Some Good News on the Stock Market
36:45 Share

This episode is brought to you by Progressive Insurance. Do you ever find yourself playing the budgeting game? Well, with the Name Your Price tool from Progressive, you can find options that fit your budget and potentially lower your bills. Try it at Progressive.com. Progressive Casualty Insurance Company and Affiliates. Price and coverage match limited by state law. Not available in all states. Imagine if you had a co-host in your life. You know, someone who could help manage your every day and do the things that you don't have time for.

Well, unfortunately, that's not something we can opt into in life, but it is something you can opt into as an Airbnb host.

If you find yourself away for a while, like I do, maybe for work, a long trip, or a big life adventure, a local co-host can help you manage everything. From guest communications to check-in to making sure your place stays in tip-top shape, they have got you covered. These are trusted locals who know your area inside and out, giving your guests a warm welcome while you focus on your own starring role, whatever that might be. You

You know that I love how hosting on Airbnb helps you monetize your home, an asset that you already have. That is a holy grail. And as a longtime fan of Airbnb, I have been telling everyone I know that they should be hosting too. But some of my busiest friends have been overwhelmed by this whole idea of hosting. But thanks to the new co-host offering, they have finally signed up.

So if you've got a secondary property or an extended trip coming up and you need a little help hosting while you're away, you can hire a co-host to do the work for you. Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. You have.

After some really messy economic headlines for the last month, which has really felt more like a decade, we might actually have some good news ahead, which is awesome. So to break it down, I'm joined by Ryan Dietrich, the chief market strategist at Carson Group, whose voice you might recognize from his many, many, many features on CNBC. Today, Ryan shares some signs that he's seeing in the market that nearly always indicate there is good news ahead. Yay. And whether this time could be different.

Ryan Dietrich, welcome to Money Rehab. Thank you for having me. I'm excited to be here and I hope we have something to talk about. It's been boring out there. I wish. I kind of like want a little bit of boring in my life right now. That would be a welcome change. Yeah, I guess with markets, it's not giving it to us, but I hear you. And at least, you know, if we would have done this a few weeks ago, we'd have one thing to talk about. Now we've got maybe some positive things to talk about. So that's a nice change from that point of view.

we do we've been seeing some bullish signals lately so let's start with an easy one the s p 500 was up one and a half percent three consecutive days okay s p what does history tell us about that does is that a good indication of momentum yeah we think it is now let me start like this you know i've done this for oh gee over 25 years i guess

And it feels like every time we start a new bullish phase, those first couple days, everybody comes out of the woodwork and says, well, it's just a short covering rally. Well, it's just a bear market rally. It's going to roll over.

And what we're going to talk about now and maybe even a couple more rare breath thrusts that we've seen. So just know the lows are likely in. I mean, that's our base case. And one of them, like you just said, is up three days in a row, one and a half percent. You can have one day, two days of big moves. But to see three is really, really rare. Went back to 1950. It's happened 10 other times, only 10.

Six months later, S&P has higher nine out of those 10 times. And a year later, higher 10 out of 10 times. So never lower a year later after three straight days of 1.5% gains. And the average returns like up over 20%. Now I'll just layer one more on here. During those three days on the NYSE, more than 70% of all the stocks on the NYSE also were higher. So that's three straight days of a lot of market breadth.

When I took a look at that, take a wild guess, that's only happened eight times. One year later, this might sound familiar, higher every single time with well over 20% average return. So there's lots of stuff. Don't ever blindly invest in just one stat or one statistic. People see a lot of the stuff I share and say, well, you said this. Well,

Well, you have to layer these things on top of each other. But like we're going to talk about here, we really think that there's multiple buying thrusts that we've just recently seen that are not the hallmark of a bear market rally, not the hallmark of just a bear market. They're the hallmark, honestly, of the end of week phases and likely higher prices and better returns. And I get the headlines. We get the concern. But the market's going to tell us what it wants to do. And honestly, what we've seen is a really positive sign in our view.

Okay, so we're going to double click on the breath rust business and breath with D-B-R-E-A-D-T-H. But before that, you mentioned short covering. If somebody doesn't know what that is, can you just quickly explain that? When we turn positive, sometimes people will say, well, those are, you know, people covering their short. Good point. It's usually, put it this way, if I hear it, it's like a backhanded compliment.

to the bulls is the way I view that when I hear that. But most people buy a stock, right? Well, if you buy a stock, someone also on the other side of that had to sell it. And there are something called short sellers, which are people who in essence sell a stock first in essence wanting to buy it back at a lower price. If you hear someone shorting a stock, that simply means they're betting against it. They want it to go lower. Now there will be a certain time when they can't take it anymore.

and in the market starts bouncing a little bit those shorts get scared and they'll cover in essence they'll buy back those shares they already sold so you think about it that's like more buying pressure i say it's like a beach ball you put a beach ball way under the water

Once you let go, it really gets moving. And if there's a lot of bearishness out there and a lot of negative sentiments like we've seen, obviously, the last, well, really all year, to be honest, but specifically with a lot of the shorts and things, those shorts cover and that can rally the market. Now, what I'm getting at when I say just a short covering rally, the view is that's just a short term.

bounce like they cover then you're just going to roll back over so again it's kind of like a backhanded compliment to a to a strong day so so again when we think you know all this negativity has been a positive but that's what we mean when we say short covering rally

Yeah, the beach ball is a good analogy for that one. And so let's talk more about the breath thrust. Hard to say. And there's a weird one. Add this one to the mix. Zweig breath thrust.

How'd I do? What the heck is it? Yeah, it's confusing to say, I guess. There's a guy, an old school guy, and people could Google him and look him up. I'd highly recommend it. Named Marty Zweig or Martin Zweig, a famous trader from a long time ago. And he discovered some of this stuff. I mean, he discovered this like 40 years ago, right? This Zweig breath thrust. We'll keep it real simple. You can Google it and look up more details. But he looked at the NYSE, so New York Stock Exchange, and he looked at how many stocks are going up versus down.

And we look at a 10-day EMA, exponential moving average. And again, keep it simple. What we're looking for in this triggers is extremely oversold conditions. So again, think where we were just a couple weeks ago when this market was getting crushed.

And then within a 10 trading day period, so a short time period, you go from extremely oversold, most stocks being down to extremely overbought, most stocks being up. That's kind of, again, maybe that beach ball effect or a pure flush out, right? If everybody's thinking alike, somebody isn't thinking, General Patton, it's like everybody's bearish. Everything's terrible. There's

only one way to go we were hearing that on april 8th april 8th we're hearing that because the market was down 19 from the peak everybody was bearish and then april 9th happened they got some good news i don't know if it was really even that good of news got some news on trade we had a nine percent rally and it's kind of been honestly off to the races since then but the zwide breath thrust triggered

Just recently. Now, what does that mean to the listeners? Well, again, looking at data, and I've got data going back really far from our friends over at Ned Davis Research on this. According to Ned Davis Research, 19 times since World War II, the Zweig breath thrust has triggered. And again, it just triggered recently.

One year later, you're ready. I know it sounds familiar. One year later, higher 19 times. Six months later, you're higher most of the time. Strong outperformance is consistent after a Zweig breath thrust. Then you lay on top of what we started the conversation with. Three days in a row, 1.5%, 70% of the stocks higher. You know, we just had a six-day rally in the S&P 400 where the S&P gained 7% over those six days, okay? Okay.

That's another one. It's only happened a handful of times, eight times off the top of my head. Once again, higher a year later, eight times. When you stack a lot of these, Nicole, on top of each other, not just one by themselves, but on top of each other with the other things we're going to get into in this conversation, we're of the opinion the Lowe's are in for this year and the Bowles are hopefully going to have some more fun, clearly, than they had the first four and a half months of this year.

So net-net, it's a very bullish indicator. It's basically saying we're in the final push of this downward trend. Yeah, in essence, the downward trend is over. In essence is what it is saying. Yeah, I mean, that's kind of what it's saying. You know, on, I guess it was April 9th was one of the first big, that was the 9.5% gain, big, huge up day. But on April 22nd, we had a huge, huge day also in terms of most stocks up, most stocks volume up. So I took a look again.

Call us the rule of 89. There were 89% of all the stocks that were up on both of those days and 89% of all the volume that were up on both of those days. When you have two days like that, that close to each other, that extremely strong, and that's extremely rare to have that.

I found five times we've seen something like that. I was going to guess eight. Yeah, well, exactly. Tell me about it. But only once did we see something like that and did the market go on to make new lows? Okay, it's very, very rare to see these signals that we're seeing. I can get into more and I know it's kind of geeky, I understand. But these are the things that move markets, right? I'm going to

Old school. I have a CMT behind my name means chartered market technician. Yes, I look at fundamentals. Yes, I look at valuations, look at trade. End of the day. Yeah. Yeah. I mean, that's how I was brought up. I can I can talk any game you want to talk. But I think what matters more.

are buyers and sellers. What is the market doing? What is the attitude of the market? What's happening underneath the surface? What's sentiment telling us? What is momentum telling us? What's the overbought, oversold indicators? When you stack those things, those to me are what tend to matter more. I mean, the four most dangerous words, Sir John Templeton, this time is different.

I get it. This time is different because we've got a Fed that can't cut. We've got potential higher inflation coming because of the tariffs. We've got drama out of Washington. But we don't really know what all that stuff means. I mean, that's the honest answer. We don't really know what that stuff means. What we do know are these signals that I've been talking about are consistent going out in history, going out generations.

That again suggests likely be open to the idea that better times could be ahead. And that's how we're, we manage billions of dollars at the Carson Group and my team does. And that's how we're positioning ourselves. Yes, we're overweight equities coming into this year. Clue, that has not been a fun year,

but I know we're going to talk a little more about it. We've been diversified. We've had some other areas. You know, I mean, literally the time we're doing this, Germany's hitting an all-time high. It's hard to get super bearish when other parts of the globe are doing well. Yes, the U.S. has struggled. India has struggled. U.S. and India led the last two years, so they kind of gave the baton back and forth. But there's some real positive things that are really taking place, and I get the headlines, but listen, we're about making money, and there are still some positives out there.

Honestly, I've become more into the charts with all this craziness because I think in the midst of all of the emotion, when you boil it down into charts and graphs and math and stats and history, it feels...

like something you can actually tackle like it just it takes out all the drama from it and so I've appreciated charting much more this year than ever before well I love hearing that I think it tells a story right I mean I'm a market technician not that different than a lot of other market strategists market technicians you see out there but you know people gravitate to stories and I'm not just about telling stories I'm about looking at history right history doesn't repeat itself but it

I love that quote, Mark Twain. We can show a lot of times in history what's happened before and not necessarily what's going to happen because nobody knows what's going to happen, but what happened before, what did happen after that. And when you do some of these things, it's incredible. I mean, listen, when Liberation Day took place on April 2nd,

And those next two days, the S&P 500 fell more than 10% for one of the worst two-day drops in history. Everybody was looking around trying to figure out what was going on. Because what we knew when President Trump held up that piece of paper or that sheet that had all those, what the reciprocal tariffs are going to be, it was shockingly higher than anybody. I don't care if you were bearish. Nobody thought 25% effective tariffs were going to happen. And then you see it, and that's why the market just sold off. And then the bond market started freaking out that next week. Eh.

And then they dialed things back a little bit. But what's not going to change is everything under the sun we've seen, emotion, right? There's trading, there's this or that. There's still emotion. Emotion moves markets. When everybody's bullish, that's when you probably want to look around and worry a little bit. But when everybody's bearish, I know it sounds crazy to say, but that's when, especially I know a lot of younger listeners and a lot of people who might have decades potentially to invest, those are when you're going to make your money. That's when you're going to do really, really well. Because when everybody else is freaking out, panicking, if you've got time to invest, it's an old saying, it's not about

time in the market. It's not about timing the market, sorry. It's about time in the market. That is the edge that longer term investors have is let the hedge funds, let the algorithms try to fight over pennies in front of a steamroller or nickels in front of a steamroller.

For the rest of us that have time and a lot of listeners to this podcast have time, it's a beautiful thing. I hate to say a bear market's a good thing because I don't want to come off and say that, but honestly, if you're young and you've got time to buy things when it's cheaper, to buy things when they're lower is a wonderful thing. The last little kind of cheeky

quote that I like to use. The stock market's the only place where things go on sale, but everyone runs out of the store screaming. Remember that. And when you want to buy some shoes on sale or a jacket or a steakhouse that's on sale, sure, we do that. For whatever reason, the way our brains are wired, most people that might have loved a stock at $100 hate it at $75.

do they hate it 75 because tv told them it's scary because there's this happening that happening and that's how our brains are wired we can't help it that's back to caveman times right get in there's a saber-tooth tiger go hide and go hide you know that's that's how we're wired and it works that way with markets too thousands of years later but that's why we have to rewire ourselves and learn some of these things and

And honestly, you learn by making mistakes. I've made tons and tons of mistakes, but I've seen throughout my career so many times people panic when they can't take anymore. I can't tell you how many people got out of the market those two days after Liberation Day because it was terrible what was happening. And then you blink and now we're above where we were on Liberation Day just a month later. I mean, kind of wild, but that's how history works.

And by the way, I don't think we've talked about this, but that poster board or whatever was held up. It was wild. Like whose job was it to go to Kinko's or Staples? Just imagine if someone saw it first. Yeah, they shared it on like, look at this. It gets out there first. But yeah, I mean, because remember that day, the market popped because President Trump said something like, oh, 10%. Everyone's, oh, 10% across the board. Good. And then we zoom in and look. And then, yeah, it wasn't too fun after that. I mean, but I think people, you know, in theory,

are down with the idea of a bear market if you have time. But I think, you know, you get antsy because you don't know how long the bear market is going to last. So what would you say to people who are feeling really scared about the bearish headlines coming out? Like,

Miller-Tabak is saying that there is going to potentially be a decline on the S&P 500 in the coming months to around 4,000. You know, a fall to 4,000 is close to 30% down from where we are right now. J.P. Morgan is putting the recession odds at 60%. So layer on these stats with the ones that you're mentioning. And I think looking at historical factors is really, really important and helps us understand that history is

does indeed rhyme. But what about when we factor in the unknown? Like, we don't know if there could be another poster board with some scary stuff coming out from the White House tomorrow. Well, let's hope not, first off. But why do you say that? Because you said, you know, a bearish market is good if you have time.

Right. Well, I hear I made a joke. I mean, they don't need that much drama with the market, but I see what you're saying. So what we're doing with with our models, right, the money we run. I mean, if someone's really worried about things, there's things you can do. You don't have to just be in like Mag seven, right? The large technology names, which has obviously struggled so far this year. You can diversify. We say when in doubt, diversify it out.

That's what we're doing. I mean, we have more international exposure right now than we've had in a long time. Because, again, the issues are with the U.S. You look around the globe. I mean, listen, Germany is about 23%, 24%. China is up double digits. Lots of countries in Africa are up double digits this year. There's a lot of other opportunities. So you can diversify. You don't have to just be in 100% stocks. I mean, you can be in bonds. Now, bonds haven't done all that great this year. But look at gold. I mean, gold has done incredibly. Now, listen, gold is awfully, awfully overstretched, I think, in the near term.

So those are all some things that we've done in some of the models. Like we made a name for ourselves as a Carson Group this time two, two and a half years ago, early 23, most of 23, saying there'd be no recession, say there'd be a bull market. I know it's like, oh, okay, you said that. Trust me when I say this. That wasn't popular. People hated that. I mean, I don't know why. People hated that call because they were promised a bear market, promised a recession. We went against it. We had like 91 to 92% overweight equities or overwork.

equities in our unconstrained tactical models that we run. I know it's a mouthful. That's just saying we had a lot of stock exposure because we thought stocks do really well the last couple of years. We have dialed that back a little bit. We're like 74, 75% equities right now. We do have some gold. This is like all year. This is like all year. This is something we just did. We did this coming into this year. We added some international exposure. We added some treasuries for the first time in a while. Because again, if you're a little...

just after a 70% rally, like we saw in the S&P 500 from October 22 to the February 19 peak this year, you got to say to yourself, that was awfully, that was nice. That was great for investors, but it might not always be that way. It might be rocky, right? We didn't have a 10% correction last year. The

odds of a 10% correction this year were very high. We were on record as saying we probably have a 10% to 15% correction at some point this year. No, we did not think it'd be a near bear market down 18.9%. We also didn't think that Liberation Day would be as aggressive as it was, but it is what it is. So that's some things that I think people can think about and do is to diversify themselves. And the other thing, I've done this a long time, some of the best investors I've ever met

The people that set it and forget it. By that, I mean every two weeks in a 401k or every two weeks in somewhere else, an IRA or something, they just put money in. And I know it's hard, but they close their eyes and you wait. And 10 to 15 years later, if you were buying dollar costs, averaging in, following a plan when it's red out there and everybody tells you how bad everything is on TV, that's when you want to hunker down, right? The time to plan for the storm is not during the eye of the storm. I mean, we have to plan for the eye of the storm way before it comes. And you mentioned the uncertainty.

I mean, unfortunately, 2025 is not the first year in history where every day is green and there's no uncertainty. We've had uncertainty throughout history. I mean, just last August, right? That was a great year. Last year was a great year. Stocks gained 25%, give or take. You know, we had that yin-carry trade on wine that I know hopefully most people remember what I'm talking about. But trust me, that first week of August was really uncomfortable market conditions.

I mean, didn't crash, but market pulled back a lot in three days. And there was a lot of fear. Most years are going to have those scary headlines. You can do yourself a big favor by coming into the year, just expecting a 15% correction at some point during the year. You know, bear markets happen every three and a half years. We had two bear markets started this decade. And believe me, a very, very close bear market just a couple weeks ago.

So those things do happen, but sure enough, now we blink and we've come well off those lows. And I get the negative sentiment. I get the negative calls that people have made. There's always some bulls. There's always some bears. But I think when we look at the entire picture and backdrop,

There's still an economy that likely avoids a recession. It slows down. We just got a negative GDP print, right? Just last week, got a negative GDP print in the first quarter. Well, that's not great. But then you peel back the onion. It's because a lot of companies bought a lot of stuff ahead of time, ahead of tariffs, inventory soared, trade, exports, imports, exports took out like 5% of GDP. So if you look at something called final demand, which is like spending from households and

businesses. It was like 2.3%. I'm not saying 2.3% is great, but I'm saying that's a fairly solid economy heading into all this tariff stuff. Is it slowing down? Absolutely. The economy is slowing down, but it doesn't mean you have to go into a recession. And in recession is when you tend to get those really big 4,000 number that, I forget who you said said it, but whoever said 4,000 on the S&P, I mean, that's calling for a recession, right? I guess I'm not in that camp quite yet.

Yeah, but also a reason that you don't want to pull your money out or go the other way when there's a sale happening is because I think it's what every 19 days or 20 days. Historically, there's been a new high in the market too. So you miss out on that ride. Hold on to your wallets. Money Rehab will be right back. And now for some more Money Rehab.

If somebody is looking to diversify into international markets, which you say you now like, where should they start? It's a little intimidating to do international stuff. No, it sure is. And listen, we have something called home country bias, which like the name would suggest where you live is what you tend to invest in. The good news for most people. Well, I guess you've got international listeners. You definitely have international listeners. But for people in the U.S.,

You know, if you've been overweight in the U.S. the last 10, 15, 5 years, last 2, 3 years, you've done really well, really, really well relative to the rest of the world. You know, the easiest way is through ETFs, right? We really like developed international. I'm not technically allowed to mention any ETFs by name, but there are some very easy to find developed international ETFs.

I mean, Germany's doing well. There's lots of other countries are doing well that you can add a little bit like in our models that we run, you know, we we've got like 10, 15% developed international in, in the models. And you know, that's, that's a decent amount. That's probably a lot more than a lot of RAs have a lot of other places have. So we, we clearly have some exposure to those parts of the world, which were this time a year or two ago, we were more all in us. And that obviously worked really well. But now it's just like, you know, okay. The lifeblood of a bull market is passing the baton around and

you know i still think we're in a bull market i know what's happening in the us but again look around the globe there's like different ways you can look at this but like the globe x us so take the us stock market out which honestly i think it's like half the entire market cap of the globe if you take that out you're up almost double digits this year

And the U.S. is down, yes. But there really are some other parts doing well. So I think a diversified portfolio with a little bit of developed international makes sense. With emerging markets, we're not too warm and fuzzy on China right now. Or on emerging markets, that's because we're not too crazy about what's going on in China still. The Chinese stock market's doing okay. We've seen this before.

Like Lucy in the football where Charlie Brown tries to kick the football. She pulls the football back. We've seen these fits and starts with China before. So to us, just the sentiment got way too negative regarding Europe. And rightfully so, Europe's underperformed the U.S. it feels like for two decades in a row. But all of a sudden, they're starting to do better. And this is why you diversify. There's an old saying. I've done this for a while. An old saying. We'll have your sayings. Yeah, being diversified is always having to say you're sorry. All right? Mm-hmm.

And it felt like that the last couple of years, because all you needed to do was be in the Mag 7. And boy, oh boy, you were doing pretty good. Why in the world would I? I work with financial advisors every day. Like, you know, their clients say, why in the world would I go buy a utility stock or a health care stock? What all I need to do is go buy the Mag 7.

Well, then you come into this year where those stocks are down 30, 40, they're probably up a little bit lately, but down 30, 40%. That is why you diversify. That's why you don't chase the shiny object all the time. The shiny object is the top performing group the last year or two or growth is the top performing sector the last two years.

How is growth doing this year? Not very good. I'm not saying it can't come back. I'm just saying these first four months have been a big, big black eye, whereas value was actually up in the first quarter. I mean, value was up in the first quarter. Financials are up on the year. You know, there's other groups that do well, and that's why, again, you don't want to go all in one group. You don't always want to chase shiny objects. Stick with your plan, diversify, follow your investment plan.

Of course, I work with financial advisors, so I would say work with a financial advisor, but you don't always have to do that, but that can obviously help as well. Yeah, when everybody after the election was so stoked about the market, the shiny object

actually down, gold was down. I ended up buying some gold then, which has gone on a huge run. I know you aren't able to mention specific tickers. I'm just going to mention them. How about that? Just Vanguard. Vanguard tends to be low cost ETFs that you can get. VEA, which is the developed markets ETF. VXUS, which is Vanguard's total international stock ETF.

ETF and VEU, for instance, your own research, of course, is the all world X US ETF, which is the one. Yeah. The idea you were mentioning. You know, you mentioned sentiment. I love sentiment because it's true. When President Trump won market rally initially, the Economist had a magazine cover.

with $100 bill rolled up shooting into outer space. And I forget the exact title, but it was something about the envy of the world, okay? Now the last four covers in a row from The Economist to say they're bearish would be an understatement. It is like literally has one of them as a countdown to when President Trump leaves office, okay? I mean, so you talk about sentiment. I don't know if I've ever seen sentiment sour so quickly. But again, you know, when everyone loves it, that's when maybe you got to look around and wonder what's going on. And sure enough, I mean, everybody,

said the dollar had one way to go and that was up this year when President Trump won. We looked around, we disagreed because again, if everybody's thinking alike, somebody's thinking, everyone was talking about one thing, the opportunities to the other side. And when the dollar goes lower, gold does better. When the dollar goes a little bit lower, you know, also does better. The

the rest of the globe, right? International stocks tend to do better when the dollar is weak. So that's what we've clearly seen this year. And also I'm with you on gold. We actually added gold for the first time in some of our models back in March of 2023. So a really long time ago, you know, oh, Barron's, I'm a big fan of Barron's. I mean, Barron's literally this weekend had gold bars on their magazine cover. Okay. If you're a contrarian and you see Barron's with

gold bars on their magazine cover. That tells you a lot of people have realized gold's done really, really well. So maybe it's time for a well-deserved pause. But the reality is we also, I'm with you, we added some gold back in November after the election when dollar soared, gold was crushed. I like to buy things in bull markets with violent short pullbacks. And sure enough, that's what gold obviously did back in November. So good trade there.

Examples of buying gold would be something like GLD. Exactly. Yeah, those are easy. You need new gold stocks. We personally don't own any gold stocks or gold ETFs. We're sticking with simply ETFs based on the price of the metal. But trust me, if somebody wanted to be more aggressive and they had a stomach for it, then yes, some of those gold stocks obviously will do a lot better because they're more leveraged than the actual metal. But hey, the metal is doing pretty darn good on its own.

Are there any other gold ETFs or gold exposure besides GLD? That's, you know, like the most popular. Yeah, there are. That's clearly the big one. I mean, that's the that's the goal. You like this one? That's the gold standard. I can't believe I just said that. That's the gold standard for ETFs with gold. There are some others. Honest goodness off top my head. I'm not 100 percent sure, but there are. But that's the safest one that if you just want some gold exposure, you know, it's been around the block once or twice. Funny thing about that one, GLD, and I think it was 2011, maybe.

Maybe 2012. That's when there were more assets in that GLD ETF than there were in SPY, the S&P 500 ETF. It had to have been 2011. That's when gold peaked. And that was, looking back, a major, major peak in gold. And that was one of those anecdotal sentiment things that, looking back, oh, it's obvious. But, I mean, that was a little over the top. We're not quite seeing that.

yet with gold. One other thing on gold, I mean, gold went up from 2009 until about 2011, so about 12 years. Then look at the chart. Gold went sideways for about 12 years. Now, when I say sideways, I mean it didn't go up. It went down to sideways for about 12 years. So now it's broken out.

We're a couple years into this thing. By no means am I like some huge gold bug. I think stocks are going to do pretty good. I don't think there's going to be a recession. But for a diversified portfolio, someone's to own something. Think about a 60-40 portfolio. What is that? 60% stocks, 40% other stuff. Usually bonds. Usually bonds, the other 40. To us, it makes some sense to own some gold in that other 40%. And maybe gold's going to pull back because it's had such a historic run. Perfectly, perfectly normal. If gold pulled back 15%, that'd be...

perfectly normal with the with the incredible rally that it's had and that's maybe an actual good buying opportunity so for longer term investors out there have some stocks yes have a little bit of bond sure but honestly having a little bit of gold makes a sense because again these cycles last a lot longer than you think if 12 years it went up the one time 12 years went sideways now we're two or three years into this one who knows who knows what's going to happen but i would be open to the idea that gold might continue to do pretty well here over the next you know five to ten years honestly yeah i

I think what you're saying is that it's not fun and sexy to be diversified in a year like we had last year when equities were ripping. But when we're in a year like this year, you all of a sudden appreciate the other 40 or whatever else you're diversified in that was looking like a dog last year.

No, that's exactly right. And even 2023, I mean, mag seven did well. So people were conditioned for a couple of years to just be in the large cap tech names and then, you know, then they dropped like they did. So it's, it just still makes sense. I mean, this is some old stuff that people way before my time were talking about, but stay diversified, stick with your plan, you know, continue to buy when you're supposed to buy and then,

Don't make an irrational decision if you can help it at the worst time. I'll do another quick little story if we've got time. Lawrence of Arabia, the movie Lawrence of Arabia, there's a scene called the candlestick scene. And this guy goes up to the candlestick and pinches it and takes it out. The second guy looks at it, goes up to the – he wants to try it. Goes up to the candlestick, pinches the candlestick, screams in pain. And he looks at the first guy and goes, how in the world did you do that? The first guy looks at him and just says, you just got to know it's going to hurt. Right.

That is investing. It's going to hurt. Yeah, it's the cost of admission. Your strategy is not going to work at all times. I don't care what it is. It's not going to work at all times. And the cost of admission, we like to say on our team, volatility is the toll we pay to invest.

Every year, well, on average, you see a 10% correction once a year. Doesn't mean every year has to have it, but on average, you see that. You see like eight different 3% corrections a year. You see like five different 5% corrections a year, bear market every two and a half years. But then you look at a longer term chart and you're like, wow, that usually goes up. You know, 50 years ago, right now, was the fall of Saigon. And listen, I'm no expert on this at all. I just know it was a very, very big deal. Like April 30th was the fall of Saigon.

But you look at history, and it's just like a small blip on the map in 1975 now. And stocks have gone up. And we've had world wars. We've had pandemics. We've had inflation, deflation, all this terrible stuff that's happened since May 26, 1896. Why did I pick that date? That's when Charlie Dow started the Dow Jones Industrial Average.

which is a bunch of railroad stocks back then. It's not so much now, but the reality is we've seen a lot of bad stuff. But for the investors and the listeners out there, just remember, we've also seen a lot of good stuff. Throughout history, we've had bad news. We've also had a stock market that came back to new highs every single time. I'm not saying it's going to happen quickly. Sometimes it takes a while. You know, 2022 took a long time to get back above those January 22 peak that we just saw. But a lot of people that were investing and adding to their exposure in 2022, 2023 were really, really happy

When in the first quarter of 24, we broke out to new highs and gained another 20% last year. So I think those are just some real important concepts to remember. And as a market strategist that works with financial advisors every single day all over the United States and I think we're 51,000 households now. These are things that we try to preach every day. And it's fun. We don't take it lightly. But it's very, very rewarding to try to help people reach their long-term goals and put a cherry on top of some of the worst things.

The most negative thing we have is our own brain, our own selves, ourselves. We kick ourselves in the shin more than we should, right, as investors, because we get all worked up and all upset or the opposite, too excited when your neighbor's getting rich. And I'm going to paraphrase it. I'm going to butcher it. But J.P. Morgan said, you know, the worst thing to see is your neighbor getting rich because you're going to make bad decisions. And I'm paraphrasing it. But that's the worst thing to see because then you're going to want to do what they're doing. And they're probably full of you know what anyway. So, again, stick with these plans and invest for the long term and you'll do

really, really well, I'm pretty confident to say. Yeah, I like it boring. I like to keep my strategy real boring. Yeah. Just have fun somewhere else. But, you know, this idea that when you're in the thick of it, it's really hard to zoom out. But once you do, you can see that this is just going to be a blip. But while everybody's focused on

That's the biggest story in the news right now. I'm sure there's other stuff going on that we're just not following. What's one of the biggest things that you're watching that's not so much in the headlines right now that maybe we should be focusing on more? Yeah, I guess I kind of cheated and gave some of these away. I think the fact that Europe is doing so, so well, people still aren't even talking about that. At least I see.

I mean, that's really not out there. You know, that's one that stands out to me. I'll try to say something else I haven't said yet. Here's one that I was talking about three weeks ago, okay, when the market was looking pretty dour.

The credit markets continue to function just fine. I said, if there's a monster under the bed, we would have had more stress in the credit markets. When the S&P 500 was flirting with a bear market just a couple weeks ago, I'm going to get a little geeky, but you can look this up, listeners. It's free data. Spreads, like investment-grade corporate spreads, BBB spreads, were not blowing out. Well, it's just...

Keep it real simple. When those things blow out, that's the credit market's way of saying we're worried about the monster under the bed. We didn't see that earlier this month. And sure enough, here we are now with the market come off the mat in a big, big way. And the credit markets are still quite calm. You know, the VIX, the volatility gauge, it's a function. Hopefully people have heard of the VIX. When it spikes...

It shows fear out there. It's what the options market thinks volatility will do in 30 days in the future. So that's a mouthful, but just real simple. About three weeks ago, the VIX spiked above 60 on a Monday. It was one of those Mondays a couple weeks ago when things were just a bloodbath. And that is extremely

So the option is to go from above 50 and then close beneath 25. That just happened, oh, maybe a week or so ago, or maybe just this week, maybe last week. Last week, the stock market closed beneath 25. So the option is to go from above 50 and then close beneath 25.

markets calming down. We get the headlines. We get the uncertainty. We get the manufacturing slowing down. Consumer confidence is lower now than it was in the middle of a 100-year pandemic. We understand all of these things. But sometimes there are smarter functions out there that we follow. And the credit markets and the VIX calming down are some that, again, to us suggests the worst is over and the lows are in. That doesn't mean we're going to go straight up. That doesn't mean it's going to be

off to the races will be very clear. But do we violate the April 9th, the April 8th lows at this point? I mean, we're, we're saying no, there's been too many things that have taken place. We think, you know, we're well off those lows, by the way, that those lows are in, it might still be choppy, might be frustrating, but that's how we're seeing the world here. And the two things to answer your question, the two things no one's really talking about, I guess, would be credit markets hanging in there. And the VIX has really come back. Those are two things we like to see.

Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes.

Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.