan Isaac:
Or one single stock you bought.

Matt Mulcock:
I was just gonna say, there’s some context to this and one assumption we’re making when we say you only lose if you sell, it’s, if you are well-diversified enough for that to be true. ‘Cause someone might hear that and say, “Oh well… ”

Will Gochnour:
“I’ll just hold onto this.”

Matt Mulcock:
“Netflix just went down 80% over the last three months. I’m only gonna lose if I sell.” But that actually might not be true ’cause Netflix, if your entire portfolio is in Netflix and Netflix goes under, which is possible, we’ve seen it, Netflix goes bankrupt…

Ryan Isaac:
That’d be… I gotta finish Ozark before that happens.

[laughter]

Matt Mulcock:
Right. And I’m not saying Netflix will, but to your point, Ryan, if you’re invested in one single company, the chance of true full permanent loss is absolutely there.

Will Gochnour:
It’s possible.

Matt Mulcock:
But if you’re well-diversified enough, again, that’s the assumption we’re making…

Ryan Isaac:
Then Will’s example is what happens.

Matt Mulcock:
Will’s example is exactly right.

Ryan Isaac:
It’s gonna go back up.

Matt Mulcock:
The chances of you having total loss means the world is over.

Ryan Isaac:
It means 15,000-plus companies basically…

Matt Mulcock:
Are gone.

Ryan Isaac:
Everything we interact with in every aspect of our daily lives are out of business.

Matt Mulcock:
Yep.

Ryan Isaac:
So it’s over. Yeah so that’s the fear people have and so I think it’s really important to educate around what loss means in the stock market. So to Will’s point, if someone put in their money and it went down tomorrow and then they took their money back out, you locked in your losses. But I wanna say that there’s a caveat to that and that is you might do that on purpose as a tax strategy when withdrawing money. When you have a very large net worth and especially when your net worth is really liquid, you have a big portfolio of stocks, you have a lot of options when it comes time to take out money.

Ryan Isaac:
So one of the fears is, “I’m in retirement, I don’t have an income anymore. I’ve got a few million bucks in a brokerage account or some IRAs or something. And then I need… I’m taking out money actively to live on it.” And then the market starts going down, which will happen ’cause the market will keep doing what it’s gonna do, whether you’re working or not. But when you have a big portfolio and markets are down, if your net worth is enough, which is why we talk about total term and all that kind of stuff, if it’s enough, selling things at a loss on purpose, I mean that’s an active strategy people do. We just did it this week for some big client accounts.

Will Gochnour:
Assuming that you take the money out and put it right back in.

Ryan Isaac:
Yeah take it right back out, putting it… Or someone who just needs… I’m just saying someone who needs the money might take a loss on purpose in a portfolio because they’re like, “Well, yeah, I’ve got… I could pull out the money that’s got gains in it, big taxes.

Will Gochnour:
You’re gonna pull out anyways.

Ryan Isaac:
Yeah I’m gonna pull the money out anyways, so why don’t I just pull the money out that I’m gonna spend and take a loss for tax purposes? So I guess my point of that is it can get fairly nuanced with strategy and that it doesn’t always mean a bad thing. You can pull money out that is at a loss and do it on purpose, but the principle of all this that people are scared about is permanent loss of capital. And the idea that the stock market is a place where you can permanently lose the money you put in there, which in a diversified portfolio, that’s not what’s gonna happen in one stock or one cryptocurrency or one friend’s business, totally. One dental practice? Yeah.

Matt Mulcock:
Well that’s why, just to this point of, again, coming back to your client’s email, I think there’s two critical questions to be asking here when something like this comes up. And every one of us and every person out there has thought like your client has thought, whether they’ve sent the email or not. I think two critical questions to be asking is, number one, what’s my timeframe for this money? Number two is what’s the alternative? So coming back to like, what’s the timeframe, so if she’s saying like, “I’m worried about risk of loss,” my first thing I’d ask is, “Well, when do you need this money? If you need this in 30 years and this is your retirement money, then do you really like… Why would you really care if this money is… If the value is down next month or even a year from now.

Matt Mulcock:
The “What’s the alternative?” is like, what dollars or where else could you put this money? If you have no other job for these dollars, meaning there’s no investment you could put into the practice. Because you could argue for this client or anyone else out there, you could argue, “Okay, is the stock market the best place to put the money?” Maybe not, but it has nothing to do with what’s happening in the market right now. It has everything to do with, there might be an alternative strategy like, I don’t know, go put money in marketing, go hire someone, go hire a consultant.

Ryan Isaac:
Yeah, what does the rest of your life look like?

Matt Mulcock:
Exactly. But if it’s just coming down to, the alternative is “I’m just gonna sit in cash and wait,” that to me over the next 20, 30 years is far riskier to you than just putting the money into the market.

Will Gochnour:
Right.

Ryan Isaac:
Yeah totally. So if we were to wrap up this with our bumper sticker, what’s the bumper sticker again?

Will Gochnour:
Keep it simple, keep it going.

Ryan Isaac:
God that’s so good.

Matt Mulcock:
I’mma go make that right now.

Ryan Isaac:
That sounds like a Willie Nelson song.

Will Gochnour:
Yeah.

Ryan Isaac:
Would that be true?

Will Gochnour:
That could be a country song.

Ryan Isaac:
That could be a good Willie Nelson song.

[vocalization]

Ryan Isaac:
“Keep it simple, keep it going.”

[laughter]

Will Gochnour:
Keep going.

Ryan Isaac:
It feels like it would be one.

Matt Mulcock:
Yeah.

Ryan Isaac:
I think that’s the principle here, and people who are listening to this having the same questions, like is this the time to keep going? I’ll say that… Maybe this is a hot take. This controversial alert here. I don’t know.

Ryan Isaac:
Hit it. I’m ready.

Will Gochnour:
What was the… Oh, you’re daring to say the triple dog dare.

Matt Mulcock:
Triple dog.

Ryan Isaac:
Oh yeah, I’m gonna triple dog dare.

Matt Mulcock:
Dare you say.

Ryan Isaac:
I was just gonna… I’m in this group of people that I’m talking about so I’m including myself in there. For people who are still planning on working for quite a while and don’t need their money anytime soon, have the appropriate amount of liquidity outside of their investments for business or personal emergency fund or any expenses coming up, times like these are what we need to have happen as investors. We want… As counterintuitive as it seems, we need these times to happen.

Ryan Isaac:
I save money like my clients do every paycheck. And so for the last six months, all of my savings have bought more shares. They’re the same dollar amount, but I’ve been buying more shares than I was six months ago. And as the year’s gone on, they’re there are just deeper and deeper discounts. And it might be down twice as much six months from now as it is right now, but we need these times to happen. Do you think that’s a fair thing to say? And I’m not talking about people in retirement who don’t have enough money to live on. I feel for that. That’s a really tough… That’s a whole different discussion, tough place to be. But savers, people who are in the middle of their careers, we kind of… We want these things to happen.

Ryan Isaac:
And honestly, I think it is really helpful for a client’s psychology to experience this as much as possible right now, because when you’re 70 and you’re not working anymore, or 60 or whatever, the income’s done and you go through these times with a portfolio that’s like 10 times bigger, you need the mental strength and emotional callousness to get through this stuff. To know, like we were saying this on another show, but to be able to look back and go. “Oh, I remember going through that and having those feelings and I see how it worked out,” you need that hindsight to be able to get through the future times like this. So I think it’s actually healthy.

Matt Mulcock:
I don’t even think that’s controversial.

Ryan Isaac:
Not controversial?

Matt Mulcock:
I think the way the market functions is exactly that, like this is the price you pay for the long-term payoff.

Ryan Isaac:
The controversial way to say it was like, I’m glad markets are going down for my clients.

Matt Mulcock:
Yeah. [laughter] I’m glad you’re all losing money.

Ryan Isaac:
I’m glad we’re going through it unless… The caveats, you know what they are, but like for the saver who’s got 20 years left to work, and probably won’t even touch their portfolios for another 20 years after that ’cause they’re gonna sell their practice for millions of dollars…

Will Gochnour:
This is an opportunity, even though it doesn’t feel like one.

Ryan Isaac:
It doesn’t feel like it, but I’m glad you’re going through it. I’m sorry. It’s like tough love for a kid.

Matt Mulcock:
It is.

Ryan Isaac:
I’m glad you’re gonna… I’m proud of you, son.

Matt Mulcock:
Yeah.

Ryan Isaac:
There’s a famous line on Psych. “I’m proud of you, son.”

[laughter]

Matt Mulcock:
I do not know that one.

Ryan Isaac:
Any of you Psych fans?

[laughter]

Matt Mulcock:
No, but again, yes I totally agree and I don’t think that’s controversial, ’cause again, if you look at the fundamentals of the market, the only reason you’re compensated for putting your money in investments in the capital markets and public companies, the compensation comes at a price of like stress and dealing with these ups and downs. There’s nowhere else in life, anywhere, that you don’t pay the price of some pain for progress. Like it’s just not… There’s no… It’s not possible.

Ryan Isaac:
Woah, that’s another sticker but for another time then.

Matt Mulcock:
And I don’t think we can stress enough that we understand that it hurts. Like we’re not…

Ryan Isaac:
Well, that’s why I say it’s controversial. That’s why I’m like trying to tip-toe on that because it sounds like, “Oh, that’s a hot take. You’re so… What a cool opinion, bro.”

Matt Mulcock:
Yeah. [laughter]

Ryan Isaac:
‘Cause I realized that the stress and anguish it causes people mentally, emotionally, but I also realize the actual real problems it is for people who don’t have enough…

Matt Mulcock:
Yep.

Ryan Isaac:
Who are living on these portfolios and seeing declines like this. That’s a problem…

Matt Mulcock:
For sure.

Ryan Isaac:
And I’m acknowledging that I’m not talking about that group of people.

Matt Mulcock:
Yep. You’re talking about, you got a long career in front of you and investing…

Ryan Isaac:
I’m talking about myself.

Matt Mulcock:
Investing us, yes.

Ryan Isaac:
I’m talking about myself. I plan on working as long as people will listen.

Matt Mulcock:
Probably most listeners, most listeners.

Ryan Isaac:
Yeah, most of our client demographic, a lot of time ahead of them. This is just… This is good for us.

Matt Mulcock:
Yep.

Will Gochnour:
Yeah.

Matt Mulcock:
So enjoy it. Embrace the pain.

Ryan Isaac:
Live it up.

Matt Mulcock:
Live it up. Live it up. [chuckle]

Ryan Isaac:
Smell the roses. I actually don’t like the smell of roses that much. That’s for another time. Thanks for being here guys, I appreciate it. And for all of you listening, as always, thanks for tuning in. If you have any questions… If you wanna get on the calendar of the likes of Will and Matt…

Matt Mulcock:
No, if you’re lucky, you’re getting Will.

Ryan Isaac:
Or Jake, Taylor, or Amanda. Go to dentistadvisors.com, click the Book Free Consultation button. That’s the one you wanna click. It’s green. So you know to go on that one. And schedule a time to chat with us. We’d love to hear from you, we’d love to give you some direction, point you in the right direction. But thanks for tuning in. Thanks for listening. We’ll catch you next time on another episode of the Dentist Money Show. Take care now. Bye-bye.

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