Should I Pull My Money Out Of The Market?

Summary

Should I Pull My Money Out Of The Market?

Ramsey Everyday Millionaires
Hosted by Ramsey Network
Release Date: April 14, 2025

In this insightful episode of Ramsey Everyday Millionaires, the Ramsey Network hosts delve into the pressing question many investors face during times of economic uncertainty: "Should I pull my money out of the market?" Through a real listener interaction and expert discussions, the episode provides valuable guidance on navigating market volatility, emphasizing disciplined investing strategies, and leveraging tax-advantaged accounts.

Listener's Concern: Navigating Market Instability

The episode begins with a listener, James from Lynchburg, Virginia, reaching out with concerns about his investments amid economic instability, including tariffs and declining stock prices. James is apprehensive about the fluctuating market and contemplates whether to withdraw his funds or remain invested.

James [00:23]:
"I have some money invested in stock market right now, and with the current economic instability, with the tariffs and everything that's going on, you know, stock prices are dropping, and we're just wondering if I should consider pulling my money out of the stock market or just ride it out."

Experts Advise: Ride Out the Market Downturn

George Kamel responds promptly, advising James to "ride it out," reinforcing the importance of maintaining investments during downturns.

George Kamel [00:51]:
"Ride it out, my friend."

Dave Ramsey further explores James's concerns, probing the reasons behind his fear of market fluctuations. He emphasizes historical trends where the stock market rebounds and reaches new highs after dips, highlighting that persistent investing, even during downturns, can be beneficial.

Dave Ramsey [01:11]:
"History tells us when the stock market goes down, it always come back up higher than ever... You are buying when the stocks are on sale, my friend."

The Resilience of the Stock Market

Dave Ramsey underscores that despite short-term dips, the long-term trajectory of the stock market remains upward. He encourages continuous investment, regardless of market conditions, and cautions against withdrawing funds unless in retirement.

Dave Ramsey [01:11]:
"There's no reason to pull your money out of the stock market ever."

James acknowledges the advice, seeking further clarity.

James [01:51]:
"Okay, how old are you? That's exactly what I needed to hear."

Combatting Negative Headlines with Strategic Investing

Ramsey highlights the disruptive nature of negative financial headlines, which often drive fear-driven decisions. He references an enlightening tweet showcasing that investing during turbulent times can yield significant returns in the following year.

Dave Ramsey [01:59]:
"There's a great, funny tweet. It shows CNBC and Every time there was a headline that said markets in turmoil. If you just put money in the market that year, the following year, the average return you would get is 40%."

George reinforces this point, emphasizing that contrary to sensational headlines, downturns present optimal investment opportunities.

George Kamel [02:35]:
"Every time the headlines say don't invest, pull your money out, it's all coming crashing down. That's the right time to invest."

Prioritizing Tax-Advantaged Retirement Accounts

The conversation shifts to the importance of prioritizing investments in tax-advantaged retirement accounts over brokerage accounts. Dave Ramsey questions why James is not maximizing contributions to his IRAs before allocating funds to a brokerage account.

Dave Ramsey [02:56]:
"Why aren't you investing in retirement accounts that are tax advantaged?"

James explains his rationale, detailing his use of a brokerage account for additional investments and the rollover of his previous 401k into a Roth IRA after a layoff.

James [03:23]:
"I wanted to roll that money into something that was going to make some money."

Ramsey acknowledges that while brokerage accounts can generate returns, they lack the tax benefits of retirement accounts, which are crucial for long-term wealth building.

Dave Ramsey [04:03]:
"Well, either way, you're going to make money. You're just not getting any tax advantages. And that's where you want to go first when it comes to investing."

Investment Principles: Time in the Market vs. Timing the Market

A pivotal moment in the episode is the introduction of the investment axiom, "Time in the market beats timing the market." Ramsey elaborates on this principle, stressing that long-term commitment to investments yields better results than attempting to predict market movements, which often leads to losses.

Dave Ramsey [04:39]:
"Time in the market beats timing the market. And so when you try to jump in and out at the right time, that's good. You're going to get burned."

George Kamel echoes the significance of this mantra, appreciating its clarity and truth.

George Kamel [05:05]:
"Time in the market beats timing the market. I'm repeating it because it's so good."

Ramsey further reinforces disciplined investing by contrasting it with impulsive strategies, using a memorable analogy.

Dave Ramsey [05:26]:
"James, be a Crockpot in a world full of microwaves."

While George playfully critiques the analogy as less impactful, the underlying message remains clear: adopt a patient, steady approach to investing rather than seeking quick, reactive solutions.

Key Takeaways and Encouragement

The episode concludes with heartfelt encouragement from Ramsey, urging listeners to persist in their investment journeys despite market volatility. He emphasizes the transformative power of consistent investing and the benefits of compound growth over time.

Dave Ramsey [04:03]:
"Because I, I believe in you. The fact that you're even investing in the market gives me a lot of hope. Yeah, just never stop."

George adds a touch of humor while acknowledging Ramsey's efforts to impart wisdom.

George Kamel [05:32]:
"That's 50%. That's not bad. That'll get you in the hall of Fame. In Major league baseball, you're bat.500."

Final Thoughts

In addressing James's concerns, the Ramsey Network's experts provide a comprehensive strategy for handling market downturns:

1. Stay Invested: Resist the urge to withdraw funds during market dips. Historically, markets recover and reach new heights over time.
2. Prioritize Tax-Advantaged Accounts: Maximize contributions to IRAs and 401ks to benefit from tax advantages.
3. Adopt a Long-Term Perspective: Embrace the principle that consistent, long-term investing outperforms attempts to time the market.
4. Ignore Sensational Headlines: Focus on fundamental investment strategies rather than reacting to fear-driven news.
5. Leverage Compound Growth: Allow your investments to grow over time through disciplined contributions and reinvestments.

By adhering to these principles, listeners can build and maintain wealth, navigating economic uncertainties with confidence and resilience.

Transcript

[Dave Ramsey]

This episode is brought to you by SmartVestor. Connect with an investing pro near you at RamseySolutions.com SmartVestor we're gonna start it.

[George Kamel]

Off with James in Lynchburg, Virginia, My old stomping grounds. George, I went to college.

[Dave Ramsey]

Oh, that's right.

[George Kamel]

That's right. James, how can we help?

[James]

Yes, I just got a question for you. It's an investment question. The. I have some money invested in stock market right now, and with the current economic instability, with the tariffs and everything that's going on, you know, stock prices are dropping, and we're just wondering if. If I should consider pulling my money out of the stock market or just ride it out.

[George Kamel]

Ride it out, my friend.

[James]

Ride it out.

[George Kamel]

Yeah.

[Dave Ramsey]

What do you think is going to happen if you pull your money out?

[James]

Well. Well, it's gonna. It's not. It's not gonna. If I put it in the bank, it's not gonna fluctuate.

[Dave Ramsey]

So you're worried about fluctuation? I'm just trying to get to the.

[James]

Root of your fear, Rust.

[Dave Ramsey]

Okay, well, here's what we found. History tells us when the stock market goes down, it's always come back up higher than ever. If you look at any crash, which we are not even close to right now, yes, we're seeing a dip. And if you zoom in, it's scary, but if you zoom out, you go, oh, we're still at, like, record highs. Okay? And so here's what I do. Here's what Ken does. Here's what Dave Ramsey does. We just keep investing when the market's down. You are buying when the stocks are on sale, my friend. When the market's up, we are thankful for growth. And so it's always a good time to invest. And you should never pull money out unless you're in retirement. You need a little bit of money for living. There's no reason to pull your money out of the stock market ever.

[James]

Okay, how old are you? That's exactly what I needed to hear. Just trying to get some. Some advice on that.

[Dave Ramsey]

Look, you've been looking at too many headlines going, ah, it's all going to come crashing down because guess what? That gets clicks and views, doesn't it? Little old me telling you, just invest every month, every paycheck, not the most exciting news. No one's clicking on that. And so if it helps, you go look at Some S&P 500 graphs and charts over history, and here's what I found. There's a great, funny tweet. It shows CNBC and Every time there was a headline that said markets in turmoil. If you just put money in the market that year, the following year, the average return you would get is 40%.

[George Kamel]

Yeah, there you go.

[Dave Ramsey]

Every time the headlines say don't invest, pull your money out, it's all coming crashing down. That's the right time to invest.

[George Kamel]

And we're talking. Okay, James, we're talking about your 401k and stuff like that. We're not talking about single stocks, right?

[James]

Well, yeah, I mean, I've got my money. It's in a brokerage account and I have a broker that's. That is managing that for me.

[George Kamel]

Right.

[Dave Ramsey]

Why aren't you investing in retirement accounts that are tax advantaged?

[James]

Well, I do have, I do have an ira. I've got a Roth ira. I have a traditional ira.

[Dave Ramsey]

Are you maxing those out every year?

[James]

Well, my Roth ira, I just started that and I haven't actually maxed those out. No.

[Dave Ramsey]

So why are you funding the brokerage account before the tax advantage accounts?

[James]

Well, it was, it was some money that I had. I had some money that I wanted to move around and I put it in a brokerage account to see, you know, to see if I could make some money there. And the Roth IRA account that I had was, it was rolled over from a previous 401k that I had with the. I worked for the railroad, okay. And I got laid off. And that was no longer. So I had to roll. I wanted to roll that money into something that was going to make some money. So.

[Dave Ramsey]

Well, either way, you're going to make money. You're just not getting any tax advantages. And that's where you want to go first when it comes to investing. So hang on the line. I'm going to send you a copy of my book, Breaking Free from Broke. Read the wealth as Patience chapter. That's going to give you a lot of tactical information as well as some encouragement and motivation and show you the right process and way to invest. Because I, I believe in you. The fact that you're even investing in the market gives me a lot of hope. Yeah, just never stop.

[George Kamel]

That's right.

[Dave Ramsey]

And you'll look back. We were just talking. Jump out.

[George Kamel]

We were talking about this during the break. You know, it's like we don't get too hung up on the drops. We're going to keep investing and buy low, baby.

[Dave Ramsey]

Yeah. And here's what I always say this. I didn't make this up. This is out there somewhere. But time in the market beats timing the market. And so when you try to jump in and out at the right time, that's good. You're going to get burned. And so it's all about just staying in the market over a long period of time. Let compound growth do its thing. Let the economy cook.

[George Kamel]

Would you believe I've never heard that phrase before?

[Dave Ramsey]

Really?

[George Kamel]

Yeah. I enjoy hearing a good phrase. And you just introduced me to a.

[Dave Ramsey]

Phrase that means a lot to me.

[George Kamel]

Time in the market beats timing the market. I'm repeating it because it's so good.

[Dave Ramsey]

It's. It's. You gotta chew on it for a second. You do, but it just helps remind you that, oh, it's not about trying to be a genius. And just.

[George Kamel]

That right there, my friend, is an axiom.

[Dave Ramsey]

That's what I'm all about.

[George Kamel]

You take that to the bank.

[Dave Ramsey]

Here's another one. Literally, you've heard this one.

[George Kamel]

Oh, he's showing off now.

[Dave Ramsey]

James be a Crockpot in a world full of microwaves.

[George Kamel]

Yeah, I've heard that one.

[Dave Ramsey]

That one.

[George Kamel]

It's not as exciting.

[Dave Ramsey]

I thought you'd like a Crockpot reference.

[George Kamel]

I do, but you know, the. The play on words, the turn of phrase. That one. The first one was clever and wrapped in truth. The Crock pot thing is a little cheesy. All right. All right. Yeah. But I appreciate the effort. You're one for two. That's 50%. That's not bad. That'll get you in the hall of Fame. In Major league baseball, you're bat.500.

[Dave Ramsey]

Thanks for tuning in to Ramsey Everyday millionaires need help with your investments? Connect with a smartvestor [e-mail] smartvestor or click the link in the show notes. Ramsey Solutions is a paid non client promoter of participating pros. Learn [e-mail] Smartest Investor.