Super Bowl Wins and Market Swings

Welcome to Coachable wealth where we blend the worlds of sports and finance to bring you strategies as you navigate your wealth building journey. John, Cody and Sean are here to help you elevate your financial advisor relationship to meet your long term goals. Now let's get to it. Welcome back, guys. A lot's happened in the last week here.

I mean, on the sports front, just from the market standpoint, I mean, there's a lot going on. Yeah, I think we have to start out. Go Birds. And congratulations to all of us. What a run.

What a what, what a season. It was a great, great season. Crazy to think about how we waited so long as Eagles fans for a Super bowl and we got two in the past seven years. Definitely cannot complain. I know.

Just pure domination on the defensive front. I mean, I never expected that outcome because what, what was the point spread? A point or point and a half going into it? Yeah, yeah, it was pretty much just a pick. Them the fact that it was what, 40 to six with three minutes left and then the Chiefs scored two late touchdowns.

Yeah, yeah. Best Eagles team I've seen in a long time. Yeah, it was, I mean, speaking to that though. So they started the season what, two and two people were saying they're overrated. Maybe Barkley wasn't the best signing.

How do you guys compare that or think about that compared to when we have volatility in that market, both to the upside and potentially to the downside. I think it's just an emotional reaction that comes with things, you know, in sports you can call it the, you know, the general manager, the head coach, you know, the owner to bring everybody in, say, all right, people are going to say a lot of things. There's a lot of headline news out there. Just like if you were investing, take a deep breath. Nothing's going to work out exactly how it's supposed to right away.

Things take a little bit of time and sports is no different. I think people love to overreact. ESPN and cnbc, it's like the same thing. You read a headline news and you think the world is falling and you should fire the head coach or you should go to, you know, all cash. I think everyone needs to take a deep breath on both fronts and just relax.

And to quote another Philadelphia sports team, maybe trust the process a little bit. Unfortunately, that one has not worked out too well for the Sixers. Yeah, going back to point though, about there was calls earlier this season to fire Sirianni and I think what was this, his last year on his contract, he's about to get a. I saw rumors that he's going to get like four years, potentially $60 million. I think he was like, bottom two, highest paid NFL coach.

I think he's about to go into the top three. Obviously he's done very well his first, what, four years as a head coach. But just that change in, in the single season, going from wanting to fire him to about to make him the highest paid NFL coach is. It's crazy. I, I think it does show too, the relationship with like, Tom Brady and Bill Belichick.

It's not just one person or one thing. It takes a whole collection of things to make, I guess, greatness. Think back to last year, Sirianni. I mean, they started, what, 10 and 1 and it just kind of fell off. Yeah.

And he got all the pressure. The coordinators are gone, stuff like that. This year, I mean, they kind of retooled with veteran personnel around them. I mean, they brought in Barkley, two new coordinators who. But I think it just kind of shows you that, hey, it's not one thing.

It's a whole collection of items that kind of create that financial plan or kind of just trend that we're looking for. That's a good point. From my experience, it feels like clients feel way more emotion when we have a market drop. So say in a single year, the market was down 10% compared to the market being up 10%. I guarantee you we have more conversations about the investments when it's down 10% compared to being up 10%.

It's the same way with sports, too. I don't know if it's just because you literally get news anywhere you look on your tv, your computer, your smartphone, anywhere. There's going to be headlines. I think a lot anymore. You guys both said it.

It is the rapid fire of kind of the, the news and the media cycle. I mean, you can turn it on and you see so many negative headlines, but you're 100% right. It comes back to, what is it called loss aversion? Were kind of the negatives outweigh the positives most of the time. And a lot of times people call us up and say, hey, I want to sell out of all my portfolio and go to cash or just make those irrational decisions.

And I think as certified financial planners, our job is to say, hey, kind of take, take a step back. What are your goals? What's your, what's your risk tolerance? Go back to the fundamentals and talk them through that. Say, hey, here's why we're at this Point.

And here's where we're headed into the future. That's very similar to what the Eagles did this year. Everybody was freaking out after the first four games. They really did not change anything. If, if anything, maybe they started to run the ball more.

But obviously it was a very, very successful season with, with winning the Super Bowl. I think Barkley ended up having the most rushing yards ever with the combination of the regular season and the postseason. Unfortunately, he didn't get the record in the regular season, but as he said, he's fine with that. He wanted to win the Super Bowl. That was his main thing.

It kind of goes back to investing. If you, if you don't need 20 returns, you don't have to take on all the risk of the stock market. Yep. One thing that was said to me when I started my career and it always stuck with me. It's like if I gave you $20, but I took $1.

What do you think about more? The $1 that I took from you or the 19 that you gained? I think people are just wired to always think about, like John said, the loss. And I think the news does a really good job of saying, whether it's sports, oh, the Eagles lost two in a row. Fire Nick Sirianni.

You know, ESPN is all Jalen. Hurts is overrated. This, that and the other thing. And it's like you turn on CNBC, oh, the market's down 1%. All these crazy news headlines, we're going to war here, there.

And then it's like you turn it on when the market's up. Oh, market's up 1% at the normal day. So I think it's like the media and the news have a big role in that. But I think people, because of that, people are kind of wired to always worry more about what they lost than what they've actually gained. I mean, how many people, Cody, have we worked with that, let's just say over the past five years since COVID are up a pretty high percent.

But then, you know, statistically, we talk about how the market is going to have a couple of 5% downturns every single year. You know, they really get hyper focused on such a small period of time that statistically happens almost every year. It's like sometimes you gotta take a step back, take a deep breath. That's why it's important to have a financial advisor or a coach and look at the overall picture. That's a really good point.

Cody just mentioned about the annual growth kind of ups and downs, but there's so many like consistencies and fundamentals that go into that long term perspective. Do you guys have anything in mind here recently that you had clients reaching out or you saw in the headlines that was potentially looking terrifying in the moment, but now when we look back, everything was fine. Yeah, I mean I've certainly had a fair share of emails and phone calls about most of it's been people. They see a headline either on the Internet or on TV and they call and like, hey, they're going to tax everything. We need to get out of all international.

Just something that's completely rash and you really have to take the time and explain that. All of us have seen some of the economists from the country's biggest banks speak. The economy is in a great overall place, just broadly speaking. And we have to kind of let them know that while there's certainly policy changes in mind, none of those things are going to happen overnight and that the news is there to make you think that there's something happening right away. But all of those things take really intelligent discussions between world leaders and Governments.

So I think you really got to again be a coach. It's like when you have a player who just threw an interception and they're for, you got to bring them to the sideline, take the helmet off, take a deep breath, you know what I mean, let them know they're all, they're going to be just fine and you know, get back in the game. Item that probably or the market volatility that comes to mind was just that a couple weeks ago with Nvidia selling off almost 20, losing almost $600 billion in market cap in a single day. Of course the news came out over the weekend so people had time to look at it and everything. Looking back, I mean Nvidia is almost back to all time highs now.

So that volatility in the short term as we you know, discussed both in stocks, investing, coaching, you can't make decisions just off of a single thing. Yeah, I mean inauguration day was on January 20th and now we're at second weekend in February here. I mean you guys both said, I mean there's been so many news items or just politically driven items that have popped up. Inflation's still hanging out there creating a little bit of volatility. I know we had cpi, PPI coming a little hotter than wanted overall.

I mean was it we're at hovering around what, 3%? Yeah, it's not that far off of there. I know they want to get down to 2%, 2 and a half. I mean it's not that far off. It just seems like some of these, these hanging items are just creating a little more volatility than needed.

Yep. John, have you had anybody ask you to put in a financial plan the price of eggs recently?

Yeah, I saw a lot of articles about that. If you broke open like the CPI on, on looked at where the inflation's coming from, I think every item was either negative or below 3%. Besides eggs, I think eggs was up like 16% or something like that month over month. It's funny you said that Cody. I was looking at a chart yesterday.

I think it was in the Wall Street Journal. But they when they broke open like what some of the categories are that are causing the higher inflation. Auto insurance, home insurance, it's up almost 11% change. Airfare, rent, housing, education, earning, stuff like that. Some of the items that, I mean it's been forefront in the headlines but it's just kind of driving that higher inflation.

So it goes back to the plan, making sure the expectations are reasonable. The expectations for football teams or baseball teams, if you were, you know, 3 and 14 the year prior, you're not going to think the next year you're going to win the Super Bowl. Like, you have to make sure your expectations are reasonable. It's just as important to understand what the client's short term and long term goals are. I mean, that's going to have a huge input and kind of one building out the plan, asset allocation, risk tolerance, stuff like that.

Yeah. And I don't think people realize, I'm sure, John, you could attest this, but if you did a financial plan and just modeled everybody in cash over the course of 30 years, it actually would be losing money. So not many financial plans would be extremely successful. If you had clients losing, let's say 1 to 2% due to inflation, if they were just sitting in cash, sure. One of the things we do all the time is, I mean, clients will come to us and say, hey, we have a vacation coming up or we want to do home renovations or something like that.

That's great. So we'll put that X amount to the side earmark for those goals. But then what are you gonna do with the, the remaining amount? And like to your point, I mean, put that money to work and we can model the difference. So.

Yeah, absolutely. I think it goes back to, as we said before, the plan. You're gonna have different allocations for different accounts and different goals. If it's a 50 year old that's retiring in 10, 15 years and doesn't plan on touching the, the IRA till RMDs, realistically, they have a 20 year time frame, so you can be more aggressive, but if they have a joint brokerage account that you know you're going to be tapping into the next couple of years or potentially need it for larger expenses, you're going to be more conservative because you don't want that volatility when you're going to be potentially pulling income from it. Yeah.

Going back to Eagles earlier this season, what do you guys think made them so disciplined even in, you know, the rough stretch where they started the season two and two. I heard interview with AJ Brown and he was talking about how super bowl was great. He goes, I kind of enjoyed it for one day. But he goes, I'm ready to get back to the grind. I saw it too.

And he's like. He said he really enjoys the dayto day, just the practicing, the, the going to the weight room. He said he loves the grind and he said that's kind of what drives him. I, I think having individuals like that, it just creates that emotional, that discipline and I'm sure it just. And probably Saquon Barkley, Jalen Hurts I think is similar.

I'm sure Sirianni is similar too. But just having that mindset and it creates that, that discipline and everyone kind of just goes into that mold and they just become a team. I'll go with the. I think having the best offensive line in football probably helps. I think you can have all the skill players in the world on any side of the ball, but if you don't, if you're not good up front on offense or defense, you're going to struggle.

I think a good offensive line is worth its weight in gold. And just on a side note there at the NFL awards, somebody went around asking all these NFL players Do you think the average person could gain one yard in the NFL on 10 carries? And a ton of responses were, well, if the Eagles are blocking for him, then yeah, I think they could. But I just think, yeah, the Eagles offensive line, I think over time they're going to just make so many things right. You can tie that back into investing too.

So if you have the good financial plan with the strategy in place, you can take the volatility that you're going to see in every year with the, with the stock market. There's going to be games where Jalen Hurts has to win the game. There's going to be games where Barkley goes for 200 yards and three touchdowns. I was just going to say to wrap this up, we talk so much about the behavioral finance and the emotion that goes into it and like a day to day basis from what the clients see. And I think it's our job as professionals to talk to clients through kind of what's going on, educate them, but also have them pull back and say, hey, this is where we're at and kind of where we're headed.

So I mean there is going to be volatility, there's going to be motion involved. Instead of thinking irrationally, kind of switch that to a more rational mindset and then also not letting emotion get the better of them. I think it's kind of our job to talk to clients through. I was going to say my one key takeaway is there's always going to be volatility both in sports and in stocks and in investing. The main thing is, just as Jalen Hurts says, what's he say make keep the main thing.

The main thing. So looking at the longer term, being able to handle that volatility in the short term and just continuing to talk to your advisor, and that's one of the main things too is it's perfectly fine to talk to your advisor and say you have stress about the market or you're concerned about this. That's what your advisor is there for you. You're supposed to reach out to them for them to talk you through both the upside and the downside of investing and looking for the longer term. That's why the coaches do the press conferences every single week, because they're talking and letting the fans know what they're thinking, whether they're going to change going forward, if they're going to change anything.

So it's just important to go back to the basics and, and sticking with the plan. Y as as easy as that sounds, we we know it's obviously tough. Yep. Especially when, when money's involved. I do love that quote, though.

Keep the main thing. The main thing. Yeah. I mean, you can tie that back to almost anything, but especially financial planning and investing. Yep.

Absolutely. All right. Go Birds. Go Birds.

We hope you enjoyed this episode of Coachable wealth, brought to you by Morton Brown Family wealth, an SEC Registered investment advisor. This podcast is designed for educational and informational purposes and not intended as investment advice. More information can be found at Morton Brown Family Wealth.