Jason and Alex started off the show by saying that we are not going to execute on any investment strategy or implement a philosophy unless they have a substantial amount of data to back this up. They discussed how too many investors implement an investment strategy that is driven and based off emotions, feelings, and news headlines. In an environment like we are in currently with so much uncertainty in the market, the global economy, and from an everyday life standpoint, it is easy to get wrapped up in the rapidly changing news headlines and get uneasy.
Jason talked about how one of the most repeated questions that he gets from clients is “what should we do now?”. He discussed how the answer to that question never changes no matter what is going on in the world around us. People should make sure that their financial plan is comprehensive in nature with specific goals being on track, and they have a solid, diversified investment strategy in place to accomplish those goals and ride through periods of volatility and uncertainty. Jason explained how the real question people should be asking themselves is if they should hire an adviser or not. They talked about how the market has continued to go up and for a lot of individuals it seems like it is easy to make a ton of money in the stock market, when this IS NOT the case over longer periods of time. They invited listeners to send their questions to firstname.lastname@example.org or call 877-707-8889, and they will send them the Investor Behavior Study. Also, we will conduct an initial complimentary discovery meeting to answer some initial questions, find out about IDA’s comprehensive range of services, and establish if there is a good mutual fit to accomplish their goals and objectives. They also discussed how IDA is looking to grow and has a core mission of helping as many people as possible while not letting the level of service and experience dip for existing clients.
Jason did a great job comparing a story of his son saying something he should not have to a classmate and not wanting to admit it was inappropriate to a client not wanting to admit they made an emotional investment decision based on emotions or outside influences when they should not have been reactive. One of the hardest things in life is admitting that you don’t know something, or you need help with something. Our team is able to provide individuals with so much financial peace of mind when they are fully able to let go and allow us to guide them down a path to a prosperous investment experience. They explained how it will not always be smooth, but it will ultimately be successful if we stay true to an investment philosophy and a strategic process.
Jason and Alex finished by talking about a client that is still suffering from the trauma of selling at the bottom back in 2008, and how it has taken years of coaching to get him back on track. The ultimate purpose of Financial Detox is to detoxify people from toxic financial guidance or news.
In this show you will learn about:
– Why should you hire an adviser?
– How to achieve a successful investment outcome.
– The importance of behavioral coaching.
– The road to a peaceful investment journey.
View Transcript of This Weeks Show Here
Speaker 1 (00:01):
This is financial detox, helping you retire with confidence featuring Jason labrum, certified financial planner and founder of Ida wealth intelligence driven advisors. For over 20 years, Jason has shown people how to steer clear of toxic advice, achieve financial peace of mind and manage their wealth for maximum impact. Join Jason and cohost Alex Klingensmith. As they simplify the complex share industry secrets and provide proven strategies designed to take you from financial insecurity to financial independence. This is financial detox.
Speaker 2 (00:43):
Hello, and welcome to financial detox. I’m Jason labrum with Alex Coleen and Smith coming to you live, is it live? No, but it’s okay because it seemed like we’re we’re in the end and the financial detox studio at intelligence driven advisors. And we are here to talk today about kind of, this is a, um, kind of a timeless, um, what would you say? A timeless topic that continues to resurface throughout our podcasts and our radio show over the, the months, the years. And I think you bring this up intentionally every once in a while just to bring back our core focus is their intention because, you know, I feel like it’s so boring to talk about this, but it’s so important. It’s real. It’s the pattern. Most important thing we talk about human behavior goes in patterns, right? Yes. I’m not a psychologist and I’m professed to be one, but we certainly do study investor’s psychology quite a bit, which is the theme of today’s show.
Speaker 2 (01:43):
And I thought about it a couple of weeks ago, a few times because I’ve been working, um, a lot more lately with some of our advisors on, on, you know, on their client experience on our grind experience. Right. And so they’re telling me stories, you were sharing a story with me about a client of yours a few weeks ago, that was exhibiting a very common investor behavior. Uh, it’s a mistake. We are our own worst enemy. So I started hearing enough of these stories and I’m like, gosh, you know, yes, we can dive into the technical stuff. We talked about GameStop and I, you know, what a derivatives and options really were recently, we talked about, um, like we went really deep into the weeds on our actual investment execution of our investment philosophy. I thought, why not actually tell some stories about some of these investment behavior mistakes, because we can see them coming from a mile away now, just like a doctor can see, you know, see what symptoms mean, certain things for, you know, certain illnesses or, or, uh, a break in an arm or something much better than a untrained professional.
Speaker 2 (02:39):
But I think it’s important because we have real data to kind of support our, our theory. I guess it’s a theory, not a hypothesis. Right? Right. Well, we’re always talking about how we’re not going to really anchor into something unless we have data to back it up. That’s right. Whereas I think there’s a lot of times where people have, or emotions or feelings about how to invest in it’s because it is a thought or a feeling or emotion or a headline driven, you know, um, decision that does not good for investing. So we’re trying to what we’re going to do here today on the financial detox shows, we’re going to revisit some of the behavioral aspects of investing. And it’s super important right now, more than ever, because here we are at new all-time highs, you know, tap it, inflation data. The market is cranking.
Speaker 2 (03:26):
Bitcoin is cranking. Things are rocking. So these are the times when people, uh, one of the times, the worst time is probably when markets are down when people make mistakes, but this is a time where people make mistakes too, by hurting, by jumping onto some other, you know, uh, concepts that we’ll talk about. But it’s, it’s an interesting time right now, the market just keeps going up despite the fact that, um, you know, it seems like there are some issues going on out there. Yeah. Do you mean like, as like a $1.9 trillion stimulus package that was, we’ve spent twice the stimulus on COVID we put twice as stimulus to work on COVID that we’ve put, that we put during the 2008 credit crisis, which was when, like, if you think about, uh, some of the most major financial institutions in the world were failing completely.
Speaker 2 (04:15):
Um, and we’re spending double that amount of stimulus. Like if it worked once, why not just double up what we’re doing and it’s like saying if one beer tastes good and makes me feel good, why not just have like six beers? Because at some point it’s a problem. Like at some point you’re going to have a hangover, right, right. When you keep doing these things that are, um, uh, you know, temporary fixes to really more long-term systemic problems. So what you’re talking about in this study, we talk about that it’s different this time, right? Part of what, the story of what I hear from clients, when they talk about what you’re saying, like this has never happened before. So that’s going to justify this behavior that I feel, so the action I’m going to take, because it’s different this time. And I’m scared is I’m going to move all of my investments to safe investments or bonds or cash even, right.
Speaker 2 (05:01):
It’s one decision someone can make. Right? Yeah. And I think the biggest thing that we have, um, you know, stories to talk about, cause we have real listener questions, right? We get listener questions all the time. And we deal with over 1300 clients at intelligence driven advisors. So we have a lot of real data and input and, and practical experience in this. And, and, and clients do ask and people ask, you know, what should I do now? And that the answer to that question never changes. What you should do now is make sure that your financial plan is comprehensive and holistic and intact. And that you understand where you are point a and where you want to be point B and you understand all of the components of that. And then, and then your stress testing and you’re analyzing and monitoring that what you’re doing with a diversified well allocated intelligent portfolio is going to get you there.
Speaker 2 (05:50):
But that’s not what most people want to hear to that question though. Most people want to hear. That’s why I’m having a hard time getting fired up on this show out. I know, cause this is what you do all day every day. But their mission job is your mission is to get us fired up army financial detox. In the very beginning. When you, when this idea was born by you was to detoxify the investor behavior from emotional blenders. Right. I think I said that wrong, but that’s essentially what the point is, right? Yeah. This is a key one, a story yesterday, I talked with one of our biggest partners that works. Let’s do it. And he, you know, they refer us a ton of business and he’s like, I got this client, can you just, he’s just decided he’s going to fire himself. Cause he actually honestly took a gut check moment.
Speaker 2 (06:28):
This person has almost $20 million of net worth. And half of it’s in the market, you have some real estate, he’s a developer like it. And so he fired himself and told his, uh, his advisor who we partnered with that he realizes that he’s been a victim of all these or several of these emotional identified. He turned the page. I forgot them all. But there’s um, based basically these things we fall victim to, right. There’s mental accounting. There’s his was mental accounting. Actually. That was one of his biggest ones, meaning that he’s kept seeing his numbers go up over time because he kept adding money and he thought he was crushing it. And it’s hard to do the math because most of the statements that people get are just accounting. They’re not performance, they’re just accounting. So if you add a hundred thousand dollars to a million dollar portfolio, you’re not up 10% and your investments, you’re up 10% in accounting because you added a hundred thousand dollars.
Speaker 2 (07:16):
Right? So all throughout the years he’d been doing that, moving large sums of money in and out of development projects, we had no idea how he was really doing right. And he had mental accounting. He also was a victim, like most people in the media. So he’d made all these decisions based on what the media was, um, you know, kind of pointing out at that moment in time. So finally he had a gut check moment. He said, you know, this is crazy. I am an a firing myself. I’m going to hire somebody who can, who can at least help me coach me out of these patterns of behavior. Who, who can you refer? You know, who can you introduce me to? So there’s the, there’s the real question is, should you hire an advisor or should you not? And I think right now it feels so easy to make money in the market because the markets have gone straight up for a long time.
Speaker 2 (07:56):
I mean, not straight up, they’ve had, we’ve had dentures, very temporary volatility, right. Temporary downturns. And then it turns around and cranks. So it feels like it’s really easy, but, um, is it, you know, is it, and do you have accurate performance? Our performance reporting is so complex to figure out, and then you have time-weighted dollar weighted interval. I mean, you have many different ways to calculate performance, so to understand what you’re truly doing and how you’re actually performing in versus what is, is the really big question to, how am I performing versus what oftentimes we get to, how am I performing versus the S and P 500 or, but what about the S and P 500 or what about the NASDAQ? And that is interesting. Um, but that was narrow framing by the way, I had to look it up again. Cause these, these investor psychology things.
Speaker 2 (08:43):
Yes. Research study, by the way, maybe you should talk about what this event is. Well, let’s, let’s do that, but we’ve got to go to a quick break. So first of all, we have this great, um, investor. We call it the investor behavior report. It’s yours for free. All you gotta do is send an email to email@example.com, firstname.lastname@example.org. We’ll shoot over the investor behavior report. It’ll get you to thinking correctly and at least make you aware of some of the things that could potentially be going on beneath the surface with your own investor, psychology and help you make better decision. And that’s what financial detox is all about. So stay with us. We’ll be right back. We’ve got a quick break here. It’s the financial detox team at intelligence driven advisors. Eight seven seven seven Oh seven 88.
Speaker 2 (09:30):
Welcome back to financial detox. You can get ahold of us at (877) 707-8889. That’s (877) 707-8889. Why would somebody want to get a hold of us, Alex? Well, why did we give out our number on a podcast, which has also put out as a radio show because you don’t get a lot of podcasts where somebody puts out their phone number to call. So what we’re doing is we are blending a radio show and a podcast. And the reason why we do that is so we can reach more people and we can, you know, uh, duplicate our, we don’t have to duplicate our efforts. So, um, if you’re listening to this on a podcast, um, it’s not exactly like most podcasts. If you’re listening to this on a radio show, it’s not exactly like most radio shows. It is a hybrid. It is a blend, keep you on your toes.
Speaker 2 (10:14):
Right. And where do you hear us on the radio on KCB Q a? The answer is San Diego and that’s, um, Saturdays at one 30, but you can check out our show on any podcast, wherever podcasts are played by simply searching for financial detox. That is the name of the podcast. But anyway, call us, call us because you want to have a conversation, right? I mean, I love all the reasons that I’ve heard of all of our team getting calls and emails from the radio show and or the podcast. Yeah. It’s all over the board. Whatever thing that we’ve talked about that you’re like, you know, I want to have just a conversation about that and learn more. Um, it doesn’t need to be some huge commitment where, you know, you’re, you’re actually gonna hire us and go through the whole process or whatever. We’re not going to throw everything at you.
Speaker 2 (10:52):
It’s just a conversation. So you’re saying we’re going to give our, our time for free to have a conversation with our listeners so that they can call and ask us any questions about investments or financial planning or Bitcoin or allocation, or it is what we do. Okay. And it’s fun. I think we enjoy it. I love that. I like like a complimentary, um, is that like a complimentary portfolio analysis or a complimentary discovery meeting if that’s where it takes us? Absolutely. So we’re, I guess that’s, that’s the reason why you call us in right, is to have a complimentary, no cost, no obligation, um, as light or as heavy as you want to go, there will be some limit of time that we will donate, you know, for free, of course, to do that. But oftentimes we’ve had these conversations that I think last 20 or 30 minutes, or there’s a couple of them several tag on today.
Speaker 2 (11:37):
And the whole point of it is discovery to see if it’s a good mutual fit. You know, if we are, tend to be right for you, and if you’re right for us in the way that we do things, and then we take it from there and we help build you a financial plan to show you where our first wave of recommendations would be, if you were to become a client. So in the end we have two agendas, right? Cause we’re into transparency. Yes. We love transparency. That’s what a fiduciary, full-time all the time fiduciary. I know that’s duplicative and, and I’m repeating, but there’s a point it’s to full draw a full time, full time. And all of the time, um, fiduciary is legally bound to act in your best interest. And the reason why we, we talk about that is because, um, we, we love transparency is what we’re built on.
Speaker 2 (12:16):
That’s what intelligence driven advisors on what most of the RIA registered investment advisory, um, landscape, uh, is, is built on. And so we have an agenda, right? We’re offering you to sit down and talk with you. And, and that really is a discovery session to see if there’s a fit to see if our services are a good fit for your needs. Sometimes they aren’t, a lot of times they are. And then we go to work for you. If we’re not right, we will. And we’re happy to point you in the direction. That’s right. We’ve had clients that just aren’t good fits. Maybe they’re just market timers or they’re just stock pickers. They’re not a good fit. So we’ll say, Hey, here’s some thoughts. Here’s some ideas. Here’s a couple reports like you can get today, the investor behavior report and, um, you know, go get it and let us know if you have a question or maybe we’ll load you into our financial planning system and you can, um, you know, do some financial planning for yourself on our free tool that we make available to, to read your show listeners and podcast listeners.
Speaker 2 (13:10):
So I think that’s a good thing to do. Like clarity. What are we doing here? I know we go over here. Pardon? Assumptions. We just talk and find other shows like we are building a business that continues to grow, right? So you may, I’m sorry I cut you off. But I had to, because you made me think of the second point, right? Yeah. Yeah. I mean, we are learning to be real. We are open business, right? And we want to hire great talented people and create a great career path and life for them. And we want to serve more people. I mean, our mission, our overall mission is to create true financial peace of mind for all that’s for all people. Like we want to help everybody who is even remotely interested in being guided and helped. So that’s cool. Sorry. I cut you off.
Speaker 2 (13:53):
No, no, no. It’s good. So we are open for business. We, we, uh, we seek actively seek to continue growing and we do it in a way. You always do this really well, but we don’t want to ever sacrifice the level of experience or service to our existing clients. We actually want to do it in a way where it stays the same and improves over time. So it doesn’t ever tail off, which is an experience that many people have with all kinds of professionals. Actually not just advisors, financial advisors, but probably worse with financial advisors though. Uh, yeah, yeah. Right. Because you get comfortable, they get, and they quit serving you. They don’t call you. And then the market goes down and you don’t even hear from your advisor. And you’re like, what’s the guy doing? Like you should be hearing from them. Yeah. So yeah.
Speaker 2 (14:31):
That’s, I think a really good point is that we do want to grow, right? We want to add new clients to our firm, but we’re not crazy though. So they aren’t going to we’ll stop. We’ll literally stop growing. If it means that we’re sacrificing service our existing clients, because they’re the ones who got us here. We have a great business. We don’t need to grow. We want to grow. We don’t, there’s a difference. Right? When I started in this business, I needed to grow. I needed to add new clients because I needed to make more money and I needed to survive and live. And so I had to serve more people. Now we want to do that because it’s, it’s fun. And it’s what we do. And it’s, it’s delivering this, this, uh, process and procedure that we built. It’s so good. It is fun.
Speaker 2 (15:06):
And that’s why this show, I did that. The idea of, for me, it was fun because it was enough stories that happen in a short enough amount of time where I’m like, Oh, there’s a lot of people out there that are still lost in this, like in their own emotional confusion about things last year is over, right. This is 20, 21. It’s different than 2020. Some of it feels the same. So people are kind of like, ah, they’re stuck. They’re anchoring. Right. They’re stuck in like these things of like, well, but that’s, you know, last year and then in the virus and the pandemic and then the government and this stuff, and it’s like, look, I get it. And you’re right. It is different this time, empathy, compassion. But what are we going to do with that? We can identify the emotion. You know, we can take action on what we can control and accept what we cannot control.
Speaker 2 (15:46):
And I know you’ve heard that a million times, but I get excited when going to have that conversation with someone new, because it’s like, they never heard it. Right. Why haven’t they heard it? I don’t get it. Why, why is so bizarre? Like we’re working with the other day. And he said, you know, I’ve been an investor. I’ve had advisors for 25 years, got a super successful, exited a big company. And he’s like, I’ve never, never done a holistic, interactive financial plan. I’ve never seen my whole life put on a planet. And he, it’s not like he needs to know if he’s going to run out of money. Right. A lot of people are concerned about, am I going to run out of money? Right. A lot of our clients, that’s not a concern. It’s not about, am I going to run out of money?
Speaker 2 (16:21):
It’s more about what am I doing with my money? What is my purpose? And am I maximizing it? And when they see what their true financial capabilities are, how much they could actually spend off the soup, a reasonable rates of return and stress tested and all that. Then their whole world of my financial purpose opens up. Like I really wanted to start this family foundation. I really want to be charitable. I really want to give to my grandkids and get them started in a business and give them a house. I really wanted to, you know, there’s so many cool things that come out of the true financial purpose. I think part of it, least people, people haven’t actually experienced it or they have, and they just weren’t ready to hear it that time. That’s true. Sometimes we like, I I’m guilty of this all the time.
Speaker 2 (17:03):
And my wife, especially, she’s like I told you that and I’m like, no, you did. And she’s like, remember when we had the conversation and like, did I just wasn’t listening? I’m sorry. She can admit it. And you’ve always been awake to show up, but I was having a rough start there. Yeah. That’s okay. We have our moments. So I have a story. Oh good. And this is a cool story about any or sad or scary. It’s mixed. It’s cool. It’s just, it’s about life. Okay. We’re going deep here. We’re getting to this here. Right? It’s this is not surface level stuff. So, um, I was talking to my boy last night and he was telling me a story about school and something that he said at school, it wasn’t appropriate what he said was wrong, but he did it in a, you know, he wasn’t in trouble at school or anything.
Speaker 2 (17:44):
He was just telling me a story about something he said to a friend and I’m like, well, that’s just not appropriate. Right. You shouldn’t have said that. He’s always the joke. I’m always the bad joke. Right. You can’t, you don’t want to talk like that because then you’re associated with that kind of talk. Um, or with that thought process and it’s just not good. And he wasn’t accepting it. Right. He was like, I didn’t mean anything bad by it. I didn’t, you know, and I’m like the first step to like getting to like growing and becoming a better person, son is that you recognize, you have to admit that, that there is a problem. What you did was not perfect. It doesn’t mean you’re a bad guy. It doesn’t mean you’re in trouble. It just recognizing that that behavior wasn’t ideal. Okay. So, and it took him a while till finally he says, I realize I shouldn’t have said that.
Speaker 2 (18:35):
And I said, perfect. Now we fixed the problem. Right? It’s over. It’s not a big deal. You’re not in trouble, but you just, for five minutes here, you haven’t been able to, you haven’t been willing to accept the fact that what you said should probably have not been said, and you, you made a mistake. And I think the same thing goes to now tie that back to, I think investing is that people investing, whether you have an advisor or you don’t, there is undisputable evidence that talks about these behaviors that you’ve mentioned a few of Alex like mental accounting, narrow framing, loss, diversion, hurting regret, media response, optimism, anchoring these, this is factually a part of most investors life that causes detrimental damage to their overall wealth preservation creation. So you have to recognize there might be a problem. Like you have to recognize what I’m doing may not be working, or there may be data or evidence that could show me a better way to do this.
Speaker 2 (19:37):
But what you’re talking about is humility. Yes. And so that’s, I think that’s the most important, uh, trait in, in an effective leader, whether it’s a leader at school and a child and a student or a son and a father or an organization or an investor, you know, leading your family on your investment endeavors, it’s humility to recognize what you don’t know or to recognize a mistake that you’ve been making and any, any way, shape or form you associate the current headlines, current media, your current emotional turmoils. We all have them. They’re real, not dimming, not, not minimizing those. If you’re connecting that to how or why you’re making investment decisions, it’s probably, there’s a, there’s a high probability that it’s just not going to work out as well as it could. And the cool thing about what we’re doing for people. And I think what financial detox is all about is you don’t have to go through these struggles and these guesses and this, this, this understanding of the current environment, the media, and moving here and moving there, you don’t have to do that in order to have a great outcome in order to have a great outcome.
Speaker 2 (20:44):
All you have to do is, is put yourself into a defined philosophy and use kind of time-tested strategies that are new and evolving, right time tested. It doesn’t mean you’re anchored in some old school thinking that never changes, but you do have an investment philosophy and a process. And I think that’s what we’re talking about doing right, is how do I be a willing to retrain yourself if you’ve kind of gotten off track? That’s the humility part. I mean, a lot of us get stuck in our ways and you know, it’s like, well, I’ve always done it this way. Or I was taught this way, or this is what I’ve learned in red, where they’ve had an experience like the one client. I keep thinking of [inaudible] based upon one stock and selling it at the bottom of the market in 2008, made it behavioral butter.
Speaker 2 (21:27):
And now really just doesn’t trust investing because of a behavioral blunder that he actually made. Like it was, there’s nothing wrong with investing, right? It was just how he invested was the wrong way. And so to reeducate him on, Hey, there’s a good way to do this is taking years and years to trauma there. That’s why they call it psychology. This report is literally, we’re running out of time at some point here as soon. But I know that what’s one of the most powerful parts of this thing. This, this study that’s done by an independent third-party is Dalbar, right? Is the data showing the actual performance of individuals versus major benchmarks, which is we don’t like many major bench. It’s not like a comprehensive benchmark, which is what we prefer, but at least it’s something measurable to baseline and it basically proves or disproves all the naysayers, which is important.
Speaker 2 (22:16):
It’s like, yeah, I I’ve heard those stories, but I’m different. You know, like, no, you’re not. You can do unbelievably well by extracting rates of returns that are available for investors. And you don’t have to try and game the system and you don’t have to try and time it. And that’s what financial detox is about. So take us up on this. If you’re listening to the podcast or you’re listening to radio show, get this report and read it and then call us right for this. We said, why would you call us calls for a discussion and discovery session and just talk about what you’re doing. And maybe we can provide guidance and help, uh, or point you in the right direction. And maybe you want to hire us and we’ll show you what we do, but either way, um, get the report, take a look at it. And we hope this was a helpful and productive use of your time. You can get ahold of us, or you can get the report by sending an email to email@example.com. And you can also give us a call anytime at (877) 707-8889. We want to hear your questions. So ping us if you’ve got any questions and we’ll take you on the tour of financial detox. Thanks so much for listening. We all good, Alex. Yeah. That’s it. All right. Talk to you later. Bye bye.
Speaker 1 (23:24):
To learn more about financial detox and to get access to today’s show notes, transcript and resources, visit financial detox.com. Call Jason and the team at intelligence driven advisors. If you’re ready for financial detox and a better tomorrow, call (877) 707-8889. Get answers to your that’s (877) 707-8889. That’s financial detox.com for podcasts and information. And if you like what you’ve heard, be sure to hit the subscribe button that way you’ll be notified about upcoming podcasts. You’ll take one more step toward financial peace of mind.
Speaker 3 (24:05):
This content is provided for informational purposes only, and should not be considered investment advice or recommendations to buy or sell any types of securities. Mr. Labrum and intelligence driven advisors are not responsible for the consequences of any decisions or actions taken as a result of information provided in this program and do not warrant or guarantee the accuracy or completeness of the information provided the information discussed today, reflects the views of Mr. Labrum and his guests. As of the date of the show and are subject to change without notice past performance is no guarantee of future results. Any forward looking statements or forecasts are based on assumptions and actual results may vary from any such statements or forecasts. No reliance should be placed on any statements or forecasts when making an investment decision. Accordingly listeners should not rely solely on information provided today in making any investment decisions. There’s a risk of loss of investing in securities, including the risk of loss of principle. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for particular investors by natural situation or risk tolerance, asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses.