Long-Term Investing Ideas in a Volatile Market
Simon recently spoke with a $35 billion global asset manager about how they're navigating the market volatility. The key takeaways are to think long term, tune out the noise...
Ritholtz Wealth Management COO Nick Maggiulli shares advice on how to save money and compound wealth over time.
May 5, 2022 – By Simon Erickson
Our financial world is getting complex, and there are a lot of challenging questions now facing investors:
“The S&P 500’s going through a really sharp selloff. How should I invest in the middle of a bear market?”
“Inflation just hit a 40-year high. What will this mean for the stock market?”
“The Fed just raised interest rates and the yield curve recently inverted. What does that mean for the economy?”
“How should I think about Bitcoin, stock valuations, “sector rotation”, funding my retirement, or [insert your favorite recent financial media news headline here]?”
These are important questions and there are a lot of moving pieces. But perhaps the most straightforward and logical answer is to just keep buying.
That’s exactly the title and the key takeaway from Nick Maggiulli’s recent book. As Chief Operating Officer of Ritholtz Wealth Management, Nick has taken an evidence-based approach to saving money and compounding wealth over time.
In an exclusive interview with 7investing founder and CEO Simon Erickson, Nick describes the important concepts he introduces in his book. He explains how investors can maximize returns over long periods of time, especially by tuning out market multiples or macroeconomic news. Nick elaborates on why people should be investors, how a person’s background influences their approach, and how luck play a larger role than many of us may be willing to admit. He also describes why “buying the dip” isn’t as important as you think, how the “crossover point” could be helpful in your retirement, and how to think about investing in a crisis.
Publicly-traded companies and cryptocurrencies mentioned in this interview include GameStop and Bitcoin. 7investing’s advisors and/or guests may have positions in the companies that are mentioned.
This interview was originally recorded on April 26, 2022.
Simon Erickson 00:00
Hello, everyone, and welcome to today’s edition of our 7investing podcast. I’m 7investing founder and CEO, Simon Erickson. Our mission is to empower you to invest in your future. I’m really excited to welcome Nick Maggiulli to the program today. He recently wrote a book, just keep by, which is helping people on their long term investing journey. Nick’s joining me today from California, typically from New York City. Nick, welcome to the program.
Nick Maggiulli 00:22
Thanks for coming on, Sa, appreciate it.
Simon Erickson 00:23
You know, just keep buying. It’s simple, Nick, it’s a great message and kind of a you know, is right there for long term investing and why you should be doing it. You’ve got some excellent takeaways in the book. But at the highest level, why did you write this book? What prompted you to do so?
Nick Maggiulli 00:36
I wrote it because I realized that there’s a lot of beliefs we have in the personal finance and investing space that were just beliefs. And we weren’t backed by data and evidence. And I wanted to just kind of dispel a lot of those rumors, myths, things like that. And so I kind of, I’ve been doing this for a few years on my blog of dollars and data. And I finally said, You know what, I think I have enough material here to kind of create a book and print investment philosophy that’d be really useful to people like throughout their investment life, whether you’re getting started as a 20 year old, or you know, you’re kind of near retirement in your late 50s, or something like that, it’s going to be useful kind of to figure out what you’re going to do next.
Simon Erickson 01:08
We’ll talk about a bunch of those, I think one of the first ones that you mentioned throughout the book is saving where you can and getting started as soon as possible, you know, buying now versus averaging in over time, you say that predominantly the right strategy is to get started as soon as you can tell us a little bit about that one?
Nick Maggiulli 01:22
Well, I think the the best way to think about this is just like a basic thought experiment is like, imagine if you had a let’s say $100,000 or even $100 million doesn’t matter. And you had to invest it over you have one of two options, you can either invest it a million dollars a year over the next 100 years. Or you can invest it all right away, right? So you either invest it all now or you do $100 A year for the next 100 years, in let’s just say US stocks now, which would you choose? And you’re saying, Okay, if I wait, you know, 100 years, inflation is going to slowly eat away at them by the 100th year of the time invested? Like I would probably be far, far underperform if I just put it all in now. Right? And so you can you can clearly see why that’s ridiculous. Like you should just get invested Now regardless of valuation, because 100 years from now, it’s very likely the markets gonna be higher. So if that’s true, like if you wouldn’t wait 100 years, and you shouldn’t wait 100 months, or even 100 days, right? And so generally that that general trend of the market going up into the right over the very long term, kind of guides that philosophy. And so of course, does that mean there’s never going to be a market crash? No, does that mean that some people are going to buy at a certain time and then they’re going to see a crash, and it would have been better for them to slowly wade into the market, of course. But generally, when you look across most asset classes, most of the time, even non income producing assets like gold and Bitcoin, things that don’t necessarily have to have a fundamental, you know, value to them, you see that people who had just bought right away have outperformed those that slowly waited into the market over like 12 and 24 month periods. And what’s the amount of underperformance it varies for each asset, but in the stock market is usually 5% a year, on average, if you just put it all in now versus kind of averaging it over the course of a year.
Simon Erickson 02:55
And we’ll we’ll chat about investing in a crisis in a minute here. That was a great topic in one in one of the chapters of your books, too. But I think one of the emotional biases that works against individual investors or any type of investor of them is valuation, right. We always say, Ah, it seems like the stock market’s too high. Right now, it seems like going to wait for this pullback. You kind of addressed this in the book to use the case, the cyclically adjusted P E ratio made popular by Robert Shiller, but kind of if you’re investing over time, it doesn’t really matter where you’re getting in, for the most part, right?
Nick Maggiulli 03:23
Yeah, especially if you’re investing over time, if you’re doing lump sum payments, then yes, like where you buy matters, valuations can matter. It’s the thing though, it’s like if you’re diversified across multiple asset classes, you’re buying over time, the issue of valuation is far less important, right? Like, I always say the worst, the worst investment decision history was like, if you were a Japanese businessman in 1988, you sold your business, and then you put it all into Japanese equities. 1989 That’s probably the worst investment decision in history, maybe that or something, maybe buying something that literally was destroyed in a war outside or something like that, which are very rare. If you’re buying overtime, you’re diversified, you’re not going to see things like that they’re not going to matter as much. So I think people need to keep some perspective on that when like, oh, my gosh, markets are overvalued, like, people been telling me that they’re overvalued since 2017. Right? And it’s like, maybe things have changed. Yes, yields are lower than they’ve ever been, right? If you’ll start to go up again, then it’s like, okay, well, maybe these markets aren’t worth as much and then prices will come down. But when when yields are near zero, where they’ve been at least a couple years ago, and people are saying, Oh, these values are too high. Well, where else can you go to earn money? Right? You kind of have to like you would expect prices to be bid up if yields go down. Right on on bonds.
Simon Erickson 04:32
perspective, word was a good one I just mentioned there. And yeah, I think that we all have a different perspective as investors. You know, the seven investing principle that we use is that investing is personal. We approach risk in different ways. We approach sectors of investing in different ways. We’re all thinking about things things differently. Where the stock market whether that’s your grandpa that’s investing in the horse tracks, whether it’s you know, high risk growth stocks or low risk dividend paying stocks, we all kind of have different goals. I think that’s a large degree influences the type of investor that we are. The other thing that I wanted to bring up that was interesting was kind of the role of luck. And when you get started and when you’re born, kind of influences your appreciation of the stock market or your overall returns, can you talk a little bit about the role of luck in investing?
Nick Maggiulli 05:17
Yeah, the thing with luck is like over shorter time period, when I say shorter, I mean, like 10, to maybe even 20 years, like, luck can matter a lot like when you’re born. And I think the best thing, my favorite example of this is, if you took someone who beat the market by 5%, a year from 1960 to 1980, they would have made less money, less money than someone who underperformed the market from 1980 by 5%, from 98 to 2000. So you got someone with 5% alpha from the sick from 1960 to the end of 1979, has worse total performance than someone with negative 5% alpha from 98 to 2000. And that shows how much luck matters, right? It’s like, you could just like literally the best time to ever buy stocks was probably like 1979 9080, because just you know, the next 20 years are just that rip, especially the.com bubble, if you just if you ended in 2000. It’s just like a one of the best two decade returns ever. And so look obviously matters a lot in the short run. But over longer periods of time, these things tend to even out of course, it’s not guaranteed there are markets where that’s not going to happen. But over a longer periods of time. Like, they don’t look as extreme. And you know, as I said, if you’re diversified as well, you have less to worry about in these circumstances. So that’s something to keep in mind. So I like to kind of have some balance here and say like, yes, luck matters a lot. But there’s a lot of things you can do to prepare for that right. You can diversify, you can have an emergency fund, you can there’s a lot of things as an individual that you can do, even as as information changes that you can use to prepare yourself and your family or whatever. Protect your finances.
Simon Erickson 06:44
I really liked the point that you made about the convergence over three decade periods right over a 10 year period yesterday, I see a divergence dependent on the role of luck, depending on when you were born, depending on where you were born for the first large part to over 20 years less pronounced and over 30 years, you know, you’re turning, you’re kind of starting to see what was it five to 7% real rate of return expectation for investors? Is that kind of your long term expectation for the clients that you serve, or the investors that you work with. What do you think that is an appropriate return to expect from the stock market?
Nick Maggiulli 07:11
Yeah, so what’s an appropriate return? Respect, I think every person is different. I don’t want to speak for like, with my investment committee, my firm does, right. That’s not my role as an operations role, by the way, so even though I do write about investing, for me, I like being super conservative. So I assume like US stocks are like a 4% real return going forward. And if they’ve been much higher than that, historically, it’s been like 7%. So I’m assuming 4%, they’re, you know, like, maybe across like a portfolio. So maybe US stocks will have five and then, you know, across the portfolio at something like 4% Real, which I don’t think is that crazy, might be a little bit lower today than that. But, you know, if you plan for something like that, and then you have more upside, then you’re gonna have you know, more things you can do with philanthropy, or more giving or whatever, you can live a very different life if if the market provides you with more positive upside than you expected. So that I like to try and be very conservative with expectations, because there’s a lot of people out there like, oh, well, the stock market returns 10% A year from like, nominal terms, right. Like, that’s a lot, like, I assume, like seven percents even a lot on nominal terms. And, you know, I think something like 6% is a little bit fair. But like, look at history, the markets done much better than that. And we’ll keep doing that. I don’t know. But I just like to be really conservative, just in case that’s just like how I like to view the world. So
Simon Erickson 08:21
I think that’s why is it I also liked the points you made about diversification too, you bring up a bunch of different asset classes in the book, you know, you’re not just talking about stocks, we’re not just talking about any sub sector of the stock market. You also bring up bonds, you bring up cash, you bring up Bitcoin cryptocurrencies, you know, farmland, all sorts of different stuff you bring, and there are a lot of those are income producing, so it kind of can normalize or ride out the storm and things are a little bit more challenging. That’s one of the challenges we face to who is it? You know, we see a lot of investors. Also a lot of younger investors, too, they kind of got this, this YOLO you know, diamond hands kind of mentality right now, you know, go all in on on GameStop, and Bitcoin and things like that, and probably not a great strategy, when you see the volatility of the stock market, especially through tough times, like we’re going through right now.
Nick Maggiulli 09:07
Yeah, I think a lot of people have learned that lesson. Pretty recently, I think if you had made this speech in, you know, let’s say, October 2021, or November 2021, you would have said, like, oh, you know, you’re just saying that because you missed out. But now like, a lot of those people that have made a bunch of money have now lost a bunch of money since then. I mean, whether it’s in high growth tech stocks, or crypto or whatever, a lot of those things are down 5060 70% Right now, and so they’re down pretty bad. So I think a lot of those investors have learned the difference between being a genius and being in a bull market. And so, unfortunately, that’s happened, but hey, that’s how the game works sometimes, so you want to play YOLO and do all that stuff. You can I think the only people that do it prudently. It’s like they have most of their stuff in like index funds and low cost things and then they may take 10 15% of their money and put it into these wild more risky things. And I’m, I would actually kind of support that in some way. Like I don’t fully support because I don’t want them to know YOLO and all that but If you’re going to do it, have you most of your money invested in what I would consider a prudent way and then having some of it in like these riskier assets? You know, hey, that’s if that’s what you think is going to get you to where you want to go, that’s fine. I have nothing against that. But it’s much better to do that and be like, I’m 100% Crypto and all in on this one, you know, coin, no one’s ever heard, you know, stuff like that is a little bit scarier for me to think about. But hey, teach there?
Simon Erickson 10:23
And how about rebalancing? Nick, let’s chat about this a little bit. Because, you know, it’s kind of a controversial topic of market timing, right. And people have opinions on, you know, whether you can actually get in and out on the sector rotation that’s underway. Because we’ve seen this right, we’ve seen a lot of money, at least in stock funds going out of kind of large growth funds going towards large plan going towards large value, there’s hundreds of billions of dollars that have moved over the last 12 months. General consensus tends to say that it’s really hard to time the market and figure out you know, what larger institutions are gonna be doing with their own money, or any individual investor is going to be doing with their own money. But how do you feel about one timing? Or if that’s not the right word, at least sector rotation is something that you can benefit from this phenomenon as an investor. And then also, there was another chapter of your book about rebalancing, how do you feel about rebalancing between stocks and bonds or asset classes in general?
Nick Maggiulli 11:12
Yeah, so I didn’t talk much about sector rotation in the book, I do think, because the stock market is a, as they say, complex adaptive system, it’s very difficult to try and predict what’s going to happen next. So I think a lot of this like rebalancing across sectors saying it will probably work in some periods and won’t work in others, it’s probably just gonna be a drop in the long run. If I had to guess, people trying these types of strategies. Or maybe they worked historically, they don’t work anymore. You know, there’s a lot of those types of things going on. In terms of rebalancing in general, like all of the data shows, like, there’s no one rebalancing period that dominates whether that means you’re rebalancing across equities or rebalancing between equities and fixed income or some sort. There’s nothing that really works. So what I say to do is just like, I try to rebalance annually, and I usually do that at the beginning of the year, I could do at the end of the year, too, it depends, you know, somebody, sometimes I’ve done the end of the year, if I want to harvest losses, if I don’t have any losses, I’ll wait and just do in the beginning of the year, right. So it’s just different times, I’ll do it. And I’ll just have like a time when I do it once a year, and it’s easier falls does with tax reasons. There’s a lot of different ways you can do it. But yeah, and the other way to rebalance is a kind of a consistent, or what I call an accumulation rebalance, is instead of selling one, one thing, and then buying another is throughout the year, as as the weights start to move out of line, you start buying the underweight thing, right. So let’s say you’re in a normally a 6040, stock bond portfolio, but now it’s like mid year, and for some reason, you have like, you know, 65% stocks and 35% bonds, if you’re still buying into the market, maybe you just lower how much you’re putting into stocks, and you just increase how much you’re putting into bonds to get that closer back to your 6040. So you don’t have to ever sell, right? Because idea of at least in non taxable accounts, it doesn’t matter. It’s easy to rebalance, because there’s no tax consequences. You don’t have to pay gains or anything. But in your brokerage account. If you’re trying to rebalance, you have to sell something, you have gains, and you have to pay the tax man, you don’t want to do that, right. So it’s better just to like buy more of the underweight things. So you get back to your waiting, I think that’s the way to do it. And yeah, it’s also like part of the just keep on ethos, and you don’t have any tax consequences. So if I did recommend one thing, I’d say try and do an accumulation rebalance. So basically, as you get money, you’re starting to put it into something new get a fair, okay, well, where do I need to add it so that I can get that balance to where it needs to be? So
Simon Erickson 13:20
and so with that strategy? I mean, we’ve seen market turmoil lately, right? We’ve seen a sell off of a lot of stocks, and a lot of especially high flying kind of growth stocks. Would this be the time to be adding, you know, based on that kind of approach, adding to stocks to kind of keep the balance in line with what you traditionally have in bonds?
Nick Maggiulli 13:35
Yeah, well, assuming, like, assuming that the cause, I mean, you could argue that okay, let’s say you started 2021 In perfectly in balance, and stocks, you know, had a pretty good year and 2021. So now, are you still in balance with bonds, you probably are overweight. And now, with this recent decline? Are you now back to your core weight? Are you like, I don’t know. It’s really relative to where you are, I always have to look, I know where you are. So like, I would say, yeah, yeah. For someone who was perfectly imbalanced on Jan one, and now they’re under than yes, you would be buying more stocks and bonds to get back to your target weight. But yes, it’s always relative to where you are. So I can’t say yes, everyone should be buying more stocks, because some people are probably still overweight, even despite the fact that they were, you know, on on target like a year ago. So
Simon Erickson 14:14
yeah, and I really liked the news. One of the parts in the book you wrote about Wally j, the judo instructor, right? Yes, you should never teach exactly the same way that you were taught. Investing certainly is relative. It’s certainly it’s personal for everybody to find their own way to do it. Exactly what the shadow would have been about retirement real quick. You know, you wrote a little bit about how to fund a successful retirement. You pointed out in your book, that kind of our spending generally is the highest in the age group of 45 to 49 year olds, years old, just decline year after year after that, for the most part. I would say retirement is one of the biggest financial worries for people in their lives. But you’ve made the case that maybe we shouldn’t be as worried about that as we are.
Nick Maggiulli 14:52
Yeah, so there’s two pieces. I think in chapter two I talk about this and I remember I’m looking at current retirees. There’s no guarantee that you know, ever In today’s gonna be, you know, as well off as current retirees are but the data shows like, inheritance generally go up as people get older. That’s one piece of information. So people in their 60s are leaving behind, on average $300,000 Like households, when they’re when they die. And then 70s, it’s higher 80s is high, right? So generally increases, you’d be like, you’d think, Oh, well, are they running out of money? It’s like, no, they’re gaining money. And my favorite piece favorite piece of research came from Michael Kitsis, where he showed that, you know, if you had a 6040 portfolio, and you did the 4% rule, so doesn’t matter how much money you had to start with, just say, a million bucks in your nest egg, and you’re taking out 4% A year, after 30 years, you’re more likely to have 4x your wealth than to be below where your starting point like so if you started the million, you know, you take 40,000, at the first year, I adjust for inflation take off, you know, another 4%. And keep doing that every year for 30 years, you’re more likely to have 4 million at the end of that 30 year period than you were to have, you know, under a million dollars. Now remember, this is based on historical data. Of course, history, you know, the future may not be like the past, of course, it’s always just the standard disclaimer. But even if it’s off by a little bit, let’s say it’s, it’s double instead of below, you’re like, you’re more likely to have double your money than below, people are worried about running out of money. I think the opposite problem is, is more common than people think right? Only one in you know, it’s six, or one seven retirees are pulling down on principle, most live off their social security and their investment returns, right, or even less than their investment returns. A lot of people, there’s things called, you know, required minimum distributions, I know, your audience probably heard of RMDs, they’ve, you know, sort of the government basically forces you to take money out of your non taxable accounts, and you pay some tax. A lot of these people take these RMDs out and then oh, do they spend them? No, they reinvest them, they just, they take it out of their non taxable they put into their brokerage, you can reinvest, and these are older people who are retired, they could be spending it on whatever and they don’t. So I think there’s a lot of evidence that just retirees aren’t spending enough money. And I think, you know, of course, I’m not saying that, we’re going to be in the same financial shape. Like obviously, a lot of as you know, the as the baby boomers die off, it’d be a lot of inheritances, a lot of money is going to come down line. But in the process of doing that, I think we’re gonna see like, there’s a lot more wealth than people realize, right? And so then thinking like, Oh, I’m gonna run out of money, I think the data is just doesn’t show I don’t see this massive, like, we’re all not going to have money thing in the future. And, you know, I just, it’s not there now. And I don’t see how it’s going to get there in the future, unless we have like, obviously, a World War or something. But that’s, no one’s gonna predict something like that. Right? So for all practical purposes, you don’t have to worry about it.
Simon Erickson 17:21
And how about general rules of thumb? I mean, like, we’ve kind of gotten used to send the 4% rule, right 4% of whatever you got in your portfolio, you should be living off of every year, you brought another one in your book called the cross. What was the crossover point? Yes, across a little bit about that one, too, Nick.
Nick Maggiulli 17:34
That’s from Vicki Robin. And I think it’s Joe Dominguez, your money and your or your life. Great book. But basically, that point is just like once your investment income just exceeds your spending. So let’s say you spend $5,000, a month after tax, once you can bring in $5,000 a month, just off your investments, then like you can, in theory live off of that. Now, assuming that’s after tax, and all your capital gains, everything you can be like, Oh, I got 5000 dividends like you still gotta pay for those. Right. So after tax investment income, once it exceeds, you’re basically free, you can just live off of that. It’s like you have, it’s almost like you have a business paying you profits when you do have a business in theory, if you own like some sort of income producing asset that’s giving you money. So I think that’s another great way to look at it. But the big thing about retirement, I know, we talked about money a lot. I think the big thing for most people, and this is kind of what I’ve learned in like researching retirement for a long time is like, the money is not really going to be I think most people’s concern for some people, though, you’re 63 years old, you haven’t saved $1 in your life, like Yeah, no offense, but retirement money is probably gonna be an issue for you, right? You have like couple years to save. And even if you retire at 70, like seven years is not enough time to compounding, it’s not going to be great, you know, but for most people, I don’t think that’s the issue. I think for most people, it’s an existential crisis, like, what are you going to do day to day like, you may go into an office, now you have some sort of routine you’re used to, and then all of a sudden, all that’s gone, all those people in your life are not going to be there as often you have a completely new identity, and how are you going to live with that new identity not being a person that has responsibilities and doing all these things? And I think that’s the bigger thing to think about you can, the corollaries I find are those people who like sell their business and get super rich, and then they like, go live on an island for a while, and then they get bored and depressed, right? It’s like, you got to figure out like, what is your purpose? And what are you going to do in retirement? So I think what’s more important instead of worrying about your money, which obviously matters is figuring out okay, what am I going to do once I’m actually there? Like, what’s my day to day life? Like, what’s my social life going to look like? Where am I going to spend my money? How am I going to spend my time like, all of those questions, I think are far more important. And I try to emphasize that in the book and don’t get me wrong, it is a financial book. But I do want to try and help people like you know, as the tagline says, act smarter live richer it’s that richer is like a yes it that’s financially but also like just like your life have a richer life in every aspect of it. So when I think financial solutions, the right solution, I will bring it up but when I think it’s non financial, I will also specify that so in this case, I think with retirement, it’s far less about money than you think.
Simon Erickson 19:54
I love that I love the way that you always frame it. You know, this is a tool to improve your life as a whole and money in the quantity quantitative part of that is one part of it, but don’t lose the qualitative part as well. Nick, two more questions for you. You did a lot of research for this book. My first question is what what part of it? Did you like learning about the most What is something you learned, when doing the research for this book that you really enjoy? You didn’t know before.
Nick Maggiulli 20:16
The in the second chapter, I tell there’s a story about these arctic char, which are basically these fish that I didn’t realize this, they, their digestive tracts change size. And so I’m kind of giving up, it’s kind of a cool piece in the book, but their digestive tracts change size, based on the time of the year, and basically, based on how much foods available, so basically, it’s like, imagine like every day your, your body burns, like I don’t know, let’s say 2000 calories, just sitting there doing nothing, right. So you need 2000 calories just to survive, right? Well imagine if like once, like, you know, there’s no food there, your body goes into, like hibernation mode, basically, and only burns 500 calories, so you don’t need to. And so that’s basically what they do. And there’s no food around their digestive tracts get smaller, they don’t burn as many calories they can survive. And then once like, all the salmon come back, that’s what they eat, they will go and eat the salmon eggs, they will then their digestive tracts get very big, and then they start, you know, doing whatever, 20 503,000 calories or whatever, I’m trying to give you the human equivalent. But you get the point, right. And so I thought that was really cool, just like learning about nature and this kind of idea of like plasticity in our bodies and kind of what can happen or not our bodies when certain certain types of animals that have that. And I just thought it was really cool and how it kind of relates to saving money. But yeah, that’s like just cool stories like that stuff. I learned about nature. I think that’s what’s always the most interesting to me is like stuff like that. It’s like, yeah, don’t get me wrong. I love investing and all this, but it’s like, the world is just so you know, amazing to me at times. I’m just like, wow, that’s just insane that when you hear about these types of things, I’m like, Oh, I can probably relate that to saving money. So that could be cool.
Simon Erickson 21:39
Very good anecdotes. I always like those in the book. And then my last one, Nick is here, it seems like we spent so much time these last couple of months, at least, you know, it seems like we’re talking about downturns, we’re talking about sell offs. We’re talking about volatility. It’s kind of like, you know, this new persona that the market has taken on, it was certainly very different than it was 12 months ago, when there was a lot of super instant celebration and things like this. I want to point out in chapter 17, you see, your favorite financial quote, of all time is from Jeremy Siegel, it’s fear has a greater grasp on human action, ven does the impressive weight of historical evidence, man that is so you know, in gold. So many of the things that you point out in this book, which is evidence based, what would be something you would leave our listeners with in the current challenging market environment that we’re in, that might have hope for optimism, or at least a bigger picture perspective of what investing really means.
Nick Maggiulli 22:27
Investing really is a long term game. And, you know, if we look back and say like, Oh, look at this, this time was challenging look at March 2020, that was a challenge. And we all lived through everyone listening to that lived through it, even if you were like 18 didn’t really have much money invested, you just started getting into it. You live through it in one way or another. And I think most most of your listeners probably had money invested, you know, just a couple years ago. And you know, I thought you know, world was ending, I thought this was all going it was bad and everything and we get through it. And and this is true of humans in general, this is not just the US is the world, we kind of get through bad times and you know, humanity marches onward. So I think that’s kind of the the main thing is like, look at the evidence, look at the trend of what’s going on. And I think most things, you know, are progressing and moving forward. Of course, there’s a lot of distributional things we have to solve. There’s a lot of problems we still have. World is not perfect, especially for not a lot of people, but it’s getting better children are living longer people are living longer, like health outcomes are improving. We’re solving a lot of problems we have. So I think that’s the long term, you really have to have a long term perspective. And if you sit and look at the headlines all day, there’s always you know, as, as my colleague, Michael Batnik, likes to say, there’s always a reason to sell, there’s always a reason to sell, you know, and so I think that’s the thing to keep in mind is like, you know, stay in the game. Because if, you know, I can go back to any point in history and find you a time when the markets overvalued. I mean, you can try this yourself, go Google stock, market overvalued, and an insert a year doesn’t matter what year but 2012, but 2013 2014 doesn’t matter, you will find tons of articles telling you why the markets due for a correction of 50%, six, whatever. And so with that stuff always out there, no one ever feels like the market ever feels fairly valued or safe or anything. So just kind of keep that in mind, you know, fear does that have greater grasp on human action than does the impressive weight of historical evidence and that’s probably never going to change. But, you know, I’m trying to convert people one at a time and that’s what the books about, you know, covering people like evidence matters and data matters, you know, you know, other things matter too, but like, we try to focus on evidence here,
Simon Erickson 24:19
so when they meet Julie is the Chief Operating Officer of RITHOLTZ wealth management. He’s also the book author of just keep buying which is just hit the shelves I recommend picking up a copy of it’s an excellent read, Nick, thanks for joining the 7investing podcasts is happening.
Nick Maggiulli 24:34
Yeah, appreciate you having me on Simon. Thank you.
Simon Erickson 24:36
Thanks, everybody, for tuning into this edition of our 7investing podcasts. We’re here to empower you to invest in your future. We are 7investing.
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