4 Seasons Podcast

Financial Storms: How to Stay Calm When Markets Tumble

• Jeff Bingham • Episode 10

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How Concerned Should I Be Of The Impact Of Market Volatility?

Market volatility can trigger our worst financial instincts. When headlines scream about plunging indexes and portfolio values shrink, many investors make costly emotional decisions they later regret. This timely conversation cuts through the noise to deliver practical wisdom for navigating uncertain markets with confidence.

Jeff Bingham tackles the current sources of market turbulence – from US-China tariff negotiations to ongoing geopolitical tensions – while offering a broader perspective that both new and seasoned investors desperately need. He highlights a psychological blind spot most of us share: we worry about downside volatility while rarely questioning the sustainability of extended bull runs (like the back-to-back 25% gains in 2023-2024).

The episode reveals two devastating mistakes investors make during downturns. First, selling near market bottoms when fear peaks, locking in losses and missing the eventual recovery. Second, reducing or stopping retirement contributions precisely when quality investments go "on sale." As Warren Buffett suggests, smart investors buy when there's "blood in the streets" – acquiring assets at discounted prices from those making emotional selling decisions.

For those feeling market anxiety right now, Jeff offers a calming framework: Has your financial situation fundamentally changed? Is your portfolio properly constructed for your risk tolerance? If not, minor adjustments may be warranted. But if the answer is yes, the wisdom is clear and powerful: "If you're built right, stay the course." Your financial journey continues through all market seasons.

Ready to build a portfolio that withstands volatility while capturing growth opportunities? Schedule your free 20-minute consultation by calling 423-247-1152 or visiting BHRetire.com.

To learn more about B&H Wealth Strategies visit:
https://www.BHRetire.com
B&H Wealth Strategies
423- 247-1152

Speaker 1:

Welcome to the Four Seasons Podcast brought to you by B&H Wealth Strategies, serving Northeast Tennessee and Southwest Virginia since 1966. Here we guide you through the ever-changing seasons of your financial journey, offering insights to help you grow, protect and enjoy your wealth. Ready to turn your financial dreams into reality, dare to dream. And now here's your host. President of B&H Wealth Strategies, jeff Bingham.

Speaker 2:

Markets' ups and downs can be unsettling, but should you panic or plan? Learn how to approach volatility with a calm, confident strategy. Welcome back everyone. Skip monico, host slash producer back in the studio with president of bnh wealth strategies, mr jeff bingham. Jeff, how you been this week. I've been great, skip, how you been this week.

Speaker 3:

I've been great. Skip how you been this week. It's been a bit since we've been on, so, yeah, you doing okay yeah hanging in there dealing with the wind.

Speaker 2:

Glad that this week's been really windy and stormy, so I'm thankful. Today's a really pretty day, so I'm good with that.

Speaker 3:

Yeah, yeah, I went out for a little walk and meditation this morning. It was a little brisk but quite nice out there.

Speaker 2:

Absolutely, absolutely. It's a little cold, but hey, I'm good with that. So, jeff, we need your expertise here because there's a lot of volatility going on in the market right now. I think everybody would agree. So how concerned should we be about the impact of market volatility?

Speaker 3:

Well, that's a big question right there and certainly everyone. Market volatility is Impacts everyone. It kind of can create a lot of that. You know angst and anxiousness that comes along from time to time and being an investor over a long period of time, what does change is?

Speaker 3:

the headlines, kind of the results and the rides don't necessarily change really that much. Like I said, the headlines and obviously right now the headlines are. You know, there's a number of things, but I think we can kind of boil it down to, for the most part, just continuing to talk about it, with President Trump implementing the tariff. You know the tariff and the tariff negotiations that are taking place out there, and I think that's obvious. I mean, there's a lot of elements around that. We've got some geopolitical events with Russia and Ukraine and obviously with Gaza and Israel that you know. The Middle East situation is still going on and I'm not minimizing those at all. But right now front and center is the tariffs and primarily the front and center would be with China and how the China-US negotiation is going to take place. The two gorillas in the room, the 64,000-pound gorillas, I suppose, in the room that are battling that out, if you will, in that negotiation. So anyway, that was a long way to get to.

Speaker 3:

You know what do you do during those time periods, but I think what you do have to look at is that has your financial plan? Has anything changed in your situation? Did you put together a portfolio when you began your journey that you know was appropriate to kind of manage through the ups and downs, the volatility kind of the roller coaster, trying to smooth that right out, obviously with a portfolio diversification et cetera. But did you put it together to begin with in the first place? And when you're looking at market volatility and those downs, has anything changed in your situation? And if nothing has changed in your situation, then then you've got to think about okay, really, if I'm built for this, do I need to?

Speaker 3:

do anything and the answer is probably not, because things do take place that are there. But you know when you start, you know kind of panicking and you know we call it. You know sometimes you need to talk people off the ledge.

Speaker 3:

People can be their own worst enemies when it comes to investing in other aspects of life, for that matter. But we're talking about investing here. Is that, you know? Because our inclination, you know, we want to preserve. We you know loss is brutal and grueling, and certainly the headlines. We watched the news. I mean we had an 814 point sell off earlier this week. I suppose that was on Tuesday. We can kind of talk about the elements around that, you know after having a pretty good run from the early tariff sell off.

Speaker 3:

Let's say that we saw these gigantic losses in markets and then we saw the rallies come along from that and we kind of, you know, we've moved past and I'm not sure where we are on the number today, forgive me, as we, as we move into I guess we're Friday the 23rd on this recording date. But you know we had moved, you know, past the April, from the day the April 2nd announcement of Paris was made and we dropped precipitously, you know, down through that to where we probably lost give or take about 10% of value and then we had rallied back to not only get that back but actually move past the April 2nd market value when the tariffs were announced and again we bounced around again. So here we are with another loss and a little more volatility in the market this way. But the thing about it is and I'll say this and then I'll kind of pause, and I think the question, the way that I answered it, even suggests this is that when we think market volatility we only think to the downside right. I mean we think downside first. It's immediate. Market volatility means the market's going down. Market volatility cuts both ways. It also market volatility to the upside. But we don't worry about market volatility on the upside and, quite honestly, when you sit in the chair that I do that's probably as much of a concern for us in some ways, that market volatility to the upside meaning that it just goes up and you can have these big days and these kinds of things that are around that. But when we watch years like 2023 and 2024, when the market almost uninterrupted and people might kind of take issue with that statement right there, but with almost out any interruption we saw back-to-back years of the market going up, 25-ish percent back-to-back years and that's straight up to that number right there and that's really concerning because what goes up must come down, so markets and trees don't grow straight to the sky, that kind of thing. So I think again as I try to pause here for a moment and let you kind of jump in here that we only think of volatility on the downside, we don't think about it on the upside. It cuts both ways and both are concerning to me on my side of the table.

Speaker 3:

But again, we build portfolios that are made to go through storms but also thrive on the upside. So again, if we built it correctly and there's really not a fundamental change in your financial situation and there's just not some cataclysmic event taking place in the marketplace that's out in the world, let's say in the United States or the world? You know, and how do you define that? That's another conversation. Then, most of the time, you want to kind of just, you know, keep your head down, keep plowing through this, you know, ask the questions. You know, are we built for this? You know, I have clients that will call me and they want some reassurance, but most of the time it's reassurance and that's what we try to provide, like I said. So we try to be built for storms like we're talking about today.

Speaker 2:

Very good, Very good. So what's the most common and I'm sure there are common mistakes that people make during market volatility, particularly when the market's dropping. What are some common things there?

Speaker 3:

I think the most obvious is that people want to get out right, they just want to. They don't, you know you can have a conversation with them and maybe in their you know, in their intellectually they know probably it's the wrong decision to make, but emotionally they just can't take the downside anymore. The headlines are scaring. They can't stand to see their net worth drop any longer, so they want to get out. So they exit out of the market. They sell their stock positions, their equity, mutual funds, various ways that they own these things, but the growth part of their portfolio that's going down, which is what is going to happen. When the market's going down, they sell and they're not going to sell when it first starts. They're going to sell almost. I mean you can just set your watch by it. They're going to sell when the market is probably near its worst point. So you sell at the bottom, near its worst point. So you sell at the bottom. And then when do you decide to get back in? So you sell at the worst time. You know you just exit. You know you just you've had enough, you can't take it anymore and you get out.

Speaker 3:

That's probably the biggest, that's the biggest want that people have. They want, you know, they just want to get out, because we're, you know we are preservationists or conversate or conservationists it's hard for me to say. You know, kind of, at heart, humans are that way. It's how we're built, how we're wired, and bad news just sells more than good news. So not only do you see it in your own statements that you get, and if you check it online all the time, and people will check these things online all the time, now that we have all the technology in the access, it's available out there and I don't think it's a good idea, but we provide it obviously for our clients because it has to be done.

Speaker 3:

But you just don't want to look at it every day. You don't necessarily want to watch CNBC or Fox Business or wherever your Bloomberg or wherever your you know kind of financial news is, or any news, because every all news shows are going to show what's going on in the market, especially during downturns. You cannot, you can't turn anywhere where it's not going to be talked about. You know, over the last, you know the last several months for sure, as this has been going on. So you know you really need to kind of shut those things off so you don't make those kinds of mistakes.

Speaker 3:

And another mistake, I guess, would be probably the second common one that I see, skip, is that those that are still in the workplace and they're contributing to their 401k plans you know, and I've heard this for you know, I've been doing this for 35 years now, or even a little bit longer they will stop contributing to their 401k plan or lighten up how much they're contributing, you know, during these sell-offs and then say you know, I'll kind of do it. You know, when the market settles down.

Speaker 3:

You know I'll start contributing again and that's in my humble opinion and the numbers will prove this out that's absolutely the worst time to stop contributing, because you know the old adage is that you buy stocks when there's blood in the streets. That's the old Warren Buffett. That's a paraphrase from Warren Buffett. So you know what that means is that when that fear is out there and the sell off is taking place and you're buying, if you keep buying, you're buying cheaper shares of either stock or the funds or the ETFs that you own and the companies that are in there. So if you have faith in the United States of America and the companies that you're investing in, you want to buy them when they go on sale. You don't want to buy them because people have no problem putting money into the market when it's going up, right, and it's setting new records. And the reason why it's setting new records is because people just keep funneling money into it, right? So you're buying at the top at expensive prices, versus on the downside. You're buying at cheaper prices. And if you think what you own is good and you have good quality investments that are in there, why would you ever stop buying them when they go on sale Because they're giving you a gift. So if you sell them, you know somebody's. There's a trend, you know when you, when you're buying and selling stocks or funds or ETFs, remember there it's a transaction that takes place, there's a buyer and a seller and there's a winner and a loser in each of those transactions. There's a reason why somebody will buy them from you at that price when you want to get out Right, and what you want to do is you want to be buying them. You own some of those shares. You want to be buying them from those that are willing to sell them to you at a discounted price. You don't want to stop buying them. You want to stop buying them. You want to keep buying them.

Speaker 3:

You know, that's my opinion there. And then, when they go back up, you know the other ones, the ones that you already own. They've got to go further to go back up, but if you bought them at a cheaper price as soon as it starts moving back the other way, you're already beginning to make money with that new money that you put in there. So, dollar cost averaging right. So the old dollar cost averaging, which is a beautiful way to accumulate money over a long period of time and that's why that's why just putting money away on a regular basis into a 401k plan or an IRA or you know any kind of savings investment plan, you do it on a regular basis, a disciplined, regular basis. As my dad always said, if you put yourself on the payroll first and you pay yourself first, you will be a financial success. And, like I said, this market is already given opportunities multiple times this year to buy discounted prices, and you know. But again, that means somebody selling right.

Speaker 2:

Somebody selling?

Speaker 3:

you want to be a buyer when other people are selling?

Speaker 2:

Very good. Well, that is some really good information and very helpful, although we're just kind of scratching the surface because I know this is a big issue right now and will be for a while. But, as always, your insights make things clearer. Maybe we can come back to this subject in another episode in the future.

Speaker 3:

Yeah, I think that'd be a good idea and I would love to do it and hopefully that helped anybody out there that's listening and just kind of kind of you know getting to that, to that point, you know, kind of fed up or just the fear, right, you know, again, you got to everybody's got a comfort zone when you got to be able to put your head on a pillow at night and go to sleep. You know there's the financial elements of things and then there's also the comfort zone. You know the behavioral we call behavioral finance. You know the emotional side of it. So, but if you know again, if you've done, or I've done my job, talking with my clients and I know who they are and we've kind of vetted out that their risk tolerance, their emotional ability to withstand the volatility as we've described right there, then that's the conversations that I have, you know, with them when we're going through these times.

Speaker 3:

We put this portfolio together just for these times. We're built for this right and you can take this and you're still going to be fine. We determine where you are, where you want to go and how you want to get there and that nothing has changed just because the market has dropped, you know, five, 10%, whatever, you know, wherever you want to pick your point, to kind of have that conversation. If that hasn't changed, if your situation hasn't changed and the portfolio is built correctly, you know, literally it's an overused adage and it kind of it's stayed the course. If you're built right, stay the course.

Speaker 2:

Very good, very good, great advice. Well, jeff, appreciate your insights as, again, very helpful, and we'll talk more about it in a future episode. Have a great rest of your day and we'll we'll catch you in that next episode.

Speaker 3:

God bless, skip Thanks.

Speaker 1:

Thanks for tuning into the four seasons podcast brought to you by B&H wealth strategies, where your financial success is our priority. Schedule your free 20 minute consultation today by calling 423-247-1152 or by visiting bhretirecom. Take the first step toward making your financial dreams come true. Until next time, remember every season is the right season to plan for your future. Securities and registered investment advisory services offered through Silver Oak Securities Inc. Member FINRA, sipc. B&h Wealth Strategies and Silver Oak Securities Inc are not affiliated.