Investing for a Better Tomorrow with Greg Johnson and Paul West

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Fire nation sitting very patiently listening to all the great words of wisdom that you're gonna be sharing with us about investing for a better to morrow ends greg. Let's start with you. I'm curious about your thoughts on the importance of both diversification in risk tolerance when it comes to creating long term wealth. My audience are entrepreneurs. Small business owners. They really need to understand. Where diversification in risk tolerance are going to play in their world's good question. It's good concept. I yeah we deal with a lot of times with our clients you know. Sometimes you know when we have new clients or when we're talking to are trying to pitch the new people as well but He'll which really kind of interesting is a lot of people. Feel like you're not in the market meaning in by their terms of the market is just equities That is the only way you can make a return now. It's the only way of long hung to be successful if you do look at you know. Equities will perform better than obviously other asset classes. You know over the long haul. I we kind of showed our clients. And you'd look at you know the Portfolio just the s p. Five hundred since two thousand until now in menu look at the a diversified portfolio. Where it's sixty cord sixty percent Equities forty percent barnes. She may have some. Neil that as well may have some International stocks on the equity side but the sixty forty portfolio actually rob performance. Confide under which really interesting edgy. Do that taking less risk so what. I really say the people is look at times. We go up to seventy or eighty percent stocks. You know there's going to be other times when you make below sixty or sixty forty down to fifty fifty something of that nature. But you don't just believe that by taking risk your get returns for it. And that's something that's it's difficult concept for people to understand especially earlier but careers but it's something once you do understand it's gonna awards over the long haul and fire. Nation is critical. To think about is even when greg sharing this information and you know he might be talking about a one or two percents. You know of a higher return per year. My some people might kind of be like Well is that really that big of a deal and the answer is it's a huge deal as a massive deal over the course of a ten year portfolio. I mean it literally can be the difference of millions and millions of dollars so paul. What do you want to add to what greg share. What do you wanna riff on. Greg makes good points here. Just a piece i would add onto. This is diversification is all to help people be comfortable so when i think about risk. It's a lot of it's behavioral Everyone likes to chase latest had ideas. We're certainly seeing that ear and twenty twenty out so we had the market deterioration in Bartsch what happens every start selling because see other people selling and what had been happening since markets back quite nicely so if you did nothing to x. point in a better spot if you properly allocated to begin with The market's always done a wonderful job of making the majority of people and that's why having the right play together is a really good strategy and it's hard right because it's you see other people making money. You wanna make adjustments because no-one wants to feel like they're not the smartest person in the room so they wanna go chase returns. And that's why with you build out a plan and build out a target asset allocation curve. Sticking to it by greg. Bench is the most important thing they could do now. I just want to be very clear. Fire nation. that's. I'm not near the level of either gregor paul and the financial knowledge space. I spend a few years of john. Hancock in corporate finance. And i did my six three six six and my series seven as well so i do kind of know the talk and i know the lingering understands some things although it's been a long time and one thing that i really was thinking about when policy talking. Was you know. There is a big big difficulty when people churn when they come in and out of investments a lot. Because there's just a lot of fight this fees just a lot of expenses that go along when you are churning in and out of things and that's why you know when paul was going through and saying hey like if you're actually properly allocated at the beginning and probably diversified the beginning and you wait things out your oftentimes a lot better situation. Because over the last seventy eight plus years markets you know been nicely trending up but one thing i wanna talk about and let's stick with you here paul on this one is how can an investor enter and exit a position properly. Because i know that we don't wanna do this often times when you do want to actually get in or get out of a specific position. How do they do that properly. Given their specific time horizon there's probably several different pathways. You go down with this. John but i mean you're talking about specific positions. They usually mean. Someone's investing with money that i'm going to call. It is Disposable because they're now make it a calculated risk on when to get in and went to get out so there is certain timing things and what we see in especially for all your listeners. If they're working or they're busy during the day then they're not making trades during core hours. So it's easy to do sit at home at night. You're on your ipad it. You're looking up stuff. You're doing your own research. Like oh i really like this so you go enter in an order. Now you're dealing with after mark trading hours. So you need to be smart about when you're actually implementing your trade because a good traders know that People who don't do this frequently will push the buttons at odd times of day into especially if they don't understand the difference between what we call market orders versus limit orders. Where you actually name. Your price is people can be caught up guards. We wanted to be careful with that in like getting in and out is in. I always advise against it. Because you're just you're you're guessing. I'd almost rather say hey. Who do you like to bet on the football game. If you're probably just been chance to get that one right your point also about disposable income. I've always been a believer in having your core and then you're explore so you have your core. That's going to be that rightly diversified. Where you're in it for the long haul. This is the long term time horizon. But you know you can have that explore if you really want t know tesha waters in a few things but it should be within that disposable income

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