Chicken Little's Guide to Terrified Investing (and Why It Fails)

What if everything you thought you knew about investment risk was wrong? That's the fascinating premise we explore in this eye-opening episode that challenges conventional wisdom about what makes investing "risky."

Most people equate risk with volatility—those stomach-churning ups and downs in your 401(k) statement. But as we unpack through lively discussion and real-world examples, that volatility is only risky when mismatched with your time horizon. For long-term investors, those same market fluctuations actually generate the superior returns that build substantial wealth over decades. The true danger lies in ourselves—our behaviors, perceptions, and emotional reactions that sabotage even the soundest investment strategies.

We dive deep into the many faces of investment risk: market risk, credit risk, interest rate risk, inflation risk, liquidity risk, and concentration risk. But we don't stop there. We explore how social media algorithms create echo chambers that reinforce harmful financial beliefs, and how propaganda and misinformation shape our investment decisions in ways we rarely recognize. As financial behavior expert Charles Ellis wisely noted, "The problem is not in the markets but in ourselves and our reactions to the market."

For those seeking solutions, we examine practical approaches to managing risk—from traditional diversification strategies to innovative risk transfer mechanisms through insurance products. Whether you're a seasoned investor or just starting your financial journey, this episode provides clear, actionable insights to help you make investment decisions aligned with your true goals rather than driven by fear or misunderstanding. What's your relationship with risk? Your answer might reveal more about your financial future than any market forecast ever could.

We love to hear your thoughts, questions, and ideas. Send us a text!

Developing your financial bullshit sniffer one episode at a time.

Episode Transcript

Keli Alo (00:02):
Welcome to Bullshit on Stilts.
We're back for season two andlet's just say it's as popular
as a fart in a high-riseelevator.
We're still barking atfinancial fairy dust like a dog
and a mailman, and in thisseason we're serving up a fresh
batch of debunking financialsales tactics and ads you never

(00:23):
asked for, all while helping yousharpen your own bullshit
sniffers for those life-changingfinancial decisions.
So grab your favorite drink,bring your sense of humor and
don't forget your calculator.
Join us on our quest to exposethe financial shenanigans that
even your grandma would callbullshit on.
It's time to get sniffing.
Let's get after it.

(00:51):
Welcome to Bullshit On Stilts.
I'm your host, kelly Aulo, andmy co-host, the beautiful and
ravishing Mark Robinson, is withus today again, which is
fantastic.
Today we're going to talk aboutinvestment risk and all sorts
of different types of risk thatkind of fall into that bucket.
We'll shape the conversationaround short versus long-term
investing goals, and then we'llwrap up the episode with a

(01:14):
little discussion on how totransfer risk investing risk to
someone else.
All right, so that's today'sepisode, thanks.
Thanks for joining in.
We're in episode five, seasontwo.
Let's get after all right, we'reback on and we're gonna kind of

(01:37):
, we're gonna see what comes outof that first recording dude
boy this is risky that wasfantastic that was probably some
of the best conversation we'vehad and well, god, since I
before I knew you, some of theconversations we had well before
2014 were my best conversationsI've ever had with you.
That's true.
They were fulfilling, they werelucid you don't know where to

(02:02):
go.
You're like I don't know whereto go with this.
Where's he going with this?

Mark Robinson (02:05):
I'm just going to start off with talking about
risk, and we use risk in a lotof different ways and use other
words to describe risk.
So there is risk that isinherent.
There's risk that we kind ofbring on ourselves.
Most of that would fall intobehavior.
In a context of the market andinvesting, we have a tendency to

(02:26):
confound ourselves with ourbehaviors, our perceptions and
our reactions to our perceptionswhen we either attempt to take
on risk or avoid risk, and itshows up in many different ways.
We often equate volatility withrisk, and we'll talk a bit
about that.
We can talk about risk thatshows up in how we put together

(02:49):
portfolios, from highlyconcentrated to highly
diversified, and the risk basedon certain rates of return and
the mismatch often between thetypes of investments we have for
the time horizon and the goalsthat we have.
So there's a lot here that wecan start with.
So I'll allow you, kelly, topick door number one, two, three

(03:13):
or the box that Jay's bringingdown the hallway right now.

Keli Alo (03:16):
That's right.
Yeah, I think when we weretalking about this, the idea was
to discuss that risk-rewardstuff that's out there.
It's just part of financialdecision making for people and
it runs the gambit right Acrossall sections of finance.
And certainly I'd like to talkabout the investment side of

(03:38):
risks, right.
Just kind of the pure personsthinking about their 401k.
They want do something that.
That those risks are, I think,what come to mind quickly for us
, certainly.
And uh, I see the cat'sstarting to rip your coat,
that's by the way.
We don't warrant any damagedcoats by cats around this studio
, okay, so believe me, I'mfamiliar with cats.

Mark Robinson (04:00):
I am, you know, hemming's.

Keli Alo (04:01):
House in Key West they have like a bunch of cats,
six-toed cats.
We're the same here.
We're kind of Hemingway Northwith about 100 cats here in the
studio.
You know you've been reallyhandling them well, by the way.

Mark Robinson (04:15):
You know, I just when I default to using the cat
box here, it's my only option.
I've been meaning to say youknow, last time you were here.

Keli Alo (04:25):
It took me an hour to clean that mess up.
What the hell did you have toeat the day before.
Oh my God, you know.
Next time just make sure youhit the box.

Mark Robinson (04:35):
That's all.

Keli Alo (04:35):
I'm asking All right.
So, when it comes to investing,I think there's investors out
there, right?
401k participants, mom and dadand all that.
They're out there, right, 401kparticipants, mom and dad and
all that.
They're out there and they'rejust trying to figure out how do
I allocate what investmentfunds should I put my money into
?
Why does my advisor do it thisway and so forth.
But when the investment worldgenerally talks to a participant

(04:59):
of a 401k plan and they sayrisk, what do they mean?

Speaker 3 (05:04):
by that Risk means losing all of my money Me too.
What do they mean by that riskmeans losing all of my money too
.
What do they?

Keli Alo (05:07):
mean by that mark?
What are they?
What are they really sayingwhen they say risk when it comes
to 401k investment funds, as anexample?

Mark Robinson (05:14):
all right.
So in the context of aninvestment fund, risk usually
means potential volatility soit's not losing every penny up
and down.
The big term for that isstandard deviation or variance,
how much it can go up or howmuch it can go down over a
particular time period, and soreally risk means volatility.

Keli Alo (05:35):
So it's like the roller coaster ride, yeah, Over
time, of what that fund might goup and down in terms of value
the price of the fund, right anddown in terms of value the
price of the fund right, yes,okay, yeah, okay.

Mark Robinson (05:45):
So the problem is is that when you separate that
from a time horizon or a givengoal, that volatility can
actually be good.
Wait what Volatility is good?
So really, the risk in thatregard isn't really a risk.
It really is just your abilityto manage or handle the

(06:06):
volatility, the ups and thedowns.

Speaker 3 (06:08):
That makes sense over long time frames, because
volatility goes both up and down.

Keli Alo (06:12):
So you're equating that to what?
To the time frame that you'reinvested?
Sure, okay, let me give you anexample.

Mark Robinson (06:20):
I'll give you a specific example.
If I need to have my moneyabsolutely necessarily in six
months and understanding thatthe market inherent in the stock
market stock market specifichere is volatility, meaning ups
and downs that can be hugeswings one way or another, it's

(06:41):
probably not a good idea to putmy money into the stock market
if I absolutely necessarily needit in six months.
Now, if my time horizon is, say, 10 years or 15 or 20 years in
retirement, that volatility ismy friend, because the very
volatility that can take it tonew lows over a six-month period

(07:03):
of time is the very volatilitythat has the market now at what.
Where's the market now?

Keli Alo (07:08):
Dude, it's been in a pretty good correction here 20,
30, 40?
Oh, dow-wise, yeah, I don'tknow, it's like 35, 36.

Mark Robinson (07:15):
Yeah, all right, so 35, 36,000, because I
remember back in 2012, it was, Idon't think, around 4,000 or
something like that.
So that very volatility thatwe're experiencing right now is
a very volatility that took itto where it came from.
So, in that way, volatility ismy friend and it is not a risk

(07:36):
If I'm matching it up to aparticular time horizon and a
goal that says I need return.
Therefore, I need thevolatility, or risk as we call
it.

Speaker 3 (07:46):
Oh, I get it.
So I need the up volatility andI need to hold through the
downward volatility just to earnthe average expected returns of
my allocation plan.

Keli Alo (07:57):
So, in other words, if my time horizon, like a
retirement savings time frame,might be 20, 30, 40 years, I can
accept, theoretically at least,a more volatile roller coaster
ride in my investment savingsaccount, because over time it

(08:19):
just becomes a statistic.
Right, it's just, you want thatup variation, you just don't
want to get creamed on the down.
But over time markets go uphistorically at least us markets
, that's right go up they go upmore often than they go down
conversely, if I, if I want asmoother ride, a safer roller

(08:39):
coaster ride, like the littlecaterpillar roller coaster ride,
then I can invest my money thatway and certainly in certain
instances, if it's a short-termgoal, I I kind of want that low,
no risk, because I need mymoney and I know when I need it.
For the six month time horizonin this case give me almost no
color roller coaster ride.

(09:00):
why do I keep saying KohlerRoaster, no roller coaster ride,
and I get that.
So how does a person in their401k plan or in their brokerage
account decide which way to go?
Like, if I'm just if I'm a 30year old, should I just always
have my money and the highestgaining investment opportunity

(09:22):
that's offered me like 100%stock, just because I'm 30?

Mark Robinson (09:26):
Absent me.
Bringing in the behavioral risk, maybe so.
Do you want, over a 20 or 30year period, that investment
that throughout history hasalways performed the best, or do
you want the second or thirdbest performer?
Then you have to put in thebehavioral component of that.
Are you able to hang in thereLike my belly, can I actually?

Keli Alo (09:48):
handle that roller coaster?
Can you actually handle?

Mark Robinson (09:50):
it understanding you've got a 30-year time
horizon.

Keli Alo (09:54):
Do you find, when you were practicing, that most
people were able to handle theroller coaster Because when they
said, hey, I can handle it, Iwant 10% plus returns, I can
handle it, I want 10% plusreturns, I can handle the roller
coaster what percentage ofthose people that you worked
with actually demonstrated thecapacity to handle the down of

(10:14):
the roller coaster?
That scream part of it whenyour portfolio is all of a
sudden 20, 30, 40% lower.

Mark Robinson (10:21):
I'm going to answer it this way they had the
capacity to handle it, in thatthey did not, for the most part,
sell out.
Did they bitch about it?
Absolutely yeah, but they didnot sell out, yeah okay.
Okay, yeah, and sometimes you'vegot to do that, you've got to
complain about it and talk itall out and you just hang in
there, right?
No, that's true, all right.

(10:42):
So let's stay on this for justa minute and kind of reframe
this and summarize it.
So we've been talking aboutrisk, but really what we mean is
volatility.
So the volatility presents arisk from a behavioral
standpoint If you are investingin a higher volatility
investment like 80 to 90% stockallocations.

(11:03):
Because you want it to go up.
I understand you've got to gothrough some down periods over a
long period of time.
You want that excess returnover something that is lower
volatility, so-called lower risk.

Speaker 3 (11:17):
That might be something like zero to 30% stock
allocations.

Mark Robinson (11:20):
But that's for a long-term time horizon.
If it's a short-term timehorizon and you absolutely
necessarily need your money, whyare we even talking about
volatility?
You just get a CD or a moneymarket account or something that
comes due at or before the timeyou need that money.
So in that context, we don'teven have to talk about interest

(11:40):
rate risk or things of thatnature.
You need the money.
Interest rate risk or things ofthat nature, you need the money
.
So I think it's good to, whenwe talk about risk through all
of this, we frame it into whatis the potential realized
outcome that we're afraid of.
And is that realistic?
Is that a probability or not?

Keli Alo (11:57):
Yeah, I'm trying to think through this from just a
very kind of organized way totalk through this right.
So if I have a short term goalwith my money, the most
important thing is a return ofmy money not a return on the
money.

Mark Robinson (12:13):
Yes, fair enough.

Keli Alo (12:14):
And so I'm going to most likely, if I'm a normal
person want my money insomething safe savings account,
a CD right, something safe.
Take no risk If I move out to along-term investment-.

Mark Robinson (12:30):
Let's reframe that, let's not even say safe An
instrument that has the highestprobability of being a whole
dollar plus any interest, by thetime you need it.

Keli Alo (12:42):
Yeah, safe, I mean, if we're talking to CFAs, I agree
with you, but this is someonedriving home, and do we really
have to sparse it down to thatdegree?

Mark Robinson (12:54):
Well, because I would say that the safest
investment for me to maximizewhatever that terminal value is
going to be out 30 years fromnow, my safest investment is a
well-diversified stock portfolioof index funds.

Keli Alo (13:07):
Well, yeah, and that depends on the circumstances,
doesn't it?
That's what I'm saying.
So it would be safe only if yourequire that return level.
But what if you won the lotteryand you didn't require that
return?
That doesn't necessarily needto be the kind of risk you take,
okay, but you could be allbonds and very safe quote
unquote stuff.
Sure, I get your point right Interms of the, the return.

(13:31):
The required return determineshow much safety you can afford
to take or not.
And if your required return isnine and you're invested in safe
stuff quote unquote, like a CDand you're making four quote
unquote, like a CD and you'remaking four, you're never going
to achieve your goal.

Mark Robinson (13:55):
So that CD, while safe from a volatility is
unsafe from a aggregate sum ofcompounded returns on your
investment over 30 years right,and the other is a safer
investment from the probabilityof having a higher terminal
point.

Keli Alo (14:04):
Yeah, the stocks would be yeah, yeah, yeah.

Mark Robinson (14:06):
Yeah.

Keli Alo (14:11):
All right.
So one of the problems withrisk when it comes to financial,
is there's all sorts ofdifferent types, versions and
definitions of risk.
Right, yes, there are.
We did some, some work and youwork and you can quickly come to
a double digit list ofdifferent types of risks.

(14:31):
So some of them and I'm justgoing to list out a few so that
as we're talking today, it mightkind of blend into making some
sense here so risk, market riskis a risk.
What's market risk?
Real quick.

Mark Robinson (14:46):
It's an inherent risk and it is the risk that
just comes, systematic risk, ofbeing in the stock market itself
.

Keli Alo (14:53):
Yeah, so just investing in financial markets,
yes.

Mark Robinson (14:56):
There's inherent risk.

Keli Alo (14:56):
There's an inherent risk, which is volatility, which
is volatility.

Mark Robinson (15:02):
Yes, and perhaps default companies going out of
business.
But for the most part it's justthe market risk.

Keli Alo (15:10):
Just being invested in the market.
You accept risk.
Yes, Then there's credit risk.
What's credit risk?

Mark Robinson (15:17):
Credit risk is the risk of a particular
investment being downgraded,therefore losing value, maybe
even going out of business, isbasically what credit risk is
the credit worthiness of aparticular company affecting the
price of that particular bond.

Keli Alo (15:36):
Let's say so one company is rated as high quality
and company B rated as lowquality yeah if I invest, if I
own both those bonds or evencompany stock.
What could I expect from thehigh quality security versus the
lower quality security?

Mark Robinson (15:57):
so well a lower default rate lower default rate
yeah and a lower probability ofit going out of business or
being missing an interestpayment.

Keli Alo (16:08):
Also maybe the ability to pay a dividend or continuing
to pay the existing dividendrate as an example would be a
little bit of that credit risk,interest rate risk kind of tied
a little bit to that credit risk.

Mark Robinson (16:20):
Yeah, it is, yet it is separate.
The interest rate riskcertainly has an impact on the
value of a bond.
From the risk standpoint.
If I have, in most recentexperience here, 10-year
treasuries at 1% and 2% and 3%and suddenly in two or three
years the new issues on 10-yeartreasuries are at 6%, 7% and 8%,

(16:44):
well, certainly the value forthe remaining time period of
those 10-year bonds that youbought several years ago they're
going down in value.
Why?
Because you can get three timesthe yield on it right now.

Speaker 3 (16:56):
So what you're saying is that issued bond prices, so
those bonds currently incirculation, will drop as the
general interest rateenvironment goes up and the
bonds price will go up wheninterest rates decline.

Mark Robinson (17:08):
Yeah, the new bonds are paying a higher
interest than your bonds, and sothe bonds that you may have I'm
talking individual bonds oreven within a portfolio the
value of them go down so thatthey match whatever the current
yield is on that.
So, for example, if I had a 7percent, if the going rate now
current market was 7 percent ona 10-year treasury, making all

(17:29):
of this up and yours were allthree times that bond gets
marked down to where the priceof it for the coupon, that 3%
coupon, equals a 7%.
Yeah, that's a long way down onthat price.
Yeah, sure it is.

Keli Alo (17:44):
Well, the other thing, another way that interest rate
risk would play, is if you'releveraged and you're borrowing
money and you have long-datedborrowing and you're going to
have to roll that portfolio overand you're going to have to
take on a new level of loanswith a new level of interest
rates.
The cost of money, which canchoke a lot of things.

(18:06):
Well, it can choke an economy,right?
Typically, we choke off themoney and guess what happens?
Recessions follow, so to speak.

Mark Robinson (18:13):
Now you're doing what you were scolding me for
doing, See am I Shit?

Keli Alo (18:16):
Okay, all right, All right.
Next one Inflation risk.
What's inflation?

Mark Robinson (18:20):
risk.
Inflation risk is where myvalue, the purchasing value of
my money, goes down.
In other words, I can I buyless with a dollar.
That's, in effect, it, which iswhat we went through.
Where were we up at nine, tenpercent inflation, at a yes or
so nine point six.

Keli Alo (18:38):
I think yeah, nine point six percent or so, month
over month, or yeah, yeah, yeah,yeah.

Mark Robinson (18:43):
So you know, something that was for five
dollars it's suddenly 550.
Yeah, whenever I.

Keli Alo (18:47):
Yeah, Whenever I think of inflation.
In 1977, I went to Star Warsthe first Star Wars movie.
It was 99 cents to get into themovie and I think for $2.50
more I got a soda and a popcorn,free refills.
So what $3.50 all in and thatmight have been steep.

(19:07):
Maybe it was more like $2.50all in when I think it was the
last star wars that went to themovie theater, like skywalker
rises or whatever.
Nine I took myself and my twodaughters, and I think the bill
for entry individually was closeto about 20 bucks ahead.
That's inflation so the moviehasn't changed.

(19:29):
I mean the experience haschanged.
You know the seats recline, youknow you got this leather, you
got cup holders, you got allsorts of things.
You even reserve your seats.
Couldn't do that in 77, butalmost 20, almost 60 bucks to go
see that with popcorn and sodas, yeah, but then I think those
prices have gone up in excess ofinflation.

Mark Robinson (19:52):
also, I remember Tom, who we both know was
talking about how much he usedto be able to buy a McDonald's
the equivalent of a Happy Meal,a French fries and a hamburger
and a soda back in late 60s,early 70s and I was like boy is,
is that cheap?
And you know what I did I ranthe numbers, yeah, with the

(20:15):
inflation yeah, and it was justslightly ahead of inflation, but
not huge yeah, no, no.

Keli Alo (20:22):
So that's the insidious thing about inflation.
Yeah, yeah, it's alwaysinstructive to look at that
anyway yeah, well, we don'tfollow.

Mark Robinson (20:31):
Follow that we.
Once again, I follow women'slacrosse.

Keli Alo (20:33):
I digressed, well, yeah that was a really good
digression um okay, liquidityrisk what's liquidity risk?

Mark Robinson (20:41):
I need my money and I can't get it.
That's what it boils down to.
That's right.
You can't get all that's right.
And where typically does thatshow up?
I'll tell you.

Keli Alo (20:52):
Well or with penalties or with penalties.

Mark Robinson (20:55):
You can get at it first.

Keli Alo (20:56):
Typically, it's your alternative investment world.
Yes, private placement, hedgefunds they all have these some
limited partnerships yeah.
Yeah, where they can gate peoplefrom taking money out.
But certainly there areinvestment products out there
that will penalize you fromtaking money out.
But certainly there areinvestment products out there
that will penalize you fortaking money out.
So sending you less than whatit says on your contract value

(21:18):
or your account value orwhatever it is Mutual funds can
do that.
I think they've really gottenrid of those mutual funds, the B
shares that had a back-endcommission charge on it if you
took your money out too soon.
But certainly annuities havesurrender charges, right, um,
even life insurance policieshave surrender charges, even cds

(21:39):
.
Do cds?
Do you actually forfeit yourinterest and sometimes you pay a
penalty yeah, so it is kind ofa liquidity risk.

Mark Robinson (21:47):
But I think you nailed it with the first couple
where you're just gated out orthere is a window and if you
need your money and that windowisn't open for redemption.

Keli Alo (21:55):
Yeah, definitely a real world thing to think about
that liquidity and oftentimes,when a sales professional is in
front of you promising outsizedwonderful gains, there's almost
always a catch, whether it'ssurrender fees, penalties or the
potential to be gated atprecisely the moment you don't

(22:15):
want to be gated you know?

Mark Robinson (22:17):
Yeah, I think that's a truism.

Keli Alo (22:19):
Yes, all right.
Next one Sector risk.
What's sector risk?

Mark Robinson (22:24):
Well, so we have industries and then we have
sectors.
I'm talking about S&P, thattype of stuff.
So you have a sector like thehealth care sector, financial
sector, technology sector.

Speaker 3 (22:37):
For clarity.
The S&P 500 Index divides themarkets into 11 sectors.

Mark Robinson (22:41):
And the risk in that is the performance of that
sector, either above or belowthe market as a whole, w-h-o-l-e
.
So it's the risk of being in agiven sector when the whole
market is doing quite well, butyours is running into some
trouble and so you're at theeffect of that single sector and

(23:06):
that risk can be quite onerousbecause sometimes those sectors
can stay down for quite a while.
So that's really what sectorrisk is.
Simply, it's just a portion ofthat market in a particular
sector.
Probably sometimes peopleunderstand that more of an
industry.
You're going to have multipleindustries within a sector, yes,
to where it's just falling onsort of out of favor, let's say

(23:29):
for multiple reasons.
Maybe some of the other riskswe've talked about interest rate
risk, for example, orgeopolitical risk, and you're
just kind of stuck there becauseyou're not diversified.

Keli Alo (23:38):
Yeah.

Mark Robinson (23:39):
And that's not offset by something else that is
doing, another sector that'sdoing well.
So that sector risk and we canget into that because it keeps
going down that becomes toindustry risk and then specific
risk of a stock within that, yes, particular industry I
sometimes think of it as abaseball team.

Keli Alo (23:57):
You have a sector risk , so in baseball you have
different positions on the onthe playing field right pitcher,
second baseman, shortstop don'tforget the cute college kid
that fields a foul ball off thethird.

Mark Robinson (24:08):
Yeah, but they're not on the field so they don't
count.

Keli Alo (24:09):
So so it's just the players right first base, second
base, third base.
But the point is is that in asector there's 11 sectors in the
s&p 500 index.
Each of those sectors are sortof like one of those players on
the field.
The player we're looking atmight be a right hander, six
foot or above, and there are awhole bunch of left-handers that
are, you know, shorter than sixfoot playing the same position.

(24:33):
And now we start getting intothat industry example that
you're talking about so healthcare, health care equipment,
health care delivery serviceproviders, pharmaceutical all
sorts of different stocks areinside that sector.
Fair enough, yep.
Okay, let me see.

(24:55):
We'll talk a little bit aboutconcentration risk,
concentration risk.

Mark Robinson (25:01):
really to summarize, this is when you're
counting on just a veryconcentrated few investments to
kind of pull all the weight foryou, and there's a risk to that.
A lot of small cap funds,particularly on small cap mutual
funds, would take veryconcentrated risks on a bet that

(25:22):
, through security selection,they would outperform the small
cap market, let's say like theRussell 2000 or the s&p 600.
Yeah, so concentration riskagain is too few bets, hoping to
get excess returns out of that.
Yeah, then on making a lot ofbets across a particular sector

(25:44):
or industry or or a market right, asset class so.

Keli Alo (25:48):
so most people, main street, just people that save
money and it goes into a 401k orwhatever.
They're typically taught orcommunicated to be diversified,
fair, yes, concentration risk.
Sounds like someone's notdiversified, is that?

Mark Robinson (26:07):
fair, yes, okay.

Keli Alo (26:08):
When I think of concentration, I always think of
individual stocks.
You know having 510 stocks andI'm concentrated?
Yes, because I only have 10bets on the table, like you're
talking about.
Whereas if I buy one fund let'ssay just again S&P 500 index
fund of some sort, I'm going tohave at least a couple hundred,

(26:30):
maybe upwards of three, four oreven 500 stocks inside of that
fund.
So, compared to the 10 stockaccount, I'm completely
diversified and I'm notconcentrated in that measurement
.
Is that correct?
Yes, that's right.
But would you say I'mconcentrated if I'm comparing my

(26:51):
S&P 500 index fund the onlything I own to someone that has
stocks and bonds and small capand maybe developed non-US and
some high yield bond?

Mark Robinson (27:06):
That's a good.
Who's concentrated now?
Yeah, well, it's.
If you are in multiple assetclasses and sectors within those
asset classes, then you arestill less concentrated than the
individual who has just oneasset class or one sector or 15

(27:27):
stocks so it's almost like youcan equate this to a
well-balanced meal, right?

Keli Alo (27:33):
If you're only eating chicken legs every day all the
time, that concentrated diet isprobably going to come with some
risk, some volatility in yourhealth.
I'm guessing yes, it would.
Versus if you have awell-balanced some salads, some
veggies, a little protein andblah, blah, blah.
Your presumed level of risk isnow lower, is that fair?

Mark Robinson (27:58):
That's fair.
And so that's why it's called abalanced diet.
It is, that's right.
I eat raw nowadays, yeah, whichis like a balanced portfolio, a
combination of stocks and bondsand diversification within that
.

Keli Alo (28:13):
Which is probably why that's the primary thrust of
retirement funds,retirement-dated funds they're
all totally diversified.

Mark Robinson (28:24):
It was funny.
We got it so right with thatJust buy broad markets low cost
and leave it alone.
Yet here's that other behaviorrisk and it's the pour over on
all of this.

Keli Alo (28:35):
So let's get to that behavior risk.
What is behavior risk?

Mark Robinson (28:39):
Behavior risk is.
Well, there's all sorts ofbehaviors we can get into that,
whether it's let's narrow itjust to the investment savings
here conversation we're having.

Keli Alo (28:51):
Let's not talk about your choice of which pumps to
wear depending on what time ofday it is.

Mark Robinson (28:57):
Oh okay, Whether hats are okay or social behavior
In sun or not.
Frequently certain nightclubsand that kind of risk.

Keli Alo (29:05):
That's right, that's right, yeah, oh, okay.

Mark Robinson (29:08):
Yeah, I guess I can go there.

Keli Alo (29:13):
So behavior risk.

Mark Robinson (29:15):
Yeah Well, we've got all sorts of that and a lot
of it comes down generically toin investing, overriding greed,
overriding fear, how we like togame recent memory, anchoring on
certain things, most recentinformation that we have.

(29:36):
There's all sorts of thingsthat impinge on that.
But I think generically andcorrect me if I'm wrong on this,
it's a fresh thought is itcomes down to how we react to
fear or greed.
I think I could put a lot ofthese others under those two
categories.

Keli Alo (29:55):
They would all be subsets of that From the
behavior standpoint as theoverlay to how we think about
money, our relationship withmoney.

Mark Robinson (30:04):
Yeah, and there's all sorts of rationalizations
within them, of biases,prejudice, unexamined opinions.
All of that come under, whetheryou're in the fear camp at that
particular moment or the greedcamp.

Keli Alo (30:18):
Yeah, I get that I wonder if fear grows by virtue
of your environment, right, byvirtue of your environment,
right?
So if your environment caninstill a fearful view of the
world, then if the natural,normal person, without that view
, just a normal view, let's sayjust a well-balanced view of

(30:39):
life, some things happensometimes.
It's good, not so good,whatever versus someone else.

Mark Robinson (30:56):
That is really just views life through fear.
Are they more or less likely toinvest money into a growth or
aggressive growth investment?
Great question, because youcan't pull people kicking and
screaming into something thatthey that might be in their
better interest and this comesdown to metaphysics, there are
those of us is this ron lHubbard thing?

Keli Alo (31:09):
No, go on.

Mark Robinson (31:11):
Okay, go on.
What was I talking about?
Metamucil.

Keli Alo (31:14):
Yeah, metaphysical world, oh, metaphysics oh yeah
when.

Mark Robinson (31:18):
There are those of us that we think we are just
this hapless, helpless chip,buffeted about by universal
forces we have no control over.
Then you have the other thatsays, yeah, shit happens, but
for the most part I'm biggerthan my circumstance.
And if I were to graph out mylife, it has a little bit higher

(31:43):
rise than it does run.
In other words, it's an upwardincline, because I presume that
I'm ultimately bigger than orcan surmount whatever my
circumstances are.
So for those of us that aretruly dwelling in fear, you're
not going to dwell in the stockmarket at all, because it'll
just confirm it anytime there'sa downside and you'll revert to

(32:04):
Henny Penny.

Speaker 3 (32:05):
What the hell is Henny Penny?
You don't know.
You exhaust me.
It's like being a chicken,little you know, like everything
is bad, like the sky is fallingand life sucks, kind of an
outlook.

Mark Robinson (32:14):
Whereas others that are saying, yeah, we've got
to put up with this stuff, butit'll all work out, or at least
has.
Yes, they're probably bettersuited behaviorally for taking
on the volatility, theshort-term volatility.

Keli Alo (32:29):
So let's stay with this for a second.
So if you're a person that isinherently fearful or stressed
when it comes to finance, whenit comes to so a chicken little
volatility in my investmentaccount, I don't like seeing you
know x in losses.
I don't like my account when itgoes backwards.
In fact, I don't like it somuch.
I'm not going to invest thisway anymore as an example, or I

(32:52):
need something safer, lessvolatile.

Mark Robinson (32:54):
Well, there's a workaround on that.

Keli Alo (32:56):
What is it?

Mark Robinson (32:57):
Invest more.

Keli Alo (33:00):
Ah, 100%.
That's like we were like bonded, like mentally right there,
dude.

Mark Robinson (33:05):
We were.
That's what I was going for.
I thought that you were goingto get it wrong.
I thought you were going to saylike cotton candy or something.
I was very good at passingnotes back in fifth grade.

Keli Alo (33:13):
That's right.
Well, good at passing notesback in fifth grade, that's
right.

Mark Robinson (33:18):
Well, I did.
I just kicked that littletriangle football with a note on
it that, yeah, that's, that'sright.
Oh, 100, I remember doing thatwhen the teacher would turn
around and then you'd part ofthe game was not getting caught
kicking the field yes across toyour buddy, and you know, from
one grade to another, it trulywas advances in technology, how
we got better and better andbetter, and then tricking them
out, yep, yep, and then makingthe indent on them so you could

(33:39):
get a little bit more.
That's right, yeah yeah,absolutely.

Keli Alo (33:43):
You know, back then the brain was a powerful tool.
It was back then we couldfigure stuff out, man, yeah, no,
that's exactly what I was goingfor.
The way to reduce the amount ofinvestment risk you are
required to take is to save moreof your money.

Mark Robinson (34:02):
Sure.

Keli Alo (34:03):
In other words, live on less than what you earn, and
I know everybody's like I can'tdo that.
Oh yeah, thanks a lot, but it'slike when you go into the water
and you go underneath, you'regoing to have to hold your
breath.
I can't fix that for you.
That's just what it is.

Mark Robinson (34:19):
Yeah, got to live on less.
So, for example, if you don'twant to take on the 10% rates of
return for the market and 5% iscool for you you can invest
twice as much money.

Speaker 3 (34:30):
Are you okay with that?
My favorite chicken little Bequiet Trying to listen over here
, To achieve a terminal point?

Keli Alo (34:37):
Yeah, equal the same value at some future date?
Yeah, absolutely.
And that's where I think peopleget caught up.
A lot of people that we'veworked with in the past haven't
gotten serious about thatdiscipline, just chalking a few
shekels away every day, startingwith your first job, not when
you're 30, not when the kids areoff to college, not when you're
30, not when the kids are offto college, not when you're 10

(34:58):
years away from retirement.
But it's just part of it.
As they say, if it's not there,you don't miss it, and so
there's an awful lot of validity.
And if you're a good saver, iethat person that saves first,
spend second you can have yourcake and eat it too.
You really can.
And if you decide to save moreand sort of invest in a moderate

(35:22):
or a moderate growth fashion40%, 50%, 60% in stocks or
whatever over the course of 20,30, 40 years, you'll have that
much more.
Statistically, theprobabilities are pretty damn
high, do you?

Mark Robinson (35:35):
know who summed this up quite well.
His name is Charles Ellis andhe wrote, and I'm paraphrasing,
that the problem is not in themarkets but in ourselves and our
reactions to the market.
That is the correct answer.
Really, the problem is alwaysourselves, it's not the markets,

(35:57):
because the markets, in theirunpredictability, are kind of
predictable as to what they do.
Sure, yeah, yeah, it's we.
When we enter into that, we'rethe ones that bring all the
confounding aspects of it.
Even back to the liquidityissue, I'm gated out.
Yeah, that was a risk, and youknow what the risk was, and it

(36:18):
just came home to roost.
You didn't read the offeringmemorandum or the prospectus.

Keli Alo (36:25):
Yeah, or you were sweet-talked.

Mark Robinson (36:28):
Yes, and that this was sort of the sweet talk
of the salesman.
That's another risk.

Keli Alo (36:32):
That's right.
It never happened, it's notgoing to happen.
It's really the market.

Mark Robinson (36:35):
Yeah, it's like how animals are If you get bit
by a dog or something orsomething like this.
Often it's what you did, notwhat they did I got bit by a dog
.

Speaker 3 (36:44):
What were you doing?
I tried to take away a bonethat the dog was chewing on.
Definitely your fault.

Keli Alo (36:57):
I would have bitten you too.
Our behaviors when it comes tomoney and when it comes to
financial decisions are a primeingredient and key variable to
us being successful notsuccessful.

Mark Robinson (37:02):
Yes, key factor, absolutely.

Keli Alo (37:04):
Because one of the things we've talked about time
and time again is it's reallyabout people being exposed to
the information around financialdecisions and getting them to
be more and more comfortablewith understanding and viewing
that decision in a manner that'smore constructive, rather than
just someone selling mesomething.

(37:24):
Someone's selling me something,and you know there's always
going to be people selling stuff.
There's nothing, and they'recritical players in a
marketplace, no doubt.
But this is really abouthelping people start getting
their hands around makingdecisions, financial decisions
and maybe in this case, we'retalking about risk reward and,

(37:45):
right now, about behavior.
But what are your behaviorsthat have stopped you from doing
?
I'm guessing, at least fivethings, when it comes to
financial peace of mind, thatyou still haven't done.
It might be just getting a willbecause you have minor children
.
It could be that you haven'tgotten true life insurance

(38:08):
coverage because, well, you gota $50,000 policy through your
employer.

Mark Robinson (38:12):
You just gave some very good examples of what
Charlie Ellis was saying.

Keli Alo (38:18):
Problem's not the markets, it's us, that's right.

Mark Robinson (38:20):
Our perception of them and our reactions to them.
That's right.
But some of this other stuffyou want to talk about risk, it
always is us.
Just mentioned the lifeinsurance, you mentioned the
wills, so really overarching allof this is us.

Keli Alo (38:41):
There's so many other things.
When it comes to risk, it justpops into my brain If I'm not
creating a monthly budget andtrying to follow that budget and
validate the budget, I'maccepting risk that I'm wasting
money I don't know where, butI'm spending more than I'm aware
of somewhere without anyintention, just spending.

(39:02):
That's a risk, right, that'sthe risk of not getting as much,
in economic terms, utility outof the income coming into your
household.
Yes, right, I think I.
I think I nailed that, I thinkyou did.
The econ professor might bepretty proud of me right there.
So it's funny how it's all overthe place.

Mark Robinson (39:20):
And the unintended consequence of that,
yes, big time.

Keli Alo (39:30):
I've met with some that I know and they're very
afraid of financial market, somuch so that for their entire
working life, one of theirretirement accounts has been
left in a stable value fund.
So in other words, it's aretirement accounts short term
bond fund.
Right, it's very low risk, verykind of low return compared to
other investment options.
And so she achieved her goal.

(39:52):
I didn't want to lose any moneyto the stock market.
Problem is the amount of moneythere is dramatically below
where it should be and couldhave been had it been in just an
average run-of-the-mill,properly diversified one of the
funds in there.
And it was her fear thatstopped her from doing it.

(40:13):
But guess what?
Her new fear is?
That's replaced losing money infinancial markets because of
corrections.
The new fear is did I saveenough for my retirement?
How can I possibly retire onthis amount?
That's not enough, but that's aresult in large part not solely
, but in large part to beingafraid of volatility across

(40:36):
stocks, bonds, cash, alternativeREITs and so forth.

Mark Robinson (40:39):
It's a great example of we're our own worst
enemy, like Ellis is essentiallysaying right, yes, yeah, yeah
and it's that very fear ofvolatility or of the unknown
that often, with that kind ofmindset, keeps you from maybe
doing what you really want to doin life getting a job that's
really matched because youalways are doing the okay.

(41:01):
What about what if the internalveto, whatever it is it, keeps
you from that, and here it ismanifesting in the marketplace.

Keli Alo (41:08):
Yes, yeah.

Mark Robinson (41:08):
So you can be 60, 70 and saying what the hell
happened to my life and, in thiscase, 60 cents of what the hell
happened to my portfolio.
That's right.
It didn't achieve what I wanted, just like me.

Keli Alo (41:20):
Yeah, there's so many phrases, right?
You miss a hundred percent ofthe shots you don't take, right?
You got to show up in order tojust play.
I mean, just on and on and on.
So when it comes to behavior,right, I think we're getting
this idea, but how could theherd behavior affect me, an
individual, when it comes to,let's say, saving for retirement

(41:42):
in my company?

Mark Robinson (41:44):
Oh, that's a real good question, because if we go
back a long period of time, theherd mindset was if everybody
in the herd is wild-eyed andstarting to move, the impulse,
the survival impulse, is tostart running with them, because

(42:08):
the best-case scenario is okay,you're tired, you just ran a
half a mile for no reasonwhatsoever.
The other side is, you goteaten by the saber-toothed tiger
, and so it's always flightfirst, flight run.
Worst case, you're out ofbreath.

Keli Alo (42:25):
It sort of comes with a presumption that I don't know
why, but this is what I'm doing.

Speaker 3 (42:29):
Yes.

Keli Alo (42:30):
I park my logic, but if nobody's going to save money
in the 401K, why should I?

Mark Robinson (42:36):
Yeah, that's true .
So it doesn't go through thewiring of the visual cortex to
the uh-oh.
I see something wild-eyedmoving to the amygdala that says
holy fucking shit, I'm scared.
It doesn't go through thehippocampus, this is.

(42:56):
Wait a minute, wait a minute.
I got memory on this, we'veseen this before.
And then it goes to the frontalcortex and says, huh, maybe
this is a time to run the otherway.
Yeah, in this case, buy, buymore.
Yeah, does that satisfy youfrom a I think so biochemical?

Keli Alo (43:13):
yeah, I think so I mean, you talked about the
hippocampus, so yeah, I'm withyou now.
So I think the big one that'saffecting most people today when
it comes to and most people,anybody that has a smartphone in
their hand and looks at itperiodically, especially the
social media, Facebook, tiktok,whatever, but those people,

(43:34):
that's who I'm talking about.
Oh, a big issue, those people,those people so like my mom,
who's not with us anymore, butshe didn't look at her phone and
she never, scrolled on it, yeah.
So she wasn't that part of thegroup.

Speaker 3 (43:46):
She's not those people.
Apparently, I'm one of thosepeople.

Keli Alo (43:48):
It's like us.
Frankly, I think we all fallinto that group, my and my
daughters, and they're you know.
Okay.
How does the psychologicalbehavioral finance confirmation
bias?
How is that sort of hijacking,with today's social media and
algorithms, people's beliefs andtheir willingness to even put

(44:14):
money into a 401k?

Mark Robinson (44:17):
account Boy.
It could be a complete hijack,Because what happens is it
compounds on itself and the moreyou are getting confirmation
bias or the algorithms arepushing more and more that
confirm whatever your notion is,the more certain and entrenched
you become in that and thereain't no escape because it just

(44:38):
keeps coming.
That's right.

Keli Alo (44:40):
Yeah, these smartphones.
Right, if I touch a thing onInstagram and it's a purple
tiger, I guarantee you that I'mgoing to present it a couple
more colored maybe not tigers,but they're going to be animals
and they're going to bedifferent colors.
And eventually, if I touch oneof those, I'm going to get more.

(45:01):
And that's confirming my biasin an example probably a really
bad one, but nonetheless, thosealgorithms will feed you exactly
what you're willing to look atin the store of social media, so
to speak.
If you grab that jar of peanutsbutter off that social media
and look at it, guess what?
You're going to get hit withpeanut butter advertising, and

(45:22):
maybe it's peanut butter stockprices and maybe it's on and on
and on, but that's what thosealgorithms do.
So if you believe that my dadtold me never to put money into
401k, it's all bullshit, becausehe had a pension and he never
needed one, and and you knowyour uncle, joe, well he died
when he was 43 and if he put allthat money away, he would have

(45:43):
never have had that money.
You need to live while living'sgood.
That might be a bias that youtake with you now forever.
And when you're looking at yoursocial media.
What have you done?
You're paying attention topeople that tell you why a 401k
is a ripoff.
The government owns 50% of it.
Blah, blah, blah, blah, blah.
It's a bias.
I think I just went on a rant.

(46:05):
Let me get off my soapbox.

Mark Robinson (46:07):
Yeah, but you know what, and it's not really a
rant, because even back beforeall the Internet, you had all of
the publications that were youknow whether it was Money
Magazine.
There were several of them thatjust were all pushing buy, buy
short-term, short-term,short-term returns, you know,
buy the company with the best,you know eight-week return,

(46:32):
annualizing that.
You know that kind of stuff.
So it is out there and it'stough to fight.
Yeah, it is, it is tough tofight.
I don't know whether there's asolution for it.

Keli Alo (46:43):
I don't know either.
I mean left up to its owndevices.
There is none.
I mean the algorithms willreign supreme with informing you
of whatever you show themodicum of interest in.
That gets to another thing,which is the framing effect,
right?
And how that affects thesecommercials that are out there,

(47:05):
these talking heads that are outthere and listen.
Some of them are probablywonderful people and great at
what they do, and some of themprobably are not so wonderful,
but the framing effect right,which is describing an
investment in terms that.
I think you once again talkabout this glittering generality
, these hard-to-believe claimsof you never lose your money or

(47:28):
a tax-free Roth conversion, andall of these statements which
are really false, but they'renot so false that they can't be
run on an advertisement.
You know the legal counsel hasgot around that so they don't
get slapped on their head fromthe FCC or the SEC or any of
these other regulatory bodies.

(47:50):
Do you have any thoughts moreon that?
Thoughts more on that.

Mark Robinson (47:53):
Just that.
If my investment time horizonwhere there is the most
volatility, therefore the mostnewsworthy components of markets
up, markets down, big time down, big time up there's a
smoothing effect that can takeplace both psychologically as

(48:14):
well as in the markets itself.
If I'm grabbing enough data,all that volatility gets
smoothed out into averageannualized geometric rates of
return.
If that's my time horizon and Iset that, why am?
I trafficking in all thisshort-term shit.
That's precisely correct.

Keli Alo (48:29):
We get drawn in to headlines yeah, and we've been
trained the daily burlesque ofthe market?
Absolutely, we've been trained.
Why are we doing that?
And, unlike the past when, yeah, and we've- been trained.

Mark Robinson (48:35):
The daily burlesque of the market?

Keli Alo (48:36):
absolutely, we've been trained and and, unlike the
past, when we were kids, therewas some editor-in-chief that
was saying, yes, no, you know,there was the pursuit of of a
greater degree of truth and factback in the day.
Today, you know, it's verydifferent.
It's all about a position.
Right or wrong, that'sirrelevant.

(48:56):
It's about the position thatmatters most.
They're framing their spotaround first, be fearful, and
second, we have things toreplace the fear.
So here's your hero, 10 bonustax free.

Mark Robinson (49:11):
So they're the the risk here, the risk here,
particularly over the lastcouple of minutes here, is the
risk of falling prey topropaganda, misinformation,
disinformation and not fulldisclosure.
That's right Withholding.
That's right Withholding ofcritical information.

Keli Alo (49:29):
Yeah.
So the point was, the point isthese commercials are fantastic?
Is these commercials arefantastic?
You might talk to someone.
That's really good, but withoutasking really damn good
questions, without understandingyour own risks, without
understanding your own behaviors, that might detract from you
making really lucid decisions onbehalf of yourself, your family
and so forth.

(49:49):
Boy, you're, you're, you'rekind of left up to the sales
professionals way they want toengage you, what they want to
engage you, what they want tosell you.
Don't be afraid to say bullshit, throw that on the flag on the
play and make them re-explain itor answer these questions.
And we help people when theyneed help on making decisions.

(50:10):
We help them look at that stuffwe're not selling.
We're just there to help themnot make mistakes.

Mark Robinson (50:15):
Really, you'll protect them from their greatest
risk, and that's themselvesyeah perceptions and reactions
to their perceptions.
Salesperson risk goes up therebig time.
Huge propaganda, thedisinformation, the
misinformation, just the chatterof, uh, what you find on social
media?
Yes, just mindless, insipid,banal chatter.

(50:40):
Yeah, from suddenly, peoplethat are experts in the market
yeah, that's really the biggestrisk because these markets, even
in their unpredictability, havea predictability and they're
not really the problem.
It's how we choose to dancewith them, that's right.
It's how we interact with them.

Keli Alo (51:00):
All right.
One last thing we want totackle before we wrap this
recording up is abouttransferring financial risk and
the actual ability to get rid ofpieces of risk, if you so
choose to get rid of that risk.
And typically when we talktransferring risk, we're talking
insurance companies.

(51:21):
So you want to take a stab atkind of, let's say, let's talk
annuities just for a second.
We're going to do this kind ofclean.
How do I transfer retirementrisk?

Mark Robinson (51:34):
to an annuity.
Well, I transfer the risk of merunning out of money over to
the insurance company who, for acost, will make sure that I
have a fixed amount of money or,with a ride or two that
adjusted to inflation, that Iwon't run out of money.
Maybe it's me, and maybe it'salso my spouse they don't run

(51:56):
out of money.
Maybe it's me, and maybe it'salso my spouse, they don't run
out of money.

Keli Alo (51:58):
That's right and, in fact, if you're wondering how do
you run out of money if you'renot in an annuity, all a person
has to do is look up what'scalled sequence of return risk
as it relates to retirementincome.

Speaker 3 (52:11):
What is sequence of return risk?

Keli Alo (52:14):
It refers to the fact that the order and timing of
poor investment returns can havea big impact on how long your
retirement savings last what'scalled sequence of return risk
and you will find the answer asto what can happen in an
invested portfolio that you'retrying to live on in retirement
while it's in a roller coasterride in the financial markets

(52:35):
Compounded with also longevityrisk.
Longevity risk.
Yeah, Things change.
When Social Security started,the average age or mortality in
the US was like 68, 69 years old.

Mark Robinson (52:48):
Yes, and the average pensioner didn't live
seven years past.

Keli Alo (52:53):
Now people are usually and customarily living into
their late 80s and 90s.
My mom did.
I have no idea how, but she didHer husband was 85.

Mark Robinson (53:02):
That's because you moved away, Kelly.

Keli Alo (53:04):
That was, yeah, I mean , she finally started doing her
own mowing, anyway, but 90 yearsold.
We have relatives and ourfamily history is more like 70s,
but everybody is in their 80s,going into their 90s.
So that kid born in 2015, thelikelihood of him or her

(53:28):
reaching the age of 100, I thinkthe probability, is
astronomically higher than whenyou or I were born.
I mean, you were born in what?
1924?

Mark Robinson (53:36):
yeah, I just am thinking about that with my
daughters.
Yeah, think of all the pile upof uh that are brought to my
grave site for another 120 years.
Yeah, I know, holy, just fromthat standpoint.

Keli Alo (53:53):
Well, what's surprising is you think they're
bringing flowers, but still itmight be hamburgers.

Mark Robinson (53:58):
Yeah, me too.

Keli Alo (53:59):
It could be your favorite chili mac recipe.
I put it in a bowl there.
You know Chinese do that.
They give food offerings totheir ancestors.

Mark Robinson (54:09):
I didn't know that.
I think of all those Thaicarry-out cartons all over
stacked up high on my IsThailand part of China?

Keli Alo (54:21):
No, it's not part of China.
It's a totally differentcountry Leaving off on the
bottom, so they stick together.
So, yeah, so we're talking.
That's how we transfer afinancial risk of running out of
money in retirement with anannuity.
How do we transfer the risk ofGod?
Maybe I don't make it hometomorrow night and I have loved

(54:43):
ones that I feel financiallyresponsible for, sure well,
that's a loss of income and youcan transfer that with some type
of insurance life insurance,whether it's generically life
term or cash value, whole life.

Mark Robinson (54:59):
So if something does happen to you let's say
you're in your 30s or 40s you'vegot another 30 years perhaps of
earned income, and if you'remaking 100 gr a year, yeah,
that's a lot of money to replacea lot of money that all of a
sudden, yeah, vanishes from thefuture of the household.

Keli Alo (55:15):
right here's.
Here's an interesting thing howdo I transfer the the financial
risk of wasting my money in aninsurance policy by just paying
the premiums?
What the risk is?
I wasted my money.
I lived until I was 100, as anexample, why did I have the life
insurance?
I didn't leave a spouse here, Ididn't.

(55:36):
Do you know?
There's a lot of fear aroundwasting your money in life
insurance?
How do you transfer that risk?
I don't know.
Cash value life insurance doyou transfer?

Mark Robinson (55:43):
that risk.
I don't know cash value lifeinsurance yeah, of course I
thought you were tricking me.
Nope, nope, I just popped intomy brain.
I'm like that is a risk, andthat's a true risk, like why did
I?

Keli Alo (55:51):
waste my money on a 30-year term.
I spent, in this example, 90000 over 30 years for a life
insurance policy that I left.
Why, well, the answer is a cashvalue policy where you could
grow and accumulate cash in yourpolicy.
You could borrow from it, youcould use it for retirement
supplement.

Mark Robinson (56:09):
You can do all sorts of things with that cash,
but you know what that's thecost, though, kelly, I put that
under the cost of just beingcautious or mitigating risk.
Do you think you're going tomitigate risk all the time?
No, and it's at no cost to you.
No, and you're always going towin.

Keli Alo (56:26):
No, but there is a risk that I can transfer of
wasting money on a term policy.
Yes, because I think thestatistics are still 2%.
3% of policy owners that havetemporary insurance actually
collect on it.
That means that 97% of peoplewith term outlive the policy.
Sure.

Mark Robinson (56:47):
But was it worth it?
The peace of mind, was it worthit?
Yes, and on that, measurement.

Keli Alo (56:52):
It may well be On the flip side.
You don't have to lose the$90,000 a month.
That's right.
You can have it accumulate andblah blah blah.

Mark Robinson (57:02):
The only reason I'm bringing that up is I just
don't want to think if it's nota cash value and you can bail
out of it at some point thatinsurance is not of value, even
if there's no payout.
On the cash value no on anytype of insurance, whether it's
term or whatever, if you didn'tget a return off of it and you

(57:23):
had the risk mitigation.
Yet you get out of jail free orthere's no cost to you.
I don't know how many things inlife work that way.

Keli Alo (57:31):
Yeah, no, and I agree with you.

Mark Robinson (57:32):
How do I?

Keli Alo (57:33):
transfer risk when it comes to my vehicle or my home.

Mark Robinson (57:37):
You buy insurance , there you go, Whether it's
property home auto yeah yeah.

Keli Alo (57:43):
You do the same thing, Even umbrella yeah, yeah yeah,
and that's awfully expensive.

Mark Robinson (57:48):
That's right, as we both know, with daughters,
it's very expensive.
Yes, yeah, you know, there's nobreak even on that.

Keli Alo (57:55):
No, there isn't Usually.

Mark Robinson (57:58):
No, there isn't, Because even have some gap
insurance there to cover what Ifyou owe something on that thing
?

Keli Alo (58:04):
Yeah, yeah, exactly.
So, anyway, the idea of thistransferring financial risk is
where that insurance world playsand that's what it does.
And for someone that'srisk-averse they don't like the
roller coasters, they don't likethe idea of losing money, they
don't want to waste money, theydon't want to idea of losing
money, they don't want to wastemoney, they don't want to boy.

(58:25):
The insurance industry does apretty damn good job of
designing solutions to help you,really surgically, if you want
to narrow in on, what specificrisk are you trying to get rid
of?
It's pretty, it's pretty, uh,brilliant.
Just so long as you, hey, youknow how to trust.
But verify that recommendationsand or what you own right now
is is still well within um, yourarea and arena of needs.

Mark Robinson (58:48):
Getting back to salesperson risk, it's not the
insurance product, no, it'swho's selling it to you, indeed,
again.
So here we had.
Those are where the big risksare, yes, again, behavioral or
the interaction of salespeoplewith the consumer the hapless
consumer.

Keli Alo (59:07):
Those are the biggest risks still, I think we've
kicked this horse pretty hard anumber of different ways.
We'll go to the drawing boardfor what do you want to talk
about next episode?

Mark Robinson (59:19):
Well, I'd like to do just a variant of this,
where we do talk about riskybehavior outside of the
marketplace and bring in therisque, which I believe is a
french word.

Keli Alo (59:28):
Oh yeah, it is.
Yes, yeah, risque interesting.
Yeah, burlesque maybe yeah, areyou?
Still performing in thatburlesque no, no, no, no, no.

Mark Robinson (59:39):
Uh yes, idiot manager pointed out that I'm
starting to develop cellulite onthe back of my thighs.

Keli Alo (59:46):
Is that what it was?
Yeah, interesting.
Well, that kind of yeah.
I see I wasn't going to sayanything, but I get it yeah.

Mark Robinson (59:54):
That's all right, peloton, maybe I just kind of
got bumped on that, but it wastime for me to go anyway.
You know it really was.

Keli Alo (01:00:01):
You were much taller than everybody else.
I for me to go anyway, you knowit really was.
You were much taller thaneverybody else.

Mark Robinson (01:00:05):
I mean, for that matter, I don't know.
Yeah, yeah, you know, it's kindof.

Keli Alo (01:00:08):
so Well, listen on that note.
I think that wraps up thisepisode of Bullshit on Stills.
I think it does Outstanding.
Hey, till next time and youreyes wide open, man.
Good stuff, no, no, keep youreyes open, keep your eyes open
and your sniffers down yeah.
Read the small print.

(01:00:28):
Thanks for tuning in to anotherepisode of Bullshit on Stills.
We hope you enjoy Season 2 andfind it as refreshingly honest
as ever, because who needsfinancial fluff when you can
have some facts?
Remember, we're here to helpyou navigate through the
financial fog and come out theother side with a clear head.
A big thank you to our talentedcontent creators from

(01:00:51):
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journey a little bit funkier.
Special shout out to AndreRossi's Funky Street and
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(01:01:13):
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