The Jon Sanchez Show
08/07- 9 strategies to use now, to handle market volatility
Two days ago on Monday, August 5th, investors both globally and domestically had a scary wake up call. The awoke to a global market sell off, a 12%+ loss in Japan and eventually a 2%-3% loss on our major indices. Volatility is back whether we want it to be or not. But how should you handle it?
- Duration:
- 34m
- Broadcast on:
- 07 Aug 2024
- Audio Format:
- mp3
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Would you please? Yeah, one of those choppy days, you know? Oh boy, yeah, a little bit of whiplash to say the least. A little bit of whiplash. My goodness. Well, it was another volatile day today. I wish we could have, you know, closed where we were earlier, which was a high of 480 points on the down. Unfortunately, we didn't close there. We closed down 234 points, but we're going to give you all the details. What happened today? Why we had those great gains and then we faltered going into the close, give you a little bit of uptick of or a little insight as to what the futures are doing at this point. And then we're going to get into our topic of this evening. Now, when Jason and I created this topic this morning, you know, like I said, things were looking much, much better. And I actually thought to myself, hmm, I wonder if this is going to be kind of a yeah, an outdated topic or something, you know, but it turned out not to be. By any start to the imagination. So after Jason and I give you the stock market review, what we're going to be focused on is this. So think about this for just a second, folks. Two days ago, I mean, even Monday, of course, August the 5th. Investors both globally and domestically awoke to a very scary, scary situation. Matter of fact, it started Sunday night, but, you know, unlike, you know, all of you, you get to go live your life. Jason and I are watching things on Sunday nights to see how we're going to do on Monday. So we awoke, as most people did, to a global market sell-off, right? Remember this 12 point, what was it? Two or 12 point four, somewhere around there, a little over 12% loss in the Japanese market, right? They plunged over 4400 points. Then eventually we saw between a two to a 3% loss on our major indices. Volatility, folks, is going to be the theme of tonight's show. Volatility is back whether we want it, whether we don't. I mean, Jason and I predicted this was going to be an extremely volatile year back in January at our very first show for a number of different reasons, whether it's the upcoming election or a number of different factors coming off of a strong year last year, et cetera. So it's back, it is back. But the question is this, how do you as an investor handle it? How do you handle volatility? Well, if you don't have an answer to that, we're going to help you out tonight, because what we're going to do with you is we've compiled a list of nine things that you should do now to handle this market volatility. And Jason, again, today was a perfect example of market volatility, was it not? It definitely was, right? And the VIX index, which we talk about all the time, that shows up on lots of-- Yeah, explain what that is. I mean, I don't even know what that is. Yeah, market watch, just as an example here. You can see they show the VIX right on the top left corner of the screen. And the VIX sort of clean way, I like to describe it. It is the implied volatility, I know, two big words. What does that mean? Of the S&P 500 for the next 30 days. And implied is as simple as that, sort of what the market thinks, right? Or what market makers think. This is their implied number. The volatility or the daily movement of the S&P 500 will be over the next 30 days. A VIX of 27.8 will round up and say 28, just to keep things simple. As a 49er fan, I think of Joe Montana, number 16, if you divide VIX by Joe Montana's number. So if you forget what the number is, you just go look and see what his number is. Divide that number by 16, and that is what the one standard deviation implied volatility is on the S&P. So that's 1.75%. So we'll go back to bell curves, right? Your one standard deviation is two thirds of the time. This is what the sort of normal back and forth would be on the market on any given day, up or down that 1.75%. So that's different than where we were two weeks ago with a 12 VIX, which implied that normally the market's going to bound between, you know, 80 to 90 basis points a day, which felt great. We all liked that. Now, when you're looking at your portfolio, know that if you're at that same level of investment that you were two weeks ago, your portfolio probably is going to have the ability to move twice as much. And that should be understandable to you that that's the type of investment you have right now. So typically when vol picks up volatility, people will cut exposure in their portfolios because they want it to move a certain amount that makes them feel comfortable. Again, I'm overly simplifying and your risk tolerance are all different. But, you know, to keep it simple, you could probably almost say that if normally you're 100% invested, if VIX is at 28, if you cut your portfolio in half, it would feel more like it felt two weeks ago in terms of the average price move that you see of, you know, I'm up $10 or I'm down $10. That's overly simplify, you know, gives you a sense of what VIX is. And so that's evolved. So when you see this market, if VIX stays high like it is, get ready for up and down a lot, doesn't mean that it's going to go straight down, doesn't mean that it's going to go straight up. But the intraday moves are going to be a lot wider because people have stepped back. The market makers have, you know, instead of keeping their paddles real close to each other in terms of those spreads, bid-ask spreads, they move away because they know that markets are moving faster. They don't want to get run over. So vol moves out, prices move out, market gets more wild. And that's sort of the world that we're in right now. And this is something that's portfolio managers that Jason and I watch very closely because again, this tells us what kind of volatility we're going to be expecting for our clients portfolios, right? And again, as he alluded to, we close today at a VIX of 28. And I keep in mind this VIX moves intraday, right? It's moving all the time. So it could be at 28, you know, let's say the market was open right now. It could be at this 28, but something dramatic could happen either for the good or the bad and that number could go up or that number could go down. So the most important thing, I love your explanation, Jason. The most important thing I think for everyone to remember is a VIX, VIX, you know, around that 16, 17 right around there. That's kind of kind of the normal if there is such a thing anymore. That's kind of when, you know, you're just expecting modest moves like Jason alluded to. But yeah, you get above that. You get up in the 20 range and man, this thing is all over the place. And again, today was a prime example of that. Let me let me take everybody back to where we were this morning. So, you know, I was doing the stock updates with Ross Mitchell this morning. I'm looking at my notes right now. You know, the Dow features were up 311 points, just a few minutes before the open. And so again, it looked like it was going to be a strong day. NASDAQ features were up about 244, S&P's were up 58. And it looked like it was going to be a carryover effect from yesterday's market rally. But as the day began to progress, the market digresses, I like to say, and that volatility index began to pick up and pick up and pick up. And before you know it, we gave up all those gains. We went negative and we finished negative. We finished with a loss of 234 on the Dow, 0.60%. NASDAQ lost 171, 1.05%. And the S&P gave up 41 points or 3/4 of a percent. Now, in retrospect, at the level of these markets, I mean, what's a 0.60% loss? And the big scheme is not much other than I'm talking about the Dow. But, but here's the most important thing, where we were compared to where we finished. This is what we look at. So we had, if you do the math, we hit a high today on the Dow at 39,477. Again, closed at 38, 763. So I already did the math for you. That's a 714 point reversal in today, right? From the highs to the lows. So that tells us again, volatility is extremely high. This tells us once again that the algorithms are in control. This tells us once again that traders that are physically doing trades, they're very nervous about this market. And you know, they're really Jason. Here's the interesting thing. There really was no news to, to create this full back from those highs. Again, when the Dow, our peak was about 480 points. There was no really negative. There was, there was one, sorry, not the coach job, two things. One, 714 divided by 38, 763. Guess what that is? 1.8 percent. Pretty close. I don't fall. The other thing was we did get a bad bond auction, right? That was the part that happened earlier in the session where the bond auction, the 10 year bond, again, I won't get into the two nerdy, but it was not a good one in terms of the implied interest rate for the auction. It was about three basis points higher where it eventually went through. That is much worse than people had expected. Again, everyone's nervous, right? Any theoretically bad news right now is just much, much better news because of the fact that everyone's hairs are standing up on their arms right now. And that is part of what moved, rates moved. And that's when, oh gosh, the bond auction was bad. Consumers slowing, we're all going to die. That was the reversal time too. Yeah, no, you're right. You're right. I missed that. You're absolutely right. I forgot about that that happening. But here's the interesting thing. We haven't seen a lot of correlation between the stock market and the bond market recently, right? We've seen the markets down. We're seeing bonds going down and, you know, we got a little bit, but, but not like we have in years past where you, you know, market starts to have problems. Boy, oh boy, you know, they jump into the bonds and in yields plummet, right? We actually had yields up today. I mean, tenure yields up, eight basis points at a close of 397. So again, that was kind of strange. That's why I didn't, I didn't include that point that you just brought up. But I think you're, you're right and I'm wrong on that. But, you know, the, the other, you know, thing that we have to look at is, you know, for those of you, again, that may be new to the market when you have a bad bond auction. And remember, the Treasury is constantly, you know, auctioning off bonds, right? This is not the government survives. It's some call it a, you know, a Ponzi scheme, right? The government goes to the bond market and says, "Hey, guys, we're going to make it really simple. We're going to auction off, you know, $50 million of a 10-year Treasury note, and this is what we're willing to pay." And the bond market, the bond traders go, "You know what, no, no, no. We want more than that." And that's what Jason means by saying the $42 billion of the bond auction, it wasn't received well. In other words, investors wanted a little bit more. So that tells us they want that higher yield than what the government was willing to pay. And so therefore it's poorly received, you know, in the, in the auction. But, you know, this goes on almost every day. There's, you know, billions of, sometimes trillions of dollars that are auctioned off in all the different maturities, the Treasury notes, and the two-year all the way to the 30-year, et cetera. So the bond market, you know, is influential many times or vice versa to the stock market. So yeah, thanks for catching that, Jason, again. Yeah, no, it's not wrong. It's just, we got two, two sets of eyes looking at all kinds of stuff all the time. They just, it was, I think it's just, you know, like you said, think of that VIX indexes, you know, pretend you're, this is going to be way out there analogy, you're texting back and forth with someone and everyone, everything's fine. You're going to read everything as everything's great. You guys have a fight about this, that or the other, and you're starting to text back and forth, even though you're not saying anything negative, everyone's like, what the heck do they mean by that? You know, and that's what this market's doing right now. It's over analyzing every single tick. And this is just one of those things that, you know, you had a big washout. We have two days where, you know, I would argue that people aren't out there aggressively buying because they're like, that was garbage. I can't wait to buy this, not out of this market. It's like, oh, it's okay to get back in. It's okay. And then, you know, bright exactly. And so that's why, you know, it feels like you're probably going to test those levels that we're at on Monday as much as I don't want to say it. It just feels like the market needs to, you know, maybe get a little scared again before we can set the levels to go higher. Yeah, and real quickly before we turn it over to Kristin, the other thing that I did not like, and I know the same with you is you saw the big cap names roll over, right? You had Tesla down $10.14 and the video down $6 and some change. I mean, Airbnb had terrible earnings. They lost, you know, over $17 today. So a lot of big names that people have in their portfolios just did not hold. And folks, again, that'll be part of our conversation, the psychological aspect of investing, right? If you buy something, let's say you bought in the video a couple of days ago when it was beaten up. And then you're like, hey, you know, coast is clear. Market rose yesterday. We're doing good. And then you're owning it today. And then you, you know, you're hard at work and, you know, you look at your stock quotes after the stock market close and you go, wait a minute here. I thought this market was recovering. You know, it lost over $6. What the heck's going on? And that creates a panic and panic just starts, you know, creating, selling. And that's, you know, really what we're going into now at this point. There's just not a lot of confidence that equities can hold up. But, you know, that's why we're going to have this great subject tonight, which is again, nine strategies to use now to handle this market volatility. Let's turn it over to Kristin Snow. She is in the right now, traffic center. Hey, Kristin. Sanchez, show on News Talk 780, KOH with Jason Conner, Sanchez wealth management. Once again, we finished with a loss of 234 on the Dow, 0.60%. Our close was 38, 763. The NASDAQ lost 171, 1.05%. S&P down 41 points or 3/4 of a percent to a close of 5,199. As we mentioned earlier, a 714 point reversal from a highs this morning, where the Dow touched 480 points to this loss again of 234. On the oil front today, 2.8% gained 75.22 a barrel, quiet for gold. Just an 80 cent rise to 2,430.40 an ounce. And Jason, back to that bond auction situation. Then result, we saw yields moving pretty sharply today. A eight basis point increase on the tenure to close of 397. Yeah, I mean, it's part of a version off of the really, really low rate direction that we had over the last couple of days, too. Right? It's kind of set to bounce. And then again, if the bond auction's bad, it means that rates go higher, right? That the bond market is telling you that, hey, where your current rates, where you think they are, the market's going to want exactly. The market's going to want more money to lend to you because you're marginally a marginally higher risk in the future, right? It's a small number, but that's sort of what it tells you. So to see rates up, that's part of what we would expect. Absolutely. All right, we touched on Airbnb, one of the disasters of the day. Again, down $17.46, 13.4% lost to $1.1301. Again, they had okay earnings numbers, but the guidance was terrible. Amgen $16.54 pulled back down 5% to $3.12.50. After the earnings came out from that company, they were not good. And then Disney had some pressure on the Dow, $4 and a penny lost down 4.5% after its earnings released to $85.96 a share. All right, we're going to get a head start, Jason. Unless there's anything else you want to mention from your standpoint on the market today? Are you good or anything else? Yeah, just jobs number tomorrow, right? That's not the big one, but just the non-farm little guy? No, the weekly challenge. Yeah, the unemployment day. But it'll be enough that people can... Yeah, initial claims, continuing claims. Yep, exactly. Yeah, they're going to be watching that one closely. That feeds into the non-farm. All right, well, let's get an early start on our topic tonight, because we have a lot to talk about. Again, we're talking about market volatility. Jason did a great job explaining an industry term called VIX, which I'm sure many of you have never heard of about before. It was something, again, that we watched very closely. And frankly, now you should also. But the volatility is here. But what do you do with it? How do you handle it, right? You can do what a lot of people do. We call it the ostrich syndrome, which is you just bury your head in the sand and raise it up when the storm passes. That's not the good way to do it. You need to understand what's going on with volatility. And most importantly, how it affects you, your family, your portfolio, right? Everybody has their own set of goals and risks and so on and so forth. So once again, Jason and I put together a list of nine things that we think you should consider when you're talking about handling this volatility. It's tough psychologically. It's tough for you as a retail investor. It's tough for us as professionals, because we have a lot of money that we're managing and other financial professionals. So this is something, again, that is not just something that you, the retail investor, have to deal with. Everybody that is involved in Wall Street is dealing with this volatility right now. And so it is a very serious situation. So let's get started, Jason, on the first one, then let you run to number two. So what you're doing right now, listening to this show is our first point. Stay informed, but don't get overwhelmed, right? We've seen it so many times with investors that they think they're doing the right thing by listening to every news source, right? They listen to our show, they turn on CNBC or Bloomberg, and then they're on the internet and they're in their chat rooms, and they're talking to them with friends and so on and so forth. And you kind of mentioned this earlier, Jason, I want to bring it up again. There's a term on Wall Street called analysis paralysis, right? That's where you're overwhelmed with information. And what is happening is you never end up making a decision, because you're so fine-tuned into the intricacies of, oh my God, the market did this or the market did that or this fed comment. I mean, we're throwing a million different things on a daily basis, it feels like. So that's what we're saying, stay informed, listen to this show. I think we bring something very unique to all of you that no one else does, especially here in Nevada, and that is Jason and I are in the trenches each and every day. We are living, eating, breathing the stock market, and we take that knowledge between the two of us over 55 years of experience, and we bring that down to a level that everybody can understand, right? You can turn on CNBC, but unless you're a portfolio manager, you're not going to understand the vast majority of what they're talking about, but we try to bring it down to a level and bring you our insights as to what we're seeing. So we want you to stay informed, again, if you can't catch the show, catch our podcast, listen to it whenever you want to, but you got to keep updated, right? People always, a lot of times say, oh my God, I've got a financial advisor, I don't need to know what's going on. No, that's the farthest thing from the truth. If you have money invested, you have a responsibility to yourself, and to your family to know what's going on. We're not saying you need to be an expert, but pick your favorite online news source, again, CNBC, Yahoo Finance, market watch, whatever you want. Take a look at that. You really don't need, if you have an advisor, you really shouldn't be spending more than about 15 minutes a day listening, understanding, etc. Now, we try to give you a lot of different things, right? First half of our show is always a market recap, and then we either get into real estate or like we're doing now, we get into a financial planning/portfolio topic. So stay informed, learn about these economic indicators that we have to deal with, that move the market, move your portfolio. But once again, stay away from that, you know, making impulsive decisions, like what we dealt with the other day, you know, where we wake up in the market plummets, you have to understand what's going on, because if not, if you just read the headlines and we, you know, Jason, we brought up this term on the show the other night, and I want to bring it up real quickly before we go to break, and that is remember something, folks, especially those of you that are new to the market. Bad news sells, right? Jason and I have lived through, I can't tell you how many countless market declines, some of them very serious, some of them, what we call headfakes. But bad news sells, when things go bad in the market, like again on Monday, every new service out there is going to make you feel like the sky is falling, right? That's what, again, that's what sells, they're trying to get ratings, what's that? That's the CNBC market sell-off, and they're- That's right, market sell-off, we're doing a special segment tonight, yeah, yeah, exactly. And that's where, again, if you have a financial advisor, that's when you, you know, you should be receiving communication like our clients get from us. If not, pick up the phone, if you're nervous about things, but if you're self-managing, take a deep breath. Don't make impulsive decisions, because usually those are going to be wrong. Kind of gather the facts of what's going on, look at your personal situation, then make your informed decisions, but don't let your emotions, direct your portfolio allocation and decisions, or you'll fail. I promise you that, you just cannot do it that way anymore, and especially the website action that this market is presenting to us each and every day. All right, there's .1 of 9, we'll continue with the rest of them, and we are done. After this break, but first, let's turn to my good friend, Greg Neff. He's got a news traffic. Welcome back to the John Sanchez Show on Nuztok 780KOHH with Jason Gott. We finished down 2.34 on the Dow. The Nasdaq lost 1.71, the S&P down 41. But we're helping you make it through by giving you some advice and some helpful tips and so on and so forth on how to handle market volatility, right? As time goes on, volatility seems to dramatically increase, right? We have these things called AI, we have these things called algorithms, we have all kinds of things, and then you throw in various market turmoil headlines, and before you know it, again, as I started the show by telling Jason, please crack open the glass case in our office and hand me the C-caller because we need it, right? We're up and down and all over the place, and Nick gets a little bit tired with that. Now, in all seriousness, these are things that we can handle, but you need a game plan to do it, and we're trying to help you lay that game plan out. So our first point we covered, stay informed, but not overwhelmed. Don't get the analysis paralysis. Take on number 2, my friend. Diversification, right? Yes, amen. You know, if you find all of your portfolios going up together or always going down together, you're not diversified, right? And that's the thing that is the secret to success, you know, trying to own all parts of the investment universe, own bonds, own stocks, own commodities, own real assets, real estate, things along those lines, you know, try to diversify as much as possible, don't have that FOMO where so-and-so has all their assets in specific semiconductor stock, and they've done so great. Guess what? They've got dismantled over the last five days. You know, I'm looking at month-to-day performance across the host of sectors. Utilities are up. Consumer staples are up, month-to-day, real estate, up, month-to-day, right? So technology down 9.8%, consumer discretionary down 9.3%, energy down 6.3%, right? So having more, you know, less cyclical parts of, if you're just staying in the U.S. stock market, having diversification away from just technology, have other areas that can be more consistent growers, even though they, you know, aren't directly linked to AI, right? But I mentioned trying to find more than just, you know, the hot thing that everyone's talking about, promise you over time will help you dividend stocks, things along those lines, trying to, you know, at least mitigate some of this volatility we're talking about with some more consistent parts of your portfolio, diversify the verse 5. For those of us, or those of you that did not follow our five o'clock show for so many years here on KOH, just a little backup here, you know, how Jason and I manage the money for our clients. And then, of course, we manage some funds in-house where, you know, Jason and I manage, we create the portfolios, we manage them, and then we have the majority of our assets with institutional portfolio managers. But Jason, the reason I'm bringing that up is I want you real quickly, because this is an excellent time for people to learn about this, how we kind of use a core satellite strategy, especially on the funds that we manage in-house with our ETFs, and then, you know, as the core, and then our satellites, which are the individual stocks. Explain that as far as how we like to diversify. Yeah, I mean, kind of do it with both. Yeah, with the institutional managers as well as our internal money is, you know, again, we've got a core exposure to the sectors of the markets that we want to own, if it's US international, so on and so forth. And then we have some sort of a wiggle room with more tactical picks. If we want single stocks, or we want sectors, or we want commodities, or things along those lines that John and I work together on based on, you know, our various investment processes. But yeah, to have a good core portfolio that always is going, right? That's, you know, you're, I'd say you're one foot that's always in the water, right? Trying to get in and out of the market tends to be, yeah, it tends to be a fool's errand, right? You sell low and buy high a heck of a lot more than you ever want to. Like we've talked about with fear, right? People have a tough time running into the flaming building. But if you go back and look at the past, it's historically been fairly fruitful when it's coming to the stock market. But yeah, just having a part of your portfolio that's always there, even if you pick a couple mutual funds that are balanced funds or, you know, have a very good five and 10 year track record, those can be the core of your portfolio. But if those happen to be heavy, volatile, growthy type things, then your satellites can be more the consumer staples or utilities or some of those type areas. It's almost, find out what you're good at and then hedge the rest of it through core portfolios. Love it. And one of our favorite investment classes besides individual stocks are ETFs, so because again, you can, you can laser into certain sectors. Remember, there's 11 sectors of the S&P 500. If you think, hey, I want to get into technology or I want to get into semiconductors, I mean, there's thousands of ETFs, and they'll already own the basket of stocks in that specific industry, like semiconductors as an example. So instead of you going out and saying, hey, I wonder if NVIDIA is going to do good or Broadcom or something, it's already pre-built for you. So all you need to figure out is do I want to be in semiconductors or not? And if I want to be in how much or how little? And so again, that's another great way to diversify the portfolio without trying to be an individual stock jock and stock pickers, we like to call them. So diversification, absolutely the key. All right, number three on how we handle volatility, stick to your investment plan, right? Easier said than done, right? Again, we're all human beings, we are not machines, our emotions are, you know, influenced. We all have different things that trigger our emotions, even as professionals, right? And, you know, but again, here's the great thing I was telling this to a client the other day. Here's the great thing that when you hire someone such as ourselves to manage your portfolios, a, we are focused on you, you know, 14 hours a day, 15 hours a day, it was about what Jason and I work. So you can go live your life. But also, we do not have that emotional attachment. I don't mean that in a negative sense, because your money is our money, right? We are on the same side of the table as you. But at the same time, you know, our job as professionals, just like your doctor, your attorney, your CPA, is to be objective, right? We have insights to information and things you'll never see or never understand because you don't do this for a living. So stick to your investment plan, have a long-term strategy, stick to it even during the challenging times like we are finding ourselves in and we'll face, you know, thousands of other times going forward. But also at the same time, you got to have a little bit of flexibility. And we always emphasize this to our clients. And that is, look it, if something changes in your life, you need to let us know, right? We are not mind readers. We're not in contact with you every day. One that drives me nuts, Jason is when, you know, a client will call up and go, Oh, by the way, did you know my husband died, you know, three months ago, I'm like, no, you didn't tell us that that's, you know, we should be one of your first phone calls because your life has changed, your goals have changed, your situation has changed. So always look to that, you know, when you're talking about an investment plan, but the most important thing is get into a plan, stick to it. Don't be so rigid. You can't change it or tweak it. I guess is a better word. But most importantly, stick to your goals, stick to your plan, and you can write out volatility when you're looking, you know, five, 10 years down the road instead of, Oh, geez, what happened at, you know, 1235 p.m. at, you know, on August the 7th, that'll drive you absolutely nuts. And you're not living your life. Let's go to number four. Sort of like we talked about with that core satellite conversation is having, you know, quality investments. Yeah, maybe there's going to be a part of your portfolio, even if you say five percent or even, you know, if you're playing around 10%, where you're just picking bank shots, right, where these guys cure this obscured disease, it'll go up 30x or it's going to go to zero. Like I'm not against owning those, but own them in sizes that are appropriate to a bet, right? That's not a five percent position in your account, right? That is a percent or less, right? Just something that, look, it's either going to be feast or famine and appropriately allocated in that stance so that when you're building your portfolio, you're trying to own, you mentioned ETFs or stocks, et cetera, that are have a tried and true track record. They're, you know, strong fundamentals. They're not some new thing that nobody's ever heard of. And you're going to go pot limit hoping to hit a home run because unfortunately you tend to strike out a lot with that sort of stuff. So consistent earnings, balance sheets that are, you know, bulletproof if you're looking for a good core name or a dividend aristocrat of some kind, but, you know, trying to at least have the bulk of your portfolio in something that's long-term in quality and play around with someone you want. Real quickly before we go to break, talk about the importance of, you know, we're talking more individual stocks, of understanding the management and the experience and so on and so forth because that can get you through a lot of market volatility just owning quality stocks that have strong management, right, that have been around, they know how to handle economic downturns, et cetera. That's not that real fast. Well, I mean, almost even on the flip side to say when you've got new management teams, especially on the asset management side, those can be some alarms because things often change, right, especially if you've liked what they've been doing historically. But yeah, I mean, tried and true. You've seen the potholes before, right? You've known enough to at least know where you've been wrong and at least can take that information and hopefully put in processes that help you avoid making that mistake again. I think that's the good part about a CEO who's been through a couple cycles, right? Hey, they're a little more confident. Yeah, they're a little more confident in their decision-making because they've seen the mistakes of others. They've seen the mistakes that they've made and they've, you know, learned from them. I do it all the time. I know what my, at least as many flaws as I can count. There's always new ones coming for some darn it. But at least, you know, I put things in place that help me at least make the correct decision despite what may be an emotional bias, right? And that's what I think good CEOs and good management teams do and same with investment folks. Absolutely. Now, think about this. One of the most respected CEOs on Wall Street, Jamie Diamond of JPMorgan Chase. Do you want to own JPMorgan Chase or, you know, some kid that just got out of, I don't, Harvard, that still is, you know, coming out of puberty, managing your, your bank stock, right? Or your, your bank if it's, you know, when you're stockholders, just, you know, think about that. It's not to mention, you know, young kids can do well, but I want somebody that's got some gray hairs. All right, we'll come back and talk about emergency funds. Let's wrap it up. Welcome back to the John Sanchez Show on News Talk 780K, which with Jason Gone. All right, we're trying to help you get through this period of volatility. Well, again, it's always going to be here, but right now it's a little exasperated. All right, so we've lined out nine ways to help you again survive this. So we covered four of them so far, stay informed and not overwhelmed, diversify the portfolio, stick to your investment plan, and focus on quality investments. All right, we're going to hustle for the remaining points here. Number one, or the next point, number five, maintain an emergency fund, right? You know this. Rule of thumb on Wall Street. You should have three to six months of your living expenses, tucked away in something safe, secure, money markets, CDs, et cetera, your stock market accounts. Do not count as emergency money, but as Jason and I like to tell our clients, whatever you're comfortable with, right? If you got a good steady job, maybe you can cut that down from three to six months to maybe a couple months, but the bottom line is only you. Now, your financial advisor, no one else can answer what your comfort level is, but maintain one, whatever you feel that you need to do, maintain it. DCA, Jason, a new term for many people. What is considering dollar cost averaging on our six point? Yeah, just slowly purchasing into a portfolio of stocks or, you know, a specific stock over time. Instead of putting everything in now, you can sort of spread it over six months, a year, two years. It just gives you the ability to smooth out those purchases. So, you know, no one is kind of your final anchor. You're just sort of adding on weakness, makes you feel better and participating as the stocks going higher over time. The psychology of investing folks is so absolutely important. And one thing we notice when people do utilize dollar cost averaging, you almost want the stock to go down because for those being unfamiliar, you know, if you put money in a 401k every paycheck, that's dollar cost averaging, and it's in its basic sense. But, you know, let's say you want to build a position in, you know, XYZ stock, let's say Apple, right, you almost want it to go down so you're buying it cheaper. So, DCA or dollar cost averaging a great strategy. Number seven, we kind of touched on this, Jason, rebalance the portfolio. You know, we got to periodically review it, whether it's weekly, monthly, quarterly, once a year, every six months, whatever, you know, based upon the size and the volatility of your portfolio should describe how frequently you do it. But bottom line, don't do that ostrich scenario. I'd mention at the beginning of the show, rebalance on a regular basis. Emotional, Jason, do we avoid emotional decisions? Try to avoid rebalancing your portfolio when you're emotional, right? Yeah, there you go. Combining seven to eight. Figure out times when you're nice and calm and everything feels good that you can make your decisions there. But yeah, I mean, resist that urge to make rash decisions and kind of think of trying to take out emotional decision-making as much as possible in your selection. Exactly. Absolutely. And not to sound biased, but seek professional help. This is a big, bad world that we find ourselves in. If you don't have time to manage your own money or the expertise, this is where you go hire somebody to do it. A good financial advisor is going to be more than worth any cost that they charge you as far as the management fee, etc. So, consider that if, you know, if you're not doing it at this particular point. Hopefully, this was helpful. Don't forget, pick up our podcast at your favorite distributor. Great job, Jason. We'll do it again tomorrow night. God bless. Have a good evening. This program was sponsored by Sanchez Wealth Management. The material in this program was intended as general information only and should not be taken as specific investment tax or legal advice. None of the information on this broadcast was intended to be a solicitation for the purchase or sale of any security. Further information is available by contacting john@sansheswealthmanagement.com or 775-800-1801. John Sanchez offers securities and advisory services through Independent Financial Group LLC, a registered broker, dealer, and investment advisor. Remember, FINRA SIPC. Securities offered only in states, John Sanchez is registered in. Sanchez Wealth Management LLC and Independent Financial Group LLC are unaffiliated entities. Hi-Fi is Casino. Hi-Fi is Casino is a social casino with real prizes and big Vegas hits at hi-fi if casino.com. The hottest games right from Vegas and all winnings go straight to your bank account. Hundreds of exclusive games, free daily rewards, and come back to get free coins every four hours. Only at hi-fi-cocino.com. Hi-Fi casino is a social casino. No purchase necessary void. We're prohibited. Play responsibly terms in addition supply. 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