A/B Conversations: CFP® Your Way Out Of It – Real Advice on Building Wealth & Retirement Planning

Ep #136 - Why Ben and Adam HATE Market Volatility

• Benjamin Haas I Haas Financial Group

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Market volatility is always hard to go through. Expected or not, emotions run high, and the best thing we can do is stay in good communication with our clients. In this raw and (minimally prepared) podcast, listen in as Ben and Adam peel back the curtain a bit by sharing all the reasons why THEY hate volatility. You’ll learn a lot about what they focus on during times like these and how they approach client conversations.


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Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice.

[00:00:00] Adam Werner: Hi everyone, and welcome to AB Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple certified financial planners on how we think and feel about everyday financial planning questions, and what should really matter most to you. A healthier financial life starts now.

[00:00:28] Ben Haas: Hey, Adam. Don't have to ask you how you're doing. I know how you're doing. It's been one heck of a week.

[00:00:36] Adam Werner: Doing great. I've talked to a client earlier today. He asked the same question and I said, he just asked how are things going? I said, as long as you don't turn on the news or check social media, everything is fine. Business as usual. Everything is great.

[00:00:54] Ben Haas: So here's what's awesome about you sharing that. I need to admit to everyone here that I asked Adam last night to record a podcast with me and told him I wasn't gonna give him the title. We're not doing any prep. We have no notes in front of us.

This is raw as can be, and he trusts me enough to go through this journey with me. But without you knowing, you just gave a great segue into the theme here today. We've been in so many conversations with clients, market volatility's hard. We work with some awesome people that after conversations or even during the conversations are just going, how are you guys doing?

So let's peel back the curtain. Theme of the podcast here, Adam, putting you on the spot, is why Ben and Adam hate market volatility. We have lots of conversations in our offices that nobody hears. So I'm thinking the format of this, and let's just see where it goes.

Why do Ben and Adam hate market volatility? Start your sentence with, because tell us why you hate it, and then let me give some context on why you hate something and then I'll do the same for you. Wow.

[00:02:01] Adam Werner: Okay.

[00:02:02] Ben Haas: Why does Adam hate market volatility? Because dot.

[00:02:06] Adam Werner: Ooh. Okay. So without having any time to reflect.

[00:02:12] Ben Haas: I love it.

[00:02:13] Adam Werner: I'll say, it took me a second, but I think the first real concrete thought that popped into my head, why I hate market volatility is for our client's sake, right? So, we've been having a lot of conversations, and maybe this was kind of already on, on your prep, prep side of things, but the disconnect between what people hear from the news, bond yields crater, and stock, worst day in a decade. Whatever the sensationalized headlines are, does not equate to the individual. At least for us, because we believe in diversification. We're not purely just invested in the S and P 500, does not equate to their investment experience. But unless people are checking that, which us, yeah, exactly.

We hope people are not checking daily. We hope they're checking it way less frequently than even maybe weekly. Maybe monthly or quarterly is the right cadence, but that's the difficult part in bad times. We just don't necessarily want people to work themselves into a tizzy if they're really not experiencing what the headlines are portraying.

But we also would want them, I think, to check, to verify, hey, the markets are in a lot of volatility right now, but check your account just to verify your emotional side of things. Are they reacting or feeling a certain way and does that align with how their portfolio is actually doing?

[00:03:49] Ben Haas: That's an easy answer for us. Right? We hate market volatility because the news plays a role here. That was of course, gonna be one of the first things that I was probably gonna share as I thought about it too, right? And it is the sensationalized words, it's crash, it's crater, imploding, eroding, whatever.

They're all popping up right now. But yeah, to your point, it just, it all, I'm gonna, I'm gonna use mine now. Because I think for a lot of people it always, for some reason, still feels like the first time, like they haven't gone this before. That this time feels different. And I think you and I, you know, we get into each other's offices and we're just talking through things, and to your point, we're just worried how they're gonna react to it.

Not that we're worried about their financial plans, not that we're worried, hey, we're not doing the right things, or, you know, clear something's not working. We need to do something different. We're just worried about the role that the media and the information they're getting is playing with their emotions.

And that's not like I guess I need to be very clear right now. Yeah, this can feel very personal, right? People have opinions on what's right and what's wrong,

and I, we are not here to pick a side on anything. You're allowed to have these feelings. It's human to have these feelings. It can be sensationalized pretty quickly.

[00:05:05] Adam Werner: Yeah. And our, one of our main roles in times like this. Is to hopefully help people avoid making costly emotional decisions with their life savings. Right? So that certainly feeds into that where if they are thinking everything is in free fall and I need to get out of the way, I can't stomach this anymore then, and if that is not truly aligned with how they are actually doing, that makes it difficult. It just feels like they are feeling all of, or a lot of that stress and anxiety when, to your point in our minds this is, I don't wanna say this is normal, but we expect, we expected volatility coming into this year. In any given good year, I know we can show the chart, right? The intrayear movement is, you know, 14% to the downside in any average market year.

So from that respect, this isn't wildly off the charts in terms of an ab normal market environment, considering the last two strong years that we've had in stocks.

[00:06:16] Ben Haas: Yeah. And go back even further, like as you're saying that, I'm trying to think. 2019 double digit returns. 2020 double digit returns, 2021, double digit returns, 2022, double to the downside.

2023, double digit returns, 2024 double digit returns. I'm talking S and P. What's on my board? So like we're so, I don't know, we're like conditioned in a way, like recently, recent biases. Things just go up, and then, yeah. Yeah. Why do we hate volatility? Because it's hard.

I don't know. What should we say there? It's hard to zoom out. We can't use the usual playbook of, Hey, stick with diversification. You know, we're higher than we were this time last year, by the way. That's true. But yeah, it just it's hard for clients to zoom out and it's hard for us to use that playbook when they got emotions just like we do.

[00:07:08] Adam Werner: And it feels really hard to go through.

It's just so easy and natural for people to use the high watermark as the benchmark, right? Stock market hit an all time high. The SP 500 hit an all time high on February 19th, so here we are a month and a half later having wildly different conversations, but for a lot of people comparing, well, here's what I'm down, or here's the dollar amount that I lost.

[00:07:36] Adam Werner: A lot of that is compared to not necessarily 12 months ago, or even back at the beginning of January. It's that highest point back in February, which is not necessarily an unfair comparison, but some context and perspective, to your point, maybe zooming out a little bit longer makes a heck of a lot of sense.

[00:07:58] Ben Haas: Yeah. So as you're saying that, now I have another because. Why? Why Ben and Adam hate market volatility. It's probably because it takes our client's eyes off of kind of the whole point of all this. Like what matters most to you and your ability to spend and live the life you wanna live.

Right? I had a conversation with client this morning. She's very near and dear to me. Like, I don't want you not thinking that you can go get that car in a couple weeks because you promised your grandson yours. And I don't want you thinking you can't take the grandkids to Italy next year because you do that like every other year.

Like that's the whole point of building a diversified portfolio and keeping cash is that when there's market volatility, I don't want you to take the eyes off the prize. That is just leading a more fulfilled life. That's why we built the plan and marketability, I mean, that gets in people's heads like the losses are the losses, but it's really not about the losses.

They're scared they can't do the things that they want to do.

[00:08:55] Adam Werner: And I would say for the majority of clients that we work with, they have good habits, right? The good habits that got them to retirement, to get them to hopefully a comfortable spot in retirement is making those tough decisions, right?

Being disciplined with their savings, living within their means, so getting to retirement. And feeling, and we've talked about this on a recent podcast, right? Flipping that switch from a saver to now a spender when you get to retirement. It's very difficult for people to do.

[00:09:27] Ben Haas: It's already hard. Yeah.

[00:09:29] Adam Werner: Yeah. So then you tack on top of that, the feeling of now the markets are down, I assume I'm down just as much, if not more so, like I'm suffering all of this pain in my investment.

So, you know, what I can control, the markets, but I can control what I spend and what I take from set investments.

And that level of control for a lot of people, it just, that scratches the itch. When everything feels chaotic. And so many things out of your control, just being able to grab onto one thing and say, but I can do this.

That gives some level of comfort and peace of mind that, you know, in the storm, I'm in control of this one little piece, so I'm gonna hang on to that, which, yeah, in our minds, if we did the proper work and people were truthful with us upfront on here's what I expect to spend and here's what I expect to need, then yeah, this should not affect their day to day living. We, and we would hope that it does not.

[00:10:27] Ben Haas: But yeah, we hate market volatility because if we already struggle to get people to spend because they had good savings habits, these times do not help. You got another one?

[00:10:40] Adam Werner: Not off the top of my head. Do you have another one?

[00:10:43] Ben Haas: I do. Again, I guess it, I put this on you.

But, it's actually because of something you said to me earlier today. I hate market volatility for us as well. Ben and Adam hate market volatility because, 'cause patience is hard. Like you just said it. We have clients that you feel like you need to control something. And a lot of my conversations with people that are really like tuned into this are going, you know, what are we gonna do?

What do you think we need to do? And to say we're gonna do nothing is not a great feeling. Like, I don't feel good when I say that. I mean, it is our way of saying, Hey we feel like we were prepared for this and here's what we're watching. But it's because patience to like actually allow things to digest, to actually be able to assess, like are, do we need to do something different?

We'd never want to be the people that got caught selling on Tuesday and didn't participate in Wednesday or participated in Wednesday, and then they felt Thur like. You don't need to know exactly what's going on in the market to catch my drift there. Like things are moving quickly. We need to just be patient.

But that's really hard when people feel like they need to control something.

[00:11:55] Adam Werner: Yeah, and I know we talked about this in a different conversation too. It's only been a week and a half since the initial tariff announcement, you know, Trump holding the board with all the different reciprocal tariffs amounts. And then that's really what kind of sent everything into a free fall.

But leading up to that, the market was down roughly 10% from its peak, you know, over the prior month and, you know, whatever, five, six weeks. But, and so we were fielding some of those concerns just from that initial kind of downdraft. And then when everything kind of felt like it hit the fan next week or last week, everything just kind of got fanned.

The flames being fanned. And now if people were already anxious, it's now ratcheted to a whole ‘nother level. It feels like we've been in this, even though the worst of it has only for us. It's only as we're recording this.

It's been a week and a half. It feels like it's been months. Just the bombardment of headlines and feeling like there's been, it's been relentless now and it really has been months. Right? Since the new administration took over in the end of January. Headlines, multiple headlines per day for the last several months.

And it's a lot for people to digest and, we talked about this as well, people could just turn off the news, right? And unplug themselves from it. And that's incredibly hard to do. But I think for the majority of retiree clients that we work with, the news is kind of on. Either it's on their phone or it's on the TV in the background.

And if they're not, are not extremely busy in retirement, it's, yeah, it's much harder to kind of tune it out when maybe you have too much time to tune in.

[00:13:43] Ben Haas: Well, so now that I'm kind of getting into the theme of this myself, like, so that triggers another one to me that we were talking about just last Friday when we were kind of in the mode of now we have to reach out.

It's because, all right, I gotta go back to title. Why do we hate, why do Ben and Adam hate market volatility? Because your silence worries us. Like we know you're to it. We know you're tuned in. And then you're not asking questions or reaching out to us and not that's your job. Right? Our job is to be proactive with communications, and I hope everybody feels that from us.

But the fact that we got no messages last Thursday and there was like nothing in my inbox on Friday morning we're like, crap. Now we have to like, we don't want to, we don't want our communication to make it seem like we're alarmed, like, oh, we're reaching out to you because things are crazy. No, but we do need to be here for you to kind of, I hope, be that filter between the news and again, your financial plan, what we have going on, rean on your plan, all that stuff.

[00:14:42] Adam Werner: Yeah. So we're really peeling back the curtain for clients listening to this in that we often have the internal debate of should we send something out? And to what degree are we for people that aren't concerned and aren't paying attention, are we gonna, are we gonna cause them to, to panic or to stress them out?

Because if we're reaching out, they think, oh, well Ben and Adam are sending me something, then I should be worried. Like, I should be stressed out. And so we often have that conflict of should we send something when we're not hearing from people, but just, we just we would rather hear from people, I'm fine. I'm good. Thank you for checking in.

But as we saw, again, peeling back the curtain, we sent some messages on Friday and we were overwhelmed with the responses, just giving people the opportunity to engage and a lot of people took it.

[00:15:36] Ben Haas: Yeah. And you know, kudos to you, you know, for helping come up with a plan that like, we just needed to let people express themselves.

Like the outreach didn't need to be. Here's what we're gonna do about it, and or here's all the historical charts on why you gotta stay invested and nerdy financial planning stuff here or there? No, it just had to be, this is tough to watch. Like, how you feeling, like, let's just walk through it together.

But yeah, it's definitely this time, unlike other times for me, like, I hated the market volatility because like, silence just didn't, that didn't feel good.

[00:16:11] Adam Werner: Yeah. And I, from our standpoint, right, and I think that is human nature with just a lack of information, you often assume the worst. So for us, yeah.

If we're not hearing from people, then we often assume, well, they're not reaching out to us because they're in a panic. But we also, you said it earlier, right? We get to a lot of these conversations basically, and people are asking us. How are you holding up? How are you doing?

[00:16:35] Ben Haas: You see the bags under my eyes?

[00:16:38] Adam Werner: But I think that, that goes to the point where we work with such great people. We care about them, and obviously to a certain degree, right?

They care about us in return. And I think there are certain people that are more hesitant to reach out for help or just some level of support, because they worry about us in that situation, meaning, I'm sure there's other clients that they're helping, so I'll just leave them be. Yeah, and we don't wanna, we don't want anybody to feel like they're in that situation where they can't reach out for any reason.

[00:17:14] Ben Haas: That is probably a perfect way to wrap this up, Adam, like, we kind of made this podcast about us, but clearly, you know, you did the right thing and turned it right around and let it off with, this is about them like we hate it because we're empathetic to what they need. Like, we care about our people. They care about us.

That's why partnership needs to exist. That's why we need to stay boutique, right? We're not a volume shop. We never will be because at times like this, we need to be able to communicate with the people that need us to communicate with them, and we'll never be too busy and overwhelmed to not take that phone call or to not reach out to you if we think we need to be proactive.

[00:17:52] Adam Werner: Yep. Yep. Well said.

[00:17:55] Ben Haas: I promise. Well, I should, I shouldn't make a promise. I can't keep, I don't intend to ever do something like this to you again and say, Hey, oh.

[00:18:02] Adam Werner: I'm game. I love it.

[00:18:04] Ben Haas: Jump on the podcast with me and do zero prep. There's no filter. But I think some of our best conversations together are in my office, in your office.

There's no microphone, but this is how we talk ourselves through it. I think we make a great team. I appreciate all that you are. You keep me level when I'm a mess. So thanks for coming on and doing this. We hate market volatility. Everybody does. But this too shall pass one way or another.

[00:18:30] Adam Werner: Well thank you sir.

[00:18:32] Ben Haas: Alright man.

Chat with you soon.

[00:18:35] Adam Werner: Alright, nice time. Bye.

Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only, and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, consult with your attorney, your accountant, and financial advisor, or tax advisor prior to making any decisions or investing. Thanks for listening.

 

Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice.