Checking In On The Stock Market (S3E13)

Tuesday, October 10th

Kris & Sheri go over the Status of the Stock Market. What does Bull & Bear actually mean? How do you know what to do next? 


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

You would think it was the scariest thing alive based on how much time the media gives the stock market. But it turns out you don't need to be terrified at all on this episode of her mourning the podcast. Chris gives us a market update right now I'm Sherry lynch I'm Chris Carroll is at a bull isn't impair let's go. Her money is sponsored by Carol financial hi this is in financial financial advisor with Carol financial. Retirement may seem like a long way down the red but Cassini start the better off you'll be in the longer. But you're starting a family. Buying your first hand or simply want some help figuring out where to start join us for our news simply saving series this fall at a Mecklenburg prairie on Tuesday October 24 at 530 we'll walk Petri easy ways to save and things you should be doing to ensure you're on track for retirement. To register for complementary workshop please visit our website at Carol financial dot com it's Carol financial it's retirement simple. Three words that Isa strike terror into my heart votes to keep. It's the sort of thing years of us understand your devers doesn't pay attention to but it's overwhelming an intimidating and we have broken the market down on her mind and podcasts. Before he made it as simple as it can be made but we liked appearing radically checked him on the market especially at a time when. We have so many natural disasters Turkey Harvey her confirm not herky Jose the wildfires in the west. Well we're heading in to that what's going to be the holiday season. What is going on with the stock market that's today on her money the podcast I'm Sherry Lang. So I'm Chris Carroll where are we right now Chris come. As we're sitting here talking we're pre close to all time highs in the stock market. No I'm not so bull market yeah I'm kind of markets are bull markets so do you know why they're called bull markets and bear markets not only win a middle attacks he starts down and thrust up. When a bear attack she starts up and trust that. Shot off fast and why that is so bear markets searched high and comes down. And a border charged lingers well thank you that he's to confuse me here's why. When people would sail bear markets bad I'm like a bear is a mighty first is actually. On an imposing count it and we can I eat so I don't really get. But now I understand so thrusting up full. Slashing down there were about a market yes or remove bull market there really since the 20082009. Kind of what what people call the Greek recession or something like that now. I don't I don't know if you drive conservatives it was a bad markets I was the last out market. I think you visit as the credit crisis that happened 20082009. Which a lot of us know had a lot to do with real estate prices and a lot get a mortgage catalog of and so you know we we we went through that bad market and we've been in kind of a constant bull market since then that makes this one of the longest bull markets ever. Come. When you when people talk about that increasingly nervous speed kindness and we talked about the psychology of the market move in earlier episodes they may be nervous because they go. Well stock market so high were Moorhead and her crashed that's like saying. This marriage pretty good I guess I'm sure now I love that analogy I've. Why don't you and I really. Don't know I'm gonna use that I love it you know there's just it's it's great because it captures something that I think a lot of people miss some that is. The market's not a backward looking thing it's a forward looking thing range so. I'm mark morneau I don't know it doesn't notice outta the good girl and how well it doesn't know in the last crash was right I mean in the markets a forward looking thing coming in and it's gonna it's constant constant changing. Constantly moving you know what would the market with with the market price today tells you is what do people think the futures don't look like. It doesn't tell you light of the markets here because Tony years ago XY NG happen that's pretty much. The market doesn't know and sent the markets knowledge you wanna diet workers dammit I've been good long enough it's time for gig clink its. No this is old enough of these people that are always so gloomy and they made me nervous I avoid them and that's why are there certain channels on my cable I just closed my eye when we go passive because. There's always someone sitting on their dog seems like it's inevitable appreciate crash I'm. Is it inevitable and I know that the market does site also markets. Opened down it is inevitable I mean if you look at the long term. You know there's there's basically going to be a a major correction every seven years yourself so when I talked to you about your finances what I should be telling you is well. I'm very hopeful that you'll see seven more good economic crashes in your life. Right because that would mean you'd move another fifty years has sounds good to be very kind of you. I mean we are here for eight we do your prayers I'm just saying you know. Some that that's a natural cycle now they don't come regularly get through like kiwi just said the market doesn't know why it's been seven years time to do it great. But over time that's about how the averages about seven years so. If I'm gonna live another fifty years from an in seat seven album may dossier we'll see six foot. Well let me ask you this so I remember the tech bubble. Okay and I remember people talking about the tech bubble and that inevitably detect bubble would burst and it days. Great and I remember people talking about the housing bubble and it did seem to mean that. No one should give me a mortgage for a house that I clearly can forward I understood that noble. What's the bubble do you surely quarter we talking about now is there a bubble. More and it's really hard to assist one this really hard to see bubbles when your income. It's much easier after the fact receivables and a lot of us who remember after the fact. Oh you know some good some said that there was a buffet yeah right Iraq you know I heard this this and that that would have meant there was a bubble. But when you're in it it's usually pretty hard to actually tell it right so. During the tech bubble the rural lot of reasons that people thought that these technology companies or take over the world of now why would anybody get to a store to buy diapers from making get a diapers dot com and get them in our delivery liver. How soon. Who cares is you don't make any money everybody's gonna do this stuff so that you were a lot of reasons during the real estate boom pow but real estate precious never cruised. Right there's not you safer than passion. And write such so there's always some kind of reasoning at the time so I would tell you looking Arab today I don't see a big bubble. But at the same time I'm very conscious of the fact the winner in one it's hard to tell. Com now what are some of the things that are most expensive right now captured me were concerned we're thinking about that one of the things that. That I see out there that you really expensive right now is. I can rental properties multifamily housing softly yeah rider sure and it seems like they're still deemed apologies complexes. Around here right rear where I cash so that's a sign that there might be a bubble and that now. Now bubbles are ever bubbles different you know every bubble. Explodes. Some of them just deflated slowly. Break so. It's entirely possible that the way that the blew a little bit of a bubble that we have been those kind of apartments in rural properties may be just. They they can't sell anymore and they can't renew your mound where it's come down and down and down until it's more reasonable. Well let's talk about the behavior behind the home apartment and because we we didn't suddenly take delivery of a bunch of renters from another galaxy. Re make of the I don't think so here we are like we're all here on the planet living somewhere. On some things I've read say that. The reason for G explosion rental properties is because millennial still wanna buy house's because they watched their parents. I'm get chewed up and spit out during the housing crisis of 2008 that we were just talking about so. Is the uptick and neat what feels like a construction boom in apartment complexes. Is that because millennial cannot live in their cars that they don't want to buy Harrison is sure Foss I sat upon us. I don't I think it's part of that problem ultimately tell it looming put a different spin on our Cape Wind. When we reacted. From 20082009. This housing problem that we happen. Our reaction to try to help everyone get through that that bad economic time was to push money into the system. And so you heard about the Federal Reserve was putting all the money into the system the Federal Reserve list. Growing their balance sheet this was armed I think this was a lot of running your castle window and let you know yeah so they're putting. We say things like to putting money into the system. One way to think about this is that that there's just a lot of new money. It's how the air for people who used to do things now what is what do they not want to do. They don't want you to do the things that caused the last economic crisis. So if you wanted to find money to you borrowed too. Build a spec house to sell. That turns getting harder intervention would do that right because what the problem was people barring these big houses they couldn't afford right. But what people found out was the banks were actually willing to loan money to help with projects that had to do with apartment complexes. Now how would you get them to loan you money which she's due should go to them and you'd say hey mister baker. I want to show use this research report that somebody did that says the armed issues in Charlotte as an example at millennium goals don't wanna Mario is gonna buy houses were all gonna be ranting and with a number of young people moving to Charlotte for jobs and listen. Our local our our local system is going to be 50000. New apartments over the next five years. And I'm going to build 5000 off. Okay. Well well that sounds great you build three apartment complexes sounds like he could lose straight ten you're gonna build 110 of the apartments that that our town needs. The Bagger says that sounds like a great idea and here's the problem. So it's a hundred different people develop that same researcher for two different bankers. And a hundred different people get the loans that they need to do it. And each of them each of a hundred different people who's going to build 10% of the apartments that we need in our city. So that's a 1000% of the apartments that we need diversity are going to get built. Wow. So is that not just trying to. An extreme example let's ensure example but that really is what's happening in our city right now is that you got a whole bunch of different people. That are that are all vying for this growth and apartments in the growth in the apartments is real and that's helped bubbles topic. That's what I was gonna say it does that not when you look at he stepped back from that. I mean it is it is just human nature to give me an inch semi take a mile yeah Simpsons arcade you tell me that on aging baby boomers want upscale assistant living among builds to summon there's one of those on the corner that go there's several from being built right now yeah. And the blood meals don't want to my house is on you if you let me I'm gonna builds until double pop. And then we find ourselves and what crisis what. Ulcer you unity you're gonna do you're gonna be willing to go by a few condos and rent a marcher. Both the millennial former rentals and maybe next time I really couldn't runners. Maybe I should go to GI RL is real estate investor media be Russa investors are buying up a bunch of little condos or rent some of these millennial right so it's. Everybody gets in the mindset right. Now I'm not saying that that's a big bubble I'm not saying it's gonna burst I am saying that. I have seen. The difference between what people are willing to pay in rent persons purchasing right now and it does not make any sense. What is that makes no sense for somebody to rent an apartment. When they can buy pace some move similarly sized Condo. For significantly. Less money per month. Chris don't human beings why do we learn. And how quickly we like that he's. Do you learn languages though remember why are we realize how we learned the wrong lessons you know as soon good goldfish. There's a pirates club the other thing I know do. Here's a fiery emotions say much to do so few of us can learn from other people's mistakes usually we have to make the mistakes ourselves and learn how to really learn from them so it's not like you can tell your kids like. Please never do best and not actually listen to you right he he can't say no absolutely not. I should never never ever ever ever. Rents bottom floor Condo who you know you can unnoticed no one year old and a bell about doing that never remote canyon rim on the sixth floor with no elevators don't do it justice. My view my bonus in Manhattan my non starter Rachel says she's like I have to move out. I have got to be grown up or I'm never gonna leave home so like honey we don't want you to go but if you absolutely since so she gets a job in another city. And dawn stills Nash found an apartment it's great I can have a dog global block. Some like great we're gonna I'm gonna help you move so we drive up their togetherness she showed me pictures on her phone of her apartment Chris this is what she ran it. She rented a ground floor apartment. In a slight depression surrounded by eight foot tall box woods the. Only thing missing was crime scene tape and announcers saying. The only woman has not been seen since Tuesday. I was like sweetie I don't mean actually cure mom or anything but this is and currency debt trap and she could see this. I'm like I told not to render grove apartment yearned for a beautiful girl living alone and look at them don't you see these this serial killer and I'm biased towards. They never listen Chris they don't ever lessons in Maryland so let me ask you a question about the stock market OK I was studying Erica which is always dangerous. But they talk about different sectors Slaton who energy sector in the financial sector and the housing sector. Right now in this bull market that Warren are all the sectors pretty healthy he cleared we see some areas setters that are wobbled. Every every bull markets different serves different sectors respond differently you know. Inner she's one that you can always point out because energy doesn't really move with the wrestle market him who's based on what's going on in the oil markets right now that can be very different to what's going on there wrestled. Now also. What sectors are healthy recently. Technology has been really help the health care's been really help the I think people look to the future and say oh all the best ideas or technology ideas and health care ideas and when your bull market those things tend to do really well. But most most every sector's done OK I mean move them to the utilities have how to we are wrong I think people are Sharon realized that. The future utilities might look very different. Right and if we transition to alternative power can come back to the energy sector rescue lesson. This is something I was wondering about in the wake of hurricane hardy Jason. You know in the all the talk about gas prices rising and we did see gas shortages in parts of the country we did see prices go up. People talking I saw one talking head. Saying you know that it hurt him Harvey could really affect the energy sector stock market and one of the people sitting next to me said. Did the oil comes from like Kuwait so wired they just gals some people because they can. If the group that that's a great response. Oh no boomers started doesn't come from Kuwait that is a very common misconception. Most all the energy all the guys who uses from the US sir I didn't and processed here. But we do imports saw much. But we kind of export some two misses form of the very strange things the countries due to make each other happy is. And you send you some you send me some and that's all right stay out of a wash anyway. Most of the Middle Eastern world goes to Europe. Right I mean that's where most of the kids she used most of ours actually comes from this hemisphere. Which I don't think anyone and each disk. What made her an unbelievably mind blown statement. Because I don't hear from anyone. That basic fact. The idea that we were getting our energy from here who have you know it's always like word on chain down to these wealthy. Six computer wouldn't it. In the middle this you're sure. This is all they have a lot of money and so they are able to control some things for the moon you know much like him very wealthy person they. They can have an impact but most rural culture here about a third of all the gasoline in this country is process in the Houston area. So you know whether it actually comes from there. A lot actors processed or process because you don't hold nice clean gasoline out of the ground and put it straight in your car. Most of us know that rate that. Neurosis about Third World we use in this country that's that that gasoline is actually processed in Houston in the greater Houston area. So that's why a natural disaster there can affect us more it can make gas prices go up it will make. Energy you know the major energy company that has a lot of facilities in in that area would likely go down because they're gonna have to repair the facilities. Facilities will be off Florida. That tends to affect. You you didn't see the flu overall energy sector reacts to. Two recent disasters but it wasn't a huge reaction this is our mind blowing stuff this is. They're a little just a little million. The. So I am I have a friend he's really she's a sales executive and she's unbelievable with money and numbers and everything and we were having lunch and she said. Tight on tires late I was on the phone with my broker Oman concerned that the market is heading for crash until just discussed because of course the market is just scheming villain that way. And and she said so I told my broker removed global bottled water and can I I must've had a look on my face again just slap in the face of the Trout consume it. He means you're not doing Madison oh I'm recording with Chris next week's what if I assume that you may. This past season but I've always been a firm believer and I don't know what I'm doing so letter ride ride right yeah and history tends to be on the side of people. Like me who let it ride is that a true thing her faucet. As such it's an absolute truth thing I mean it's. I actually had this conversation with the students last week and I was I was trying to explain to him that. I think we all know somebody. Who thinks they're like a genius and knows what the market's going to do. But you know we also know that everywhere and thinks they're taller smarter and better looking than they really are. Marianne hearing a hum well if if you think you really know where the markets going then that means you're. You know brighter and more capable of predicting these things in the Ph.D.s from Harvard and MIT and cal can. You know and all of that all about that did spend all of their time trying to predict where it's going to go really have very limited success doing that. I think it's an over confidence thing that he Kathy T it's crazy you think you know. As a as others see them relatively I think I think seemingly sane and rational man. Who is in the financial sector professionally. Are there things that keep you awake admired her for the most part are you pretty neat. Leave you know even when we're having kind of. Bumpy ride. Yeah pretty philosophical. And I'm pretty laid back about the whole thing I think part of my job as a financial professional is not to have big emotional reactions so that would be unsettling. You meet with your financial advisor he's wide. That's Kramer's for the that's Kramer's floors of the heat can be on TV having the big emotional reactions. While people like me can just sort of smile and shin it's OK you know we're either somebody has to captain the ship in the storm and you probably don't want it to be the guys to shoot. Extremely. Honest. If if British Open at socially I think I think I'm pretty laid back in general about how things are going I mean I. You know I try to doing with my eyes open I try to pay attention to things. But I don't think you can have rude degree actions and I think you're crazy if you know what to. Exactly is going to happen in the future when we're at a place like we are today where we've been in this galloping bull market for awhile do you find that you have clients are commune known crests. I'm its common I have both I have learned I come to mean that say. Gosh it's new it's up so much you know what she should we should we get more conservative should read batten down the hatches and have other clients who think. Should we take more risk is god should be nice to make more money because everything keeps going up right. Actually one of the things I try to do is attract or keep a tally of how many have on each side. Of that argument connection Tristan wind too many people here on the same side of us in the wrong. That's into seeing so when you have too many people going yeah let's get in big. Let's give it is probably a good time to actually about no matches little and when you have a whole lot of people who all about down the hatches it's. Probably time to get a little more pressure. So just you know regular people talking and not people are trying to play the mark care pavlik is zillions of dollars you know people with. A for a one case of savings seemed a little bit college savings anything we need to be thinking about looking have focused on as we head into the final quarter of 2070. Million. I think if you need to think about the same things you always seem to think about that is like taking the right of amount of risk. And my constable with what would what would happen to my investments if the market did get down twenty or 25% of what does that what would that mean to me would it change my wife hopefully the answer is always know it wouldn't change your life raise rates. But do this the second question is how I feel about it. If you feel okay see about what you think would happen to all your money in that situation. Then you're probably who can pretty good shape. I think you need to be honest and you need to ask that question on an ongoing basis you know if I look at everything. How wouldn't all be effective if XYZ happened now here's which you don't have to ask yourself you don't have to ask yourself how would I be affected if there was nuclear war. Because if that happens it doesn't matter. Yellows when he in the Brazilian soccer anything Philly matter race how did you of the way of foreign nuclear war in your watching your stocks you know you aren't you or a bad person. Yeah exactly why isn't. Home you know I I don't you wanna make absolute statements but let me do that if apocalypse and you're going towards a month for a one case you know. You can do wary about the. Yes the dude that. There will be an apocalypse is suborbital gonna happen once or don't don't spend too much time planning foreigners and all of farce all of our accounts are going all American. I don't doubt that she's in the eighth GMs not gonna work in and it's you know we're another week you know how to. So you feel on pretty good pretty philosophical. Pretty you know high level headed about where we are now I do I think we're gonna start. See interest rates rise next year tore me team I think that that's going to slowdown in the growth in the stock market. The but there's a whole lot of ways we could slow down growth rate we can get a few years of very low returns that they can do you still be positive. We get a giant seesaw bumpy ride where. It's really bad the really good to really bad the really good I'm not earn you know again I know I'm not Smart enough to predict how little hop and but as interest rates go up that slows down the economy and it slows down the growth of stocks. OK so I I think that we are going to start to see higher interest rates the Federal Reserve has tried to start raising interest rates. They can't raise them too quickly because you can't. He can't GM the break secure already raced out on this fat yeah. You know when you're flying you're concerned yeah race and we're all pretty slow right now CO be careful watch Jim the brakes to water. But I think as interest rates tries picture I think we'll see some see lower returns. I don't think that's something to be scared off I think it's just part of the process. And I think if you know if you wanna go hide under the table that so cave which new Heiden on the table don't pay any. And there's and panic is what creates problems to have seen little whether it's arid you know in real life for with a mark campaigning creates problems. You subscribe if you haven't already crisp itself a killer newsletter Carol financial dot com. It's like the perfect theme for you if you wanna learn more about how money and finance works. But your eyes cross at the father of Reading like parents yeah if you want if you wanna McCain's. Rule update about what's going on in the market or what we see your on when was the last shall we just. And sometimes my emails are just silly little things I mean that's okay to register now one for happy grandparents stay. I was. So yeah I mean this sort of as so I love about it's not even you get a and you can actually comprehend it and digested and take action on it it's Carol financial dot com. And on when I'm not using my incredible ninth grade math skills here at her money dot com. I missed a radio show called the bond insurers so we just released a brand new podcast called. The province very odd cast and you can get bad applause and cheering dot com slash podcast. And everywhere you don't want to podcast that's it for this episode of her money we're feeling very good about it being the bull market in understanding what they call it fat then yeah. Chris Carroll pitcher newsletter Carol financial dot com and we'll see you next time on Hermione the podcast. He if you want more information about what we talked on today's show or if you just have other questions about money. Is our website it's WWW Doug Carol financial dot com for you can only should mean email whether it's through the podcast or through our website. I'd be happy to help if I can't. Her money is sponsored by Carol financial. Hi this is in financial financial advisor with Carol financial retirement may seem like a long way down the red but the Sunnis start the better off you'll be in the long run. But you're starting a family. Buying your first ten or simply want some help figuring out where to start join us for our new simply saving series this fall and of Mecklenburg prairie on Tuesday October 24 at 530 slow walking through easy ways to save and things you should be doing to ensure you're on track retirement. To register for complementary workshop please visit our website at Carol financial dot com it's Carol finance up its retirement simple. They're her mighty my guess is just a tiny Sherry lynch and meet Chris Carroll. Our executive producers are no trial broke. 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