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-- -- Well also talk about market psychology of housing right listen to this.
Some relief today after the markets got rocked for a second day after the Fed merely hit -- At a potential pullback of its stimulus program later this year check up that -- It's -- out.
Retirement savings taking on the chin despite a late rebound in the Dow and S&P so how do you manage the fear in this marketplace joining me now.
Doctor keep tableau psychologists in Fox News contributor and Sam Stovall chief equity strategist at -- and IQ.
Think I'll start with you I've known you a very long time we want to talk market psychology here.
Is our professional investors.
Just losing -- Well I think that what's happening is that investors are making a lot more out of the move that we've seen.
Because we have not even declined by 5%.
And historically we have a decline of five to 10% every year since World War II so we're really just doing what we normally do.
See I think people have lost their minds on -- I agree with you.
Doctor -- if you think about this kind of thing all -- time market psychology.
-- food lines in the sand right now the people are saying -- my goodness things are crazy somehow we've decided that a 4% mortgage rate over that's gonna kill the market right.
We've decided that it 2.5 percent yield on the ten year treasury is insanity what.
Well well -- say that the reason -- you have that kind of panic is tried telling an alcoholic.
That there isn't going to be any alcohol available for.
Four hours or six hours in other words.
When you're drugs.
With free money at and irrational interest rates that are artificially low.
The idea of a pull back brings reality back like wait a second yeah it has been a bubble.
We've been addicted and dependent on government fixing the system.
And guess what it can't be sustained and yet people get their -- up they get panicked they should.
Well I think you make a great point Sam -- -- Government standing behind actually that Federal Reserve Ben Bernanke keeping this market afloat for four years we've had a four year bull market.
We have to transition now to something else how to we do that it's individual investors.
Well I think we as an individual investors don't really have a choice in the matter we're gonna have to be dragged along and it really depends on how we -- -- -- -- be be rat long.
I don't -- -- I want to lead the charge and figure out the right way to do it Tellme now.
Well the way utilities you don't overreact.
My feeling is that what the Fed is trying to do is to avoid a Japan like deflationary environment.
They're the only game in town because congress can't seem to get its act together to come up with -- any kind of measures that would help to support the economy and so.
Interest rates are artificially low.
They didn't hit they told us that -- the data can get used to come in as it is.
We will start -- tapering program in the latter part of this year and end by next year so basically we're just getting back to a non stimulus environment.
So back to normal really the doctor keep people feel like.
It's not back to normal it's something new how would you advise people to deal with what is probably going to be a very volatile summer and then fall.
-- number -- to get expert advice you don't want to be your own psychiatrist.
And you don't wanna be your own financial planner unless you are one.
And so I think that the other thing is to say look now getting to sleep and not having nightmares are waking up in the middle of the night.
Should mean that you conveyed to your financial team or advisor the fact that you want to be conservative you wanna preserve your position.
You don't want to be subject to bipolar disorder.
Which is what happens.
When you several reality and you let your moods float from -- a load a high.
Because of artificial.
Government propping up of you gotta come down to ground level and I think the people should become -- financial advisors.
Hey maybe they eat this -- landing as easy as possible because it's common.
Well Sam when I think about this because.
I don't really make decisions based on what the market's doing with my retirement accounts -- my savings accounts instead what I do is I'm always putting money and all the time.
So I take out all of that anxiety and you know it's possible that I don't even look at it as much as -- -- Would you tell people who they know they shouldn't operate off of their got.
I say that they should be more like you.
That they should realize that we have had declines of five to 10% every year since world war two and we've gotten back to break even in only two months.
We've had twenty declines of ten to 20%.
We've gotten back to break -- and only four months so you probably better off buying then you are bailing.
And the only way -- you actually lose money is by selling at the bottom so I would say don't let your emotions rule as the other guest was saying.
You're paying an advisor to hold your hand and to tell you not to sell at the worst possible time.
I don't bail doctor -- the last -- here what would you say.
Yeah -- in the last word is is this that.
-- since we've seen even the Internet bubble when that burst that wasn't such a quick.
Recovery that ruined a lot of terrible and so for the folks who were at the manic high.
Now I'll be there's a -- and say look don't be don't have irrational exuberance either.
Green in yourself plan for stormy weather to come and I agree with -- Mike Mike -- guests here don't panic right.
Keep your head.
When others are losing their.
Particularly the professional training you know what they make -- -- -- daily times like this this is what they live for this is what they want is an individual investor you don't have to play that game.
You can be smarter than Wall Street and that's what we talk about here.
All the time doctor apple and Sam thanks so much for coming on great advice and great backs love that thing.
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