Podcast Summary: The Stacking Benjamins Show – "How To Smooth Out Your Investing Ride...or not" (SB1668) Release Date: April 9, 2025

Introduction

In episode SB1668 of The Stacking Benjamins Show, hosts Joe Saul-Sehy and OG delve into the complexities of managing investment volatility amidst economic uncertainties such as tariffs, trade wars, and consumer spending slowdowns. The episode aims to provide listeners with strategies to stabilize their investment portfolios, whether they are novices or seasoned investors.

Main Discussion: Market Volatility and Tariffs

The episode kicks off with a discussion centered around a recent Wall Street Journal article by John Cinderel, which examines the correlation between President Trump's tariffs and the stock market's downward trend over the past few months. Joe references the piece, highlighting the argument that focusing solely on tariffs oversimplifies the myriad factors influencing the market.

Joe Saul-Sehy [07:52]: “The things that really affect the market, OG, come out of the blue sometimes, right? They are things that you didn't expect...”

OG contends that attributing market volatility solely to tariffs is a narrow perspective, emphasizing the importance of recognizing multiple risk factors that can impact investments.

Debate: Is Investing Dangerous?

A spirited debate unfolds between Joe and OG regarding the inherent dangers of investing. OG passionately argues that investing, when approached correctly, is not dangerous and is essential for financial growth. He criticizes the portrayal of the stock market as fraught with peril, suggesting that fear-based narratives deter people from investing altogether.

OG [09:21]: “This is completely normal. If you look at the stock market and go, oh my God, there's danger around every corner... That's being stupid, that's just being dumb.”

Joe counters by acknowledging the risks associated with short-term investments and the potential dangers of not diversifying. He emphasizes the importance of a long-term investment horizon to mitigate these risks.

Joe Saul-Sehy [10:52]: “Once you realize there's no danger to investing 100, there's danger and there's risk...”

The hosts ultimately agree that understanding and mitigating risks through diversification and a long-term perspective are crucial for successful investing.

Hedging Strategies: Yen as a Hedge

Transitioning to hedging strategies, the hosts discuss a headline from Investment News featuring Goldman Sachs. The article suggests that the Japanese yen can serve as an effective currency hedge against US recession risks, predicting the yen's appreciation against the dollar.

Joe scrutinizes this advice, questioning its practicality for the average investor.

Joe Saul-Sehy [17:25]: “Goldman Sachs, very smart people, says that if you just buy some yen, then...”

OG remains skeptical about relying on currency hedges like the yen, arguing that such strategies may be overly concentrated and speculative.

OG [19:13]: “Hedging, that's not investing. It's speculating.”

The discussion highlights the complexities and potential pitfalls of alternative hedging strategies, advising listeners to approach such recommendations with caution.

Listener Question: All-in-One Funds vs. Diversified Portfolio

Listener Ryan from Tennessee poses a thoughtful question about the efficacy of all-in-one funds like Dimensional Fund Advisors' DFAW or Avantis Investors' AVGE as simplified substitutes for diversified portfolios that align with the Efficient Frontier theory.

Joe and OG break down Ryan's query, explaining the advantages and limitations of single-fund portfolios versus diversified multi-fund approaches. They acknowledge that while all-in-one funds offer convenience and broad diversification, they may lack the nuanced control and potential tax benefits that come with managing separate holdings.

OG [35:37]: “Dimensional kind of leans on [academic research] quite a bit...”

Joe adds that for retirement accounts like IRAs or Roth IRAs, consolidated funds can simplify portfolio management without compromising diversification.

Joe Saul-Sehy [41:33]: “I think the risk is that you don't understand what you're doing. That to me is a danger in your portfolio is that I don't get why I'm here.”

The hosts conclude that both approaches are valid, depending on the investor's preferences for simplicity versus control, and stress the importance of understanding the underlying investments.

TikTok Minute: Jimmy Carr on Trading Time for Money

In the TikTok Minute segment, comedian Jimmy Carr shares insights from his career, drawing parallels between trading time for money and financial decision-making. He humorously discusses the sacrifices involved in pursuing one's passions versus securing financial stability, resonating with listeners contemplating their career and investment choices.

Jimmy Carr: “How much to not live your life? How much do I have to give you across the table?”

Trivia Segment: NASA's First Astronauts

Doug presents an engaging trivia question about NASA's first seven astronauts, known as the Mercury Seven. He recounts notable achievements of these pioneers, such as Alan Shepard becoming the first American in space and John Glenn orbiting the Earth.

Doug [27:57]: “What did NASA call these first seven astronauts? They were the Mercury Seven, cuz. Why not?”

Listeners are encouraged to reflect on the contributions of these astronauts to modern space exploration and their legacy in advancing human achievement.

Key Takeaways

1. Diversification is Crucial: Avoid focusing solely on single factors like tariffs. A diversified portfolio helps mitigate risks from various market uncertainties.

2. Long-Term Perspective: Adopting a long-term investment horizon (10+ years) reduces the impact of short-term market volatility and aligns with strategies to achieve financial goals.

3. Understand Hedging Strategies: While strategies like currency hedging can offer protection, they may introduce additional complexities and risks. It's essential to evaluate their suitability for individual portfolios.

4. All-in-One Funds vs. Diversification: Single-fund portfolios provide simplicity and broad exposure, suitable for retirement accounts, while multi-fund diversified portfolios offer greater control and potential tax benefits.

5. Education and Awareness: Understanding the inherent risks and strategies in investing empowers individuals to make informed decisions rather than relying on fear-based narratives.

Conclusion

Episode SB1668 offers a comprehensive exploration of investment strategies to navigate market volatility. Through insightful discussions, debates, and listener engagement, Joe and OG equip listeners with the knowledge to make informed financial decisions. Whether considering diversification, hedging, or simplified investment vehicles, the episode underscores the importance of education and a strategic approach to personal finance.

For more insights and detailed discussions, visit StackingBenjamins.com.