Uh… Is The Stock Market Broken?

Returns in the stock market may be down, but there’s no reason to panic!

According to How to Money hosts Matt and Joel, the ups and downs of the stock market are just a part of the system. While investors may not be getting what they want on the trade floor right now, there are still ways to take advantage of the slump.

“One of these things that you can do is start socking away more money,” said Joel. “If returns are lower you might need to invest more of your paycheck in order to reach some of your financial goals.”

In other words, buy low and sell high, if it is financially practical of course. The two agreed that sticking to your financial plan is important especially during a bear market.

“This is just a slight change to the behavior you're already doing,” Joel added. “We’re not telling you to pull the emergency brake and go in reverse.”

The hosts also advise against checking the stock ticker multiple times a day or even once daily. This can cause anxiety and may cause investors to act on emotion rather than logic.

Another crucial element to add to your stock portfolio, if you haven’t already, is to diversify your investments. As Matt puts it, diversifying your portfolio may seem boring, but it's one of the smartest plays in the stock market playbook. He added that it’s easier to stomach the losses of the market overall than in a trendy stock you bet everything on.

For example, the pair discussed the story of the ARKK Exchange Traded Fund that was extremely popular during the early days of the pandemic. Short-term investments began making a lot of money, which drew new investors and in turn raised prices. However, the fund isn’t giving those same sky-high returns and investors who bet everything on the fund lost big.

“People were excited. They wanted to participate and be a part of the next big investor fund,” Matt said. “Diversification though, can be boring on the way up, but a life saver on the way down. People who invested everything in that (ARKK) fund are understandably freaking out right now because of the roller coaster ride they have been on.”

Listen to the full discussion on the stock market and investing in general on the “Is The Stock Market Broken?” episode of the How to Money podcast, available on the iHeartRadio app or wherever you listen to podcasts. If you want to be sure you’re listening to the podcasts everyone else is checking out, iHeartRadio has you covered.  

Every Monday, iHeartRadio releases a chart showing the most popular podcasts of the week. Stay up to date on what’s trending by checking out the chart here. There’s even a chart just for radio podcasts featuring all your favorite iHeartRadio personalities like Bobby Bones, Elvis Duran, Steve Harvey, and dozens of others.