Investment Anxiety Entering 2025

Summary

Podcast Summary: Investment Anxiety Entering 2025 Jill on Money with Jill Schlesinger | Hosted by Audacy | Released on January 17, 2025

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Introduction

In the episode titled "Investment Anxiety Entering 2025," Jill Schlesinger, CFP®, along with her co-host Mark Telercio, delves into the prevailing concerns surrounding market volatility and investment strategies as we step into the new year. Addressing listener anxieties and providing expert insights, Jill aims to equip her audience with the knowledge to navigate the uncertain financial landscape of 2025.

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Market Performance and Current Sentiment

At the outset, Jill acknowledges the remarkable performance of the stock market over the past two years. “The S&P 500 totally was just killing it up 53% over those two years,” Jill remarks at [03:20], highlighting that this marks the best two-year performance since 1997-1998 ([03:48]). This impressive growth, however, sets the stage for the current wave of volatility and investor unease.

Jill Schlesinger [03:20]:

"The S&P 500 totally was just killing it up 53% over those two years."

Jill Schlesinger [03:48]:

"Oh, and by the way, that's the best two-year performance since 1997 and 1998."

As the market experiences a downturn, Jill notes an uptick in anxiety among investors. She observes that the recent sell-off has prompted many to reach out with concerns, reflecting a common emotional response to market fluctuations.

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Listener Concerns and Emotional Responses

Jill emphasizes the importance of recognizing personal emotions in investment decisions. “Regardless of who you are, you are not devoid of emotions when markets go up and down,” she states at [04:01]. This acknowledgment serves as a foundation for addressing specific listener questions about maintaining investment strategies amidst volatility.

Jill Schlesinger [04:01]:

"Regardless of who you are, you are not devoid of emotions when markets go up and down."

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Q&A Session: Navigating High Stock Allocations

One of the prominent questions comes from Tyler, who inquires about maintaining a high allocation in S&P 500-tracking funds despite experiencing significant market drops and recoveries.

Tyler's Question [05:24]:

"Are we okay to continue to invest this way considering we do have a high risk tolerance, or should we look to diversify more?"

Jill responds by assessing Tyler's risk tolerance and time horizon. She advises that a high stock allocation is appropriate if Tyler can withstand potential future downturns and does not require the invested funds in the near term.

Jill Schlesinger [06:27]:

"If you were willing to take on the risk and you saw markets drop and then come back up... you might be willing to just be fine with a 90-10 portfolio."

Mark Telercio [06:54]:

"So presuming you don't need any of this money in the next 10, you can handle it."

Jill further underscores the importance of alignment between investment strategies and personal financial goals, emphasizing that emotional resilience is key to maintaining one's portfolio during turbulent times.

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Q&A Session: Managing Anxiety Over Employment Stability

Another listener, Keith, expresses anxiety about potential privatization efforts affecting his federal government employment and benefits.

Keith's Question [07:20]:

"I am so scared that I'm going to lose my job, my pension, my health care, my thrift savings plan and all the other amazing benefits that come with working for the federal government."

Jill and Mark address Keith's fears by recommending practical steps to mitigate anxiety through financial preparedness. They advise eliminating consumer debt, building an emergency fund, and optimizing retirement plans to create a buffer against potential job instability.

Jill Schlesinger [08:55]:

"No outstanding consumer loan debt, no credit cards, auto loans, you start paying them down fast, that you have an emergency reserve fund that can actually float you for 6 to 12 months if something were to change."

Mark Telercio [08:53]:

"That would include making sure you've got..."

These strategies aim to empower listeners like Keith to feel more in control of their financial situations, thereby reducing anxiety related to employment uncertainties.

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Q&A Session: Balancing Emergency Funds and Investment Opportunities

Victoria, a 31-year-old homeowner, seeks guidance on whether to withdraw funds from her investment account to bolster her emergency savings amidst market uncertainty.

Victoria's Question [09:30]:

"I’m debating pulling out a substantial amount of the $35,000 that's invested and putting it back into a high yield savings account for safety. But I can just as easily see myself regretting that move if I wind up not needing to have made that choice."

Jill advises against market timing and emphasizes maintaining a sufficient emergency fund as a priority. She suggests reallocating a portion of the investment account back into savings to ensure financial security without drastically altering the investment strategy.

Jill Schlesinger [12:32]:

"Don't violate that. Stop trying to outguess what you think is going to happen... So, no, I don't think you should be doing this."

Mark Telercio [12:31]:

"That's what you should do."

Jill reinforces the importance of a disciplined approach, encouraging Victoria to avoid impulsive decisions based on short-term market movements and instead focus on long-term financial stability.

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Concluding Insights

As the episode wraps up, Jill and Mark reiterate the significance of aligning investment strategies with personal financial goals and emotional comfort levels. They urge listeners to seek professional advice tailored to their unique circumstances and to remain steadfast in their financial plans despite market volatility.

Jill Schlesinger [13:27]:

"That is our program for today."

Mark Telercio [13:26]:

"It is a Friday, so I just..."

The episode concludes with reminders about subscribing to the newsletter and encouraging listeners to engage with the show for ongoing financial guidance.

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Key Takeaways:

1. Emotional Resilience: Recognize and manage emotions to make informed investment decisions.
2. Risk Alignment: Ensure your investment portfolio aligns with your risk tolerance and financial goals.
3. Financial Preparedness: Maintain an emergency fund and minimize debt to reduce financial anxiety.
4. Avoid Market Timing: Focus on long-term strategies rather than reacting to short-term market fluctuations.
5. Seek Professional Advice: Tailor financial strategies to individual circumstances with expert guidance.

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Notable Quotes:

• Jill Schlesinger [03:20]:

  "The S&P 500 totally was just killing it up 53% over those two years."

• Jill Schlesinger [04:01]:

  "Regardless of who you are, you are not devoid of emotions when markets go up and down."

• Jill Schlesinger [06:27]:

  "If you were willing to take on the risk and you saw markets drop and then come back up... you might be willing to just be fine with a 90-10 portfolio."

• Jill Schlesinger [08:55]:

  "No outstanding consumer loan debt, no credit cards, auto loans, you start paying them down fast..."

• Jill Schlesinger [12:32]:

  "Don't violate that. Stop trying to outguess what you think is going to happen."

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Conclusion

In "Investment Anxiety Entering 2025," Jill Schlesinger successfully addresses the common fears and uncertainties faced by investors in a shifting market landscape. By providing actionable advice and emphasizing the importance of emotional and financial preparedness, Jill empowers her listeners to make confident and informed financial decisions as they navigate the complexities of 2025's investment environment.

Transcript

[Jill Schlesinger]

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[Jill Schlesinger]

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[Jill Schlesinger]

Welcome to the Jill On Money Show. It's Friday, January 17th and we are here trying to help you make better, less bad, more considered financial decisions. And you know, I think it has been a while since we've gotten a slew of messages that tend to have a similar theme. We usually get lots of different kinds of notes all the time. Whether it's about your own retirement or maybe you're thinking about a home purchase or it's debt pay down, or it's a tax question or it's a Roth conversion question. Like, we just get this smattering of different topics, but lately we have been fielding a lot of questions about market.

[Mark Telercio]

Volatility, stock market specifically.

[Jill Schlesinger]

And it may be strange to actually say this out loud after having such an incredibly, incredibly strong two years in markets in 2023 and 2024, where the S&P 500 totally was just killing it up 53% over those two years. Oh, and by the way, that's the best two year performance since.

[Mark Telercio]

You ready for this?

[Jill Schlesinger]

1997 and 1998. So, you know, now all of a sudden, market's selling off a little bit, we're getting some volatility and we are seeing that, generally speaking, people are feeling.

[Mark Telercio]

A little bit uptight about that.

[Jill Schlesinger]

Is that you then send us a note. Because every situation is different. And maybe in your particular situation, we need to pay special attention to what's going on. Regardless of who you are, you are not devoid of emotions when markets go up and down. So if you got a question, go to jillonmoney.com, click the contact us button, write us a note, and if you want to come on the air, check the box. Mark will do everything else. And when we get that note and we bring you on the air, just be willing to have a conversation that might go some places that you don't expect. Maybe you're coming onto the air and you say, I have a question about stocks. And then we all of a sudden find out you haven't done your estate documents.

[Mark Telercio]

I'm still gonna bug you about those.

[Jill Schlesinger]

Estate documents, so give us a holler, let us know what's going on. While you're on the website, don't forget.

[Mark Telercio]

To sign up for the free weekly.

[Jill Schlesinger]

Newsletter, which comes out every Friday. Like that would mean today. So check that out. All right, here we go. Let's do some emails. This is a lot about markets and I want you to pay attention, okay? Cause a lot of the conversation that you're having with yourself has to do with this. I know that because when you write us, you're reflecting what you feel, but also what everyone else is feeling. Here is a message from Tyler, who writes, Hi, Jill, I read your book.

[Mark Telercio]

The Dumb Things Smart People do with Their Money.

[Jill Schlesinger]

And I recently started to listen to the podcast. My wife and I have about 90% of our portfolio, which encompasses a 401k, a Roth, a traditional IRA and a brokerage account. And 90% of that portfolio is in a fund that tracks the S&P 500. The COVID drop almost numbed us from taking on risk. In fact, we saw it drop by 40% back then. And then it came roaring back. Okay, the question is, are we okay to continue to invest this way considering we do have a high risk tolerance, or should we look to diversify more? Tyler, not knowing a lot of other details about your life, this has a lot to do with what you can withstand in the market movement. Because if you were willing to take on the risk and you saw markets drop and then come back up and.

[Mark Telercio]

You don't need this money for 10.

[Jill Schlesinger]

20, 30, 40 years, okay, you might be willing to just be fine with a 9010 portfolio. But the question is, are the gyrations in this iteration of markets driving you to the point where you're uncomfortable sticking with your portfolio allocation? So if you were able to withstand it once, you probably can withstand it again.

[Mark Telercio]

So presuming you don't need any of.

[Jill Schlesinger]

This money in the Next, let's say 3, 4, 5, 10 years, you can handle it. Except if you don't trust yourself because the next time the market drops by another 40%, you won't be able to stick with a portfolio then I would reallocate. I don't think that this is a.

[Mark Telercio]

Straight up, this is what you should do. Answer.

[Jill Schlesinger]

It is so much about when you need your money and your feelings and.

[Mark Telercio]

Trust in yourself to absorb losses.

[Jill Schlesinger]

Okay, so that's really important. Here's a follow up. By the way, here comes from Keith, whose subject is how do I not be anxious, worried and nervous? Okay. Hey Jill and Mark. We spoke months ago and I have been doing well. However, a friend of mine told me about how all I would say is the incumbent president and his people are going to privatize the post office, which is my employer. I have been a career employee since 2018 and I received full time status as of 2020. I am so scared that I'm going to lose my job, my pension, my health care, my thrift savings plan and all the other amazing benefits that come with working for the federal government. I don't know even if it's possible, the Constitution would basically have to be rewritten. Is there any advice that you or Mark have for me? Thank you for taking the time to read this and I hope to hear back. You know, I think that there have been a lot of worries about government employees feeling Change is upon them. This idea that Elon Musk, the Doge unit of the government, which is trying to find some ways to save money, I think that they are somewhat overstated. But I think that if you're worried about how not to be anxious, one thing you can make sure is, is that you've done everything in your power to protect yourself. And what would that include?

[Mark Telercio]

That would include making sure you've got.

[Jill Schlesinger]

No outstanding consumer loan debt, no credit cards, auto loans, you start paying them down fast, that you have an emergency reserve fund that can actually float you for 6 to 12 months if something were to change, and that you are using your retirement plan to the best of your ability. You know, Keith, there's no way to protect you from your own anxieties. But I think those actions might be the best thing you can do just to at least feel like you're in more control. Okay, this next question is from Victoria, who says, hi, Jill and Mark. Historically speaking, I know the stock market is overdue for a correction. You know what? We actually probably are down almost 10% from the tippy top in some markets at least. Okay. But let's get back to Victoria. Add onto that idea the unprecedented and potentially volatile environment we're entering in 2025 with a new president and doge and unknown policy and tax and inflation issues. I'm experiencing uncertainty about where to put some of my extra funds. Okay. Victoria says I'm 31, I'm single. I'm a homeowner in a relatively affordable location in Texas. I have $88,000 in retirement 401 and Roth IRA, $7,000 in an emergency fund, a high yield savings account, $3,500 in a separate fund for non emergencies, and $35,000 in a general investing account with Betterment. It's about 3/4 stocks and one quarter bonds. Previously, I had maintained $12,000 in my designated emergency fund, which would cover about.

[Mark Telercio]

Six months of expenses.

[Jill Schlesinger]

That $12,000 is obviously more than the $7,000 that she has, which would cover three and a half months. But Victoria says she opted to invest some of that extra money last year in search of higher returns. Guys, I don't want you to invest your emergency reserve fund.

[Mark Telercio]

I really don't.

[Jill Schlesinger]

Okay, but let's move back to the question. Now that 2025 has arrived with all of its uncertainty and that now I'm hearing they were overdue for a market correction, I'm debating pulling out a substantial amount of the $35,000 that's invested and putting it back into a high yield savings account for safety. But I can just as easily see myself regretting that move if I wind up not needing to have made that choice. I'm at a unique time in my life where I'm trying to hoard and grow my money as much as I can over the next seven years. She's only 31. Okay, I'm just hoping to receive some guidance or reassurance. Should I leave my money where it is? Should I pull some money out to build up my emergency fund just in case? Should I pull out even more? Okay, I want to be clear. As I just said earlier, I want Everybody to have six to 12 months of their expenses socked away in a high yield savings account, a certificate of deposit, or a money market account. So if in your case, Victoria, you took five grand out of your emergency fund and that money was put into a retire into a investment account, and that money has grown, great. But when you have. You have $35,000 in an investment account, what I would do is I would at least take out the five grand of that maybe 7,500, and put it back into your high yield savings account.

[Mark Telercio]

That's what you should do.

[Jill Schlesinger]

Don't violate that. Stop trying to outguess what you think is going to happen. So you took a shot. I don't know when you invested in 2024, but if you, if it was at the right time, maybe you made some money. Look at that $35,000. Try to get out of at least five to $7,500 of that account. Try to make it as tax neutral as you can and stop the doing this. This is market timing, gang, and we know better. So, no, I don't think you should be doing this. And I really think that for the vast majority of you, if you're feeling anxious about something, that probably means that you have too much risk on the table, or maybe you're just a nervous Nelly. But listen to that. The question is, once you make a decision to change your allocation, do you have the wherewithal to stick with that when the market starts going back up? Okay. All right.

[Mark Telercio]

That is it.

[Jill Schlesinger]

That is our program for today.

[Mark Telercio]

It is a Friday, so I just.

[Jill Schlesinger]

Want to remind everybody, our music is composed by Joel Goodman. Mark Telercio is our executive producer and king of all things web, and we.

[Mark Telercio]

Are distributed by Odyssey.

[Jill Schlesinger]

By the way, you can subscribe to us on the Odyssey app or wherever you find your favorite podcast. If you would not mind, please leave.

[Mark Telercio]

Us A rating and review.

[Jill Schlesinger]

1 Wherever you listen and don't forget to do something nice for someone else today. Change your work, change your wealth, change your life. Thank you for listening and we'll talk.

[Mark Telercio]

To you on Monday. Real Estate it's been a cornerstone of wealth building for generations, but it's also often a major headache for investors. 3:00am Maintenance calls, tenant disputes, property taxes Enter the Fundrise Flagship Real estate fund, a $1.1 billion real estate portfolio built for you. We're Talking more than 4,000 single family homes in thriving Sunbelt communities, 3.3 million square feet of in demand industrial facilities, all professionally managed by an experienced team. With the Flagship Fund, you're tapping into real estate's most attractive qualities. Long term appreciation potential, a hedge against inflation, diversification beyond the stock market. Check, check, check. All without complex paperwork, massive down payments or soul sucking landlord duties. Visit fundrise.comjillonmoney to explore the portfolio. Check out historical returns and see just how easy it can be to add real estate to your investing strategy. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund's [e-mail] Flagship this is a paid Advertisement.

[C]

Hey, I'm Ben Stiller.

[D]

I'm Adam Scott and we make a.

[C]

TV show called Severance. On January 17th, Severance is back for season two on Apple TV and we can't wait for you guys to see it.

[D]

And before the premiere, Ben and I are going to be binging Seville Season one and putting out daily recap podcasts.

[C]

Yep, each weekday beginning January 7th, we'll be dropping an episode featuring exclusive behind the scenes tidbits and brilliant insights from our cast and crew and us, Patricia.

[D]

Arquette, Britt Lauer, Zach Cherry, John Turturro. The list goes on.

[C]

All your favorite Lumen employees, their friends, families, enemies in your feed every single weekday.

[D]

And here's the best part. After that, we're going to keep keep going. Tune in weekly as we recap every episode of season two. The podcast drops on the same day the episode comes out.

[C]

It's the Severance Podcast with Ben and.

[D]

Adam on Apple Podcasts, the Odyssey app, or wherever you get your podcasts.