hey there! welcome. mike williams again withgenesis and look, thanks very much for spending some time with us. i want to say ahead oftime i hope this particular lesson really drives home a point. after the last 15 years, look, we've had twobear markets, we've had two wars, (and) we've had price collapses and everything. the worldcame to a halt in march of 2009. we had a
apple stock after market, tech bubble that started off the new century.this has not been a good place. obviously we had 911 and all the emotionalchanges that went on from that. here we are, 15 years into the new century and do you knowthe most often question i get asked? here's what i get asked. no matter where igo, no matter what talk i'm doing, no matter
what conference i'm at, no matter what partof the world, here's the question: mike, when's the stock market going to crash again? i always know a few things when someone saysthat to me. first of all, the answer is, i have absolutelyno idea. no one knows when the stock market is going to crash. why? well, we all wantto believe we're in control of stuff. everybody wants to think we're walking on concrete anda strong foundation. life isn't that way. in fact, nothing in lifeis that way. but once we accept it, that's all right. that's the way we've existed sincethe beginning of mankind. nothing is going to change.
so what can we do? we can manage risk, butmore importantly, when someone says to me, "mike, when is the stock market going to crash?"it tells me one really important thing. it says, hey, they've missed the upside becausethey were afraid ever since the last one crashed and two, they haven't planned. you see, when someone plans, when we get aclient that has planned out their future, well first of all, they've handled all theirshort-term needs, they have their emergency funds, they have their cash items, they havetheir debt in order, they have their mortgage in place, they have their household needs,they have their kids needs, their family needs, their insurance needs. everything in the immediatefuture is covered.
and if you don't have that money, or thoseissues at risk, then you don't wonder whether the stock market is going to crash. becausehere's why: everything else if five or ten or 15 or 20 years away. if you're 20 yearsaway from retirement, what does it matter to you if the stock market crashes next week?hopefully it does. by the way, we tell people, pray for a correction. because correctionsare literally once- or twice-in-a-lifetime opportunities to buy things at panic levelprices. we'll talk about that more in another lesson.but here's the point of this one. if you have planned all of your immediate needs and youhave those covered, let me tell me what your brain does about the future. your brain willbe more patient. it will accept corrections
as part of every 20-year pathway. look, you won't find a 20-year period wherewe haven't had a couple of corrections. maybe even a bear market or two, but it always endsup. you also won't find a 10-year period where you lost money . . . if you stayed on yourpath. if you did what the crowd does, and that is,run for the hills when things get cheap, you ended up on the short end of the stick. that'snot the market's fault; that's your emotions. that's your actions. that's your fight orflight syndrome that we've talked about. but planning gives you confidence. it meansthat you have covered the important items. it means that now you know, hey, i shouldn'tbe worried about next month if i don't need
my ira for 19 years. i shouldn't worry aboutwhether or not the next quarter of earnings are bad and the market is soft if i don'tneed my kid's education for 14 years. why would you worry about next quarter ornext year for that matter? over time, the markets have proven one very discomfortingthought and that is this: those who take advantage of what looks like negative stock market environments,end up with more money. why? they buy cheaper instead of sell cheaper. they take advantageof panic instead of run with the crowd. my mother told me something a long, long timeago and she was right about this: if you want to get a different result, you have to dosomething that's different from what everyone else is doing.
most people don't plan. start your plan. getyour plan in order. make sure the important events are taken care of because i promiseyou this: if you have emotionally taken care of that, the senses that fire off when thingslook difficult and they will in the future; we will get another bear market, we will getanother flash crash, we will have more bad times but we want to prepare you to take advantageof those times, instead of panicking during those times. so when someone says to me, "mike, when isthe next crash coming?" i say i have no idea. but if you've planned for it, you'll be ableto take advantage of it. so hope that's helpful today. we're looking forward to the next lessonfor you.
have a great week. remember: make sure thatyou check out our podcasts on itunes. it's investor insights, hosted by yours truly.and by the way, my wife says i don't smile enough in videos, so here you go. have a greatweek.
