Mike on the Money: New Market Highs Create Benefits & Risks

ALL RIGHT, LET’S TAKE A LOOK AND SEE WHAT THE MARKETS ARE DOING RIGHT NOW. THEY’VE CLOSED ALREADY. BUT IT’S LOOKING LIKE EVERYTHING IS UP. BIG GAINS NICE GAINS IN THE DOW. SO AS WE TURN TO MIKE ON THE MONEY TODAY IT’S PRETTY GOOD TO SEE FINANCIAL EXPERT MIKE GIORDANO WITH WILLIAMS WEALTH MANAGEMENT. NICE INTRO. TODAY’S MARKETS ARE STILL RED HOT EVEN WITH GAS PRICES WHERE THEY ARE. YEAH THAT’S INVESTORS ARE PRETTY HAPPY ABOUT THAT. PEOPLE WITH 401 K PRETTY HAPPY ABOUT THAT. BUT SOMETIMES SUCCESS HAS ITS OWN RISKS. YOU SAY. SO TODAY WE WANT TO TALK WITH MIKE ABOUT HOW THIS CAN BE BOTH A BLESSING AND A CURSE, AND WHAT INVESTORS NEED TO BE THINKING ABOUT RIGHT NOW, STARTING WITH THE POSITIVE, HOW HAVE TODAY’S STRONG MARKETS REALLY BENEFITED INVESTORS AND BOOSTED RETIREMENT ACCOUNTS? ARE PEOPLE TAKING ADVANTAGE OF THIS? OH, I MEAN, IF YOU LOOK IN YOUR POCKET THERE’S MORE MONEY IN YOUR POCKET. THERE’S MORE MONEY ON YOUR STATEMENTS, RIGHT? ALL OF THOSE THINGS. SO OBVIOUSLY IT’S EXCITING. WHERE IT’S REALLY HELPED. IS THAT A YOU HAVEN’T HAD A WHOLE LOT OF DOWNSIDE VOLATILITY. SO YOU HAVEN’T HAD TO REALLY FEEL A LOT OF LIKE THE RISKINESS OF, OF THE BOUNCES THAT STOCKS WILL HAVE. RIGHT? AND SECONDLY, AND THIS IS REALLY IMPORTANT IS YOU SEE PEOPLE THAT SAID, HEY, I WANT TO RETIRE AT 60. ALL OF A SUDDEN THEIR ACCOUNTS GET TO WHERE THEY THOUGHT THEY MIGHT GET BY 60. AND THEY’RE ONLY 58. THEY’RE SAYING, I CAN RETIRE NOW. SO IT’S KIND OF ACCELERATED SOME PEOPLE’S TIMELINES. AND THAT’S A WONDERFUL THING. OKAY. THERE’S A DOWNSIDE TO THAT. YOU SAY THESE ROARING MARKETS ALSO HAVE RISK. WHAT ARE SOME OF THE BIG MISTAKES THAT INVESTORS MAKE WHEN THEY FEEL LIKE THE MARKETS ARE JUST UNSTOPPABLE? THAT’S THE BIGGEST MISTAKE. YOU’RE IN VEGAS AND EVERYTHING’S GOING YOUR WAY. I MEAN, RECENCY BIAS IS A POWERFUL, POWERFUL, POWERFUL, POWERFUL FORCE. YES. AND PEOPLE HAVE A HARD TIME SEEING ANYTHING ELSE BESIDES WHAT HAS BEEN HAPPENING IN THE RECENT PAST. SO FOR THE LAST THREE AND A HALF YEARS, MARKETS HAVE JUST BEEN SCREAMING HIGHER. AND SO IT MAKES PEOPLE THINK, HEY, YOU KNOW WHAT? THERE’S NO DOWNSIDE TO STOCKS. THERE’S THERE’S THERE’S THERE’S NO RISK THERE. IT’S JUST GOING TO GO HIGHER. THE QUESTION IS, HOW FAST CAN IT GO HIGHER? AND WHEN YOU START GETTING INTO THAT MODE, YOU START GOING, WELL, IF THERE’S NO DOWNSIDE, THEN I CAN JUST KEEP GETTING RISKIER AND RISKIER AND RISKIER IN MY PORTFOLIO BECAUSE THERE IS NO RISK, RIGHT? AND THAT LEADS PEOPLE INTO PLACES WHERE THEY SAID THEY WANT TO RETIRE AT 60. THEY NOW ARE AHEAD OF THAT MAYBE. AND THEN IF YOU HAVE SOME SORT OF DOWNTURN, IT MIGHT DELAY YOUR TIMELINE. SO INSTEAD OF RETIRING AT 60, MAYBE NOW YOU’RE LOOKING AT 62 OR 63. SO IT’S THE OPPOSITE OF WHAT WE’RE TALKING ABOUT IN THE FIRST QUESTION. OKAY, SO PUT A BIT IN THE HORSE’S MOUTH. HOW CAN VIEWERS TELL WHETHER OR NOT THEIR CURRENT INVESTMENT STRATEGY IS STILL MATCHING THAT RISK? AND ALSO THEIR GOALS? YEAH. SO THE FIRST THING ON THEIR GOALS, IF YOU’RE TRYING TO FIGURE THAT OUT, LET’S SAY YOU GO, I NEED $2 MILLION TO RETIRE OR HAVE SOME SORT OF A GOAL. THEN YOU’RE TRYING TO SAY, WHERE AM I NOW? MAYBE YOU THOUGHT AT THIS POINT I’D ONLY BE AT ONE HALF MILLION, AND MAYBE YOU’RE INCHING UP TOWARDS $2 MILLION. SO YOU NOW KNOW THAT THAT GAP IS REALLY NARROWED SIGNIFICANTLY ON A RISK TOLERANCE BASIS, WHICH YOU WANT TO LOOK AT IS HOW MUCH RISK COULD YOU HAVE IF THE MARKETS REALLY HAD A BIG DOWNTURN. I KNOW IT HASN’T HAPPENED ANYTIME SOON. NO ONE’S CALLING FOR THAT RIGHT NOW. BUT IF YOU TAKE A LOOK, IN THE LAST 30 YEARS, WE’VE HAD TWO DOWNTURNS THAT WERE 50% RIGHT. SO TAKE A LOOK AT HOW MUCH YOU HAVE IN STOCKS. IF YOU HAVE $1 MILLION PORTFOLIO, IT’S 100% STOCKS. THINK ABOUT THAT GETTING CUT IN HALF. YOU KNOW, IF YOU COULD YOU HANDLE $500,000 IN YOUR ACCOUNT? WOULD YOU BE OKAY? WOULD YOU STILL BE ABLE TO TAKE CARE OF ALL YOUR GOALS? WOULD YOU BE ABLE TO CONTINUE INVESTING IF THAT HAPPENED? IF YOU SAY YES, THEN GREAT, FINE. YOU GOT THE MOST CONSERVATIVE SCENARIOS PUT AWAY. IF YOU SAY NO, THAT’S TOO MUCH, THEN YOU WANT TO THINK ABOUT DIALING BACK THAT RISK. THOSE ARE JUST A COUPLE THINGS. I’VE GOT A WHOLE CHECKLIST FOR PEOPLE. THEY CAN GO TO MIKE ON MONEY.COM AND DOWNLOAD IT AND GET A WHOLE FRAMEWORK. OKAY. TALK TO THOSE PEOPLE WHO REALIZE THAT MAYBE THEY’VE BEEN A LITTLE BIT TOO AGGRESSIVE, OR MAYBE THEY’RE JUST KIND OF NOT ON TRACK. WHAT ARE SOME STEPS THEY NEED TO TAKE BEFORE THEY MAKE AN EMOTIONAL DECISION? WELL, DON’T MAKE AN EMOTIONAL DECISION. THAT’S THE FIRST STEP, RIGHT? DON’T DO THAT. TAKE EMOTIONS OUT IF POSSIBLE. BUT YEAH, WHAT YOU WANT TO DO IS, IS YOU WANT TO SAY, OKAY, ARE THERE PLACES I CAN PUT MY MONEY THAT MIGHT BE A LITTLE BIT SAFER AND MAYBE GET A LITTLE BIT MORE VALUE? THEY’RE NOT AS EXPENSIVE. THEY HAVEN’T RUN UP AS MUCH. SO WE ALL KNOW WHAT’S RUN UP. IT’S ALL THE THINGS THAT ARE CONNECTED TO AI. IT’S THE CHIPS. IT’S ANYTHING BUILDING DATA CENTERS, ALL OF THOSE THINGS HAVE JUST CAUGHT THAT BIG WAVE. BUT THERE’S A WHOLE LOT OF OTHER PLACES IN THE MARKET THAT HAVEN’T RUN UP NEAR AS MUCH. YOU MIGHT BE ABLE TO GET MORE VALUE IN THOSE PLACES. SO IF YOU, YOU KNOW, HAVE THE TIME, THE INCLINATION YOU WANT TO LOOK FOR THOSE THINGS, GO TRY TO FIND THOSE POCKETS OF THE MARKET, EITHER COMPANIES OR SECTORS WHERE THEY HAVEN’T RUN AS MUCH. YOU GET MORE VALUE IF YOU’RE LIKE, I DON’T WANT TO BE THINKING ABOUT THAT STUFF ALL DAY LONG, GO FIND A FINANCIAL ADVISOR WHO’S GOING TO PUT YOUR BEST INTEREST FIRST AND HAVE THEM HELP YOU FIGURE OUT WHAT’S THE BEST PA