Mastering the Market: Strategies and Mindset Built for Financial Resilience (095)

Are you prepared to navigate the rollercoaster of emotions that accompany a relentless bull market, from the dizzying heights of confidence to the potential perils of complacency? 

Lets cut through the noise and discuss practical wisdom for staying grounded amidst the market's unpredictable ups and downs. 

• How will the disruptive force of AI innovation reshape the economic landscape, if at all?  

This conversation will help equip you with strategies to build a resilient portfolio and confident frame of mind designed to withstand the market's inevitable ebbs and flows. 

🗓️ Meet with me: https://paradigmwealthpartners.com/begin-your-journey/#calendly
↔️ Connect with me on LinkedIn: https://www.linkedin.com/in/jbednarii/
🌐 Paradigm Wealth Partners (website) – Financial planning for career professionals who want to retire and stay retired: https://paradigmwealthpartners.com/
🌐 What the Wealth (website) – Adding clarity to difficult financial topics: https://whatthewealth.com/
▶️ YouTube: What the Wealth / Paradigm Wealth Partners

If you or someone you care about could use the help of a financial advisor and sees the value in establishing a financial plan, please reach out to me.

Thanks for Listening!

Jonathan

Transcript

Speaker 1: 0:12

The stock market has had an incredible rally since fourth quarter of last year. In fact, we're up, I want to say, 18 out of the last 20 weeks, one of the strongest rallies we've ever had, and so it is really really incredible and powerful to see really the rally we've seen. A lot of this is AI driven and kind of the re-innovation of technology and what that's going to look like going forward. There's a lot of things to maybe be concerned around around AI and there's a lot of things to be really, really optimistic for around AI. It's been a while since we've had this revolutionary event that's happened. I mean, there was some of this tech revolution in you know, 98, 99, and then the tech bubble burst and you know everyone thought that AI not AI, but technology was going to take over, take everything over, and that we weren't going to have any jobs. And the greatest example I can think of this is the industrial revolution, when we moved from hand plows and you know hand work and started using more machines and tractors and you know factories and those processes, and we actually didn't overall, as a society as a whole. We had sectors that lost some jobs, but as a whole we actually didn't lose jobs. We saw a sharp increase over time in productivity, in output and that created new jobs in productivity, in output and that created new jobs. Now you needed people to fix the tractors and to fix the machines and do repair work and maintenance and create new machines and new tractors. And so, while I think there's some things to be concerned about for AI, I don't think AI makes us go extinct. Of course, I may have to eat my words on this at some point, but I really think that AI will actually cause productivity to really increase and take off from here.

Speaker 1: 2:13

But I wanted to point out some really interesting facts by Ryan Dietrich. Ryan Dietrich is a former LPL chief market strategist, really, really incredible knowledge around the markets and investing and has since left and gone to another firm, carson Wealth Management, and he does the same sort of strategy over there. But I think we can come in. After we have rallies like we've seen the last 18, 19, 20 weeks, we start to get a little numb, we start to feel really, really confident, we start to feel almost euphoric in the market. We feel like it won't go down. Everything's going right, especially when it happens as fast as it has. We've had a huge move since the fourth quarter of last year, and so I want to just kind of take a few minutes to say you know, things will change, volatility will pick up at some point.

Speaker 1: 3:13

It's common to see pullbacks, and what we believe at Paradigm Wealth Partners is that volatility is the toll you pay to be on the ride, just like if you're crossing a bridge or using a toll road, you might have to use your pass or throw in some coins into the toll road to get access to that, and that gets you to your destination shorter, usually, hopefully safer, and so this is a similar analogy the volatility, the ups and downs in the market are the toll to the hopeful outcome, the outcome of the successful retirement or the successful business sale, or you accomplishing those dreams and goals that you may have, dreams and goals that you may have, and we unfortunately, as painful it is, have to go through the ups and downs. It wasn't that long ago we saw a 25% downturn in the S&P 500. And we shortly forget about that when we've seen the rally we've seen over these last six months. And so I just want to caution you there'll be a time when this market sells off again. Stick true to your guns, stick true to your conviction, to your investment policy and have a portfolio that you can be comfortable with. At Paradigm Wealth Partners, we build these portfolios so that you have a strategy and an investment policy that you can really plant your feet on and be comfortable with why you own it. One of the stats that I think is important with Ryan Dietrich and his work is just how powerful some of these moves are that we don't see as the market fluctuates.

Speaker 1: 4:59

It is common to see a 3% pullback in the stock market about seven times a year. It's common about almost three and a half times. Well, it's hard to have a half a time, but that's how averages work, but 5% of the time, excuse me, a 5% correction happens about three times a year. A 10% correction happens once a year. 10% correction is pretty painful but it's very, very common, happens once a year on average. A 15% correction happens once every two years and a 20% correction or a bear market happens once every four years. And so it is very, very common to have these ups and downs. But when you look at the market over the long term, sticking to the market, being confident in your investments and continuing to dollar cost average in make those investments over time, whether it's in your 401k or another investment account, can really benefit you and your plan over the long term. So again, just want to caution you that it's really really euphoric and it feels really really good to have these win streaks that we've seen, but it's not uncommon to have fluctuation and we'll see some more of that in the future.

Speaker 1: 6:15

I don't know when it'll come or how much it'll be. I'm not in the predictions business, other than knowing at some point we have that correction. There's no reason to panic. I think this is just part of investing. It's part of being an investor and having the right mindset, the right psyche. So just understand that and that's the toll we pay again, if you will, to set ourselves up for that successful retirement. With that said, be confident in your retirement. Have a wonderful day.

Speaker 1: 6:46

Thanks for joining me on another episode of what the Wealth. If you enjoyed the episode today, smash that subscribe button. It helps me more than you think. Also, if you found this episode insightful and a light bulb went off, share it. Your friend, aunt Judy, the random guy in the office who's always talking about investments. Wealth isn't about just the chain. It's about our choices, chances and changing our financial futures. The information in this podcast is informational, in general in nature and does not take into consideration the listener's personal circumstances. This podcast is not intended to be a substitute for specific financial, legal or tax advice. You should consult the approved qualified professional prior to making a final decision. Securities offered through LPL Financial member FINRA SIPC. Paradigm Wealth Partners is the other business name for Independent Advisor Alliance. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Paradigm Wealth Partners are separate entities from LPL Financial.