Investing During War, Day Trading and, the No Bond Crew | Ep 26

War is breaking out. How should you change your investments? Are bunds dumb? And can you get rich by day trading Australian currency? Let's find out!

Transcript

SPEAKER_00 0:00

War is breaking out. How should you change your investments? Are bonds dumb? And can you get rich by day trading Australian currency? Let's find out. Welcome back to the personal finance clip show. Hey Jen.

SPEAKER_04 0:16

Jeremy, where are you?

SPEAKER_00 0:18

Is my voice echoing? Does it sound more echoey to you, or is this microphone solving that?

SPEAKER_04 0:24

It doesn't sound more echoey.

SPEAKER_00 0:26

Okay, good. It sounds echoey to me, but hopefully. My old I'm in a new studio here at my home because I got rid of my old home office and I had like all this like foam padding, like soundproofing stuff up, and now I don't. And you got a white wall. Boring. I got a white wall, but it's gonna be painted in background set made one of these days.

SPEAKER_04 0:51

You're gonna do like a stop motion, not stop motion, like a time-lapse video of you painting. Are you painting? Or are you gonna hire someone?

SPEAKER_00 0:59

I'm painting, Jen. I don't know. Not that big, no, I actually would. I was like, I really wanted to do like lighted shelving back there, and I've been like hand-wringing about like, do I know how to do it? And I think I'm just gonna do it myself.

SPEAKER_04 1:13

Listen, painting is no joke. Like, I my friend and I painted these couple walls, and it's like the the edges are real crunchy.

SPEAKER_00 1:21

So yeah, I know it's true. Yeah, there's definitely. Yeah, that's even when you tape it, the tape, the paint can go to the tape. But but that's not what's important because Jen, I have bigger news that I actually haven't even announced yet. It's not really news, but uh I went on a trip. It was about a week and a half ago now. Yeah. And uh the day we were leaving to come home for the trip, it was like 10 a.m. and we're checking out of the the resort we're at was at 11, and the phone rings, and the front desk is like, you can't go to the airport um because the road's blocked or something. And we're like done.

SPEAKER_04 2:04

Dun.

SPEAKER_00 2:05

I know. And and we're like actually my wife Andrea answered that call and she's like, Well, can can you drive us? Is there like alternate like transportation? And they're like, You don't understand, no one's leaving. And we're like, What? That's creepy because we were in Port of Arta. And you may have heard that there was some uh cartel warfare happening, and we literally booked this trip like six days in advance because we're I think we even mentioned, I think I might have mentioned a podcast we're like gonna go check out a um venue for for a wedding, and there's like a very nice resort that's down there. So we went, we booked it like six days in advance, just a two-day trip. Uh, you know, we went down on a Thursday night, we're gonna come back Sunday morning, I guess. Yeah, like two full days and three nights. Um and then the day we come, the day we're literally like packing to go to the airport, um, that is when the craziness happened. And if you haven't heard, basically the US or I I guess the Mexican government, with some help from US intelligence, did this like raid on El Mencho, I think his name is, who's like the big cartel boss, and he ended up dying in this raid. And so then there's like this huge coordinated cartel attack where they were, you know, lighting cars and trucks and buses and stores on fire, and basically bringing these like cities into a gridlock. And that was happening, and it usually doesn't happen in resort towns like Puerto Virto. They kind of said that to be off um, you know, what's called off limits because it's a resort and they don't want to mess with the tourists, but this time there's like an escalation, so it was um it was very weird because we were like looking out, you know, we weren't right in the main part of the city where it was happening, we were about 20 minutes away, but we saw, you know, we'd look out towards the city and we like we'd watch the city burn like all day. That's so crazy on that Sunday. Um, and then if we turn the other way, there's fires the other way too. And and in this part of Puerto Vallarta, in this part of Mexico, there's only really one road because there's like the ocean and then the road and then like the jungle. Right. So there's not like alternate roads you can take. And so I'm like, dang, that one road is being blocked on both sides. Um we were fine, you know, we never were especially close to the violence. They never came to the resort, the fires weren't especially near us. Um, you know, we saw them when we eventually left the resort. Um, you know, I I we had our, you know, just recently turned one-year-old baby with us, and I was, you know, a little bit worried about the violence coming into a resort, but not really, because there's a lot of resorts down there, and it seemed like they were doing this cars on fire in the middle of the road thing to block traffic, not like murder and dwarf thing. Right, right. Um, thankfully. But I was worried about you know running out of diapers and formula because the resort doesn't have that stuff. And um, if the roads are blocked, you know, the we're just supposed to be there for two days. It's not like we packed for a long time. Right. Yeah. It's also very yeah. It's like an interesting lesson in in news because the day was happening, you know, I realized how slow mainstream media is. Um, you know, because we were literally watching the city burn for like 12 hours. And I would like go to CNN and New York Times and even go to Google, Google News and search Porta Varta. And it took like six hours before anything showed up. And it was like the Hindustan Times or something, some like international newspaper picked picked it up. Um, and then like the next day, Monday, it was like it was like front page New York Times, front page CNN. So it was literally like a 12-hour delay from what I thought was like breaking news to what was actually going on. And the other interesting thing I saw was, you know, so we were then going to Twitter and Reddit, which was like, you know, real time, you could see like people's first hand accounts, but then there's like like lies, there's like misinformation. Um I was believing it too, you know. I like I consider myself pretty internet savvy. Um, but you know, I I was under the impression that the airport was closed, that the airport was the airports, because this happened not only in Puerto Vallarta, like the other main city was happening was Guadalajara, but it was happening even other places too. But I was under I was under the impression that they were under attack because I saw like planes burning and gunmen in the airport and yada yada yada. And you know, come that was not true according to like you know firsthand accounts of people who were at the airport and the airport, like their um you know, announcements themselves. They're like, we have not been breached, there's been no attacks in the airport, we were protected by the National Guard, we're open, they never closed. They're like, but lots of flights are getting canceled, so you might want to check your flights and you know make sure you have safe transportation to the airport. Um, so it was really weird to kind of see this. It's a scary time because you know, we were we were able to see the smoke, you know, we were that close, but we still were relying on you know Twitter's miser information to figure out like what's going on. It's pretty wild.

SPEAKER_04 7:16

So nuts. Yeah, I definitely saw, I'm assuming what is a fake airport video, like a couple hours before you texted me, and I was like, oh my gosh. Like I was so nervous for you. Um, but I'm glad you're back safe.

SPEAKER_00 7:31

Yeah, I know. I feel like it was may have been worse for our friends where like they're seeing these like terrifying images and we're like, we're there. Um but from our perspective, we're like, we're generally feeling pretty safe. The resort was operating normally, like people were like sitting by the pool and there's still food and stuff. Um but it was definitely a little nerve-wracking.

SPEAKER_04 7:53

Ooh, well, you're back safe.

SPEAKER_00 7:55

Yeah, kept both kids alive. All like flights got canceled. We end up we end up having like three different flights at the same time, you know, on different days based on them being canceled. And and then like having the 11th hour, we were able to get a southwest flight on Wednesday. So we only had to we booked like three extra nights at the hotel. Ugh, southwest.

SPEAKER_04 8:12

That would have been like pass.

SPEAKER_00 8:14

Actually, I mean, end up better than our alternate. We came down, we flew down to Alaska. You don't want to hear about my whole thing.

SPEAKER_04 8:20

I would have been like, no, thanks. I'll take the next one.

SPEAKER_00 8:22

You're like, no, I'm gonna go see the thing.

SPEAKER_04 8:24

See if the cartel's doing seats.

unknown 8:26

Yeah.

SPEAKER_00 8:27

They have assigned seats now. Actually, the first time ever I flew southwest, they didn't see I actually prefer the no-assign seats.

SPEAKER_04 8:33

I can't do no assigned seats.

SPEAKER_00 8:34

Really? Oh, I don't want to love it.

SPEAKER_04 8:36

I'm not, I don't like that uh false sense of urgency when you're trying to get on the plane. It's already, people are already so messed up when it comes to that that like they're waiting in line, even though they're they're zone Z. It's like, I don't want to be running to just try and not get a middle seat. But I guess they have assigned seats now, sure.

SPEAKER_00 8:54

They do have assigned seats. Actually, once you like know the southwest system, you know how to not get stuck with a middle seat. You can get an earlier spot, but yeah.

SPEAKER_04 9:01

Delta all day, baby.

SPEAKER_00 9:03

Okay, well, yeah, if you live in LA and you live in a hub, that's fine. But like us San Diegans are roughing it with second-tier airlines.

SPEAKER_04 9:12

San Diegans. Okay, great. Let's get into the episode.

SPEAKER_00 9:15

I know, it's about finance. Jeremy survived the cartel warfare, and now let's talk about index funds more.

SPEAKER_04 9:22

Okay, let's get into our first segment. Hot topics.

SPEAKER_00 9:29

Hot topics.

SPEAKER_04 9:30

I actually don't know how far away we're gonna get from the darkness of the world in this hot topic, though.

SPEAKER_00 9:37

I know. I feel like if with the speed of these news cycles lately, um is this the hot topic of the moment or is it a new one? So what is the hot topic?

SPEAKER_04 9:48

The hot topic is World War III question mark?

SPEAKER_00 9:52

I feel like they're always, you know, the World War I and II had such good branding. Everyone's like waiting for World War III, but I just don't are they gonna name it.

SPEAKER_04 10:00

Do you remember like when you were younger and you're and you'd be like, it's not gonna be World War III? Like it was a joke, and now it's like, oh, are we in World War III? Like actually?

SPEAKER_00 10:10

I mean, that's the thing, is like who's who's gonna call it that? Who's gonna decide, you know, how many countries need to get involved before it's not just some other name?

SPEAKER_04 10:17

No, you're totally right. I'm like, we we the branding is not strong. Not to make light of it of it, but like is it world war three? Um, but yeah, I just remember that being like a little trope that you would say, like, oh calm down, it's not gonna be World War III, or like I don't want to get into a fight with him, it's gonna be World War Three, and now it's like wait, it actually Oh really?

SPEAKER_00 10:34

That was like a saying. Oh, I don't think I've ever seen it.

SPEAKER_04 10:36

I mean, chime in, chat, chat if you're listening.

SPEAKER_00 10:40

This thing is not live.

SPEAKER_04 10:41

It's not live at all. Chat, chime in, comment, let us know. Did you guys ever say that? Like, you know, like you know, it's one of the like, don't hold your breath. Remember when we used to always say that? It was like, it's not gonna be World War III. It's like that. Okay, so anyway, you made a post um on Instagram about this current war in Iran, and uh you had your chart, your infamous chart. Uh, do you want to explain the Instagram post and what what what should we be thinking about our stock market? Like, what should we think about our finances? What we should be thinking, should we sell it all? Should we buy more? Tell us.

SPEAKER_00 11:16

I mean, first, before we talk about the finances, I would like, you know, I just need to say that war is horrific and I don't support war and I don't wish, you know, war on anyone, and I uh feel deeply for everyone who's impacted for by it, and I don't revel in, you know, innocent people dying. You know, I understand a school was already bombed in Iran, um, not to mention you know, the hundreds of military deaths already and several on the US side as well. Um, so it it's it's gonna be a little bit of a harsh segue into how's your 401k doing? Uh because like, you know, that's not the most important thing. And but you know, it's also not something that, you know, I can control. I'm not the president, I'm not in the military, um, I don't support war. I don't believe I voted for this. In fact, I think, you know, people on any side of the aisle, I don't think they think they voted for this. I thought that, you know, our current administration was the weren't they called the Board of Peace or something like that? Uh I mean they use all kinds of chets by by themselves because they uh they always give themselves the nicknames. Um funny thread that was like not the the board of peace is board of peace with the alternate spelling of board. Um clever. And so yeah, why are we bombing Iran? I don't know. This is all so far above my pay grade, and you know, obviously the political pundits will be like, yeah, of course we're bombing Iran because their leader is a dick, like he has been for 37 years, and now we're gonna do Middle East regime change, because that always goes super well. Right, right, right. Uh no, it doesn't. Um so I don't know. I don't know.

SPEAKER_04 13:08

Sarcasm canon?

SPEAKER_00 13:09

Yeah, I don't know. The sarcasm canon. Uh we don't need the nuance canon, we need the sarcasm canon for that one. Um I'm so rarely rare. I'm sarcastic on this podcast. Anyway, so the the atrocities of war aside, what do you care about how's your 401k gonna do? The answer is I don't know. Um, and so you know, I uh what I did is I went back and made a chart looking at the 10 years of the S P 500 total stock market return following the beginning of any US involved major war over the last 100 years or so. And so you can look at, you know, World War II, the Bay of Pigs invasion, the Iraq War, the Vietnam War, the Korean War, the Gulf War, and the range of the re total return on those, what did I just mention? One, two, three, four, five, six wars over ten years is between 108% and 461%. And if you average them all, it comes out to around 10% per year. And, you know, sadly, the stock market just does what the stock market does. I I don't know if that's sad, but you know, it's not like the US is getting involved in a war, we're gonna have a bad 10 years of the stock market. That's not true. I also think there's sometimes sentiment in the market or in pop culture that says, ooh, war is good for the economy because there's gonna be more spending and it's gonna drive up manufacturing. And you know, I don't think that's really bared out by the facts either. I think it's just the global economic machine turns on and there's all these very short-term ebbs and flows based on the speculation of is this gonna be good or is this gonna be bad in the short term? And that's all those little bumps we see in the stock market. But when you zoom out, the stock market goes up because the economy continues to turn on as long as the world continues to exist. If there's some sort of like widespread nuclear holocaust where you know computers don't work anymore and there's no transportation and you know, the economies just crumble, banks don't exist anymore, that would be bad for the market. You know, that would mean your 401k is probably not gonna be worth much, but that also means maybe the cash in your checking account won't might not be worth much either because commerce doesn't exist anymore. Um, and you know, is that gonna happen? I have no idea. You know, you should go listen to a prepper podcast if that's where your mind is. And you know, it's not necessarily wrong either. You know, I think that sometimes do I after having just gone through that in Mexico, I was like, yeah, maybe we should have some like bottled water on hand or whatever it is to make sure that you guys have an earthquake kit. No, we have flashlights. Yeah, there's a while where I was keeping like a seven-gallon jug of uh water, you know, just around in case, but um, you know. All right.

SPEAKER_04 15:56

Story for another day, I guess.

SPEAKER_00 15:59

So anyway, war is atrocious, is is an atrocity, but um, you know, and and we're already seeing, and I think it does maybe add to the volatility uh the volatility of the market because now there's these short-term guesses about what's this gonna mean for the short term. Yesterday the market opened down 2%, which is a kind of a big day down, but it finished down one percent. Today it opened up one percent, you know, and so and year to date the market is basically flat. You know, we're in March now, and the market's basically right where it started at in the beginning of the year. And you know, I know it's really tempting to say, okay, what should I do about this? What move should I make to, you know, for my finances to uh react to this? And the answer you're gonna get on this show is nothing. You know, you should keep staying the course, you should you should do the things that you can control. You can limit your expenses, you can get those raises at work, you can earn more, spend less, invest the difference, keep doing it early and often, minimize costs of your investments. Those are the things that you can control and that are going to help you result in a better long-term outcome. But selling, predicting when the market's gonna go up and down is not gonna not gonna help.

SPEAKER_04 17:14

I mean, anybody who knows you knew what you were gonna say.

SPEAKER_00 17:18

I know, I know, but you know what? Even people who know me, 99.8% of their life, they hear other people talking crazy things into their ear. And so our job, Jen, is we need to talk rational things into the ear. And the 0.2% of your life that you can listen to the PFC podcast, we're just gonna keep chirping the same little rational things. And because you might say, hey, I've been hearing a lot of crazy things. What would Jeremy say about this? And then I say the same crazy, same not crazy thing, and like, okay. Because the one time I say, dude, sell everything, just burn, let's light your fight house on fire, run for the hills.

SPEAKER_04 17:56

Uh that video is AI.

SPEAKER_00 17:59

Letting no shit's real. Yeah. That's that's mad. It's either fake or uh, you know, it's really gone down. Go get some jugs of diesel. Okay.

SPEAKER_04 18:11

All right. Let's move on.

SPEAKER_00 18:12

Let's move on.

SPEAKER_04 18:13

Our next segment is Money!

unknown 18:16

Money.

SPEAKER_04 18:17

Can I ask a dumb one?

SPEAKER_00 18:19

This is where you get to ask smart questions to dumb people. What do we have today?

SPEAKER_04 18:24

Okay, we've got Dylan who asks, I'm 27 with 1.2 million in a Vanguard Target date fund. According to past results, Vanguard TDF has 4.1 average percent average real return. VT has 4.87% average real return. Adopting Bill Perkins Die with a zero philosophy, isn't it best to just invest in VT and have three years of living expenses? All right.

SPEAKER_00 18:51

Dylan, do we know where Dylan's from?

SPEAKER_04 18:55

Uh we don't know where Dylan's from. So are you from apologies? Yeah. Um, in the US.

SPEAKER_00 19:03

Uh it was a very smart sign question, and he talks about um let's break down the question first of all. Okay. So we're talking about he's got he's 27 and he has 1.2 million dollars in a target aid fund. First of all, Dylan, like, I don't know where you got$1.2 million. That's incredible. I, you know, either you're hugely successful in some tech field or something like that, or you had some sort of windfall or inheritance. I don't know, but that's like absolutely crushing at 27. And he's gotten a target date fund as a reminder, target date fund is just a combo of a US stock market index fund in Vanguard's case, an international stock market index fund, and a bond index fund. Basically a nice basket, like a combo menu of these different funds that are perfect for your age. Um and he says, according to past results, the target date fund has a 4.1% average real return. Real means after you account for inflation, how much actual additional spending power do you really get? How much actual real growth is there? Not just the opposite of real is what's called nominal, where the number goes up more, but if inflation, if everything costs more, you don't really get any benefit from that. So he says it's a 4.1% average real return, and VT has a 4.87% average real return. So actually, and VT by the way is the Vanguard total stock market ETF globally, the Vanguard total global ETF. So it's basically almost exactly like a target date fund, but no bonds. Okay. So to compare those two things, a target date fund has US stocks, international stocks, and bonds, or to put it more simply, a target date fund has global stocks and bonds, and VT has just global stocks. The target date fund increases the amount of bonds as you age. So when you're in your 20s, like Dylan is, it's 90% stocks. But when he's my age, 45, it's going to start introducing more bonds. And then when he's like retirement age, like 65, it'll be like a 50-50 portfolio. Half stocks, half bonds. And he's saying, hey, since the stocks go up more, why don't you just have 100% stocks and then a big pile of cash to basically wait out any of the dips in the stock market? So if the stock market is down for three years, you can just live off of your cash for three years, giving it time to recover, and then you can go back to your higher performing stocks. So let me break down some things. First of all, looking at this past performance is a relatively short history. VT was incepted, it was introduced to the market in 2008, which was kind of a bad time to introduce a fund to the market because the market was in free fall around the time this was created. Um and so I want to put a huge amount of faith in what the market's done between 2008 and 2026. It's like an 18 year time frame. Um, second of all, your numbers are not right, Dylan.

SPEAKER_03 21:58

Oh you seem like you're a smart

SPEAKER_00 22:00

Dude, you got you've got it going on, but you made a big mistake. You were looking at the return. I don't know what you're doing, but based on the numbers, this is my guess. You're looking at the return of the price, the share price only, meaning the dividends both of these funds kick off, you are taking and flushing out of the toilet. If you look at the actual what's called total return, that means the increase in share price plus the dividends you get reinvested, the total return you get is not around 4% over the last since the inception, which is what I assume what you're doing since 2008. The nominal return, that's the numerical return for VT is 8.5%, and the real return is 6.1%. And so basically you were 2% off because you weren't counting the dividends. And that actually unfairly hurts bonds because bonds generally don't go up in price at all. So their share price return is always going to be zero, and their real share price return is going to be negative. You know, if you, for example, if you buy a$1,000 bond, give someone a thousand bucks, they promise to give you a thousand bucks back in 30 years, your real return of that share price, that$1,000, will be negative. The$1,000 they give you back in 30 years will be worth much less after inflation than the$1,000 you gave them. The whole point of bonds is to get those dividends, those coupon payments, those bond interest payments along the way. That's the entire point. And in your analysis, you were deleting those coupon payments, which made the target date fund look terrible. Because in fact, I went with VFIFX. I don't know which target date fund you were using, but I was using that one, which is a 2050 fund, which is, I think even up until now, is almost entirely still about 90% stocks. But the nominal return over that same time period, going back to 2008, is 9.75%. And the real return is 7.29%. So to compare the stocks which you claim are higher performing, 6.1%, the target date fund 7.3%. Crazy, right? Um, and so you know, first your analysis is wrong. You're actually wrong about those numbers. The target date fund actually outperformed the 100% stock portfolio over this period. But I'll say that might be unusual because the reason I think this looked so bad is because of this 2008 time frame where stocks did really, really bad. You could absolutely find a time frame, and most time frames, to be fair, where 100% stock portfolio will do better. So here's my real answer to you. And and by the way, you might be right. I think what you're saying isn't crazy. Saying, hey, there's like a no bond crowd out there that says bonds are dumb. Why would you invest in something that we all kind of agree is a lower performing asset class when you could just perform, you know, you could just gut it out, gut out the, you know, and the trade-off is you would only really do bonds because the risk of drops is a lot lower. And so you get a more consistent but smaller return rather than the more volatile but higher return. And he's saying, hey, why don't we just use a big cash buffer to balance out these the volatility or weight out the volatility and then take advantage of the high return? You might absolutely totally be right. And I'll say there's lots of reasons you might want fewer or no bonds in your portfolio. One is you might have a pension. Like let's say you're a teacher, you retire, and the pension kicks off$50,000 a year of income. That pension, that recurring income, kind of replaces the purpose of bonds, which is to provide income. And then you might as well put more of your portfolio into the high performing but more volatile stocks. You might have Social Security. You know, I think a lot of us will have Social Security. Maybe we don't know the future if it still will exist by then. But that totally you could count that as part of your bond portion. You count it against your bond portion. Um, you might have real estate income. A lot of investors, you know, have a you know, rental home or two that's providing cash. That kind of is could take place of the bond portion. Or you might have a big cash buffer, like you suggested, say, hey, I'm just gonna keep a three-year emergency fund instead of a six-month emergency fund. All these things are totally rational. And if you want to do it, like you have my my blessing, Dylan. But here's the argument against. When I talk to real human beings in their 60s and 70s, they don't feel the way you feel, Dylan. You're 27. I'm 45, I'm like maybe halfway between. I still, frankly, I'm kind of feel more like a 27-year-old, and I even financially, I'm like, yeah, I can weather the storms. That's just how I feel about my own investing. But when I talk to people in their 60s and 70s, they don't feel that way. They don't want World War III the next time, whatever clown's in the Oval Office. I'm sure whoever's listening, I'm sure you don't like this guy or the last guy can virtually guarantee it these days. So you probably think someone, some clown's been in the Oval Office in the last few years. Um, they don't want him doing something stupid. Or her, hopefully, one of these years, right, Jim. Um don't hold your breath. I know I'll be 47 presidents deep and I'm still not able to breathe. Um but they don't want the president doing something stupid, see their$2 million portfolio become$1 million, and now they're worried about oh, like my inheritance or my I'm not gonna be able to pay for food or whatever. They say, I just want to lock it in. I've done it, I got here, I'm retired. I want to lock in how much I have and then just get a paycheck every month. That's kind of what bonds are for. And so when you're making the decision, am I gonna scroll hundred percent stocks with a bigger cash buffer or go with the target aid fund? I think you should at least have a real honest, you know, look in the mirror and say, okay, will I feel the same when I'm 67 as I do when I'm 27? Or is it possible I'm gonna like that income? I'm gonna like those paychecks coming in monthly, and I'm gonna be okay without a, you know, I think even in Dylan's estimate here, he said I would end up with 45% more money. You know, that logic might be true when you're 27. When you're 67, you don't really care about 45% more money in 30 years. You care about am I able able to pay for my you know travel and cruises and living expenses or whatever now and this year and next year. Because and he even mentions die with zero, which is great because you know, diode zero, the whole point of that book is hey, when you're 67, if you want to do something, do it. Because when you're 87, you're probably not gonna feel like jumping on a plane. You're probably not gonna, you know, even if you survive that long, your physical fitness and health won't be able to support the same lifestyle that you have now. And so spend your money now. And so that kind of speaks more to the idea of hey, put yourself in a portfolio that optimizes for living now, not for 30-year growth. Um, so the no bond crowd, you know, everyone I feel like the no bond, the no bond crowd comes for me, like, Jeremy, bonds are stupid, they have low returns. And, you know, I'm like, yeah, that's fine. You don't have to do bonds. Um, I will say I think there's a little bit of chasing past performance in there because bonds have done really bad lately because rates have gone way up. When rates come back down, bonds are going to shoot back up. And so just like even Dylan's own analysis was wrong, the bond portfolio actually did better since 2008 just because of you know randomness or whatever of the over that time frame. That might happen again in the future, right? So I guess here's the other thing is you might be saying, okay, well, I will just stick with my 100% stock portfolio, and then I'll wait until I'm 67 to see if I feel the same way and change then. The problem with that logic is what might happen is when you're 63, World War V will be the world war we're on by that point. Oh, God. And yeah, I know. And at that point, you might say, you might see the market drop in half and be like, oh, I can't do this. Jeremy was right. I don't don't like, I don't want to risk it going down by 90% like it did during the Great Depression. I'm gonna lock it in at losing half. And then you sell everything and convert to bonds, whatever, and then the market goes back up. That sort of timing the market is is much worse than getting the right portfolio, you know. Um, and so I that's why I love target date funds because they're kind of protect you from yourself a little bit. So, you know, Dylan, I don't I don't think what you're saying is crazy, but I still, you know, you're 27 with 1.2 million and a target date fund. Clearly, something's been working for you. Right. I would keep doing it. If you want to tilt a little bit, say, okay, I'm gonna do target date fund and a small cap value fund or and you know, VT, like do both, that's cool too. I'd give both of those portfolios an A. Um, but just yeah, be be real with yourself about what you might want when you're 67 and don't wait until then to make the decision because it might be too late if World War V happens then.

SPEAKER_04 31:05

Mm-hmm. Wow. Thank you for your question, Dylan. I hope that was helpful. And I hope that you don't feel too discouraged about the World War V that's gonna be happening when you're 67. Let's get into our next segment. Scroll Patrol. Scroll Patrol. Okay, so I'm gonna have this is a video that I got from the internet, and I'm gonna make Jeremy watch it and react. But I'm gonna give you some context after you watch it. So click on that, watch it with me, and then we'll I want to give you a little bit of context afterwards.

SPEAKER_00 31:40

Okay. I have never seen this video before.

SPEAKER_02 31:42

What do you day trade? The Australian dollar over the US dollar? How many trades you make a week? Five good ones a day. You use a broker or do you do it yourself? You I do it myself. Do you have any licenses right now? So they've expired on my end because I wasn't sure I was gonna go back into finance. I want to get into crypto as well. What's the price of Bitcoin today? About a hundred grand. I don't know at the moment. You trade no other currency? Not at the moment, no. Did you vote for Trump? I didn't vote. Um, but I would have voted for Trump absolutely. Well, I wasn't here. I know it's a cop out. I'm absolutely conservative though, without a doubt. Without a doubt, and I'm happy that he won. I'm actually really sorry about him. Okay.

SPEAKER_01 32:19

No, no, no. It's it's uh so the way this works is like once a quarter, um, Jerome Powell, the head of the Fed. He speaks on things, and those things cause ripples in the market that I trade in. How do you know like the meeting's going in? Oh, I check like all the time. There's like do you get like a Facebook inside? This is like my job at this point, so I'm like half-listening to that because I kind of understand where it's headed.

SPEAKER_00 32:44

Okay.

SPEAKER_04 32:45

Okay, so contact. There's like two videos there. I clipped them together. I clipped them together because I needed you to have more context because it was like this this person. This is from a reality show called Love is Blind, and it's a daily.

SPEAKER_00 32:56

Oh, this is Love Is Blind?

SPEAKER_04 32:58

This is Love Is Blind, and there's a day.

SPEAKER_00 33:00

Quick aside, quick aside, did you watch the first season with the The Vet Guy?

SPEAKER_04 33:06

The vet guy that everyone hated.

SPEAKER_00 33:09

He was like the heel of that season. The Indian guy. He was Indian.

SPEAKER_04 33:14

That's not the first season.

SPEAKER_00 33:15

Oh, it's not?

SPEAKER_04 33:16

If it's the Indian guy that I'm thinking of.

SPEAKER_00 33:19

He said he didn't like Indian women, but then he matched with an Indian woman and then he dumped her because she wasn't hot enough or something.

SPEAKER_04 33:23

Definitely not the first season, but yes, I watched that season. I watched them all.

SPEAKER_00 33:26

Alright, anyway, I was on his podcast. That's my claim to fame.

SPEAKER_04 33:31

Wait, we have to talk about that. We have to talk about that. That's crazy. Why? What does he do?

SPEAKER_00 33:37

Like, he was just trying to like become an influencer post like Love is Blind fame, and his like team reached out to me and was like, Do you want to be on the podcast?

SPEAKER_04 33:46

I was like, How was the conversation?

SPEAKER_00 33:49

I don't know, it's fine. Like, you know, I mean, we didn't, I didn't be like, You were a dick for dumping that girl. I know we just talked about it.

SPEAKER_04 33:57

I literally just saw a clip of him today as I was like looking at this stuff, and he was like, All these women, like uh attractiveness is is subjective, and like I don't even like any of these women except for Vanessa, who's the host, and then Nick Lachey's there and he's like, You're talking about my wife? It's crazy.

SPEAKER_00 34:12

He made some very bad, very bad PR moves in that show.

SPEAKER_04 34:17

Great TV, fantastic TV. Anyway, so this is from Love is Blind, this current season. Um, there these are two people that matched, and he has this like very interesting timeline of what his actual career is. And I knew, like, as soon as I saw that he was claiming he's a day trader, I was like, okay, I gotta get I gotta get some clips here. So the first clip was on TikTok. The second one, I was like, I need that context of like him watching the Fed meeting to like figure out a day. I was like, bro. So anyway, I don't want to uh inform too much, but you can um tell us what you think about Alex here.

SPEAKER_00 34:50

So you know he's this youngish finance bro. He's got some tats, he fancies himself a trader. He says all he trades is was it US and Australian currency?

SPEAKER_04 35:06

I was so confused, yeah.

SPEAKER_00 35:08

And so like so that's called foreign exchange currency or forex or foreign exchange trading or forex. And you know, it just has this following of people who think that they can, you know, buy the Australian dollar for 88 cents and sell for 90 cents based on what's going on out in the world. And um, you know, in in my opinion, I think that uh this type of trading, especially by you know, amateurs, which you know, I I think he is because he's not working for some huge bank that has the ability to like you know take an advanced notice of things, um, you know, is just is fake. You know, I don't think he would ever allow any sort of audit of his finances to prove what kind of income he's making. But everyone I've ever seen who does this isn't actually making money doing it. They might make money sometimes, you know, and what happens is they convince themselves they they have a system, they read the books, they like look at the charts, they read the news, like this guy's clicking refresh on Jerome's Powell talk, and that gives them some sort of edge over the call that we all have access to, by the way.

SPEAKER_04 36:16

He's actually gets like a work call.

SPEAKER_00 36:18

Exactly. And he's like four minutes later, he's gonna make one of his trades. Yeah, you know, like the call that everyone saw. So like how is it and the bots have already traded on information, you know, before you even process the words he's saying. So uh good luck. But um, he he thinks he's got the system, and so he buys at one point and then he sells, and he's like, I made a thousand dollars today. And he's like, It's working. But the problem is that was just random. You know, uh it's as though you went to Vegas and you're looking at a roulette wheel. And in Vegas, roulettes where it, you know, you spin a little ball and it lands on red or black. And it even shows like a history of where the ball has landed under like next to a lot of roulette wheels. So it can be it's like black, black, red, red, red, black, black. And so sometimes you'll say, Oh, it's red six times in a row. It's gotta be black now. So here's my system. I'll wait till it's red five times in a row, and then I'll start betting on black because you know you're it's sure to flip the other way. The problem is that's just random. Every single role is independent. The sixth role is no more likely to be black than the fifth role was, just regardless of what happened. And the and the markets are the same way because all the information he thinks he has, whether it's you know, drone power calls or past performance or charts or you know, there's all this sort of analysis these traders do. They convince themselves it's a skill when it's purely luck, but then three years later, they all quit this job because they haven't been making any money and they've been doing something else, right? And so um, yeah, I just if I was omniscient and I could go look and do an audit of this guy's trading, I could virtually guarantee you he's very close to making zero money. Maybe he's even lost money. Um, and so yeah.

SPEAKER_04 38:04

That's what folks are saying. I love when we can have crossover between our two worlds, Jeremy.

SPEAKER_00 38:09

Bad, bad job. Uh I know I did I actually did watch one episode of Love is Blind. It was the one with that the guy's podcast I was on. People even like, so at the time, you know, he's kind of like dated now, but people at the time were like, oh yeah, that guy's a dick. I was like, I don't know, like not like endorsing his view of women. I'm just trying to spread the good word about index funds, you know. Podcast even still exists.

SPEAKER_04 38:31

That's so funny. I'll have to go check out that episode. Um amazing. Okay, so are you rating this?

SPEAKER_00 38:36

Oh. Yeah, I I give I give it a I give it an F. You know, I think this is made up nonsense. And I think that, you know, his man splaining at the end to this, is that his match that he matched with? His girlfriend or whatever. His fiance. Thank you very much. I'm sorry, it sounds like wait, sorry, I missed I missed I missed the the headline, Alex 30 soccer coach. Um of course he's a soccer coach. Everyone who's everyone who's doing forex trading, making a thousand dollars a day also has to go coach soccer.

SPEAKER_04 39:11

There's so much more I want to tell you about Alex, but we don't have time. We just don't, and it would be not finance related at all. So I had to like find the little bits.

SPEAKER_00 39:19

I'm saying this as a volleyball coach, by the way. I like love coaching. I would never describe myself. I mean, I would be pretty I wouldn't be offended, but I would say it's not very accurate to say that that's my career as a volleyball coach. I'm like the the scroll button beneath my name. I volunteer as a volleyball coach because I'm exceedingly wealthy. I don't have to be a soccer coach because I'm day trading foreign currency and mansplaining about Jerome Powell calls to this, you know, fair.

SPEAKER_04 39:44

Jeremy, you don't even know he had several injuries. He was gonna be a soccer star until those surgeries. Don't you know?

SPEAKER_00 39:49

Well, he probably should have done that because that's better than trading. That dude is not gonna make money.

SPEAKER_04 39:55

Alex gets an F, makes me happy because he is trash. Um, okay, let's even know it was trash.

SPEAKER_00 40:01

I'm just going based on a 60-second clip you put together.

SPEAKER_04 40:04

I know. This is why we do this because you need to blind react, but I will give you additional context once you've reacted. Okay, fantastic. Let's move on to our next segment.

unknown 40:14

Money, money.

SPEAKER_04 40:16

Jeremy had time today.

SPEAKER_00 40:18

I had time. We're in the comments. What are we doing?

SPEAKER_04 40:21

Okay, let's stick with war. Um, you had the Instagram post, their most recent Instagram post at the top of this episode. Um, and we had some comments in there. Most people were happy that you spoke up on it, or just like we're happy to have you weigh in on what you think that they should be doing. But we did have one commenter say, you should buy between two to four years after and sell between five to six after the war because there's always a dip correction. It's always the people that have like an interesting comment that like their grammar is messed up. I'm like, you know what? I'm like, buy B Y, not B U Y. Like, I'm just like, bro.

SPEAKER_00 40:55

And what's this guy's username? Alex Soccer Coach Love is blind.

SPEAKER_04 40:59

I hate you. I block out the username. We do not count anybody on the personal finance club show.

SPEAKER_00 41:06

Hey, they're posting it publicly. I think we could totally put up post it publicly, but yeah, we don't need to because I'm not gonna that's not gonna be my cross to bear. This comment is essentially the culmination of the first segment, the war chart, and Alex's perspective, which is I can look at the charts and decide what to do. But even this comment is so ridiculous. You should buy between two and four years. Okay, so uh this is year zero. Uh you know, the war broke out a week or two ago. Um, so somewhere between 2008 or 2028 and 2030, we should buy. Then we should sell somewhere between, you know, now I'm having trouble doing the math, 2031 and 20 uh 32. Which were in there? I don't know, somewhere in there.

SPEAKER_04 41:48

And when the wars end, like there is like, you know what I mean? Like, what are you talking about?

SPEAKER_00 41:54

But he's like squinting, looking at this chart. He's like, he's like, no, see, there's a dip there, and then it goes up there. But even in these, you know, six wars I included, they all dip at different times. It's just chaos. And so this, you know, he's basically doing a what's called technical analysis of saying, okay, a technical analysis is essentially that red, black roulette thing. It's like, okay, if it's five time, five red in a row, then it's gonna go black. Or if it they have these things called like ceilings and floors, and and and if it hits the floor, it's gonna go back to the ceiling, whatever. Um, you know, technical analysis people can make that guy's and he doesn't know what he's talking about. And you're right, except for right now, everything that you do is nonsense because it's just not backed up by actual like data or results, it's backed by you know guessing. So he's trying to do a technical analysis of these charts and saying, hey, if you sell in this time frame and buy in that time frame, you'll have missed the dip that always comes along with wars, which would be great if it was true, but even by his own assessment, he can't narrow it down to more than a two-year time frame. And the market can go crazy in not only two years, but in a day or two. If you miss, you know, they always say if you miss like the few best days of a year, um, you'll have like no gain instead of 10% gain because the few best days are the are the whole gain each year. And so when he's giving you a two-year window, it's like just ridiculous. So um, you know, no Alex soccer coach, you should not be day trading best of the work. And also, by the way, like, you know, it's not like in two years, it's gonna be 2030, and you're like, remember two years ago when uh we bombed Iran, and I said two years later, sorry, two to four years later, there's gonna be a dip in the market. Now I'm gonna go, I'm gonna go buy because two years, you know, two years ago, there's gonna be different headlines, right? And I'm not trying to minimize this war, but like, you know, two years before this war, there was the you know uh Israel Gaza war, but two years before that war, there's the Ukraine Russia war, but two years before that war, there's uh, you know. Yeah. There's so many wars I don't remember all the wars. Right.

SPEAKER_04 43:54

So you're not gonna two year window is hilarious. I'm like, what?

SPEAKER_00 43:58

Yeah. And so yeah. I think I respond to that comment in Instagram like the grimace emoji this because no don't do that. Um it even you're by your own admission, it's not you don't know what you're doing. And and and the good news is if you don't know what you're doing, you're in great shape because all you gotta do is buy, buy, buy, buy. Buy low, buy, buy high. Never sell until you retire, and then sell a little bit at a time, just what you need. That's how you do it. That's how you get rich. When you think you're smart and you're not smart, I'm looking at you, Alex. I'm coming for you. I don't even know you. Sorry, dude, but like, you know, you're kind of given think you're smart, not smart. That's what I'm seeing from that very short clip I saw. Um, that's when you're gonna learn the expensive way three years from now, when you figured out that you know, forex trading Australian currency um and you know, listing a drone police call because it's gonna give you some insight, um, is is not gonna do what you think it's gonna do. So yeah, don't do that. Got it. Okay.

SPEAKER_04 45:06

We made it to the end of another episode.

SPEAKER_00 45:10

It was a good one. Sorry about the war, but keep holding all of your investments. Yes. Jeremy, break us off with those rules. If you want to build wealth, you gotta follow the two rules of Personal Finance Club. Rule number one, live below your means, and rule number two, invest early and often. See you next week.

SPEAKER_04 45:28

The Personal Finance Club Show is produced by Jeremy Schneider and Jen Mundia. Music by Esibalu and Homie. Send your questions to podcast at Personal Finance Club.com. The Personal Finance Club Show is co-hosted by Jeremy Schneider, who is a co-owner of Nectarine, an SEC registered investment advisor. The views expressed on this show are those of the hosts and guests and do not necessarily reflect the views of Nectarine. Please refer to HelloNectarine.com for all relevant disclosures. This podcast is for informational and educational purposes only and should not be construed as personalized investment advice or a solicitation to buy or sell any security. Listeners should consult their own financial, legal, or tax professionals for advice specific to their situation.