When Will the Stock Market Bubble Burst? – Episode 104

When can we expect the next major market correction? Plenty of experts have weighed in recently as financial markets continue to expand. So who should you listen to? In this episode of Dentist Money™, Reese & Ryan evaluate headlines from major financial publications over the past several years to determine the accuracy of market projections. They also pose a more important question investors should ask to ensure their portfolios remain bubble-proof.

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Podcast Transcript:

Reese Harper: Welcome to the Dentist Money™ Show, where we help dentists make smart financial decisions. I’m your host Reese Harper, here with my trusty old co-host, Sir Ryan Isaac. Sir, did you notice this morning’s snowfall?

Ryan Isaac: Yeah! It felt nice.

Reese Harper: I was hoping you got the same snowfall that I got, because I was sporting– I don’t want to exaggerate, but it had to be at least four or five inches.

Ryan Isaac: I don’t want to exaggerate, but I’m going to. It was a foot.

Reese Harper: I would say a foot would be an exaggeration. Four, five, maybe six inches would be what I was on my truck.

Ryan Isaac: Yeah, we had about five inches on the grass.

Reese Harper: Did you have to brush off your truck?

Ryan Isaac: I park in a garage; it’s 2017.

Reese Harper: Oh. You live in a community where you guys have garages that can fit multiple vehicles.

Ryan Isaac: (laughs) we have garages, yeah. It’s weird. You should try it.

Reese Harper: Yeah, mine can fit one car, and like a thousand Amazon boxes.

Ryan Isaac: Yeah, don’t you have these weird steps that come out, though?

Reese Harper: (laughs) yeah. When homes are built in the early 20th century, they didn’t plan for multiple vehicles.

Ryan Isaac: The funny thing is, 20 years from now, they won’t either. We won’t dedicate parking space to vehicles.

Reese Harper: Well, I’m excited that you made it in safely. Speaking of storms… today, we are going to be talking about the weather.

Ryan Isaac: Yeah, this whole episode is about the weather; we are just going to casually talk about the weather.

Reese Harper: So, how about you tell us what is happening–

Justin Copier: (laughs) the whole thing is small talk. It’s like, how is the weather, and how are the Bears doing?

Reese Harper: So, tell me a little bit about this cold front that you have been speaking of lately.

Justin Copier: Yeah, so it was kind of a famous on-air mess up back in 1987; we were actually watching the video of this at the booth at the Greater New York Dental Meeting, Justin and I. I mean, Q.

Reese Harper: Yes, for those of you who don’t know, we are still recovering from a jet-lagged return recently from the show. It was a great, great show. I loved that place. We are going back.

Ryan Isaac: I can’t wait for next year; it will be cool. So anyway, in 1987– this is in October in England– there was a storm that hit that was the biggest storm that had hit England for 300 years. The previous storm that was that big that did that much damage happened in the early 1700s. So the storm hit– it was like October 16th, 1987– biggest storm to hit–

Reese : It was like? That was surprisingly accurate for the dates for a like (laughs).

Ryan Isaac: Yeah, no. It was exactly October 16th; it started about 1:35 AM on a Friday morning (laughs).

Reese Harper: I like this; you have your data down.

Ryan Isaac: I have notes here, okay? So, some details about this storm: biggest one in 300 years, winds up to 145 miles per hour… coincidentally, it is basically a hurricane, but because it didn’t originate in some tropical, warm-weather place, it’s not technically a hurricane. Anyway, it uprooted 15,000,000 trees, which I think is the equivalent of your yard, slightly (laughs). It’s about like your yard. But 15,000,000 trees, several hundred thousand people didn’t have power, and that went on for a couple weeks.

Justin Copier: It blew the cobblestone right off the streets.

Ryan Isaac: The cobblestone (laughs). Maybe it did!

Reese Harper: Nice, Q. Well played.

Ryan Isaac: That was very regional of you. You can see pictures in the bays and the harbors; there are hundreds of boats that are just upside down, capsized, and sunk. Roofs were torn off. 22 people died in a three-hour period, so it wasn’t good. And there was even– a little side note– there were wild boar in captivity… that’s kind of interesting–

Reese Harper: What species of wild boar are we talking about?

Ryan Isaac: I don’t know, I’m not an expert on wild boar, are you? (laughs) I eat boar’s head. It’s just good turkey (laughs).

Reese Harper: I hunt, okay? Those are low-nitrate meats, Ryan!

Ryan Isaac: Boar’s head (laughs). But there was this group of wild boar in captivity, and their cages were destroyed, and so actually, they escaped during this storm, and to this day, there are these huge wild populations in Southern England of wild boar that aren’t supposed to be there, but they were populated from–

Reese Harper: Oh, so people had them caged up, and then they got out?

Ryan Isaac: Yeah. And then they got out, and they made huge wild boar populations in Southern England that aren’t supposed to be there, but now they are. So if we have any listeners with any wild boar experience, we would love to hear from you.

Reese Harper: That has happened surprisingly often, as people may not realize.

Ryan Isaac: Animals get out and populate where they are not supposed to?

Reese Harper: Well like in– I was watching Man from Snowy River, and the Brumby population, those guys got out of their cages too and ran wild in the woods, and that is how all the wild horses started living in the great Outback.

Ryan Isaac: Really. The Brumbies?

Reese Harper: I think that is one of those… you know. But, little known fact about animals in the wild! Like, maybe they have all been domesticated, and they have explored, and–

Ryan Isaac: Yeah, they weren’t supposed to be there. Okay, needless to say (laughs), this was a massive storm. The interesting part about it– here is where the little twist comes in– the storm started on a Friday morning at one in the morning. So just twelve hours earlier, at the lunchtime weather forecast on Thursday afternoon, there is a guy who, to this day, still has to defend his reputation; he still talking about this 30 years later, and his name is Michael Fish. He was standing in front of his little green screen, and he opened the weather forecast with a comment: he said, “early on today, apparently, a woman rang to BBC and said she heard there was a hurricane one the way.” And then he kind of laughs, and he says, “well, if you’re watching, don’t worry. There isn’t.” And then he kind of laughs, and as he goes on, he says, “it might be a little windy, and we might get some rain…” but it’s this famous historic prediction that was missed horribly. He basically said, “don’t worry, there is not a huge storm on the way, although a woman did call in to the news channel and say their was.” Later in his career, he was like, “I was joking; I wasn’t serious about that; I was talking about something else.” (laughs) but anyway, what we are going to talk about today is how sometimes, really well-intentioned, even smart people with good technology, or tools, or information make predictions that go wrong, and sometimes can be harmful. So, poor Michael Fish stood there and said, “there is no storm.”

Reese Harper: Not to mention his name is Michael Fish.

Ryan Isaac: (laughs) his name is Michael Fish.

Justin Copier: And he’s an expert! Right?

Ryan Isaac: I mean, in all due respect to Michael Fish, he was a very well-respected meteorologist; he had done it for a long time. It was just lunchtime on a Thursday, and he was just saying, “you guys, there is no storm. It’s okay.” And later that night, it was bad.

Reese Harper: Mike, if you are listening, we are sorry that you had to go through that, but–

Ryan Isaac: Yeah, we are sorry that we had to bring it up on the show, but it’s a good tie in–

Reese Harper: Sorry that this episode is going viral right now all across the cobblestone streets of London.

Ryan Isaac: Michael Fish, we’d love to meet you. Come on the show, and tell your story!

Reese Harper: Okay, well I think that the point of your story today, which I think is kind of where we are headed, is that sometimes really really smart people make predictions that don’t turn out to be true, and in nowhere does that happen more frequently than the financial sector. If you are a dentist, and you can go to the Greater New York Dental Meeting, you can sit in a cosmetic dentistry– an implant course, and have a really famous dentist educate you on his forecast for where the implant industry is going, and there might be a lot of truth to what that person is saying. And that is the pattern that a lot of dentists are in: they listen to experts, those experts make some kind of educated forecast, or are involved in continuing education a lot, and you feel like you can trust those sources, and you often can. The challenge is when dentists also make that same assumption about financial experts and their predictions, and what we have seen in our careers is that when people make financial decisions off of predictions that other people are making, especially when those people are highly credentialed and highly experienced, then that can be a dangerous– you don’t want to guide your future around those predictions. We are saying that there is a big difference between advice and forecasts and predictions. So what we are going to go through today that is interesting…I think I was actually at the show, and I got an article– the Wall Street Journal app keeps me abreast of all things financial, and they charge me a lot of money for it, and I don’t know how to get it for free. I’m like, “how can I get this for free?” It’s the most expensive app I have, and I’m like, “shouldn’t news be free now?” Once in a while I’ll get an email, and it says, “bonus week! You get 18 weeks for like, nothing.” And then I’m like, “why do I not have that and I got the bad deal to start? Now I’m stuck!” Anyway, they have me hooked, because I really feel like it is one of the only places that I get actual news, as opposed to trending news. And so, this article that I got that was kind of the headliner for the day was called “Wall Street’s 2017 Market Predictions: Pathetically Wrong,” and I was like, “wow, that’s a harsh criticism.” That was a good headline; it sparked my interest; I was reading right away.

Ryan Isaac: Yeah, you sent it to all of us.

Reese Harper: I didn’t realize that in 2017, there had been so many market predictions that were pathetically wrong, like the article says. I mean, I guess as a financial advisor, I am hearing people make predictions all the time–

Ryan Isaac: This was a big year, though. We had a lot of– new president, new proposed changes, new laws that people hoped or didn’t hope would happen, so…

Reese Harper: Yeah. And there were four main areas that the article highlighted that experts got wrong. The first one was that stock market returns ended up being a lot higher than experts predicted; this was not supposed to be a big rally year, especially in emerging countries and developed markets in addition to the U.S. market. That was kind of a major issue, and the article said, “they were wrong, at least so far–” and this is in November– “about taxes and inflation, but stocks went up anyway. They were right about political and geopolitical uncertainty, but volatility failed to appear.” Basically, what they are saying is that the experts underestimated how much the market would rise; they thought tax reform would get done earlier in the year, and it is just barely starting right now at this point. It looks like something will actually happen at this point. And then, they were also wrong about inflation, which has a big impact on stock returns. A lot people did forecast geopolitical uncertainty, which I don’t think we could have imagined how much there would have been, but they correlated that with stock market volatility, and usually that is the case. Usually when you see geopolitical uncertainty, usually there is volatility in the market, and that just hasn’t happened. It has been one of the least volatile years we have on record.

Ryan Isaac: Despite having maybe more uncertainty than we have had in a long time. Weird year.

Reese Harper: Exactly. So, I think it’s just interesting. So inflation didn’t pick up… the other thing that happened is a lot of people predicted that the dollar would strengthen, and it really hasn’t; it has hit it’s kind of low point since 2015. The way the dollar gets measured– and I think this is probably an important side note for people to understand– when someone says the dollar is weak, what is happening is–

Ryan Isaac: The dollar is weak? You’re weak.

Reese Harper: Yeah, that’s what Ryan always tells me.

Ryan Isaac: (laughs) that’s all I say.

Reese Harper: (laughs) so, let’s say you compare the United States’ dollar to the Canadian dollar. Well, the way that this works is you can exchange dollars for Canadian dollars, and you can exchange them from .75 Canadian dollars to one U.S. dollar, or as much as one U.S. dollar for one Canadian dollar. That’s kind of the range that it is traded at in history. So, if the U.S. dollar is trading to where it was a 1:1 exchange, which is the highest it has ever been, you would say that the U.S. dollar is weak at that point, because it is not as strong as if it was trading for .75 Canadian dollars. And so, when you look at how experts measure the strength of a currency, they just compare it to a lot of other currencies in the world; they usually compare it to the biggest ones, like the euro, the Japanese yen, and the dollar index usually tracks six to seven major currencies, and compares to those currencies, and measures whether it is going up or down, relative to those currencies. And so, that is kind of just a 101 reminder, when we talk strong or weak dollar. And everyone thought that this was a year where the U.S. dollar would strengthen, and it really hasn’t. It hasn’t been a significant decline, but it hasn’t strengthened.

Ryan Isaac: Yeah, the point is just that it did the opposite from what a lot of really smart people thought it would do.

Reese Harper: Also, another thing that people thought would happen is that treasury yields would go up, meaning that the federal reserve was going to continue to raise interest rates, and that those interest rate hikes, or increases in the overnight fed funds rate, would result in higher-than-average treasury yields, or increase in treasury yields, compared to the previous year. And that hasn’t happened at all stages of the yield curve. And that has been– that’s a little technical, but just know that the interest rates didn’t go up like we thought they would. So, those are all things that people got wrong this year, and that’s why the article was kind of highlighting that. You found something that I thought was really interesting, Ryan, which was a historical kind of list of, you know, since 2009 and 2010 when the recession ended and we started to dig out of– we call in the Great Recession… at that point, we had kind of nowhere to go but up in the stock market, right? But you found a series of quotes from an article that Ben Carlson wrote who was a blog called “A Wealth of Common Sense,” which I know we both really like. He wrote a list of headlines that happened every year since the bottom of that market, and around the stock market, and the meltdown that was about to occur.

Ryan Isaac: Well it’s interesting, and you probably hear this a lot from clients, or when you are talking to people about the economy, and investments, and the stock market, where the current year is kind of like the– what’s the bias, you know? What is going on right now is what feels the most real; recency bias, you know? But you hear this a lot, where people will be like, “well you know, a crash is coming,” or “the market is at its peak.” But it’s funny, because people were saying that when the market started rebounding after the recession in early 2009, like March, but by 2011, or 2012, people were like, “oh it’s gone. It’s too hot now; it has gone up too far too fast; we are do for another huge correction; another crash is coming.” The point is that people have been saying that for a long time. So this list from one of the article on his blog–

Reese Harper: Go back to 2010, and let’s start in that first year right after.

Ryan Isaac: So 2010, this was a headline from– and these are all headlines from major financial media outlets, I mean, well-respected, very popular ones. From Business Insider 2010, “U.S. Stocks Surge Back Towards Bubble Territory.” So this is a year after the recovery technically started; twelve months later.

Reese Harper: The next one was in 2011, a little more than a year later, again from the same publication, the Business Insider said, “Why This Stock Market Looks Like the Tech Bubble of 2000 All Over Again.”

Ryan Isaac: In 2012, this is from Yahoo Finance, “Robert Shiller–” not an unintelligent person, right?

Reese Harper: Yeah, he’s a Nobel laureate.

Ryan Isaac: As of– that was last year. Or was it this year that he won that?

Reese Harper: I think it was last year, yeah.
Ryan Isaac: “Robert Shiller Eyes Another Tech Bubble.” That is in March of 2012.

Reese Harper: And in 2013, the article was, “Nobel Prize Winner Warns of U.S. Stock Market Bubble” from CNBC. 2014–

Ryan Isaac: Yeah, New York Times– we passed that building, didn’t we?

Reese Harper: Yeah, we took a picture by it.

Ryan Isaac: Beautiful building. New York Times said, “Time to Worry About Stock Market Bubbles” in 2014.

Reese Harper: 2015, “Fears Grow Over U.S. Stock Market Bubble.” Are you starting to get the picture here of which words people use because they are trying to manipulate your fears? Which two words appear in every one of these headlines? Market bubble.

Ryan Isaac: Bubble bubble bubble. It reminds me of my favorite old Nintendo game, Bubble Bobble.

Reese Harper: So, they have to pay a lot of money for google search terms around “bubble” is my guess; it is probably a very expensive search.

Ryan Isaac: Yeah, probably. So that was 2015. 2016, last summer, “Uh Oh! Is the Stock Market in a Bubble Again?” That’s CNN (laughs).

Reese Harper: And 2017, USA Today, it came out a couple of months ago: “Is the Stock Market a Bubble?”

Justin Copier: (laughs) one of these years, they are going to be right.

Ryan Isaac: Well actually, Ben Carlson says that, actually. He says, “maybe all of these things are true, but they just haven’t happened yet.” It’s exactly right.

Reese Harper: Well, and the reality is, when you are an investor, you have two choices: you can listen to these headlines, and you can make decisions based on them, or you can say, “look. No one is going to be able to forecast the future of an economy or a market, so what I’m going to do is I’m going to put lots of money in different types of investments, and different types of accounts, and I’m going to make sure that I don’t need the money in that specific account until a specific period of time.” So you have one account for your three to five-year money, one account for your five to ten-year money, you have another strategy for your fifteen-year-plus monies, you have money you might need for short-term emergencies in the practice, you have one for personal splurges… I mean, you just have to be very specific about the overall investment strategy that you build, and know that no matter what happens in the economy, if you have built a portfolio that is designed well, you will be able to get through this bubble when it happens. Because it is apparently going to happen every year, you know? And we know, looking from historical data, that on average– and we have talked about this many times on previous podcasts– this will happen at some point over a ten-year period in most ten-year periods. You will see some type of a market correction, and that’s okay, you know?

Ryan Isaac: And statistically, since the 1920s, you would see a correction, which is 20%, on average, in a ten-year period, about twice. So, of course it is going to happen.

Reese Harper: Yeah. So, this has been a good seven-year period, you know? But I just think there have been a lot of people who have been out of it until– I mean, a lot of people didn’t get into this until 2012, 2013, 2014, so they missed that early stage, and you know, that is just something to consider as you go forward, about stock market bubbles; any time you see that word, just know it is the most overused financial forecasting word in the internet.

Ryan Isaac: Well, and also keep in mind that when you are asking that question, like, “is it overvalued? Is it too expensive? Is it about to crash?” Realize that people ask that same question– people far smarter than all of us– every year, and they do it publically, on the biggest websites and media outlets. I mean, people are constantly asking that question. So, it is a very common thing, and it is not new to wonder that, or to feel that way.

Reese Harper: Yeah, and it’s also okay if you have been in a situation where you have been vulnerable to this. I don’t blame dentists for making mistakes with their investments in this area; it is really hard when you have all of this information coming at you, and it just turns out to be straight up wrong.

Ryan Isaac: It’s just “pathetically wrong,” according to the article. Well, and we have talked about this too, though, that there is this– it is kind of human nature– it’s a behavioral thing where we have a greater fear over loss; our emotions around loss are much stronger than they are around gain. Notice that people aren’t asking the question, “is this thing going to keep going forever?” You know, there are not positive questions being asked. We are really worried about loss, you know, about losing things, especially the more we go up!

Reese Harper: Yeah, you don’t see questions like, “how much money will I make this year if I get in now? Is this a good time to grow my capital?”

Ryan Isaac: Yeah, “isn’t this great thing gonna go on for a while?”

Reese Harper: Another big concept of the last decade, the last seven to eight years in particular, has been the bond market crash, and this idea that the bond market is going to crash. I want to do the same exercise with the bond market. We just did the same thing with the stock market… let’s hit some article headlines that have to do with the bond market starting in 2010, right after the crisis.

Ryan Isaac: Do you want to his a spoiler alert? As of today, December 2017, has the bond market crashed?

Reese Harper: Not yet, but it will.

Ryan Isaac: Okay, so let’s start in 2010. This is from CNN: “Bonds: Avoid the Next Great Bubble.”

Reese Harper: 2011: “Is the Bond Bubble Finally Bursting?” from CBS News.

Ryan Isaac: Market Watch in 2012: “Is the Bond Bubble About to Pop?”

Reese Harper: 2013: “When the Bond Bubble Finally Bursts, a Lot of Investors Will Get Hurt,” from Telegraph News.

Ryan Isaac: USA Today in 2014: “Bond Market May Be More Fragile Than You Think.”

Reese Harper: 2015: “Is the Bond Market in a Bubble?” U.S. News.

Ryan Isaac: And 2016 from Wall Street Journal– your favorite! The one you pay for. (laughs) the exact same title! “Is the Bond Market in a Bubble?”

Reese Harper: I think they looked at 2015 and U.S. News’ report, and they saw that that article played really well, and they were like, “let’s redo it. It’s been a year.”

Ryan Isaac: The SEO on that went really well (laughs).

Reese Harper: That’s great.

Justin Copier: We call that evergreen content, where it never changes (laughs).

Reese Harper: (laughs) yeah, once a year we could run that article–

Ryan Isaac: But it really is true! You could do this.

Reese Harper: And then in 2017, Alan Greenspan on CNBC said, “The Bubble is in Bonds, Not Stocks.”

Ryan Isaac: So how funny is that, because in the same year, 2017, we just read about stock market bubbles from other people, and now this other really smart guy Alan Greenspan says, “no no no, it’s not stocks, okay? It’s bonds.”

Reese Harper: So, who do I pick? The guy that says that it’s not a stock bubble, it’s a bond bubble, or the person says it’s a bond bubble, not a stock bubble? They are both geniuses, and they both have PHDs…

Ryan Isaac: Multiple PHDs; they have spent like 50 years of their lives just studying (laughs).

Reese Harper: Nobel Prize winners in economic research… I had a conversation with a client about this recently– a really successful person who is financially independent, and it has been interesting. They have really wanted to try to get into more sophisticated forecasting and trading, and so they have taken a small percentage of their money and just tried to have some fun with it in the last five or six years, and it has been interested to watch them, because I am the financial advisor for the majority of their wealth, and they have got a small portion of their assets that they play with, basically, and try to see what kind of winners, and you know, knock-the-ball-out-of-the-park opportunities they can find, and in the public markets. I had a conversation just a few months ago, and basically, he came back to me and just said– I mean, because he has had some really great trades, and he has had some really bad ones, too. Some of the bad ones have been, unfortunately, so bad that it has probably washed out a lot of the good ones, and he has had to look back and kind of say, “I probably would have just been better off with something that I didn’t spend any time on, because I’m spending three or four hours a day on this, you know?” But the thing that I thought was most telling about the conversation was that he said, “it’s just really disheartening every time I sit down to read every day, because I don’t know which genius I need to trust, right? Which smart person do I have to trust?

Ryan Isaac: Yeah, these aren’t idiots writing these articles; these aren’t uneducated people with no experience.

Reese Harper: Yeah. So we just gave you an example of every year from 2010-2017 of basically the same message repeating itself over and over in stocks, and the same message repeating itself over and over in bonds, and in many years, those two messages conflicting one with another, from smart people. Ryan, what would want to say to everyone as kind of your parting thoughts? And then I’ll give mine on this issue. What would you want people to take away from our little exercise, here?

Ryan Isaac: Yeah, well I was saying this earlier. I think it’s tempting to feel that what we go through right now, what we are experiencing right now, the questions we are asking, the emotions we have around our money and our investments as of today, always feel like it is the most urgent, different thing, you know? So when we get questions about, “is this thing about to crash?” and “I think this thing is as high as it’s going to get, and it’s time to be careful,” or new clients saving for the first time, saying, “I’ve got half a million dollars of just stuck-in-business checking… is now really the time to start investing? Because I think it’s at the top, you know?” I think the first message that I would want people to just realize is that that question, that feeling, that sentiment, has been pervasive across every year; it happens every single year.

Reese Harper: You’re not alone.

Ryan Isaac: You’re not alone! It’s not a new feeling. The right way to look at it is to look at your individual situation. First, get extremely organized, you know? Know what your goals even are; know what short terms projects you have coming up.

Reese Harper: When you mean, like, what your goals even are, what are you talking about?

Ryan Isaac: Yeah, I’m saying, if you want to expand to a new building in the next three years, then you should know that one of your highest priorities isn’t timing the stock market… it’s being ready to have a down payment for your building, and your practice to move. If your goal is to cut back and bring in partners into the practice, and work less ten years from now, that’s a whole different goal too. So I’m saying, becoming very very organized to understand where you’re headed and what you want to accomplish, and how different parts of your balance sheet help you accomplish that. Whether it’s short-term money for the practice, or three-year money for the building transition, or it’s ten-year money for when you want to start living on this stuff and cut back, understand how those things fit in way before we give too much credence to stock market predictions every year, because they are not new; they are not new.

Reese Harper: What about people who really don’t have a big transaction in their future, and they are just wanting to get to a point where they are like, “look, I’m planning for retirement now; I don’t have a transaction I’m thinking about.”

Ryan Isaac: I think that’s even better! It’s more simple, you know, because then you just know that if your timeline is long, and you can get a little education around how markets work, and what kind of expectations to set, you should know that the markets will go down. These things will come true, but if you are trying to plan–

Reese Harper: By “these things,” you mean all these quotes that came in the–

Ryan Isaac: Yeah! The market will– I mean, a crash, technically speaking what people would say is 30% or more, in a whole lifetime, you might see that two to three times, you know? A 20% bear market correction, you will see that a couple times in a decade.

Reese Harper: Is it ever hard for you when you are talking to a client, and they have a big lump sum of money that has been sitting in cash, and they are like, “I’m just planning for retirement now, should I put all this money in the market?” Is that ever a hard thing for you to say, “yes, that’s the right thing. Start investing your money now.”

Ryan Isaac: I set the bar really low (laughs). I am going to make sure that– just know that it is totally possible that the very next day after this gets invested in the portfolio, this thing could go down 20%; it’s totally possible. But if you have invested in a way that could go down 20%, it means that your time horizon is pretty long, you know? We have thought about how long it is until you need this money, you know? And if you are a saver, if you have a savings rate that is appropriate for you income level, then kind of hope for– especially if you have a long period of time– you should probably hope for some of these down times while you are in your savings part of your career, because that is just going to allow you to buy more stuff at cheaper prices.

Reese Harper: Well, I love it. Thanks for taking the time to go through all these this morning. I think we should just leave everyone with that kind of hopeful message that if you plan effectively, and really measure the point in time in which you are going to need each one of these buckets of money, you can invest it the right way and have confidence that even as the market declines, the part of your portfolio that is declining, you didn’t need to touch for a long time anyway. But a lot of people listening probably aren’t invested properly, and they probably are not invested in a way that will allow them to go through a cycle like this effectively. How many people do you see in their mid to late 50s, or even early 50s, whose portfolios are not invested in a way that will allow them to weather a storm like this?

Justin Copier: Ooh, weather a storm! Nice, it came full circle, here.

Reese Harper: I think that there are a lot of situations where, to a lot of people listening, it feels easy to just go, “well, I’ve just gotta ride this out.” But even though we are saying that that’s the attitude someone should have, the reality is that the way most people’s portfolios are constructed, they are not built for that right now, and you will get stuck in a pretty dark situation if you haven’t invested your portfolio conservatively enough, and broadly diversified enough to where you have exposure to enough asset classes, to where you will be able to effectively weather a storm. So I guess that is my message, is to make sure that you don’t listen to forecasts from other people who are smart around financial markets; it is not the same as going to Dental CE. And make sure that you talk to someone regularly; I would recommend getting a second opinion on your portfolio if you have any concern about the advisor that you are working with, and their ability to actually understand these concepts. And sometimes, financial advisors fall into the biggest trap of making these forecasts themselves; you will see financial advisors who will permeate these myths with their clients, kind of unintentionally, thinking that’s the value they are adding to the relationship is forecasting the future, and helping clients avoid these crises, and in reality, they are just putting their clients in an even riskier situation than they would have been without them.

Ryan Isaac: Yeah, unfortunately, that’s pretty common. Alright, thanks everyone! Thanks Reese. Thanks Q. Thanks everyone for joining us today. If you haven’t already, go check out the Dentist Money™ Show on YouTube; you get the experience of listening to it and watching it at the same time, it’s very fascinating. If you like what you hear from us, and you feel like you are ready to have a conversation, go to dentistadvisors.com. At the top of the page, there is a link to our calendar; you can schedule something at your own convenience; we will have a conversation about your current situation. as Reese mentioned, we are happy to look at what you are already doing with a financial advisor, with a portfolio that already exists, have a conversation about your goals, and how we can help you to build wealth faster. You can also give us a call at 833-DDSPLAN, and thanks very much!

Reese Harper: Carry on!

Behavioral Finance, Investing