Your Portfolio – Time For You To Take Control | Podcast Episode #86

0:07
Hey, I’m Ryan Mallory, and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex, ever-changing world of finance. Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

0:25
You can succeed at the stock market, and I’m ready to show you how. Hey everybody, this is Ryan Mallory with Swing Trading the Stock Market. I guess this is the, what, the coronavirus stock market crash edition. But honestly, there’s tons of content on my website. I’m talking about this stuff every day.

0:42
You can see exactly what I’m thinking on the S&P 500. You go to shareplanner.com. You can go to my YouTube channel. I’m, I’m gonna put another video out probably tomorrow or Friday, in-depth analysis. Guys, it’s out there. You can educate yourselves. The stuff is free that I’m providing.

0:59
But here’s the more serious thing that we’re dealing with, and a lot of it comes back to what I’m hearing on the ground from people who have 401ks and have IRAs and 403Bs or just standard brokerage accounts, and I’m getting these messages, people are panicking.

1:16
People are freaked out. Now, a week or two ago, it was like, hey, Ryan, what do we buy in at? Hey, I wanna get in on this stuff. This week, it’s totally different. It’s a lot of people saying, I’m losing money, I want to get out, what do I do? And here’s the thing, I don’t tell anybody anything.

1:31
Let me just tell you why. Because that’s not what I’m out there to do. I’m a trader. I’m a person who is good at trading stocks, not a financial advisor. As helpful as some of this content that I provide is, it’s educational. It’s gonna help you become a better trader, become a better investor, but I’m not here to say, hey, this is what you should be doing with your stocks.

1:54
This is what you should be doing with your portfolio because that’s not my line of work. They have financial planners, advisors, and stuff like that. But even so, how are they doing for you right now? Pretty crappy, right? Why is that?

2:10
Do they really manage the risk they say they do? I guess they do, right? I mean, they’ve got all these things in place. Hey, we’ll put you in some growth strategies and value strategies and some interest-bearing assets and so forth, and based on your age and your retirement date, this is what we think that you do best at for your risk profile and so forth.

2:28
OK, cool. So the S&P 500 is down about 33% from its all-time highs. A third of the market gains completely wiped out.

2:47
Some of you might be doing a little bit better, some of you might be doing even worse. What’s the underlying factor on all this stuff? As a society, we do not educate ourselves to be the masters of our finances. I mean, think about it.

3:05
We go to work, we make money, we want to protect that money. And what do we do? We hire a financial advisor, a financial advisor that probably doesn’t know what the hell they’re doing. And you rely on them to tell you what you should be doing in the stock market.

3:25
And if that’s the case, why am I getting so many emails, so many phone calls from people that are saying, Ryan, I don’t know what to do. I don’t know what to do. Should I get my money out of my mutual funds? Should I get my money and put it back on the sidelines?

3:42
For one, I’m not there to tell you that. That’s not something I can do. Not at all. And I’m telling you, 100+ text messages in the last two weeks from people, people I haven’t seen in ages, years, maybe like 20 years in some cases.

4:03
They don’t know what to do. They’re looking for somebody to help them. I’m like, don’t you have a financial advisor? It’s like, yeah. But that’s not doing them any good right now because they’re seeing the red in their portfolio. They’re seeing the carnage. And honestly, I’m not trying to stir the pot here.

4:19
I don’t know if this market’s done selling yet, but what are you gonna do? Get out and then all of a sudden it goes right back up? I don’t know if it’s going to. But that’s the possibilities. And then you know what you do after that? You start staying on the sidelines saying, well, it’s gonna come back down and then I’ll get back in when it gets back down, and then it goes over the course of the next few years on an amazing bull run.

4:39
That’s what happened in 2009. People got out of the market right at the bottom. They couldn’t take the pain anymore. It goes right back up. Twelve-year bull run, longest bull run in stock market history until February of this year, 2020.

4:57
Nobody pays attention to the stock market as long as their accounts are growing. They’re like, hey, let’s look at that. Hey, I’m $100,000 over the past five years. I’m on track to retire. Or, hey, look, my account over the last three years has gone from $100,000 to $200,000.

5:14
I’m doing great. I’m thrilled and everything else. Something like this happens and all of a sudden, I’m like, oh, what’s happening? What do I do? I don’t wanna lose this money. Guys, when it gets to that point, when it gets to this point at 33% down, and you’re asking yourself at this point, should I sell everything and go into cash? You’ve already lost the battle, man.

5:32
The opportunity’s well beyond. Now you’re just hoping. You’re hoping that it can come back someday. But guess what? The NASDAQ took 15 years practically to get back up to its all-time highs after it lost like 88% off of its all-time highs in 2000.

5:55
I can’t say this enough. You gotta get more interested. You’re relying on financial advisors which, for most of them, sure, they’ve taken these tests and it’s textbook knowledge. Textbook knowledge doesn’t teach you how to handle a pandemic in its relation to the stock market.

6:13
One of the things that I have consistently said on the SharePlanner website and the trading block to members of the trading block always manage the risk. Always be active risk managers. For the last 12 years, I’ve been putting together weekly shortlists of stocks I’d be willing to short in case the market started to fall apart.

6:34
And I mean, I didn’t get to short as many stocks as I would have. Man, this thing went beyond my imagination how fast the shorts took hold. But I did get some shorts and I did make some profits off of it. Yes, I made some profits off of this market sell-off with my short positions. But 12 years I’ve been putting together these short watchlists and very rarely did they ever come in handy.

6:53
They’re handy now, worth 12 years of work. For 12 years on shareplanner.com, I’ve been talking about risk management. There were times where I got stopped out of stocks because I was honoring my stop losses in order to avoid the potential for something like this. Always followed my stop losses.

7:12
One time I even got stopped out 30 minutes on a Friday afternoon and the stock tanked only to see them get acquired by Microsoft the next trading day. It hurt, but being disciplined meant everything to me. And now this market, this coronavirus, the oil price wars that are going on right now it has caught everybody with their pants down because they don’t manage the risk.

7:40
You have to manage the risk, people. You have to. And I know I’m a little bit more animated in this podcast. I’m usually a lot more chill, but I’m 100% cash right now because I’m trying to manage the risk, because I know that these morning bounces that you keep seeing followed by these huge sell-offs by the end of the day, they’re not something that I can go long on.

8:00
When we do get a rally, we haven’t seen back-to-back rallies since February 11th. Why do I know this stuff? Because I’m actively trying to figure out how I can manage the risk to the best of my abilities. I study the charts.

8:17
That’s cool though, because everybody else likes to go to cocktail hour and drink their martinis, go on vacations, get the second vacation home and everything else like that, leverage themselves with way too much debt, and then crap like this happens.

8:34
And you start to wet the bed. Oh, but I thought my financial advisor was pretty good. Your financial advisor will not save you in a moment like this. They got other clients, nobody’s gonna here’s what I tell people too. Nobody’s gonna care about your money as much as you do. And yet we work all these years, we spend 10, 20, 30, 40 years working for the same employer or multiple employers.

8:57
It doesn’t matter how many you work for. We save up all this money, we put it in the stock market, we watch it grow, and we trust it to somebody else. Why? Why do you trust it to somebody else? Yes, there’s good financial advisors out there. I’m not saying that there isn’t.

9:15
But by and large, most of them probably won’t know more about how to manage your portfolio than you do. But you go to them because it feels good. One of the things that I want to accomplish in the trading block more than anything else is teach people how to be self-made traders, how to be self-reliant.

9:35
Great community of traders in the trading block. Man, there’s traders that do great things. Some people are managing the risk incredibly well. It’s amazing to watch. And there’s others that are in there that are trying to learn because they want to do it for themselves. They don’t want to rely on their financial advisor because at the end of the day, the financial advisor isn’t that much better than you.

9:54
Most of your financial advisors are sales guys. Why do I say that? Well, what are they in the business of? Trying to get more client money, man. That’s really what they’re in for. They will go to the golf course in a heartbeat, even on a day like this, probably, if it means being able to get another million-dollar account.

10:11
But where does that leave your money? Taking the hits. They always have some research though that they want to tell you about, some in-house research that says, “Hey, this research is pretty good. It says that while in quarter 1 and quarter 2 we expect a retraction in global GDP to have a negative effect on the stock market, we expect there to be a rebound in quarter 3 and quarter 4 of exemplary growth.”

10:37
Guys, come on, man. It’s like kicking the can down the road, trying to make you feel good with hope for the future. If this market does not make you want to take a better interest in your finances, in your long-term accounts, then this whole thing was for waste.

10:55
But if it makes you learn a little bit, mine was the 2000 dot-com bubble. I learned that as a teenage kid, stock markets don’t go up forever. They have pullbacks. You have to manage the risk. Now, I know what you say well, I have a family, I have a wife or husband, four kids, three dogs, I don’t have the time for that.

11:11
OK, why? Why would you go into the stock market then if you don’t have time for it? Why would you put yourself in something that can do the kind of stuff that we’re seeing right now if you don’t have time for it?

11:28
Does that make a lot of sense? You put all that time into working and you just like to watch it vanish. Guys, there’s basically a system reset going on right now with what we’re seeing in the stock market. Companies are getting hammered. Companies probably won’t survive this. Look at Boeing, man 440s last year, down to like $96 a share.

11:51
It’s crazy, absolutely crazy. So I don’t buy the line about “I don’t have time to study the markets.” Then, OK, fine, accept this kind of crap to happen to you probably every 10 years at least, and a few more in between.

12:06
You should be reading about the stock market. You should be studying the stock market. If you’re going to put your life’s savings and work in the stock market, why are you not learning about it at every turn, every corner?

12:23
“Well, the stock market always comes back. You just gotta hold through these things.” Sure. But guess what? You’re going through some stomach-wrenching times right now. You’re watching your capital go away, and I know that you’re probably thinking, is this gonna ever come back or is it different this time?

12:39
I think it’ll come back at some point, sure. The NASDAQ came back 15 years later. But how crazy is it that if you can just manage the risk and it’s not hard to manage the risk it means planning out your trades, planning out your investments. Look, if this investment doesn’t go my way, this is where I want to get out at. It’s a good start to simple risk management, learning about technical analysis, finding out where support and resistance is on the charts.

13:01
Read about it, study about it, grow in your understanding of the financial markets. There’s a reason why the trades that I’ve made in the trading block, the SharePlanner trading block, we’re still green on the year because I managed the risk. I manage the risk. I let the profits take care of themselves because I know first and foremost, making money in the stock market isn’t about finding good stock picks, it’s about managing the individual risk on the trades.

13:26
And yes, I hate stop losses. I hate using them, I hate getting knocked out of them, but I use them because they save me. Guys, these events are always gonna happen 2000, 2008, 2020. Go back before that, 1987, you had a big sell-off, I think it was 1998.

13:45
When are we gonna learn that there’s big sell-offs, man? The question isn’t about whether you should sell everything when the market’s already down 33%. That decision becomes emotional. It becomes impossible to answer without any certainty of whether or not it’s gonna go up or down from there.

14:01
And you risk losing your rebound, right? So there’s no right answer to that question. There’s no right answer to, “Should I get out of the stock market right now?” Guys, the time to get interested in your stocks, in your portfolio, in your 401ks or 403Bs, your investment accounts it’s not when the market has already done its sell-off or is in the midst of one.

14:24
That’s not the time. The time is when the stock market is doing well for you, when everything just seems to be moseying along. In the trading block, I mention this every day. You can go to SharePlanner.com, look at my trading plans back in January, February, go back even to December and November. I started saying there’s weird bearish divergences happening.

14:41
I was using stop losses. I got knocked out of my positions, yeah, I took some losses. But I had a ton of winners because I managed the risk. I’m not holding Royal Caribbean under $20 a share right now. Instead, we got out of it in the trading block in the 130s.

15:00
I got out of Square at 81 instead of 33 today. How about Space, SPCE, Virgin Galactic? Got out of that at like $33 or $34 a share. It’s trading almost in the single digits today if it hasn’t already got there. That’s because when everything was going well, I still took the risk serious.

15:18
And when the market did pull back finally, I was walking away with my profits in hand because I managed the risk. Is your financial advisor doing that for you? Could you do that for yourself? Yeah. Look, the financial markets are hard. The stock market is hard. Over time, it has continued to go higher, but in the meantime, you’re going to have recessions.

15:36
You’re gonna have depression-like situations like in 2008 and like what we’re seeing right now. The ball just started going on this thing back in late February. We’re like, what, three to four weeks into this massive sell-off? Fastest sell-off into a bear market in stock market history. Could have been avoided by just managing the risk.

16:10
Am I a broken record? Yeah, I bet I am. I bet some of you guys listening to me are like, man, Ryan, shut it up, we get it. But I don’t think a lot of people do. I don’t. A lot of people just say, hey, let’s just hope that it gets better.

16:26
“It’ll come back, it’ll come back.” OK. Was it necessary to take those drawdowns in between? And not all stocks do come back. Not all stocks do. Ford is trading in the fours. Sears Holding is a penny stock today.

16:42
Manage the risk. Don’t take these unnecessary drawdowns. You realize, like, I’m in a good position here. When the market finally does bottom, I may still even short the market some in between if we get some dead cat bounces that fail. I haven’t got any of those yet, really I mean, we kind of had one maybe and it just fell all apart.

17:01
But when this market does bottom, what an incredible opportunity to still be green after the market’s pulled back. God knows how much. Right now it’s like 33%. But if it goes down further and there are better bargains to be had, I’m still sitting green.

17:21
I’m not taking the drawdown. No. I’m not gonna take a drawdown at all. In fact, I’m gonna be building on what I’ve already done this year for the better. I’m not digging myself out of a hole. You know, and I’m gonna use this in simple terms.

17:40
The stock market drops from $100 down to $70 and we’ve actually done more than that right now. If it goes from 100 down to 70, and I get that’s not what the S&P 500 is at, I’m just trying to make it easy to understand here.

17:57
To go back from 70 to 100, that’s like a 42% increase you need, even though you lost 33%. To go from 100 to 70%, that’s a 30% loss. To go back from 70 to 100%, it’s 42%. If you go from 100 down to 50, that’s a 50% loss. To go back from 50 to 100, that’s a 100% gain that’s required.

18:15
Don’t dig yourself a hole, man. Manage the risk. These are defining times for your portfolio, for your future, based on how you manage the risk.

18:34
Manage the risk, the results will be amazing. But you gotta manage the risk. You’ve gotta take interest in your financial future. You’ve gotta take control. Don’t leave it to somebody else. Learn from people. Learn from people like me, man.

18:50
That’s what I’m here for. I’m here to teach. I have courses I provide. I’m gonna be coming out with a new one here before the end of the year, actually much sooner than that, but I’m trying to teach you guys. I want you to learn. I want you to do better.

19:05
I want you to be self-sufficient. I want you to be a self-made trader, self-made investor. I want you to take control of your finances, of your stock market accounts, of your brokerages. You gotta take an interest, you gotta do it yourself. You’ve gotta be willing. So do it.

19:22
Thanks for listening to my podcast, Swing Trading the Stock Market. I’d like to encourage you to join me in the SharePlanner trading block, where I navigate the stock market each day with traders from around the world. With your membership, you will get a 7-day trial and access to my trading room, including alerts via text, email, and WhatsApp.

19:40
So go ahead, sign up by going to shareplanner.com/tradingblock. That’s www.shareplanner.com/trading-block, and follow me on SharePlanner’s Twitter, Instagram, and Facebook where I provide unique market and trading information every day. If you have any questions, please feel free to email me at ryan@shareplanner.com.