Hi there. My name is Avil Beckford, and this is the latest episode of The One Problem podcast. Now, as you know, there are tons of problems in the world. But why should we get overwhelmed? We're going to take them one problem at a time. Most of the guests that have been on this program, I have some sort of prior relationship with them and this week it's no different.
She's another Ellevate sister. I'm always so delighted when they come on this podcast with me. So today you'll get to meet Shelley Nadel and she empowers women to take control of their financial destiny. Over to you, Shelley.
Shelley Nadel
Great. Thanks, Avil. I appreciate it. So let's get right into it. Our problem we're going to talk about today is how to deal with the volatile stock market. It can be a really scary time. So I'm going to give you a few practical tips on how not to get overwhelmed.
The first rule is, don't panic. You always make bad financial decisions when you're panicked or stressed out. So if you see the news, and it looks awful, just take a breath. Don't decide right there because inevitably, if you decide when you're panicked, you're going to make a bad one.
The second tip is I want you to stay informed. I don't want you to put your head in the sand about what's going on in the economy here, really in the United States and across the world. But I don't want you to obsess about it. You literally could spend all day looking at different news sources and every person, every prognosticator, is going to pretend they know what's going to happen. Here's the dirty secret. Nobody knows what's going to happen. I don't know what's going to happen this afternoon or tomorrow in the stock market.
Shelley Nadel
I have no idea and I don't pretend to know. All I can say is if you have good strategic planning in place, you'll be able to weather the storm. So don't obsess about it. You want to pick one news source. Make sure it's not extreme on either side. Get your information, process it, but don't spend all your time on it.
Third, this is really important. I have clients all the time who say, “Oh, I lost this much money or this much money.” You have not lost. It's a loss on paper, but it's not a real loss until you have what's called a realized, until you sell. So if you own a stock, let's say you own Amazon, and Amazon was down, and you didn't sell it, and you waited, and it went back up, you lost nothing.
So it's very important that you understand what a paper loss versus a realized loss is. Understand the difference between what it means for your financial future.
Next one is something you hear all the time, but it's really important. Buy low and sell high. So this actually combines with another tactic, which is you have to have a firm buy and sell discipline. Now, what does that mean in English?
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Shelley Nadel
It means that if you're going to be an investor in the stock markets; you need to decide what you're going to buy and when you're going to sell it. When a stock gets to X price, I'm going to sell it. And even if it shoots up, don't fall into the trap of, “Oh, it's going up. It's going to go up so much more I can't sell. It's going to keep going up and up.” No, decide what you want to make on that stock when it hits that point, sell.
The same thing. After you sell, the next day it goes up again. It doesn't matter. You sold, you did what you wanted to do, what you needed to do. Same thing with the buying. Buy at a low price. You want to make sure that when you buy, you buy it at the lowest price. Now, again, I told you in the beginning, I don't know what the lowest price is going to be. I don't know what the market is going to do. Pick your price, what you're willing to buy at, and don't vary from that.
And if you, “well, it's at my price, but it's bound to go lower tomorrow. I'm going to wait till tomorrow.” I've had clients go through this and torture themselves. Decide when you're going to buy. Decide when you're going to sell and stick to it. That's how you're going to be successful in the market. So you're buying low, and you're selling high. You hear terminology.
Shelley Nadel
The next trick is to make sure to look at a bear market as an opportunity to buy at a discount. So this is what I mean. In a bear market, the term literally comes from the fact that bears pull down their prey to capture their prey and have a good meal. So that's what a bear market means. It means the stocks are going down. In a bull market, a bull goes down and horns go up to get their prey.
That's what a bull market is. I know it sounds ridiculous, but when you see the bull in front of Wall Street in New York City in the United States, you see a bear. That's what they're saying. That's how they came about. I know it sounds kind of silly. But the point is, we have a bear market right now.
Stocks are cheap. If you can, it's like going to a huge sale at your favorite department store. Let's face it. If your favorite dressmaker – the dresses are on sale for half price, you're going to go out and buy them because they're at a discount.
Shelley Nadel
So the point is, a bear market is not necessarily bad. And a bear market is part of an economic cycle. It is normal. It's scary, but it's normal. So you will not panic. You're going to stay informed, but you will not obsess. You only lose if you sell. So just remember that you're going to buy low and sell high. You're going to look upon this market as a great buying opportunity and you're going to adopt a firm buy and sell discipline.
Now, I would be remiss if I didn't say if you have a good financial planner or financial advisor on your side, they're going to help you deal with this. So it's always good to get expert advice. If you can do that, that would be great. But anyway, that's what I have today to help you deal with the volatile stock market. Back to you, Avil.
Avil Beckford
Thank you so much. It's interesting because I've heard about the bear and the bull, but what you did was so visual, and it just made it really clear to me and I got it, I totally got it.
Shelley Nadel
But luckily, I don't get embarrassed easily. So, yeah, I can do stuff like that. You know me very well, you know that.
Avil Beckford
Thank you so much, Shelley.
Shelley Nadel
Thank you.
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Securities offered through Lion Street Financial, LLC (LSF), member FINRA/SIPC. Investment Advisory services offered through Lion Street Advisors, LLC (LSA) and Csenge Advisory Group. Insurance offered through Financial Success Strategies, LLC, not affiliated with LSF or LSA. LSF and LSA are affiliated companies and do not provide tax or legal advice. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed.
