Since the start of the year, we have seen a drop in the stock markets. The goal of investing is to grow and build wealth, but when the markets are moving down it can be hard to see the point of investing. In this episode, I share with you what to do when the markets suck. Because ultimately you deserve to feel optimistic and excited about achieving your biggest wealth goals! 

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I am a financial professional, who specializes in helping people to achieve their financial goals.  My absolute passion is creating new possibilities in people’s lives by showing them the ropes when it comes to money. I’m here to spark healthy and positive conversations around wealth and investment and create a world where nobody is limited by their financial situation. I believe this begins with education and shifting our relationships with money. I love getting to witness people achieving their most ambitious goals and creating new possibilities for themselves and their families! 

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Welcome to the wealth and wellness podcast with

me Kaylie Bob air, I specialize in helping people to achieve

their financial goals. I have a love for all things numbers, and

I'm passionate about financial literacy. My goal is to spark

healthy and positive conversations around wealth and

investment, and create a world where nobody is limited by their

financial situation. But wealth is just one piece of the

equation of living our best lives. So join me as we explore

both wealth and wellness topics. From your net worth to your self

worth, get ready to take confident action.

Hello, this is Kaylee. And thank you for listening to this

episode of the wealth and wellness podcast. For today's

episode, I thought it would be timely to talk about what to do

when the stock markets suck. So what do we do when they're going

down? When they're going essentially in the opposite

direction of what we would like to see, as an investor, you make

investments, and you you know, put your money towards these

investments. And the goal is really to see them go up in

value. And unfortunately, they do not always go upward. And at

times the markets as a whole move downwards. So since the

start of this year, so since the start of 2022. This is exactly

what we've been seeing the markets have continued to move

downwards. And that can be uncomfortable, especially coming

off a year, like we had last year when there was great

returns. Overall, the markets performed positively. And they

posted positive return numbers for the year. So again, it's

especially hard to see poor performance when we just been

used to seeing positive performance. And just as a side

note, another word that probably is coming up a lot and you're

hearing a lot of right now is volatility. And I just wanted to

quickly kind of break that down. So volatility is an investment

term for when the stock market experiences periods of

unpredictable and sometimes sharp rises and falls, it can be

caused by a wide range of different factors, political or

economic factors. And we're seeing you know, that being the

case right now for some of the short term events that are

happening. And when you see this sudden change in the market, you

feel, you know, as an investor, you might feel tempted to rush

into buying or selling behavior. And also, you know, it might

lead you to maybe acting too quickly, or lead to behaviors

such as buying high and selling low. And we're going to go more

into detail on that. But I just wanted to kind of as a side note

also include the topic of you know, volatility, when we talk

about this downward movement, as well, we're hitting a lot of

volatility, meaning there's just kind of the sharp rises or falls

that we're seeing as well in the market. So I want to acknowledge

first that is not comfortable to see the markets going downwards.

Because what that means is that the value of your portfolio is

most likely moving downward as well. When the market as a whole

dips, and it moves downward, there is a good chance that your

investments have also moved. And that's why we use, you know, the

market index or the market indices when we talk about how

the markets are doing as it provides us gauge of overall

market moves. And it gives us perspective as to what the

markets as a whole are doing. So then as an investor, if we see

that the markets are poor, like performing poorly, or having you

know, negative days, or they're moving down, this is usually a

good indication that your individual investments are doing

likely something similar. So if the markets as a whole are down

quite a bit for the day, you know, generally if you're

invested in a diversified portfolio, and you're looking at

indices and indices, an index sorry, that is representative

of, you know, how you're invested. If it's the US

markets, or global or Canada based and see that those all

move down, then there is a good chance that if you check your

portfolio, and your investments that they move down as well. So

it's a good tool as a comparison or indication of the general

direction of your investments to so if the markets are down, you

know, for the year, let's say the markets, US markets,

Canadian markets, global markets are all native for a year. And

you know, maybe the numbers a bit different for each. But if

you're invested in the markets and you're invested in those

markets, you're likely going to see that your performance

declines. For the year as well. So if it's negative investment

returns or market return story, then likely your portfolio will

do the same. So it gives you some perspective, you know, it's

nice to see your investments go up in value. And that's what

again, we want as investors. But if the markets as a whole are

moving downward, then you can't expect that your portfolio is

going to be doing something drastically different if you're

exposed and invested in the markets. So again, not

comfortable if you're looking at your account statement, for

instance, and seeing the decline, let's say you're

looking at, you know, your your month statement that comes in

the mail or over your email. And it's less than the number than

it was the previous month, or you're looking at the real time

values, and it's declined in a matter of weeks. Again, not

comfortable to see, of course, I do want to remind you, keeping

in mind that when it comes to investing, no money is actually

lost until a sell transaction occurs. So what you see when

you're looking at the value of your investment account is the

value of your investments valued on that specific date, or even

as accurate as that specific time if you're getting real time

updates, based on stock market, the stocks actually changed for

the day, obviously. And so if you're getting real time

numbers, what you're seeing on your account, is that real time

value, so you only really have that value, though, if you're to

sell out of your investments at that moment, and essentially

converted all to cash. So that value that you're seeing only

stands when the actual investment is sold, it's like if

you were living in your house and got the market value

assessed on your home, I mean, that's probably a little less

accurate. It's not there's not as much of an active market. But

if someone gives you an assessment, you know, you

obviously haven't made any money on your home, or you know,

cashed in on that value, until you actually go to sell the

house and specifically what you sell it for, that gives you the

number. So same is true with the markets, but there's an active,

you know, auction market happening, and there is buyers

and sellers, so you're getting that real time value of what

your portfolio would be worth, if you were to sell it out at

that, that day that you're seeing the number. So the value

of your investment account. Therefore, it's always going to

be moving a moving target almost like you're you're going to look

at a day to day, you know, maybe even hour to hour, you probably

shouldn't check it that often could get stressful, but it's

going to be it's going to move based on the performance of the

month, the markets, but money is not lost. So it's not that you

actually lost money. If the numbers lower this month, and

last month, you've only actually lost or locked that in, when you

actually sell the investment and recognize then you've sold it,

you get the cash for that amount for how many shares you sold or

for the position you sold. So I do want to clear that up first

that it's a moving number and it's not actually recognized as

that specific value until you actually go to sell it. So

depending on how you're invested the riskier portfolio, and that

number, it can fluctuate quite a bit if you have a lower if you

have just sort of like more of just an overall market exposure,

it can fluctuate again, especially in terms of

volatility. If you have much lower risk investments, maybe

you have more GIC based type investment for portfolio meaning

more like guaranteed investments, or ultra low risk,

then in theory, you should see a lot less fluctuation from you

know, day to day or month to month if you're looking at it.

But again, of course with that, obviously, you would expect

overall lower return numbers if you have something lower risk.

So again, nothing is actually gained or lost until a trade is

actually placed. The sell is made. Okay, so let's go into

more detail though and talk about our you know, the market

suck. Okay, so the stock markets year to date, again, where we

stand right now they are negative, and they've had some

pretty poor performance days with some, you know, steep

losses to start out. 2022 So you might be asking, now what, what

do I do and you might be taking action if you're a do it

yourself investor or you know, even if you work with an advisor

or you might be looking to take specific action to do something

so you're seeing the markets go down, they just keep decreasing.

And you're saying okay, what do I do I need to do something. And

unfortunately that question and and that response and reaction

might actually be doing you more harm than good. So that looking

for something to do might actually be you know, the worst

thing you could be doing And I completely understand human

reaction, when things are going bad when they're not going, you

know, when it's taken a turn for the worst, something has

happened that is wrong, something goes not as planned,

you know, our automatic reaction is to do something, we need to

fix it, if there's a problem, we fix it. But this approach, when

it comes to investing could potentially lead to even worse

results is what I want to suggest.

Then if you were to even take more of a passive approach, or

you know more of a not reactive, maybe more of a wait and see

type of approach. So the markets move swiftly, and they're

generally always a few steps ahead of us. So unfortunately,

it's very difficult to outsmart them. So if you're thinking that

you want to outsmart the markets, you know, they're

moving down. So you need to jump out of the markets well, they

move fast. And they do remember that they're usually a few steps

ahead of you. So when people try to take action, to avoid further

declines, or market movements, oftentimes, the changes are made

quite late on. And what investors actually might end up

doing is really the worst thing that you can be doing as an

investor, which is selling low, because we want to buy low, sell

high, like, Am I seeing this, right? It's getting late, I'm

taping this one is like, so we don't want to be selling low.

That's not the ideal scenario we want to be selling when things

have moved up, we don't want to be selling them at their lows.

But if you are selling into negative news and volatility,

you might end up selling at or near the bottom. And if your

intention is to reinvest when the time is, right, that's also

I would say an extremely challenging endeavor, timing

exactly when the right time is to invest again. So ideally,

finding that bottom saying, Okay, I, you know, want to get

out of the markets, but I want to get back in when they've hit

the bottom. That is really hard to do. And even the most

experienced investors don't claim to be experts at doing

this. So attempting not only to find the right time to jump out,

but then also trying to find the right time to come back in is,

again, that's basically twice as difficult to do because you're

trying to time two major points or, you know, events are part

points in the the market cycle, and trying to do both of those

correct. And generally, I would say for the most part, what

instead usually ends up happening is when an investor is

looking to do something as a reaction to the markets moving

downward, they generally sell their investments while it's

already on the decline or moving down. And then when they look to

reenter they do so a bit later on, when it's already started

rising and moving upward. So this means they actually end up

being worse off, where they've positioned themselves, because

they've sold well, it's going down, now they're buying back in

at a higher price while it's moving up. And they've just

essentially made it as if they invested at a higher point and

sold previously at that lower point. So essentially, they

probably in that scenario would have been better off if they did

nothing. And a really recent example of you know, when this

major kind of market move happened, and when a lot of

people were reacting was the the big plunge that the markets took

in March of 2020. Due to the outbreak of the pandemic,

internationally. So, you know, there's this international

pandemic, there's lockdowns happening around the world, and

the markets move down really quick as a result, and they move

down essentially about 30%. Again, some sectors move down

even more, but you would have seen a portfolio that was

invested in the markets potentially move down in a

matter of weeks, potentially, you know, 30%, or more, even in

some people's cases. And so that was stressful in many levels,

obviously, dealing with a pandemic, you know, people

losing jobs, a lot of uncertainty. And it was

difficult to see such a large decline, then, of course, to in

the value of your investment portfolio. But what followed

this swift move downwards was the markets, gaining back their

losses, and even moving above their pre COVID levels in

brackets. So I say, of course, for most sectors, so oil and gas

was a bit slower to recover and hasn't potentially maybe

overcloud recovered fully. And there's, you know, a few stocks

that have not fully recovered to their pre COVID levels, or they

were a bit slower, but for the most part, it was also pretty

quick recovery. So they called it this sort of V shaped that

was made in the markets meaning that it moved down quite quick,

but it also recovered quite fast as well. So for those that maybe

were wanting to flee during the pandemic, when it was first, you

know, all happening again, it moved down really quick. So you

might have sold down along the way, and then waiting to get

back in at the right time, it moved up rather quickly too. So

you might have gotten in a little bit later. So that's a

real life example of how you know trying to time the markets

and thinking that you can, you know, pick the right timing of

when you're going to be invested. It's challenging,

because things move quickly. And it's usually that they're

happening a few steps ahead of you. So I do just want to make

investors aware of that. So you know, something to consider

maybe that taking action or that response of what should I do?

The answer is maybe that that's not the best time to actually be

doing anything.

So I want to talk about two. So when it comes to money, as human

beings, we're emotional beings. And we take that emotion with us

to all aspects of our lives. So we definitely have that emotion

come into, you know, the money part of our lives. And the

thought of losing money doesn't feel good, because it can cause

a lot of emotions to come up, you know, this money could be

money you're saving for children's education, could be

money, you're saving for your financial freedom. So yes, the

this does bring up emotion, it's an emotional topic. And I would

say emotions are unavoidable when it comes to your money. But

that being said, I find that the best investors are those that

are able to separate emotions from their decisions, when it

comes to their money, and sort of try to look at it from a non

emotional lens, kind of take a step back, and have more of a

rational point of view, again, very hard to do in practice. And

for people that know maybe they're not able to do that on

their own, it's often you know, helpful to seek support in so in

the form of a financial coach, a financial advisor, any sort of

financial professional, having someone as your accountability

partner, or to keep you on track with that is obviously, you

know, a consideration to make if you are struggling with that

separating that emotion from how you're going to act or react.

And I'm not trying to like suggest that you get rid of your

emotions, again, we're emotional beings, I would say it's

impossible to try to just say, no more emotions. But I'm asking

you just to even have an awareness of how emotions can

play into your financial decisions. And just to be

careful how these emotions can be influencing your financial

decisions. You know, it's about avoiding the errors, that

emotions can cause us. So when our decision is made in that,

you know, very emotional based, feelings based mindset, it's

often you know, the things we're doing is basically, you know,

the things that are probably not the best things to be doing. And

and that's just like one area I talked about just before this.

So the idea of, you know, markets aren't performing good

I'm, I need to do something I need to react, when that might

be the the worst course of action for you to take, because

it could lead to even, you know, worse results. If you're doing

if you're jumping into the wrong times and selling at the wrong

times. And it's, you actually would have been better off maybe

to stay the course. And again, we saw with what happened during

COVID people that stayed the course, were often better off at

the end of the day than those that tried to jump back out,

jump back in. So I'm asking what I am suggesting is that you

avoid the emotional pull that might come up when it comes to

investing. And be aware of it. So just being aware, hey, this

is emotions coming into play is this, you know, the best course

of action for me to take. And just know that, you know, maybe,

maybe it's not as taking a step back, giving it some time

looking at this initial situation, and and trying to

maybe bring in some rational thought process process to it as

well. So then, you might be asking, Well, what should I do?

So again, the reaction is as human beings, it's okay, things

are going bad. There's a problem here, I need to do something I

need to fix it. And I'm telling you, potentially your best

course of action is to not react to not just jump in and do

something, especially because it might be very much influenced by

emotions. So then you're now saying, well, then what am I

supposed to do? What should I do?

So in all honesty, you know, usually the best reaction when

the markets are moving downward is just to not react at all.

And, uh, generally, you know, don't suggest to people in times

of extreme volatility or dips in the market, to, to use those

times as time to make big changes, again to protect you

from selling low. So if you're looking to make extreme changes,

those probably aren't the best times to do it, you might want

to just wait and give it some time and look for less volatile

markets to do so. You know, we don't know what's going to

happen on a day to day basis in the markets. But what we do know

is that historically, over longer term timeframes, the

markets have always returned positive results. Again, this is

based on historical numbers and over longer term time periods.

So we're talking 20 years plus 30 years plus 40 years plus. So

even, you know, when things are moving downwards, it might be,

you know, if you're investing right now, and seeing those

declines in your portfolio in those values, you might be asked

yourself, well, what's even the point of investing. And again,

that's the point is that over long term periods, investing has

provided investors with growth and positive results. So when we

zoom out, when we take a step back and look at those long term

charts of the stock market performance, it is an upward

sloping line. So there are some dips that occur, because there

are pullbacks markets have corrections, there are

recessions, there are bear markets, those have happened,

but still standing back and looking at that it is an upward

sloping line, the line still moves upward with all those

events that have occurred, it has still posted positive

returns the markets. So instead of asking the question, what do

I do? And having that again, very natural human reaction, a

better approach, I suggest is to look at instead, what can you

control. So like life, in general, so much of investing is

not in our control. And unfortunately, you and I cannot

affect the market performance. We want it to go up, we can't

just wheel it to go up and all say, well, we you know, we all

agree that it should go up and we want to see it move upward.

Therefore, let it move upward. That is just unfortunately not

something that could occur. And it is not in our control. So

what the market does, we have to remember, really remember this,

that what the markets going to do on a day to day basis is

completely out of your control. So if that's the case, what I

suggest you do then is focus on what you can control. And, you

know, what can you control that you might be saying, well, what

can I control if I can control the market? Well, there are

factors you can control when it comes to building wealth, and

investing. So one thing you can control is your savings rate.

That's how much money you're putting away. And adding to your

ongoing investments on maybe a monthly basis, you know, semi

monthly, weekly, yearly, that number that you're consistently

saving and adding on an ongoing basis or a recurring basis,

that's something that is in your control. And if you're doing

that, that's fabulous, especially as the markets are

going up and down. Because you're adding to different

points in the market, the markets might be up and you're

adding some money that month, then the markets have pulled

back and you're adding some more that month. And you're just

adding again, ongoing there, it's moving up and down. And

you're sort of taking the knowing, I guess accepting that,

Hey, I can't control when they're going up or down or how

much they're going up and down. But I can control saving ongoing

and adding on an ongoing basis. So I'm taking advantage of some

of these dips as well by doing so. Another thing you can

control if you are sitting on some extra cash that's not

needed in the near term, you can consider adding that to your

investments when the markets are down. So so many people in

hindsight have said that they wish they put more money or if

they invested during the lows of the market in 2020. Especially

some of the hardest hit stocks that were down much more could

have been down more like 80% or more, you know, people looking

at where those are trading now coming out of that and after

Mark Three covered from that. Well, so many people are saying

Well, I wish I would have invested or I should have put

more money into the markets. Well, you don't have a time

machine to go back in time and do that. But there are

opportunities to add more money at any time the markets

go down in value Anytime markets take a dip, that opportunity is

always there for you. And the markets move up and down. And

that's just part of the market cycle. So there was always going

to be more of those opportunities. So just because

you missed out on what happened during COVID, during 2020, when

it was first really affecting the markets, well, you can find,

you know, another opportunity and an A don't get too caught up

in finding the absolute bottom. But save yourself, I'm adding

money below the previous highs. So you're still essentially

getting a discount from where it was previously trading. Because

again, if you're going to wait and say, I'm going to wait till

it's the absolute bottom, and then I'm going to invest, well,

it's very hard to find the absolute bottom. For those that

maybe have or can, it could have been potentially by sheer luck.

But I would say on a consistent basis, that would be really hard

thing to predict. So even just saying, you know, when I see the

markets go down in value, I do have some extra cash I'm sitting

on, I'm going to add it to my investments, that's something

you can control. Another thing you can control is your overall

investment allocation. So being invested in a way that is

suitable for your risk tolerance and your timeframe. This also

includes being diversified in your investments. So again, a

portfolio that was primarily primarily sorry, invested in oil

and gas, it was impacted more during March 2020, then a well

diversified portfolio might have been where it was the more

evenly distributed. And this is the same with a tech focused

portfolio during the tech bubble, where those were the

companies that were the hardest hit, and those were the

companies that came down a lot in value. So you can and should

ensure your portfolio is diversified across different

types of investments across different businesses and sectors

and geographically as well. And that's something you can control

that is in our control. So focusing on what you can control

when the markets are declining, is what will serve you best in

continuing to build your wealth and make those smart financial

decisions. So it's going to help you stay on track to achieving

those longer term goals.

And this leads well when I'm talking about longer term goals

into another key piece of advice that I would suggest. And that

is about embracing patience. So what can you do when the markets

suck, you can embrace patience. Successful investing requires

patience. And there's so much proof of this, if you're reading

books about investing, if you follow some of the most

successful investors. You know, a good example that I'm sure

everyone's familiar with that listen to this is someone like

Warren Buffett, and one theme that constantly comes up from

his investing approach is about patience. I would say as a

society, this is my rant, we have so much less like less and

less and less patient as a whole. So we are becoming very

much more, you know, expecting things quick and everything has

to be fast. And even look at our social media consumption, we've

moved to this model of you know, wanting to just watch, tick tock

like short video formats, and that's where our attention span

is, is we want to be, you know, served these forms of

entertainment or, you know, we're only willing to give it a

few seconds before we want to move on to the next piece of

information or you know, yet pass on to the next sort of form

of entertainment, whatever it is that you're using their social

media forward. And again, this is just an example. And I like

tick tock, I get stuck in the the realm of watching tick tock

videos. But again, I think it just speaks to how short of an

attention span we have and how quickly we want things even in

our behavior with like online delivery. So we used to be okay,

when we ordered something online. It might take weeks to

get there. And that was like okay, yeah, it'll get here in a

few weeks. Now we expect it in the same day and even more on

that. It's like no, we expect it now, can we get it within hours?

Can we get it sooner? And that's how everything is moving that

quick, quick, fast, fast. So asking and expecting patience

and investing I would say is very difficult with these

shifting expectations. But it's so important. And when we look

at like our investment performance and return numbers,

again, we want to take that patient approach we want to look

back and say okay, what are The numbers like return numbers,

we're seeing over five years, over 10 years on your portfolio

or in your investments over 20 years, what are those return

numbers look like? Short term events are always going to

happen. And for the most part, I would say most short term events

are the ones that are really tough to predict. But what

matters and impacts your overall wealth is not your investments

did necessarily this week, or this month, it's how they

performed on that longer term basis. And again, this, of

course, the caveat to this is keeping in mind, you're

investing appropriately for your timeframe. So if you do have a

shorter term timeframe, let's say I'm saving for a down

payment within the year, you know, move putting the money in

the markets, and hoping for big gains over a short time frame,

not an ideal investment scenario. So I'm talking about

investing in a sense of expecting long term growth

numbers. So in that sense, it does take patience, and probably

more patience than you, you or I, or anyone, again, in this

changing the sort of dynamic of instantaneous and how quickly

we're consuming and wanting things. That is probably much

more patience than we're comfortable or used to, to think

of like, wow, two year return numbers, three years, five

years, 10 years. That's crazy, like, what else are you looking

at for 10 years. But that is important. And that's vital when

it comes to investing. Because those longer term numbers

provide you with a much clearer representation of your overall

performance, and a much better indication of your progress

towards your goals when it comes to investing. So if the goal is

saving for your financial independence, or retirement

number, then I don't want to see you know, what your performance

has been for the week? Or what your results are you want to be

looking at? Well, where's my portfolio gone over the last

five years, 10 years? How much has it grown and compounded

towards that goal? And, you know, if you're, if you're doing

that you're getting a much better view of okay, am I on

track? Am I moving towards that goal, rather than looking at the

day to day, because the day to day fluctuations can drive you

crazy. And if you base sort of where you want to get to, based

on the day to day, it's going to be all over the place. So you

have to really put your goals into perspective. And if the

money is for your retirement savings, and you're not even

looking at it to draw on that for 15 years plus, then is it

really worth your time really stressing out and looking at the

day to day fluctuations that are happening right now? I would say

probably not. So I'm not saying you know, ignore your

investments all together and take a peek at them in 10 years

time. But I am encouraging you to look at the bigger picture

and see, am I moving towards that goal? When I look at that

bigger picture, from a, you know, five year perspective from

a 10 year from a 15 year. That's what really matters is that

getting me closer to my goal. Again, the day to day, it's

really hard to gauge from the day to day with all the

volatility and fluctuations. So we do have to take a step back

and look at the averages over longer terms to get a clearer

picture on performance and progress toward the goal. So I

hope this episode has helped to relieve some of the stress or

anxiety over crappy markets. And you know, when the markets suck,

I don't like it either. So I'm on I'm on your side. But I you

know, I urge you to not let market performance get you down.

Because I do believe that when it comes to money and wealth

building, you deserve to feel optimistic and positive about

your money and your wealth goals and know that you're going in

the right direction. And I know sometimes that's hard to do

again, with that short term day to day what's going on. But if

anything, I hope this episode has helped kind of ease some of

those concerns and the stress and anxiety and look at that

bigger picture. So thank you so much for listening in. I hope

you enjoyed today's episode, and I will catch you on next week's

episode. Thank you so much bye for now

I hope you found value in this episode. And because I'm such a

proponent of taking confident action, I want to pose a

question to you the listener. What is one action that you feel

inspired to take after listening to today's episode if You enjoy

listening please subscribe and share with your friends and

family thank you so much and I will catch you next time