Mark Kenney - retirement

Market volatility. We’ve been hearing about it for what seems like forever now. And while we’d love to see continuous growth in our portfolios, in times like these, it feels like a yo-yo is painting the graph charts.

To help us better understand market behaviors, we’re thrilled to introduce you to one of our Financial Advisors here at SHP, Brian Roseman. Brian has been trading for over a decade. He’s celebrated big wins in the stock market, and also learned some hard lessons that he’ll be sharing with you today.

In this conversation, we get into how trading and market activities factor into your retirement plan. You’ll learn why investors make (and lose) money, how to avoid making mistakes that can put massive dents in your finances for years to come, and the critical components of a comprehensive financial plan.

In this podcast discussion, you’ll learn: 

  • What causes movement in the market.
  • Why no one is ever going to be able to consistently time the market to make more money.
  • How market volatility should influence your portfolio and financial plan.
  • What you can do to prevent making irrational decisions.
  • How to create a financial plan that takes emotion out of your investing altogether and stop worrying about the markets, even on their worst days.

Inspiring Quotes

  • “The way you determine if you’re right or not is whether you’re making money or losing money. As a former trader, If I’m losing money, even if my idea is right, guess what? I’m wrong.” – Brian Roseman

Resources

Derek Gregoire: Welcome everyone to another edition of the SHP Financial Retirement Road Map podcast. And every single time we put a podcast out, we have different topics, we try to dive deep into. And the whole topic revolves around having a true plan that looks at all areas, every topic is within one of these five areas of planning, which come from income, investments, taxes, health care, and legacy planning. Everyone needs those five plans.

 

But inside the investment plan, and especially when markets are volatile, which people can probably relate to, the market behavior, we want to give you lessons on this podcast around market behavior. Why do markets go up? Why do markets go down? And like we were talking about before the show, the true importance of staying disciplined to your particular plan. So, today we’re lucky enough to have one of our financial advisors here at SHP Financial, who’s been with us for a few years, Brian Roseman.

 

[INTERVIEW]

 

Derek Gregoire: So, welcome to the podcast, Brian.

 

Brian Roseman: Thanks, Derek. It’s good to be here.

 

Derek Gregoire: It’s good to be here. Even if you didn’t say that before the podcast, you were just giving us a high– you were like, why am I stuck with you both? I thought I only had one of you. Now, I have two.

 

Brian Roseman: Let’s start off, and I got privileged with two partners on this.

 

Derek Gregoire: I know. And we have Matthew Peck here. I forget not everyone’s watching. So, welcome to the show, Matt.

 

Matthew Peck: It’s cool having me back.

 

Derek Gregoire: So, Brian, real quick, just give us a little background because obviously you have a unique background when it comes to, you’ve done trading for a while. You understand the markets probably more than the average person. And so, just give us a little background about where you came from in terms of three-year career.

 

Brian Roseman: Sure. I graduated school when I was 27, and I always had a dream of trading in the financial markets. So, I saw an ad down at…

 

Matthew Peck: Well, how did that dream come from?

 

Brian Roseman: I’ve always followed the behavior of the markets. I was checking it constantly, like this is during the 90s where the markets were up every single year. And I’m like, I want to do that. I want to be one of those guys on the floor.

 

Derek Gregoire: I remember my friend’s dad, it was like 1994, and he’s like, the only thing I’m going to tell you, Derek, as you get older, just buy mutual funds. They always go up like 15% a year.

 

Matthew Peck: I guess it’s that easy, huh?

 

Derek Gregoire: It’s that easy, I guess, yeah. It was in the 90s, right?

 

Brian Roseman: Oh, every year, the markets were up, it was crazy, watching the Dow just hit another thousand-point level after a thousand-point level always is laughable. I saw an ad for a traders down at a Wall Street firm. It’s a proprietary trading shop. So, they hired me and they said, you have to be able to survive in New York for six to eight months without a salary because we’re just living on profits and losses. So, I didn’t get my first check till my ninth month, which living in New York is expensive. So, it’s very stressful. I mean, I would go home, and my hand would just sit there and twitch.

 

Matthew Peck: Yeah.

 

Brian Roseman: From that stress of not getting a check and trying to pay rent and everything else, like this goes on in New York. But eventually, I made it and I learned a lot of valuable lessons about how the markets behave and how disciplined traders actually are. They’re not people who just roll out of bed at 9 o’clock, sit up at the computer, and then just make all their money for the day.

 

I mean, the guys from Goldman Sachs, we always talked about those guys because there were a couple of buildings down from us on Wall Street. They got into the office at 6 a.m. And they worked there. They knew more about their stocks that they were involved in than anybody. And I’m just Brian day trader at this point. I don’t know them. I’m showing up at seven, going through stock charts, looking at the tape, trying to figure out how the specialists and the market makers are making the stock moves, learning technical analysis on the charts.

 

Matthew Peck: Was there a mentor? Was there someone there that would help sort of– that whole world of trading and whatnot always fascinates me. So, it’s like, was there a mentor? Like did someone sort of teach you the ropes? Or literally, you’re learning baptism by fire just on your own?

 

Brian Roseman: It’s like if we think about the markets as baseball, it’s like I’m in tee-ball level. And I’m walking into the batter’s box, and Pedro Martinez is throwing fastballs at my head that are curving away at the last minute. I mean, you’re going to get your tail kicked up for sure. You’re going to lose. But someone took me under their wing and taught me a few things and how to protect myself and manage risk, and then I started slowly figuring out. I started making all my losses back and then I started getting checks every month after that.

 

Derek Gregoire: So, you did make it. You were able to eat?

 

Brian Roseman: Yeah, I mean, I did that career for 10 years. And the first firm I was with went bankrupt. And I was a limited Class B partner, which I didn’t realize at the time that they could hold your capital until the bankruptcy was settled.

 

Matthew Peck: Oh, how nice.

 

Brian Roseman: Which was, I took me seven and a half years to get my funds back. So, I only kept the minimum amount of funds up after that, and the markets got volatile in 2009, 2010, and I had to put up more money to be able to make the same amount. I just wasn’t willing to do that for that risk level. It wasn’t worth it, again. I can be without my money for seven and a half years, again.

 

Derek Gregoire: I don’t blame you. Then you went to another firm, right?

 

Brian Roseman: Then I went to KPMG for a while and did finance work there. I learned a lot about the bond market, term loans, derivatives, and then I was lucky enough to meet you, folks.

 

Derek Gregoire: Well, the funny thing is, actually…

 

Matthew Peck: Because you were a client first.

 

Derek Gregoire: Brian and his wife Karen were clients of Matt.

 

Matthew Peck: Yes.

 

Derek Gregoire: Apparently, they were impressed of Matt’s planning.

 

Brian Roseman: Indeed.

 

Derek Gregoire: And then that’s brought you here a couple of years, two to three years ago?

 

Brian Roseman: Three. So, my three-year anniversary.

 

Derek Gregoire: Awesome. So, it goes by fast. And when it comes to like obviously what you do here, it’s obviously more on the planning side, and we have a team that handles the trading and so forth. However, when markets fluctuate, we know, like we were talking off-air, when people that we work with, that put money into their 401(k)s and they just continue to add money to the market over time, they’re not really pricing what the market’s doing because most people are buying, holding for the most part, and letting things run out and continuing to add. So, what causes all the day-to-day movements? Where does that come from?

 

Brian Roseman: Well, I follow a lot of different traders, and the bank we have heard of best described is there are different time frames of money involvement in the markets like some investors and whether it’s in our 401(k)s, Roth 401(k)s, etc., we’re constantly buying. We’re buying every paycheck, so are most of our clients that are still working and same with everyone out there.

 

But then you have short-term traders that are leveraged up that are just making their bets based on whether the stock or the market overall is going to go up or down. And they have to determine whether they’re right or not right away. And the way you determine if you’re right or not is whether you’re making money or losing money. As a former trader, If I’m losing money, even if my idea is right, guess what? I’m wrong.

 

Matthew Peck: Yeah, because the market’s moving against you.

 

Brian Roseman: Right.

 

Matthew Peck: Okay.

 

Brian Roseman: So, either my timing’s wrong or my whole thesis is wrong or my direction is wrong. So, it’s really important, like, if you’re using a lot of leverage to trade it, I mean, you can make a lot of money, but it’s a double-edged sword. You can lose everything in a heartbeat. It’s very quick.

 

Derek Gregoire: Can’t the market change, too, on a day where people are losing on their options or they have to come up with money to cover options and so forth? So, the market’s going up. Oh, what a good day in the market. Well, really, what’s happening is people just had to cover some of their mistakes or some of their calls.

 

Brian Roseman: Oh, yeah. I mean, you have two sides you can play the market. You have the long side where you just buy securities, buy stocks, or buy futures, whatever. And then you have the short side of the market where you’re betting against that stock or against the market in the short run. And there’s no problem either way. I’m agnostic for that. Long term, obviously, I’m an investor. I want the markets to go up. And over the long term, they do.

 

But short term, there are opportunities where you saw in February 2020, March 2021, the markets are going straight down every day. An old adage is the markets take the stairs up nice and slow, but they take the elevator shaft all the way down and they fall very quickly, so.

 

Derek Gregoire: Were you saying in 2020, when the market turns, it also sometimes turns when things are at its worst? When you think like remember in 2020, COVID was running rampant. Everything looked horrible. And all of a sudden, as quick as it went down and that one took the elevator up or like a helicopter up or something that so fast on that recovery in 2020.

 

Brian Roseman: Well, I’ve heard this said by a trader I respect, the market is an equal-opportunity butt-kicker from a fair trader’s point of view. So, usually what that means is the markets are designed to cause the most people possible in the short run of pain. So, when the markets are going down aggressively, like they were in March, in February of 2020, due to the pandemic starting, a lot of people got really short. They were shorting securities, betting on the downside. They were making a ton of money.

 

But people get greedy, and they weren’t afraid that the positions were going to go against them. So, they’re just riding and pressing their bets and trying to make more and more money instead of being smart and saying, “Hey, I’ve made enough, let me take some chips back off the table.” Disciplined traders do that, but a lot of people aren’t disciplined. And that’s where it relates back to us and having a plan and saying discipline and…

 

Matthew Peck: But how much of this people is actual human beings versus algorithms and the flash boys and that type of activity? I mean, if you hear about that here, it’s like, oh, it’s all computers doing it nowadays. But how much, in your opinion, is it computers versus humans that are doing this type of research?

 

Brian Roseman: Well, it’s both. I mean, there are humans behind those algorithms that are putting real money up to try to make money. So, back in March of 2020, it looked like the world was ending, everything was closing down and the markets stopped going down. And they started going back up. They made higher lows from a technical analysis point of view. And they started going back up again.

 

We’re looking at the immediate fundamentals, not looking into the future. We’re saying, well, this doesn’t make sense. Markets should be lower, not higher. And those people end up getting forced to buy back their short positions, and they end up chasing the market a lot higher. And it gives a lot of fuel for the upside.

 

Derek Gregoire: Yeah, that’s we’re saying, that fuel is kept riding it up. And so, the two emotions obviously that we’ve seen in investing, we’ve heard about this for since, I think, Finance 101 when I was in college was fear and greed, right?

 

Brian Roseman: Right.

 

Derek Gregoire: Those are the two emotions, and sometimes, people, like you said, just everything looks great where they keep boom, boom, boom. And then when things get bad, sometimes people panic and make irrational decisions. I know it’s not the topic we’re going to go fully deep in today, but I’ve never seen, like that I can recall in almost 20 years in the business.

 

Over the years, we’ve dealt with thousands of clients here at SHP. I cannot recall one and I could be wrong that was able to time the market. So, none of our clients who recommend trying to time things. It’s more of like, hey, when we set up a plan, whether you’re working or not working, we have a safer, more conservative, more dividend-oriented income covering your income stream or your cash flow needs for the next 5, 10, 15 years. That allows us not to take the emotions out of the growth bucket, if you will, because we don’t need that portion of money for many, many years.

 

But sometimes, once every few years, you’ll still have a client or two that just can’t take it in whatever cash to settle it out, they won’t get back in later. I’ve seen that happen a few times over the years. I’ve never seen ever someone be right because like you said, they get out. And even if they win for a few months, for six months because the market went down, they never get back in because it still feels like, oh, this is like the earth, the country’s going to, you know what, and things are in bad place, and we have this deficit. And so, I mean, it’s like, the timing, the behaviors, Matt, of people when it comes to fear and greed, it doesn’t work out at the time. I haven’t seen anyway.

 

Matthew Peck: Well, I mean, just think of it this way, just the idea that if the time is right twice, even if you get it right on the way down, then you have to get it right on the way up. And then everything that Brian is talking about, about the futures and everything else is how future-looking the markets are. So, what was that great line, too, about how the markets don’t wait for the sun to come up, they wait for dawn to break?

 

Derek Gregoire: Exactly.

 

Matthew Peck: So, with just for that little sliver of sun or in the clouds now, just break in a little bit, the rest of us are like, oh, it’s still crappy with my French. And it’s like, well, because it is. But if it’s slightly getting better and they see the future, then yeah, that the light is breaking over the horizon, that’s all they need. And then now, it’s on a dark night, now the gray night because again, the sun’s starting to come up, that’s when the markets will start to turn and people will be behind the eight ball just naturally because they feel as, oh, it’s so bad. It’s like, well, yeah, but not in the future.

 

Derek Gregoire: Well, I read a funny– it’s not even funny, actually. It was a book. Probably, I read it maybe seven, eight years ago, and the book literally talked about all these market prognosticators that got it right, that everyone– I can’t remember the names now.

 

Matthew Peck: Was it a pamphlet?

 

Derek Gregoire: No, it was a book, literally, a full book. And it talked about everyone that got the flash crash and the tech crash in 2008. But what it did is it took each one and it gave the history of that person and all the other times they were wrong. It was the most amazing– it wasn’t like a– so, it basically talked about this person who is highly touted for getting the 2008 crash, she predicted it. And then they go, well, they also predicted in 2004, 2006, 2010, you know what I mean? Eventually, they are right. So, even the best of the best who get all this credit, this book just really tore them apart and said, yeah, if you press it’s going to rain 17 days in a row, you’re probably going to be right eventually.

 

Brian Roseman: Oh, my best year in the market, I was wrong easily 65% of the time in my trades, 65%. So if I’m batting like 350s like baseball…

 

Derek Gregoire: Yeah, it’s good but…

 

Brian Roseman: It’s like, do you want to be wrong two times out of every three basically? I mean, most people emotionally can’t deal with that. You have to be strong. I mean, the way I always was taught is, I mean, everyone loses in the markets, everyone.

 

Derek Gregoire: Yeah, you have to.

 

Brian Roseman: You lose, I lose. The best out there, lose, but you have to lose with a plan, like if you’ve ever– do you know who William O’Neal is? He started Investor’s Business Daily. He wrote this book, How to Make Money in Stocks. And one of his rules is you really can’t risk more than like 8% on any individual trade idea because you only have to make 10%, 11% back on your next winner to get the money back.

 

I was talking to someone. They called in just to talk to us about a couple of things. And this person had lost 65% of one of their investments. You know how much money you have to make, Matt, just to get back to even. That’s not the way to do it. I mean, if you’re going to try its high in the market which I don’t recommend, but you have to learn how to lose correctly. I mean, to do that, you have to lose small, and most people don’t have the discipline for that.

 

Matthew Peck: Well, that’s what I asked. So, in your background, in the trading world as you follow that universe, what does that bring to your planning? How do you leverage that type of leverage? How do you leverage that on behalf of your clients? I mean, are you able to then kind of walk them through the fear and the greed a little bit easier because of your background? Or what does that history kind of bring to bear on behalf of the clients and here at SHP?

 

Brian Roseman: Well, for me, it always starts off with defense, and that’s the same when I was trading. You have to know what your risk comfort level is, and everyone’s going to have their uncle point and where they’re going to say, I can’t take it anymore, get me out, right? Everyone. It’s just human nature. It’s the fight or flight response that have been ingrained in the human race for millennia.

 

But what I work hard with my clients to do is to figure out, okay, how much money that you have can you afford to lose before you start worrying about it at night? And questioning the plan that we’ve worked so hard to put together for you. And I really want to make sure my clients are positioned appropriately where they never really feel that fire.

 

Now, is it fun right now that the markets are down over 20% at one point this year? No. But if we’re doing it in the context of their overall planning and knowing that their cash flow is taken care of and that they get paid for the lifestyle, we know over the long run, we’re going to be okay. So, is it from watching our net worth drop it down? No, but it’s a normal function of the markets.

 

Derek Gregoire: The way I look at it is one of the soft pieces, we invest hundreds of thousands of dollars in software to really help us build the best plans possible for our clients. And our risk software is phenomenal because one of the things what Brian was just talking about is you have to know, like what’s the two? There’s risk tolerance and risk capacity.

 

Matthew Peck: Correct, yep.

 

Derek Gregoire: So, risk tolerance is basically saying, all right, well, based on the amount of money you have and your pension and you’re still working, what’s the one that you can afford? Again, I’m getting confused right now.

 

Matthew Peck: Capacity. So, tolerance is how much can you take before you start to sweat?

 

Derek Gregoire: Exactly.

 

Matthew Peck: So, the joke I was talking about is watching like a bad NFL or NBA officiating a little bit more currently. Take that Draymond Green, you know what I mean? And then, tolerance is your physical reaction to it, like you’re up out of the chair, yelling at the TV because you have low tolerance. So, same idea, if you have a low tolerance for risk, if the money goes down, and it should be said that we all as humans, also feel the losses better than the gains. I mean, if you make five bucks, you’re like, that’s pretty good. You lose five bucks, you’re like, oh, this stinks. It’s amazing how much of a multiplier there it is on the pain. But yeah, so tolerance is how much you can physically take, and then capacity is more of a financial thing. How much can you afford to lose without your lifestyle changing?

 

Derek Gregoire: Exactly. So, some people, like if you have a pension for $300,000 a year, you might have the capacity to lose $2 million and still be fine because it’s not going to affect your lifestyle, but you might have the tolerance to say, hey, if I lost more than $300,000, I’m not going to be able to sleep at night.

 

And so, when we run our clients, every time we have a review and we build these plans for our clients, they have an idea. It’s not perfect, but they have an idea on the downside, in the upside, what they could expect during a really bad market, in a really good market. So, if they have $2 million, a lot of times they’ll come in and we’ll say, hey, the way it stands now, you could lose like $800,000 in a bad market and you’re going to retire in two years. That’s pretty risky.

 

And so, will a lot of them end up saying, okay, well, I feel much more comfortable if my downside was $400,000 or $300,000? And then we’ll build a plan accordingly and we’ll know, hey, if this loss happens in your plan, it should be on money that you don’t need for the next 10, 15 years, or more and that should help take the emotions out of it. And because our clients usually have other portions of money that if they retire, that’s going to cover their lifestyle for a few years, I’d say 95% of our clients right now are down far less than the market if they have that plan in place because part of their portfolio is hedged and the part that’s aggressive is feeling the pain, but that’s only a portion of their overall net worth.

 

And so, like you said, it’s never fun to be down. I always joke around, we’re never going to be high-fiving when the market’s down, but you know that where those losses come from, we generally should have a plan in place that you don’t need those for years to come. And it’s still not fun, but at least you can kind of deal with it and get some of the emotional behavior, the reactions out of the equation.

 

Matthew Peck: Well, that’s exactly as I say. I mean, with that plan, take fear and greed out of the equation. You don’t even need it. So, that’s what we’re trying to do is because the markets are just laced with fear and greed and we’re talking about money that’s at work the entire time. If we can cut and edit those two words out of our clients, if we could just lower those emotions for our clients, then I think that’s a job well done. Well, actually, in times like this.

 

Derek Gregoire: The last thing, too, is think about where if someone now is about to retire, has everything in the market and they’re aggressive and they haven’t made changes and they’re feeling the full brunt, that’s where people get panic. That’s where people can make rational decisions. That’s what we want to make sure that our clients, anyone listening or watching this, avoids having a plan in place so you’re not going to make an irrational decision.

 

Matthew Peck: And it’s funny, too, about how we talk about often how we’re not the best fit for everybody. And I was thinking of a woman the other day that she came in and decided to move on. And she never came on boards. We never were able to get a plan for her. But me and some of the teammates talk about her a lot because I feel for her. She was really aggressive. She’s like, no, I can’t make any moves right now because I’m down so much. And she was just like almost like a deer in headlights, basically.

 

And so, we were trying to like, that’s okay. We could help you. We have a plan for you. We’ll make sure you’re all set. And again, she was just almost like in shock for a little bit because she had just retired in January and was just completely, again, in shock of what’s happening. And then she couldn’t take any action.

 

Derek Gregoire: Yeah, she just froze.

 

Matthew Peck: Exactly. And so, I just feel for her every day because I’m like, oh, I know that we can take that fear and greed out. I know a good plan can do. It doesn’t solve it, it doesn’t make it go away, but it helps.

 

Brian Roseman: Someone like that just has to get their feet moving. I mean, it happens to everybody. We all work. We’re human beings. We all have our strengths and we have our weaknesses. So, when you get that stuck deer in the headlights, and I’ve been in trades where it’s been like, oh, no, oh, no, oh, no. And you start hoping and praying and asking God questions. If that’s happening, guess what? You’re wrong. Just get your feet moving, get out of the position.

 

But if you’re being aggressive like this woman you’re talking about, she needs to start getting her feet starting to move. And once you start moving, then she’s going to determine, okay, she needs to make some changes. Until she comes to that, though, she’s stuck, unfortunately.

 

Derek Gregoire: Right.

 

Brian Roseman: And that can hurt.

 

Derek Gregoire: And we talked about some examples of market behavior. And was it someone from GM, General Motors?

 

Brian Roseman: Oh, yeah.

 

Derek Gregoire: And he was a CEO, right?

 

Brian Roseman: William Durant or William Durante. He is actually from Massachusetts originally.

 

Derek Gregoire: Really?

 

Brian Roseman: He was a notorious stock market speculator back in the 1920s and 1930s. He also founded General Motors, combined a bunch of automotive companies together. And after the market crash in ‘29, he kept buying General Motors stock on the way down. And like JPMorgan tried to pop up the markets, got a bunch of the big money together and went into the markets on the exchange when they had just bought lots of shares all over the place. It didn’t matter. The markets were so overbought, so leveraged up that they just continue going down for a while. William Durant went bankrupt. Now, General Motors eventually did go back up, but he was too leveraged up.

 

Derek Gregoire: He ran out of time.

 

Brian Roseman: He ran out of time and he lost everything. So, you really need to have a plan and have some discipline.

 

Derek Gregoire: Yeah, I think that’s the thing is like when you look at a retirement plan, we’re just talking about investments now. But when we set our company up in 2003 and how we’ve always built is to provide so much more than just that because from a standpoint, if you think of what we’re talking today, that’s just one little piece of an investment plan, is the emotional side, setting up risk capacity versus risk tolerance, building a portfolio, rebalancing, dollar cost averaging, tweaking, all the things that go into investment management, but that’s one piece of the pie.

 

Then we talk about income. Where’s your cash flow, pension, Social Security when you’re retiring? What are your expenses? How long? Do you have enough to cover yourself with inflation for the rest of your life? What if you passed away before your spouse? Vice versa? And then that’s bucket number two.

 

Then you go to the next world, taxes. How do we tax efficiently plan? So, the income coming to you isn’t 100% taxable. We can leverage within the tax codes. Do we do any tax loss harvesting? Do we do Roth conversions? How do we leave assets behind?

 

So, then we go into health care and all the Medicare and long-term care and HSAs and work plans, retire early. You might need health insurance, retire later. You have Medicare. What’s your supplement? How much is your supplement going to cost depending on your income?

 

And so, then the final piece is legacy, trusts, wills, health care proxies, leaving assets behind. The whole reason I’m bringing– I’m not trying to sound so convoluted here, but we’re looking at one little aspect of one area of planning today. We’re looking at the emotional side, which is huge, a behavioral finance and the behaviors of just the market and how people react to them.

 

But in reality, if I’m in someone’s shoes that doesn’t have a plan, just being better, emotionally involved in your portfolio isn’t going to be the answer. To me, to gain the confidence you need is having a plan that doesn’t miss anything. Every stone is unturned, every i’s dotted, every t’s crossed from income, investments, taxes, health care, and legacy. Unfortunately, you see a lot of plans. People come into our office for the first time. Their plan is a few statements. It’s investments. Very few people have that entire five-step, we call the retirement road map process.

 

So, in my mind, it’s having clarity where you’re retired, you’re enjoying yourself, you’re at graduation parties, visiting family, and you’re not wondering, hey, is every stone being unturned in my plan? Is someone looking out for my behalf on all areas, including investments, but all areas of retirement planning? And to me, that’s how you have that confidence to know, okay, we’re going to be okay, to know that all these areas are covered.

 

And I know obviously, the market behavior in behavioral finance is a huge part of it because if you design a plan, Matt, that covers all those areas and you have that upfront conversation with that client, our clients, every time we have a review, once or twice a year, we’re showing them, hey, here’s the current upside and downside. Are you okay with that? Or do we need to make adjustments?

 

Matthew Peck: Well, that’s the thing, too. I mean, you need to have an advisor that understands the fear and the greed and behavioral finance so that you can have your hand held when needed. You see what I mean? I was going to kick out of the fact that in the past, we have become more of like psychologists in the sense, and our clients will call it, like Matt talked me off the ledge, already kind of smiling about it knowing that they’re not on the ledge. But they get at the point because another line I like to say, too, is that long-term planning and doing what we do in a certain extent is very simple because you can break it down to income and growth and legacy and whatnot but doesn’t make it easy, especially when times like this are there.

 

So, as I mentioned, having an advisor that understands the background, how the markets move so that they can be there for you during that, and I always tell people too, especially in times like this, there’s no shame in having your hand held, you know what I mean? There’s no shame in reaching out to your advisor, just saying, hey, what’s going on? I’m not going to do anything, but just walk me through it. And I think and I don’t blame people, especially when it’s a bear market, we haven’t had a bear market in a while or at least an extended one, and after 2020, just shot right back up, so.

 

Derek Gregoire: Before we knew it hit you, it was already back up.

 

Matthew Peck: Yeah, I mean, it’s just sometimes there’s that lack of institutional memory and we all have short memories anyways. But I mean, think of in the sense that especially with the younger traders that are out there, they barely remember ‘08. They don’t remember ’01 and whatnot. And we’re talking about Black Monday in 1987. So, we’re all going back.

 

Derek Gregoire: That was my eighth birthday.

 

Matthew Peck: Hey, brother.

 

Derek Gregoire: I barely remember that, I’m sure. But that’s, yeah…

 

Matthew Peck: Just the fear of that, I mean, just making sure that your advisor has that knowledge so that they can help walk you through times like this because he then asked you again with the plan in place, that also makes it easier.

 

Derek Gregoire: But the other thing too is just like a lot of times, we’ve said it before, what you can do, as an advisor is you can overcommunicate. We overcommunicate during times when the markets are volatile. Matt does his market reports. We do just extra reach outs, extra emails, just because we know if people are nervous, you want to make sure that we’re there for them.

 

And what I’ve always said is sometimes people almost need a leader more than they need a financial advisor, just someone they can trust, hold their hand, go through these situations with them, and then eventually, we know it’s going to get better, the markets get better and things go back to what– just like this is a sun comes out and the stormy weeks and hurricanes and then the sun comes back out. The markets have always gone up and done well. But again, during these times, it’s important, as you said before, to stay disciplined to your plan. Number one, make sure you have a plan, can’t be disciplined to nothing. So, Brian…

 

Brian Roseman: And to have rules.

 

Derek Gregoire: Yeah, there have to be rules. So, any other closing thoughts as we wrap up just on this topic? Or anything else you wanted to share?

 

Brian Roseman: Well, there’s always things to worry about in the markets. There’s always something for the markets to worry about. There’s always pessimism that’s going to be out there. So, it doesn’t matter what year we are. Like even during the 90s, like, oh, we’re spending some money, the economy’s too hot. But look back at 1987, on Black Monday, the markets dropped over 20%. The Dow finished down 22.6% or 22.8% that day. It was horrific, right?

 

Matthew Peck: One day. It’s a rough Monday.

 

Dean Barber: That’s a rough Monday.

 

Brian Roseman: And if you look at a long-term chart of the markets, it’s a blip.

 

Matthew Peck: Yeah.

 

Brian Roseman: The markets have done nothing but continue to climb higher. Now, is there some chop? Like if you’re closer to retirement, I can see where that makes you nervous, but that’s where you need a plan. But over the long run, the markets are fine. Like I was trading during the crash of 2000, 2001, 2002. I traded during 2008, and then selling never seemed to stop, but the markets are miles higher than they were from back then.

 

Have faith in the US economy and the world economy. We’re going to be okay long term. But you need to have a plan. So, make sure you can navigate through these times of uncertainty. You really do because if you look at what the markets have historically done, you’re going to be okay as long as you have a good plan in place to make sure you’re going to be okay.

 

Derek Gregoire: Yeah, exactly. So, final thoughts? What do you have right now for a plan? Is it just a few statements? I have a 401(k), an IRA, and an annuity. That’s my plan. To me, that’s not enough. That’s just not enough. If you were in my shoes or if you were my mom or dad, that’s not going to fly. So, whoever you are, if you’re watching, if you’re an SHP client, you have that plan. If you’re not, these are the areas that I would address, is have someone, whether your current advisor, someone here, or someone that fiduciary take you through the process and say, let’s look at your entire picture, not just the investments.

 

Let’s look at the investments, make sure you’re okay, but then take that into all areas of planning from income. Are there savings that you could utilize, health care, estate planning, the whole picture? And then to me, if I’m someone coming into a meeting and I have none of this covered, leaving after a few weeks or a few meetings and knowing that all this is taken care of and is going to be looked at going forward, that’s huge. That would alleviate so much mental space and stress as I head into retirement, which unfortunately is not going to be for a few years. But that, to me, is the next step. And whether you saved $500,000, $5 million, or $15 million, these are areas that can improve, in my opinion, your situation, give you a little bit more clarity as you head into or if you already are in retirement.

 

So, thank you, Brian, so much. I think it was a great topic, the importance of behavioral finance, just the lessons of the market in general, why things go up and down. And thanks to the history of everything you’ve shared with us, and I’m sure we’ll have you back on soon.

 

Brian Roseman: Thank you very much, sir, Matt. I appreciate it.

 

Derek Gregoire: Thank you.

No statements made during the Retirement Road Map® podcast shall constitute tax, legal, or accounting advice. You should consult your own legal or tax professional on any such matters. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk, and unless otherwise stated are not guaranteed. Our Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor.  Insurance sales are offered through SHP Financial, LLC.  Our advisors and insurance reps may offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.

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