The Clark Howard Podcast – Episode Summary: "Ask An Advisor With Wes Moss" (Released July 22, 2025)
In this insightful episode of The Clark Howard Podcast, host Clark Howard teams up with financial advisor Wes Moss and Krista Dibiaz to debunk common investment myths and address listener questions. The episode, titled "Ask An Advisor With Wes Moss," offers a wealth of knowledge for both novice and seasoned investors aiming to optimize their financial strategies.
1. Introduction to Investment Myths
The episode kicks off with Krista Dibiaz introducing Wes Moss, who delves into the topic of investment myths—a prevalent theme that often misguides investors. Wes emphasizes the importance of distinguishing between commonly held beliefs and factual investment principles.
2. Debunking the Top 10 Investment Myths
Myth 1: You Have to Be Rich to Invest
Wes Moss [00:55]:
"You've got to be rich or wealthy to really invest."
Wes challenges the outdated notion that investing is exclusive to the wealthy. He highlights the democratization of investing, noting the reduction in trading costs and the availability of low-minimum investment options. Platforms like online brokers have eliminated barriers, allowing individuals with modest funds to participate in various investment categories, including stocks and private markets.
Myth 2: Investment Timing is Everything
Wes Moss [02:30]:
"Timing is not everything in the stock market."
While acknowledging that timing can influence investment outcomes, Wes argues that consistent participation is far more crucial. The unpredictable nature of markets makes perfect timing nearly impossible. Instead, a disciplined approach of regular investments tends to yield better long-term results.
Myth 3: Cash is King
Wes Moss [05:06]:
"Cash is not king. It's good in measured doses."
Although holding cash can provide safety during market downturns, Wes cautions against overreliance on cash investments. With returns barely keeping pace with inflation, excessive cash holdings can erode purchasing power over time. He recommends maintaining a balanced portfolio that includes equities to ensure growth.
Myth 4: Bonds Are Always Safe
Wes Moss [05:19]:
"Not all bonds are safe."
Wes explains that the safety of bonds varies based on factors like duration and credit quality. Short-term government bonds may offer lower risk, whereas long-term bonds can be volatile and susceptible to interest rate fluctuations. Additionally, corporate bonds carry credit risks dependent on the issuing company's health.
Myth 5: The Stock Market is Like Gambling
Wes Moss [09:25]:
"The stock market is like gambling in the really short term. But over time, it's not that the house always wins."
Comparing the stock market to gambling underscores the short-term volatility and risk. However, Wes points out that, unlike a casino, the stock market doesn't have a "house" and historically tends to grow over the long term. Consistent investment and staying the course can lead to substantial wealth accumulation.
Myth 6: If the Market Goes Down, You've Lost Money
Wes Moss [25:16]:
"If the market is down, no, you haven't lost money if you haven't sold."
Temporary market declines do not equate to permanent losses if investments are held. Wes likens investing to an escalator with inevitable dips, emphasizing the importance of remaining invested to benefit from eventual recoveries and long-term growth.
Myth 7: Past Performance Tells You Everything
Wes Moss [29:55]:
"Past performance really does not predict future results all the time."
While historical performance can provide insights, it doesn't guarantee future outcomes. Wes advises caution against relying solely on past performance, especially with actively managed funds that may falter once initial success periods end.
Myth 8: Real Estate Always Goes Up
Wes Moss [30:50]:
"Real estate has been pretty darn steady in an uptrend. However, we've had some massive dips."
Wes dispels the belief that real estate is perpetually appreciating by recalling the housing crisis of 2006, where national prices fell by 35%, and some regions experienced declines of up to 70%. He underscores the cyclical nature of real estate markets and the importance of considering maintenance costs and taxes.
Myth 9: You Need to Beat the Market to Win
Wes Moss [31:15]:
"You don't need to do it to win."
Attempting to outperform the market consistently is challenging and often unnecessary. Wes advocates for average market returns, such as 7%, which can sufficiently grow investments over time without the pressure of outperforming benchmarks.
Myth 10: Happy Retirement is All About Money
Wes Moss [33:01]:
"Happy retirement is all about money—but it's only half of the equation."
Financial security is vital for a comfortable retirement, but Wes highlights that non-financial aspects like health, social networks, and personal pursuits are equally important. Balancing financial planning with fulfilling personal activities leads to a more holistic and satisfying retirement.
3. Listener Questions and Expert Advice
A. David from Georgia: Portfolio Allocation Calculator
David's Concern:
David seeks a free tool to assess his portfolio's allocation across stocks, bonds, and cash without sharing sensitive information.
Wes Moss [10:32]:
"There are tools that will do this, but you still have to sign up and make an account."
Wes suggests platforms like Morningstar, Empower, and SigFig, which require account creation to analyze holdings. He also mentions the innovative use of artificial intelligence (AI) tools that can provide detailed portfolio insights without the need for traditional services.
B. Daniel from Iowa: Feeling Behind in Retirement Savings
Daniel's Situation:
At 43, earning $50,000 annually, Daniel has $110,000 in his Roth IRA, $110,000 in a brokerage account, and $15,000 in a 401(k). He's concerned about lagging behind peers.
Wes Moss [14:13]:
"You're way ahead when it comes to the median number. The average is always going to be higher because there's a few of them that have a ton of money."
Wes reassures Daniel that his savings exceed the national median and average, emphasizing the skewed nature of averages due to extremely wealthy individuals. He encourages focusing on personal progress rather than external comparisons.
C. Derek from New Jersey: Whole Life Policy for a Special Needs Child
Derek's Inquiry:
Derek questions whether maintaining a whole life insurance policy is better than investing the same funds in index funds for his special needs child.
Wes Moss [19:46]:
"There is some stability to that. It can serve some sort of role or place in your overall planning, but it's not the most effective way to maximize your investment return over time."
Wes advises that while whole life policies offer certain benefits, such as borrowing against cash value, they typically provide lower returns compared to investing in equities. He recommends considering term life insurance paired with investment in index funds for better long-term growth.
D. Darren from Tennessee: Auditing Managed Accounts
Darren's Question:
With over $4 million in professionally managed Vanguard accounts, Darren wonders if he should have his accounts audited regularly.
Wes Moss [35:46]:
"You don't need to hire an audit firm or even a CPA to do this, but you should be looking at your statements every month."
Wes assures that Vanguard is a reputable firm with minimal error rates. He emphasizes the importance of regularly reviewing account statements to monitor fees and investment allocations, rather than seeking formal audits.
E. Patrick from New York: Robo-Investor vs. Index Funds
Patrick's Dilemma:
At 35, Patrick and his wife are maxing out their 401(k)s and contributing to a vacation brokerage account managed by Schwab's robo-advisor. Dissatisfied with the portfolio's performance and cash allocation, he wonders whether to shift to a low-cost S&P 500 index fund.
Wes Moss [39:21]:
"I wouldn't fold it down and pay a bunch of taxes in order to do something else. But what I would do is open another one and start contributing to that one."
Wes advises maintaining the existing robo-advisor account to avoid tax implications and suggests opening a separate brokerage account for direct investment in low-cost index funds. This approach allows Patrick to optimize returns without disrupting his current investments.
F. Aaron from Ohio: ETF vs. Mutual Fund for Donations
Aaron's Challenge:
Aaron finds it cumbersome to donate mutual fund shares to his donor-advised fund (DAF) and considers switching to ETFs but is concerned about costs.
Wes Moss [41:27]:
"ETFs are actually a really good answer."
Wes recommends transitioning to ETFs, which are treated like stocks and typically incur lower transaction fees. He suggests aligning the brokerage and DAF accounts within the same firm to streamline the donation process and minimize costs.
4. Conclusion: Balancing Financial and Personal Well-being in Retirement
The episode wraps up with a discussion on the dual importance of financial security and personal fulfillment in achieving a happy retirement. Wes Moss underscores that while financial planning is critical to eliminate anxiety and provide comfort, personal pursuits and strong social networks are equally vital for overall well-being.
Wes Moss [33:06]:
"Happy retirement is all about money—but it's only half of the equation."
Krista Dibiaz adds that retirees should focus on developing core pursuits and nurturing relationships to ensure a fulfilling post-working life.
Key Takeaways
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Investing is Accessible: Modern investment platforms have democratized access, allowing individuals with varying financial backgrounds to invest effectively.
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Consistency Over Timing: Regular investment participation typically yields better long-term results than attempting to time the market.
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Balanced Portfolios: Diversifying investments beyond cash and bonds to include equities can help combat inflation and promote growth.
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Critical Evaluation of Myths: Understanding and debunking investment myths is essential for making informed financial decisions.
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Personalized Financial Advice: Tailoring investment strategies to individual circumstances ensures optimal outcomes, as demonstrated through listener questions.
This episode of The Clark Howard Podcast serves as a comprehensive guide for listeners seeking to enhance their investment knowledge and financial planning strategies. By addressing common myths and providing expert advice on real-world financial dilemmas, Clark Howard and his team empower individuals to achieve greater financial freedom and security.