When you hear news about "the market", how much is actually applicable to your investments?

• Goal statement: I better understand what they mean when they say 'the market', and how that actually relates to my investments. (01:42)
• When you hear about the market on TV, most people's reaction is either "Oh no", when it does, something bad when it goes down or "Great! Yes", when it goes up. However, they are not talking about your specific investment. (03:10)
• We could break this down, in fact, much further because out of your stock piece, maybe it isn't all in the S&P 500 maybe part of the equity or the stock pieces in real estate funds, maybe foreign funds, maybe small cap funds, small company funds, which are all different than the S&P 500. (05:51)

Quote for the episode: "Basically, just look down at your bingo card that is your investment account and make sure, before you get worried, that it is actually matching what's on your card." (06:53)

Securities offered through TFS Securities, Inc., and Advisory Services through TFS Advisory Services, an SEC Registered Investment Advisor Member FINRA/SIPC. TFS Securities, Inc., is located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Welcome to the Enjoy More 30s Family Finance

podcast. The only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us stress, us out, and distract our focus

from simply enjoying life.

Hello, and welcome once again to the next episode

of this Raising Your Investment Mindset series. This series, if

you don't remember is what we're trying to do to help you reframe

to some degree, kind of how you may view the scary unknown out

there that is investments. So it's not about stock picking or

anything like that. It's about helping you better utilize

investments, in a more constructive way, better reach

your goals, and make life more enjoyable as a result.

So as always, if you like what you're hearing, please make sure

to subscribe, follow us on Apple podcasts, wherever you may

listen. Clicking the stars, leaving the reviews, it really

really helps us reach literally millions of other young families

out there that are just like you.

Now last week, if you remember, we discussed how saving a little

bit more is almost always possible. And just how hugely,

hugely significant that little extra bit can be and how much

farther it could take us down the road for what we're trying

to accomplish. So if you haven't listened to that yet, I would

definitely recommend to do that soon.

Today's episode though, is titled Bingo! You Probably Own

More Than the Market, where we're going to discuss what

exactly "the market" is, and how in all likelihood your portfolio

expands probably beyond what they're talking about every day

on TV. The goal then for today's episode, so the if you can say

this at the end of the episode, then you have succeeded

statement is "I better understand what they mean when

they say 'the market', and how that actually relates to my

investments." So "I better understand what they mean when

they say 'the market', and how that actually relates to my

investments." You are hunched over in your seat, you're

watching your card, your hands are sweaty, you have just a

focused intensity. The chair, it's not comfortable, but you're

so close that you wiggle around in your seat. Just one more, and

you've got it. All of a sudden you hear that word we're all

aspiring to hear the sound of victory, the sound of impending

joy. Bingo arises across the room, your heart sinks, no! And

just like that, it all slips away. Now I'm sorry to inspire

probably what are some very, very painful flashbacks from

your bingo days. But Bingo is actually a great parallel for

what we're about to talk about with "the market". When you play

bingo, you all have a card, and you are all playing the same

game. But your combinations of numbers are different than what

anyone else has out there. Those announcements for each next

number, they may be part of what you have and they may have

nothing to do with your card at all. So it may make up a more

important position on your card that you have and it may not.

When you hear about the market on TV, most people's reaction is

either "Oh no", when it does, you know something bad when it

goes down or "Great! Yes", when it goes up. However, they are

not talking about your specific investment. They're not saying

"Hey, John Smith, this is how your investments did today."

What they're talking about is what they call the S&P 500,

which is likely not the only thing that you own. The S&P 500

is what they call "the market" when they talk about it on TV.

So when they say "the market" did this, or "the market" did

that. They're just talking about the S&P 500, which is something

they call an index. It is supposed to represent the

largest 500 companies in the US together in one index, organized

by how large they are. So it's called market capitalization.

But it's really just a fancy way of saying how much the company

is worth based on its outstanding stock value. So when

they talk about "the market", it's just the S&P 500, which is

just a representation of again, the 500 largest companies in the

US.

So just like with bingo, we need to make sure that we look down

at our card and see how that may actually relate to what we have.

For starters, most people do not even own 100% stocks. They

usually have some stocks and some bonds. So let's say that

you own 50% stock in only the S&P 500 and 50% in bonds. If the

stock market goes down 10%, you're now 50/50 portfolio so

50% stocks/50% bonds, would only go down 5% since half of that

was in bonds. Now let's take that a step further. That

assumes that the bonds had no return that day, what happens

most of the time or much of the time is if stocks go down, bonds

tend to go up. Because when stocks are sold, and people get

the money from selling the stock, they need to put it

somewhere, right? It has to go somewhere else, it doesn't just

disappear into the world. And many times that means that that

money that they get from stocks are put into bonds. So if bonds

went up 5%, and that same example, so the S&P 500, or "the

market" went down, 10% bonds went up 5%, then your cumulative

return was only down 2 1/2%. So what you see on TV, "down 10%,

"the market" went down 10%." If you look down at your card, in

this example, your account only went down 2 1/2%. We could break

this down, in fact, much further because out of your stock piece,

maybe it isn't all in the S&P 500 maybe part of the equity or

the stock pieces in real estate funds, maybe foreign funds,

maybe small cap funds, small company funds, which are all

different than the S&P 500. They all may be moving differently to

what the "market" was doing that day. So as you can see what they

talk about on TV, just like the number they announce on that

bingo card, most times it does not correlate to your actual

accounts, especially if you are properly diversified.

So that leads us to the end of our episode today. So let's

circle back around to what the goal statement for today was. If

you can now say "I better understand what they mean when

they say 'the market' and how that may actually relate to my

investments", then you've succeeded in the goal for today.

So not too long of an episode today. Basically, just look down

at your bingo card that is your investment account. And make

sure before you get upset, before you get worried that it

is actually matching what's on your card.

Thanks as always for tuning in today. Join us for next week's

episode, Emotionally Abnormal, Statistically Normal and Healthy

Cookies, where we're going to cover just how much investments

can go up or down over the short term, and still being normal

from a statistical point of view, despite feeling very

abnormal, of course, from an emotional point of view, and of

course how you know, healthy cookies fit into all that mix

that whole equation.

Overall, if you're able to implement what we cover today,

like I always say, great, fantastic, wonderful. You have

less to worry about than before you can focus more on enjoying

life. Fantastic, right? If you are wanting help with these

things, though, or if you have questions you need help in

clarifying, check out that Ask Joe section on the show's

website. EnjoyMore30s.com. EnjoyMore30s.com and you can

also connect with me directly by visiting my wealth management

firm's site New Horizons Wealth Management at nhwmllc.com. Until

next week, thanks for joining me today and I look forward to

connecting with you again soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal, tax, or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer, or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS Securities, Inc., and TFS Advisory Services an SEC

Registered Investment Advisor Member FINRA/SIPC.