Timing the Stock Market #037

of having like a dinner hang at our house. Yeah, and uh, and I got home and my wife surprised me, like last second, like, hey, we're doing We're doing this. We're going out, all four of us, and we're hiring a babysitter, which we don't normally do because babysitters are crazy expensive. That kind of expensive. But it was so worth it, man, it was so to get past that. It took me a second as well. I was just like, we're doing what I was like, and we're going out?

Is it in the budget? I don't know, but yeah, that was totally worth it. We had a blast. It's fun to like reconnect as as adults, you know, like we've talked about before, how you guys, how we each have a date night. And so one night, you guys, you and Emily will go out and then I come over and babysit your girls and vice versa. Next week

will be me and Kate and we go out. But it's rare that we Yeah, like you said that we all get to get together all for adults and get some good hangs in, you know, have a have a couple of beers and talk about life and kind of catch up without feeling like we have to attend to the children right away. It's nice, man, Yeah, man, seriously, so great. Loved it. By the way, I wanted to tell you that I was like pulling out of work

the other day on my bike. Uh. And the weirdest thing about riding my bike to work is that the only place to park at work is this giant, enormous parking garage and I have to go through three gates in order to like a normal car. Yeah, exactly, it's so weird. And uh, I was pulling out the other day and taking taking my bike down the amp and I pulled up next to a guy in his car. Uh one of the sales guys at work, and he said, uh, Joel, I don't know if you heard this, but they actually

make cars now. Um, just like kind of making fun of me. Was he joking at all or was he just kind of was he actually giving a hard time? I think a little bit of both. You know, It's kind of one of those jokes that I kind of wanted to say something. I just sped off because he had to wait for the lift gate to go, but I kind of wanted to say something about the fact that he Yeah, I kind of wanted to say something about the fact that he would be sitting in traffic

for quite a while wait home. Well, I was completely avoiding it, but I did not. I was hoping that he would have sped off first, and then you would have ridden up and just like punched a slide view mirror off, like zoomed off off the sidewalk or something like that. I'm not against a little bit of social disobedience here and there, but that probably wouldn't be cool to a co worker. But I just, you know, I wanted to say that not everyone has to be into biking.

That's totally cool, and I know the guy was probably pretty much joking but no offense taken, right, But like, you don't have to be into biking, but you know what, instead of knocking it, give it a try, think about it. Uh. And that was again, Matt, that was the first episode we ever recorded, because you and I think biking is really important. We think it's important because it's good for your health. It's good exercise, right, it's good to get you out there in your town. There's like so many

reasons that biking is a social community aspect of it. Yeah, you're more connected with your neighbors. And of course it saves you money as well. The cost operate a bike as compared to a car. You can't compare the two bike contests. Bikes are way more affordable as far as that goes. Man, I hope he's listening right now, buddy. Yeah, I just I wanted to get that out there. You

don't have to be a bike lover. But if you're not currently riding a bike or and you haven't thought about it in a while, and you haven't listened our first episode, maybe you're a more recent listener to the show.

You just kind of started listening. Consider listening to episode one and thinking about how great bikes are, because I gotta say, I just kind of felt bad for him that he had to sit in traffic on the way home in this box that like makes your back hurt and stuff like that and you kind of hate life. And for me, I mean, I was getting fresh air

and enjoying this ride home without sitting in traffic. And so I just want to let people know, think about listening to episode one if you haven't heard it yet. What if he was driving to his gym to sit on a bike station, Like, what's what's the fancy exercise bike? Now? You see guys peloton? Yeah, I think it's like folks are getting them up for their houses now. It's like the new It's like the bow flex of the twenty

or something like that. But you know, I would be willing to guess that maybe half the people from your building are leaving too, and maybe going to drive somewhere to go work out, going to a gym, or going to do cross fit, even which is great, it's awesome, but still you're driving there. Why not combine the two and save money and do something that's better for your city? All right, Matt Beer for the day that you and I are going to be drinking was sent in from

a listener. Kevin in North Carolina sent us a few awesome beers that I'm super excited to try, and the one that we're drinking on this episode is Heist Brewery Uber Quenchal imperial I p a Quenchell quench All. All right, so let's keep it a crack, hey, Kevin. Two things, First of all, you rock, And second, shoot me a message on Twitter to let me know how many beers you sent Joel to make sure he doesn't like save three or four of these in his beer seller is

the only one he said. Sorry, yeah, I believe that. But bhil, Kevin, thank you so much. We really appreciate it. We're gonna enjoy this as we talk about timing the stock market. But we're gonna save our tasting notes for the end, so stick around for that. That's right, Matt, So timing the stock market. The first thing I thought of, Matt when I was thinking about timing the stock market that timing the market is like the equivalent of being

a Miami Marlins fan. And you're gonna have to explain the sports to me, buddy, because you know, I want to watch soccer, So all right, I got you back here. So the thing is that Miami Marlins have been essentially terrible pretty much got their whole history. They were an expansion team that launched in like the nineties, and they won a World Series in and I think in two thousand three, So they've won two Worlds areas randomly, but

they're these like super random occurrences. Other than that, they've just been really bad and they are always every time they do have a good team, they essentially sell off all their good players the very following year. And so being a Miami Marlins fan, let's say you're jumping on the bandwagon, you don't know when to route for them because you don't know if they're gonna be good that

year or not. You don't know if you're gonna pick that random good year where they're actually gonna do something meaningful, you know, in the sport, or if you're just gonna be are along for that terrible ride of many years where they're just completely awful. Yeah, So what you're saying is that it's completely random, uh, and you can't plan for it, right. I guess what I'm trying to say is you don't know who the man, what the management

of the Miami Marlins is gonna do. You don't know if it's gonna be a good year or it's gonna be a bad year, And so you have to be you can't just be a bandwagon fan. And just like with the stock market, right, it's really hard to decide I'm gonna jump in now. Now is the time? Right? So we're gonna kind of go through a thought process of why timing the market is actually ultimately more harmful

to your portfolio. And just like being a Marlins fan, you kind of have to be in it for the long haul, through thick thin to catch those good years, right, And the same thing, you don't know when they're going to show up, exactly stock market, similar kind of thing. And we'll get into more reasons why all it is that our friend Patrick got himself on Marlin's hat when they rebranded and kind of did that whole sort of South Beach to look with the new colors. Has he

burned it yet? Was that like five six years ago? Yeah, something like that. Had they been good since then? Okay? Because I'm pretty sure I remember that year because I watched some baseball back then, but I remember there being reports and shots from the stadium and it was like completely empty. Yeah, that's not about right pretty much. They're one of the worst attended teams in all of sports.

So the stock market is actually kind of like the opposite of the Marlins though right Like, so essentially, the stock market does well most years and there are only a few bad years where the Marlins, right, that's the exact opposite. And the question right now is, well, the stock market is up, and a lot of people are wondering if if it's time to sell, or like it's

too hot, should get out of the kitchen? And the other question people are asking is how can I put more money into the stock market because it's had a fever pitch and they can only see things continuing to go up at the same I'm right. And so another reason we're talking about this as well is because you'll hear in the news how we're entering this long period of growth that the stock market is seen. And what you've heard is that we're in a bull market where

the market has been growing. And so it might be worth mentioning to the difference between a bear market in a bull market. A bull market means that stuff growing, stuff doing awesome, prices are going up. It's a good time to own stocks in a bull market, whereas a bear market it means things are taking things are going down. And the reason behind that too is is they say, is that like when a bear fights, like he's got the call out, the close up, and he's like swiping down,

whereas the bowl like lifts up with the horns. There we go. So that's like, I guess that's how you're supposed to remember it. That's some nice insight. That's why I keep you around here, buddy. That's pretty good. It's pretty bo bull market versus bear market. Yeah, so people have been thinking, right for a few years now at this point, and we've been in this bull market, and

match just explain to you what that is. It's just essentially this rise in stock prices, and we've been in one of the longest prolonged bull markets in US history. But yeah, the longest as of a few weeks ago. Yeah, so it's been like ten years almost tonight and a half years, and so people are thinking, well, they can't markets can't keep going up like this, can they? So maybe I should sell or on the other side, there's this boundless optimism that what goes up must keep going up,

which is not scientifically possible. And so the answer is no. Corrections are always inevitable. But the answer to whether or not you can time the market is also no. And so let's go into that. Here's a quote from Peter Lynch, uh really savvy investor who worked for Fidelity for a lot of years. He said, far more money has been lost by investors preparing for corrections or trying to anticipate corrections then has been lost in corrections themselves. And I

think that's really a stoop point. So if you are in that place where you're thinking, man, I think things are about to drop, and so I should position myself a little bit differently in order to time the market well so that I can then reallocate after the dip

and do even better right with my investments. Well, I think or Lynch's advice here is something we should all take into account that preparing for a correction or trying to anticipate one and getting in and out of investments is actually going to be a place that will ultimately hurt us in all likelihood as opposed to help us. Yeah, Man and Peter Lynch. He used the fund manager for Fidelity of the most successful mutual fund in the history of the world, where for thirteen years he'd be a

big deal. Yeah, that's huge man. For thirteen years that fund was earning over So this guy, he knows the stuff, he knows what he's talking about, and even him and that's the cool thing. You know. We're gonna refer to Peter Lynch and we're gonna refer to Warren Buffett in this episode. And those two guys, two of the most

successful investors of all time. They seem to say the same thing about timing the market and about a lot of other investing strategies, but in timing the market, they both seem to say, no, it's not a good idea. That's right, man, you can't time on the market. And honestly, that's the opposite of typical behavior. Investors are attempted to buy more as the market rises. They'll do that thinking

it will continue at the same pace. Like we mentioned, there's a sort of a fear of missing out fomo effect, and this leads to an opportune buying and selling and almost always ends with a bad result. So that makes me think of this Matt. Back in two thousand nine, one of my co workers was super nervous about the stock market. Right, we were pretty much bottom of the barrel, and oh yeah, things have been taking for for years. Completely we lost the stock market had lost its value.

That's called a bear market, yes, And so my co worker was super worried, even though he's relatively young, right, he was in his late thirties, and he was nervous that what am I gonna do? Man, all my you know, investment portfolio. You know it's halfway gone. What am I? What should I do? And you know, I told him, stick with it, You'll be fine, and we'll post a link in the show notes to a graph that kind of helps you actually see and visualize. It was really

helpful for me. The history of bowl markets and bear markets, and the bowl markets are usually pretty long with lots of growth in the bear markets are usually pretty short with you know, certainly an impactful amount of losses, but they don't usually occur for all that long, and the losses aren't nearly as steep as the gains are in the bull market. But so I talked to my friend. I was like, no, listen, stick with it. You'll be fine. This is a long term play. You know, you shouldn't

reallocate any investments right now. He didn't listen. He sold a fair amount of his equity of his stock investments and decided to go into cash. And the tough thing about that is you don't know when to put it back in as the stock markets going up. Are we out of the bear market? Are we in the bull market now? I don't know, because it's easy to see now right where we what happened, But it's really hard in the middle of it in two thousand nine to

know when to put things back. And so ultimately that came back to buy him, and he missed out on a lot of the run ups of the bull market. And if you pulled out at the bottom, I'm sure he was afraid to, like you said, buy in, and so he was probably missing out on a huge gains and huge growth over the next couple of years. Yeah, completely, And just missing out on a few months or even a couple of days in a bull market can have

long term adverse effects on your investment portfolio. And that's why we think timing the market is such a bad idea. It just has these adverse consequences really if you eat, dabble in it, or try it at all. Yeah. Man, it makes me think of the thing that like mutual funds have to say where they say, like past performance is not indicative of future results, because that's the mindset that consumers, well I say consumers, but investors. But maybe we are kind of going into it with like a

consumer mentality. But you see something taking or you see something skyrocketing, and you think, oh, that's just what's gonna always happen, you know, But again, yeah, that's not the case, and you can't time it. Warren Buffet has got an awesome quote where he says, my favorite time frame is forever.

And that is so incredibly important to keep in mind, man, because we're not just looking for the performance of our portfolio of our retirement savings to boost in a particular year or like just this year or just next year. But we're looking at it with a long view. Our goal is for the long term, and what we want to see is our overall portfolio and our overall wealth

to increase. But you know, if there's months here and there and even years where there's a decline that's not something that you want to try to manipulate and take advantage of necessarily because you just don't know what the market is going to do. Yeah, Matt, that's great. So we've kind of established the fact that we think market timing is bad. There's this fear of missing out effect that people get, and so they decide, all right, i'm gonna try it right, I'm gonna sell or i'm gonna buy,

or i'm gonna do something. Goofy, Now let's do it exactly. So if that's not the answer, what is the answer, we'll get into that right after the break, all right, man, So well back from the break. So then the next thing that we want to talk about is what to do next. And the number one thing you can do is to not pay attention to the financial news when they're talking about the stock market because it doesn't matter.

The crazy thing is they want to make it seem like the stock market and what's happening with earnings or it's and all these things they matter and see how to exact stay tuned. There's a seven news cycle for investment news now you know, Well that's their product, you know, and I understand that, like that's what they have to push and to them that's important. However, to you, as an investor at home, that is not important. And instead, what we would recommend that you focus on doing is

something called dollar cost averaging. If you're not familiar with dollar cost averaging, it is an investment technique of buying a fixed dollar amounts of a portfolio investment, so either a stock or a mutual fund or a bond, but to do that on a regular schedule, regardless of the share price. And so what that means then in the long term is that your dollar purchases more shares when prices are low, and then fewer shares when prices are high,

effectively averaging out the cost. Pretty straightforward, right, Yeah. And the great thing, Matt, is that dollar cost averaging actually works out most easily for most people. So for most of us that get a paycheck through an employer, we can have a certain amount taken out of our paycheck every two weeks and we can choose the investments inside to the four oh one k that we, you know, want our money to go into, and we go into that just a little bit more. In previous investment episodes,

in particular, retirement investing is simpler than you think. But dollar cost averaging is actually kind of the default easiest thing for most people to do, even if you don't have a four oh one K through your work, setting up a roth IRA through an individual low cost brokerage company, and that's pretty simple too. And the easiest way to go about contributions to something like an IRA or roth ira is to have it automatically deducted from your checking

account once a month. So, in effect, your dollar cost averaging, whether you're getting it taken out of your paycheck or whether you're getting it taken out of your checking account once a month, you're essentially doing that. You're buying shares at the same time every month or every two weeks, and so there's no need to overthink it. Your dollar cost averaging right there by default, right Definitely. One of the benefits of being employed by the man is having

a steady paycheck. One huge downside being self employed is that with income being variable, I can't do that because we might have what with my worry being more seasonal. There's periods of time, there's months where I'm you know, we're raking it in and there's periods of time where I don't have hardly any money at all, and so it wouldn't really work out if I had an auto

draft set up. But what I do know is that our goal for the year for retirement giving is eleven thousand dollars each and so I know that if I take that eleven grand and divide it out by twelve months, that's n sixteen dollars that we are setting aside. And but we still have to manually do that. That's the big downside, right, It's it's more of a mental sort of step. You know, there's something about actually having to make that purchase right as opposed to it automatically happening.

There's like there's a mental hurdle there that you have to overcome. Yeah, you know, somebody who has a four one K that they automatically contribute to via their employer. They don't have to overcome that mental hurd They just have to do it once, essentially, set it up and make sure that you know, they're contributing enough to get at least the match and hopefully more, and after that it's done right. It just happens every two weeks and

they don't really have to think about it. That's the that is the beautiful thing of of the four oh one K, And I feel bad for people that are self and bloy. It takes a little more discipline to make it happen, you know. Yeah, there's a slight temptation there to think, oh, maybe I should hold off. Things do seem kind of crazy right now, you know, like there's like you said, there's that hurdle. Yeah, it just

kind of sucks. So let's talk about the four biggest reasons the potential screw ups that you can make in trying to time the market. The first mistake that you can make is when you try to time the market, you have to get it right, not just once, but twice. And that's really difficult. Let's say you've got a hundred thousand dollars in your four oh one k right now,

and you say, man, it looks really hot. I think I'm gonna bed on the stock market not doing well over the next year, and you decided to put all your holdings into cash. Well, let's say the stock market does have a little bit of a decline. It's really hard to know when you're at the apex or the trough of a market. So trying to time it just once, but that's really hard to do. But trying to time

it well twice, man, that's even harder, that's right, Chell. Secondly, missing out on certain days, the few days where the stock market does make some major gains, you can miss out on a huge amount of growth in your portfolio. The market doesn't just gradually increase over the course of the year. You know, it's not slow and steady. There's huge ups and there's huge downs a lot of times

in over the course of the year. And if you're sitting out during those few days where there are pretty huge spikes, you're gonna be missing out, like I said, on a lot of growth. Yeah. I mean, if you're out of the market for just ten days out of the year, of the ten days out of that year that have the highest gains, you can actually end up losing money that year in in the stock market, Like if you had the worst timing in the entire world, right, right, right,

I feel bad for that guy exactly. Yeah, you're the dude who backed out on the day before the spike and then you put your money back in and then it went You know, it's just a terrible if you're doing everything wrong man, stop right. It's just amazing though that so much of the progress of the stock market

happens on so few days during the year. And so if you decide that you're gonna be cute and try to time the stock market, well, if you miss out on one or two of those days, well that could be a big loser for you and actually have really long term implications because of the way money works over time. And plus you just feel like a dummy exactly. And the third point, Joel is somewhat related to missing out on the gains, but the opportunity cost that's associated with that.

And so the SMP goes up roughly two out of every three years. And so if you have sold at what you suppose is the top and you're sitting there with cash you want it to be liquid for some reason, you are losing out. You're missing out on those gains, uh those two out of three years. The thing is is that you don't know when those two of the three years are going to be and so to think that you can time it and that you know exactly when the market is either going to plateau or when

it's gonna start dipping again, you're fooling yourself. It's almost like thinking that just because Roulette wheel fell on red eight times in a row, that it's going to be black the next time. Right, there's still a fifty each time. And investing in the stock market is not gambling, You're you're maybe we should have said at the very beginning, it's not gambling. You're investing in American capitalism. You're investing

in American company, So it's not gambling. But in the same vein, you don't really know where the economy as a whole is going. None of us do. None of us are really smart enough to say, you know what, next year, I think is going to be a bad year for American capitalism as a whole, And we don't really know the things that are actually going to trigger decline in the stock market. We could continue to see another bowl market for two or three more years. We

just don't really know. But then all of a sudden, something could happen in regards to diplomacy or tax law or something else that's like super wonky that I don't even understand or that we have zero control over completely. Yeah, and so those kind of things can happen and trigger a bull market, But I don't know when that's gonna be.

I don't know what the trigger is going to be, and so I just know what history looks like with the stock market, and I just see that the opportunity cost of potentially sitting out thinking that I know better and can time the market is actually a fool's Errand I mean, I think it's a good point that you brought a gambling because on the flip side of the coin, timing the market is gambling. It is speculation because you

have no clue. I love what you said about investing in the stock market is investing in our country essentially, Like you believe in the companies and the ingenuity and the progress of our nation. And we have ups and downs as a country, but overall we're optimistic and we believe that we've got great things ahead of us. And that's what you invest in when you invest in the stock market. Yeah. Completely, last thing on potential screw ups when trying to time the market. Timing the market can

lead to tax triggers. So let's say that you are not inside of a retirement account, but you're investing in a brokerage account. If you buy and sell stocks inside of a brokerage account. Those moves can trigger tax consequences whatever vehicle you're using to invest, make sure you know the tax consequences of buying or selling stocks and bonds inside of that, because rebalancing, selling and buying can actually end up generating a tax bill for you at the

end of the year that you weren't expecting. That's right, man, and taxes suck. We're gonna take a quick break, but right after that we're gonna touch on how we like to invest in the stock market. Alright, so we're back from the break, and now let's talk about how we invest. A more passive approach is better for your money, it's

better for your portfolio, and it's way way easier. Try to imagine trying to time the market and all the time and energy that goes into that versus spending that time with your family instead, or if you want to be productive, take that time and actually build something. You know, like we just talked about side hustles a couple episodes ago.

Pursue something that you're passionate about, something that you can see uh scale, where you're helping people and that you're able to provide a service for people that's something I would much rather spend my time on versus sort of staring at the charts and thinking, Okay, is it time to sell? Is it time to buy? Who the heck knows? Yeah? And that's the thing, Matt, we don't know, right, and Warren Buffett, Peter Lynch, these investors that are essentially like

the Barry Bonds and Hank Aaron of investing. Sorry another sports reference, Um, I know those guys. Okay, alright, good say Babe Ruth and Babe Ruth too old old Babe Ruth and Mickey Mantle. There we go. Yes, So these guys are essentially, you know, the m vps in the Hall of Fame of investing, and and they're saying, don't time the market. They're saying, do as I say, not as I do. Well because they know how unique they are.

And I think that's why small time investors like us right can have a hard time just sticking with dollar cost averaging, where you you're just sort of following a schedule, or you're not even thinking about it, like you said earlier, you sort of you said it and forget it, or you just follow this monthly schedule where you know that you're setting aside this much money to invest. The reason that's not appealing is because it's not appealing, right, It's

just not exciting. It's not at all sexy. You don't strike it rich quick like that, right, Yeah, there's no there's no excitement at all, and it's just boring and dull. And that kind of flies in the face of the American mindset of I'm gonna start this new company, I'm gonna have an I p O. Just all these sort of fancy financial things that you think, oh, that's how

you get rich. Oh, real estate, you know, Like we talked about real estate a good bit, but it's not in the sort of speculations, get rich quick sort of mentality. And I think that's why dollar cost averaging suffers is because it just doesn't seem like this fun thing to do, because it's not it's not cool. It's not cool it's all at all. And and so much of America is the sort of rugged cowboy of like, I'm gonna figure this out on my own, you know, like like going

and going into it with that mentality. What if we can get like Colin Kaepernick to do a commercial for dollar cost averaging with that help made me make you cool. I don't know. We'll just say, just do it dollar cost average. Just do it right. Yeah, I mean, for me to one of the best reasons for dollar cost averaging is that it's easy. And I'm kind of lazy, and so the fact that I can set it up once and just kind of let it go right start investing,

it keeps going. Money gets deducted for my paycheck and from my checking account every month or every two weeks, and it's gone. Like there's something really nice about that about not having to actually do much myself, and for me, as a slightly lazy dude, I really enjoy that. I really like not having to think about it, and I think like that's another really good reason for people to

consider this do it the easy way. I love the idea that you can be building wealth over the long haul without actually taking much action, right, without actively having to think about it, and without it taking up mental space. Yeah, this is something we've talked about, man, Like how the more responsibility we have, the more limited bandwidth that we have,

at least me. You know, I'm speaking for myself for sure, but I've just got so many other sort of things going on to think that like, okay, I also now have to keep in mind with the stock markets doing and with the financial news outlets are saying, these aren't things that I need to be concerned with, you know. And and my energy and my efforts in my time are much better spent doing other things, especially the things that only I can do, like be a father or

a husband. You know, I'll take care of your kids. Oh, I know you will. Yeah, man, I think too. If we've been watching CNBC or these financial channels, reading some of these financial outlets enough, we start to think that they're discernible patterns that we can make out in the stock market, and we start to think that we know more than we actually do. And timing the market can

often be an emotional decision that cloud's good judgment. And ultimately the fact is slow and steady wins the race and it's a way easier and I love that it, dude, what's not to like? It's better results and easier. I love it all, right, Matt. Back to the beer. Yea again, this is Heist Brewery. Have you ever been been up to Charlotte to visit any breweries before? I don't know

what their beer seems like up there. No, they actually have a decent spot in the airport where you can buy some beers, and so I do remember like snagging a can of something last time I was in the Charlotte airport, but I've never actually been to Charlotte to do some brewery tour. So I was really really excited that Kevin from Charlotte ended up sending us some of these beers. And man, this Heist Brewing double I p A was really really good. Man. It's a bigger beer

at eight point two percent. It's got that hazy New England style to it, so it's got that sort of sharp hop character that I love so much. But at the same time, it doesn't finish out too bitter because it's kind of got that juicy, juicy freshness to it. And it's yeah, most definitely my favorite I p A style right now, maybe even my favorite beer style at all right now. I feel like it's the beer style of which I could drink every night the most of Yeah, exactly.

I think it's probably not my favorite overall beer style because on those occasions where I have one of my favorite styles that's hard to come by, I love it, but I could drink, you know, one of beer like this every night and not get tired of it. This this one was no exception. It was really good and if they were close to me, I would totally add it to my weekly lineup of Hazy I PA most definitely thanks a lot, Kevin, We appreciate it. Man. Alright, Matt,

final thoughts on timing the stock market. I just gotta say, there's been so many articles because of this raging bull market we've had. It's it's historic history. Right now, we're in the longest bull market that there has ever been, so there's there's a good reason to pay attention to it, and everyone's got an opinion. Everyone's got a reason to

buy or a reason to sell. And that's kind of why we felt the need to make this episode, because if you're listening to the financial news and the opinions of people on TV, then you might decide now it's the time either to buy more stock or to sell what you've got. And the answer to that is no, you shouldn't be timing the stock market. It's a bad

idea for a lot of reasons. Instead, you want to be focusing on dollar costs averaging and the reason for this is because you can't predict the market, and so, for instance, if the market is high, you might think that you should go ahead and sell because you want to buy low and sell high. Right. However, what if the market continues to rise, you'd been missing out on all of that. You can't predict the market. So the easy approach is a passive approach, where you set it

and forget it. Where you make your contributions recurring thing, whether it's in your four oh one K, through your employer's paycheck every two weeks, or you have a recurring deduction from your checking account into an i RA. Either way, the passive approach is the best because you'll be dollar cost averaging by default, and you won't be tempted to be swayed by the financial news and make an emotional decision that could impact your long term wealth building in

a major way. Slow and steady wins the race. That's right man, All right, everyone, thanks so much for listening. Our home on the web is how to money dot com. And if you are listening right now and you like what you here and have found this podcast helpful, please let us know. You can give us a review on Apple Podcast or wherever it is that you are listening to your podcast, and definitely be sure to subscribe. All right, Joel, Until next time, Best Friends Out, Best Friends Out,