Sometimes it can feel like it has become empty to say ‘look at the glass half full’, but in the stock market being optimistic, quite literally, pays. Jason Gabrieli and Tyler Reedman discuss how far the market has come since its bottom in March 2020.
Tune into this episode to learn:
- How being optimistic about the stock market can be quite profitable for you.
- The mistakes everyday investors make after the markets go up.
- What would have happened if you invested money when the markets were down.
[00:30] Episode overview: going from the bottom to the market to the top of the market.
[01:24] March 2020 was a scary time to be an investor.
[02:40] How long did people think the markets will stay down in 2020? (Poll results)
[03:56] How being optimistic about the stock market actually pays.
[07:01] Paying more attention to bad news than good news (are you guilty of this).
[07:23] What would have happened if you invested $1 at the bottom of the market?
[09:13] The mistakes people make after experiencing a strong bull market. OR Do you actually know what you’re doing in the stock market or is the market just up?
[10:29] What is a pessimistic investor like (and a way you can reduce negative feelings when looking at your portfolio)?
- “Optimism pays when it comes to investing because, most of the time, markets go up. The stock market is up roughly 3 out of every 4 years, on average. Over the long-term, optimism as a strategy is nearly impossible to beat. This is why buy and hold is perhaps the greatest strategy ever invented.” - Ben Carlson, A Wealth of Common Sense Blog
- Markets can go down much faster than they go up. However, the best way to remain in the market long term is to maintain your optimism so that you can maintain your stamina.
- According to Bloomberg, if you look at all the one year periods from 1915 - 2021, the gains in the period of March 23, 2020 - March 23, 2021 are only beaten in July 1933 and March 1934 which is the period of recovery from the great depression.
- The 2020 recovery period was kind to all kinds of stocks, not just large stocks. It almost did not matter what you were invested in, stocks grew highly.
- When the stock market does really well, people think that they are doing the right thing, picking the right stocks, and entering at the right times when in reality it can just be that everything is up in the stock market.
- Our brains often tell us that what goes up must go down. However, the stock market can keep going up even after hitting all time highs.
- Losing things makes you feel sad twice as much as when you feel happy when you gain something. Keep this in perspective when checking the value of your perspective.
Of Dollars and Data Article with the Poll: Buying During a Crisis
A Wealth of Common Sense Article: The Power of Setting Defaults for Optimism
If you have any questions or topic suggestions email us: firstname.lastname@example.org
Connect with Tyler Reedman: LinkedIn
Connect with Jason Gabrieli: LinkedIn
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[06:14] “There’s a saying that I’ve heard before that says that ‘markets go up on an escalator and they go down on an elevator’, and I thought that was funny just because it seems like this past year we never really got off of the elevator and on to the escalator” - Tyler
[07:07] “If you’re not optimistic about the future, what’s the point of investing in the first place?” - Tyler
[08:48] “Most people look specifically at the S&P 500, right, it's one of the most commonly talked about indexes composed of large US companies, if you don’t know, but it really didn’t matter that much what you were invested in. You could have been in international stocks, small stocks, micro capped, mid caps, growth companies, value companies, since March 23rd virtually everything has been up. Virtually all asset classes have been up and that’s wonderful, right? People kind of needed this recovery because it couldn’t get much worse than what it really was but at the same time now everybody feels like they know about the stock market.” - Tyler
[10:29] “We are starting to hear a lot of people and a lot of pessimism kind of creep into the picture. It's that feeling of things have done so well so far, how can it continue?...The fact that it (the stock market) is at an all time high, doesn’t mean that it has to go down”. - Tyler
[13:30] “A long term perspective is critically important and benign an optimistic investor is really the best way to put yourself in a good spot over the long term” - Jason