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Podcast Episode 108: The Market Dropped!!!!!

| September 11, 2018
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Episode Summary

In this episode, Paul discusses the key force motivating people to abandon a disciplined strategy of keeping portfolios: market volatility. We learn that volatility is a great asset for portfolios, as long as we are prepared for it in the ways Paul describes.

We explore the last 40 years of market volatility and examine what it truly means to have a diversified portfolio, the benefits of being unswayed by news outlets, and the fact that downturns in the market are inevitable but not hopeless with the advice Paul shares in this episode.  Finally, Paul makes a special offer for listeners.

What Was Covered

  • 1:13-What really makes people afraid when the market goes down
  • 2:54-Why when the markets fall, the media falls apart
  • 3:48-The current economy’s status
  • 5:38-Today’s topic on markets, volatility, what to do, how quickly markets rebound, and why people become distracted
  • 7:21-What is market volatility
  • 8:42-What causes market volatility
  • 9:05-Why are stock companies willing to pay us so much on their stocks
  • 12:13-Volatility and the undisciplined investor
  • 12:41-Diversified versus “diversified” portfolios
  • 15:49-Economic History: Market downturns from 1978 to 2015
  • 18:18-What goes up…
  • 20:55-Must come down
  • 27:40-Paul encourages us to hold strategy and rebalance
  • 28:48-Why we must build a discipline strategy
  • 29:45-Paul urges us to understand why our money is doing what it’s doing
  • 30:50-Downturns are inevitable, so we must prepare in advance
  • 32:41-Paul’s final encouragement


“People oftentimes say to themselves, well I don't like volatility. Yes, you do like volatility when it's on the upside.”

“And because of the tolerance of the volatility, the market going up and down, we hang in there and stay disciplined, that's how we get the reward.”

“Some of the biggest transfers of wealth, you're going to see, are going to be from the undisciplined investor that gets out of the market.”

“Those that stayed disciplined, held strategy and rebalanced, they are the ones that get a chance to reap the gains.”

“You know there's a thing that my wife and I teach our children, is that comparison is the thief of all joy.”

“Now you could also sell out and put everything in cash, but here's the problem. That has never or consistently or predictably worked out for anybody."

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