Podcast Episode - Suze School: Trick or Treat

Investing, Podcast, Stock Market

October 29, 2023

How do you feel when the stock market moves? Are your investments tricks or treats? On this Suze School episode, we get a lesson on how to be a rational investor versus an emotional investor.

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Podcast Transcript:

October 29th, 2023. Welcome everybody to the Women and Money podcast as well as everybody. Smart enough to listen, Suze. Oh, here and today is Suze School. Good news is number one. Both KT and I are back from New York. I'll tell you about that in a second.

But if you go on the Women and Money Community app or you follow me on Instagram or wherever you may follow me, you saw KT is healthy. She's back truthfully everybody and will absolutely be here on Thursday for Ask KT and Suze Anything.

However, first, let's talk about New York now. New York was really the first time in three years that I appeared on a live television set. Sure. Sure. Over the last three years I've done a lot of Zoom and TV, that way. But that's very different than walking into a studio, sitting down the cameras go on and you are live. It is out there and there's just something about that and I loved it. And if you watched my segment on CNBC, you could see I was lighting up that entire studio with how excited I happened to be.

Also, I did tape about a 20 minute or 30 minute interview with Chris Wallace and that will go live on Max. It's streaming and it will go live on November 3rd and it was a fabulous interview. So I hope all of you tune in November 3rd or whenever you can and watch that. I have to admit. However, my favorite event was the luncheon that I went to for the 50 over 50 the 50 women that were named for 2023 that are over 50 that are changing the world. And I don't even know how to explain what happened that day, but maybe it's because people haven't seen me in a long time or whatever. But the love that was showered upon me and the accolades were just truly, truly overwhelming.

So I'm happy to also announce that in March, I think it's March 8th. They do the really big event in Abu Dhabi and KT and I will be going to that. So overall, it was really, really successful, business wise and on the personal level, I got to meet Sophia, our niece's boyfriend and her two roommates, all of which got the Aunt Suze and KT Stamp of Approved. So that was also kind of great. But now we are back and here we go,

October 29th, 2 days before Halloween. And you know how the theme for Halloween is always trick or treat.

Well, that is exactly, in my opinion, the exact same theme that you could attach to the stock market these days. One day it's up and it's up and it gives us a treat and then all of a sudden it tricks us because then it goes down and down and down and it goes up and it goes down last Friday, it closed seriously down. And then you write me and you say, Suze, you have got to talk about how crazy these markets are and what we should be doing.

And I read that and I think about that and I think back to one of the greatest things that I learned over my years of being on this great planet is you cannot rationalize with an air rational person.

And I say that because number one, it's true. But you all have to remember that the stock market is made up of people, people who buy people who sell and you have to imagine what they're going through right now. Most of them are being totally irrational.

They get afraid when the market goes down rather than be happy that the market's going down. They get exuberant when the market is up.

But yet are they buying, what are they doing?

And the truth of the matter is people are dictated by what's happening in the world. People's emotions are dictated by what's happening also in their personal life and the needs and the financial needs that they may have. Do they have a job where they just laid off? Are they going to get divorced? Was there a death? Was there an illness and all of these things come to play in the stock market's moves?

But what always strikes me as really, really funny is that all of you, even though you have 10, 20 or 30 years till you need this money, maybe even more. You are only feeling great like it's a treat when the market is going up and up and up and up.

And I sit there and I, as I explained on CNBC if you watched that segment, I don't want the stock market to go up.

I'm actually very happy that the market goes down and down and down at times because then I can continue to buy and purchase stocks at a lot lower price.

And right now we're having a push and a pull between interest rates in the treasury market and what's happening in the stock market? Have you noticed that when interest rates in the treasury market start to go up, the stock market goes down? Now, why is that? Have you taken out your little Suze notebooks? Have you, have you? Anyway, the stock market starts to go down because people think why should I risk my money? In the stock market when I can lock it up for a long time or a short time or whatever, it may be at a 5 5.5% interest rate, possibly even higher as time goes on.

However, when interest rates start to go down, people start to think, oh, maybe I'm just better off buying stocks that give me a good dividend yield or stocks will perform better at that point in time. So we have a treat that gives us a trick and then we have a trick that sometimes gives us a treat and then we become totally irrational because we don't know what to do.

How many times have I said to you? You need a plan, you need a plan and you need to be patient.

You need a plan so that you are patient so that you can prosper. Because if you rush, if you make decisions based on your emotions, if you just do things because what's happening out in the world and everything, not that you shouldn't pay attention to it.

But then that is when you make mistakes. If you have 5, 1015, 20 years or longer, why are you upset when the markets are going down? Have we not agreed that the only way to be investing in this market is through dollar cost averaging you are not to take a large sum of money. And I don't care whether it's for treasury bills, treasury bonds treasury notes, dividend, paying stocks, technology stocks. It does not matter what you are buying at this moment in time because we have a trick or treat market constantly for now. For a while, you take advantage of it when the timing is right now.

Put a pin in all of that for a second because I still have to go back at this point in time to pioneer natural resources or PXD. Now, for those of you who don't own it or never did uh uh uh uh Don't go sitting there thinking, oh God, don't tell me, Suze is gonna talk about this again. I don't have it. It doesn't pertain to me. Oh, it most certainly does because what's happening with this stock that could happen to you one day and the people that have been involved in it, you need to learn from their stories. Don't make a mistake, learn from other people's stories. Everybody and I've done a podcast where I've said, what's your story?

What can you learn? Not only from yourself but other people's stories. I tell this story about PXD because I'm so sorry. It makes me laugh. It really does because I know all of you even though I did that podcast that said, if only are any of you upset that you sold PXD at 238 or 240 are what like, how do you feel about it? If you see it go up and a lot of you said? Oh no, Suze, I'm fine and everything. I don't think so. I don't believe you to tell you the truth. Although I do hope you're being honest with yourself.

So just a really quick recap back around October 5th, right around there somewhere PXD which is pioneer Natural Resources. That's a symbol for it. Energy Company is trading at about $217 a share.

At that point in time, Exxon announces that they're going to try to purchase it for $253 a share. It's an all share transaction. So therefore, if you own it sometime next year, you will get about 2.3 shares of Exxon for every share of PXD that you have. I come on now and I say, you know, I'm an investor, I'm not a trader.

I have learned over the years that it's really possible that these deals could fall through and it could go right back down to 217.

So maybe Monday morning when the stock opens, we should consider selling it here. Many of you depending on your tax situation, maybe you want to keep it whatever it may be. But a lot of you decided. All right, you're going to sell it on Monday morning and you got about 241 or $43 a share.

Then throughout that day, it started to go down and then everybody started to get afraid. Oh my God, it's gonna go down all the way again. And so many of you sold it at about 235 $236 a share. And then as time went on, it started to go up to 240 again, 245 to now 250.

And I know the people that sold it at 235 no matter what you tell me, you're now going, oh my God. If I just held it another week, I'd be up, 15 points goes all the way up to 257. Almost 10% more than those people that sold around 235, 237, 238. All right.

So now we've had a treat for those of you who kept it.

Did you sell it at 257? Did you, even though the deal was for 253 it's at 257. It's above what the conversion price is supposed to be. Did you sell it there? Probably not because you thought, oh, there's more of a treat here. It's gonna continue to go up. I'm gonna be hopeful here.

And now just a few days later on Friday, two days ago, it closed at 238. Exactly where it was all the way back when.

So do you see the roller coaster that, that stock just went on?

But it wasn't the stock that went on that roller coaster? You also went on that roller coaster the roller coaster of emotions. If only I had and you watched it go up and if only I had sold it then as it went back down, it was like, oh my God, thank God, I sold it at 243 for those of you who held on to it and you didn't sell it at 257 or in the fifties you went, oh my God. I just lost 20 points. You only make or lose money. Everybody, when you have actually sold a stock before the day that you have sold it, it's a paper gain and it means absolutely nothing.

So once you have sold a stock, if you wanna give yourself a true treat, unless you want to buy it back, stop looking at it because if you continue to watch it and you have these, if only moments, oh my God. I should have held it and whatever you then will look at the other stocks or exchange traded funds or whatever it may be in your portfolio and once it goes up, you'll go, I better take it right now and you'll sell it and then a month later it will go up another 10 or 20%.

There has to be a reason why you sell, there has got to be a reason why you buy, not just one that it has gone up in value, it's got to be one that, oh, the company isn't really earning that much. Money anymore. I don't like the management, I've made good money in it and I need the money. It's starting to scare me because of how much money I've made. Whatever it may be, there has to be a rational reason as to when you buy or sell a stock, it cannot be an emotional decision, it cannot be a decision because somebody else has done it or is telling you to do it unless you have trust in that person.

So it's a really, really important lesson.

One of the things that I was talking about on CNBC was someone of the best traders. You know, the people that sit around that desk, Karen Finerman, whatever, they make hundreds of millions, so much money that they manage. It's not even funny and we had a little thing as we were sitting there. If you watched it, the earnings of alphabet came out and they were all debating when I was sitting down, would they buy Alphabet or would they buy Microsoft? So now I sit down, I really didn't hear the discussion at all and they said, all right, Suze, we know your personal finance, but we also know you are an incredible investor. And the reason that they know that is I always tell them the stocks that I am buying. I am selling what I am doing. I mentioned a few of them on air that day. If you happen to watch, I'm sure there's a tape of it somewhere. And I said, not me, I'd be a Microsoft girl the whole way over alphabet.

And they just looked at me and like, really? Are you kidding?

And then the next day alphabet went down Microsoft went up, I wrote Karen Finerman who I just so loved so much. I can't tell you. And I said, well, I guess your picks were wrong and mine was right.

And she said, yep, I guess so. And I said, Karen, we're in this for the long haul. It's not a day event. Did it go up? Did it go down? What will it be a year from now or two years from now? So I know it's a stock. Microsoft is a stock that I happen to like a lot for many reasons and it's not, what does it do on a daily basis. It's what do I think about it long term?

And so I bought some and not a lot and then if it happens to turn around and go down again, like it did the other day, it went down significantly. I could pay a little bit more. If it goes up, I can just watch it for a while. I can see what I'm gonna do, but I didn't take everything that I had designated to purchase that stock with and purchased it that day.

If you are what I call a lump sum investor where you have a lump sum of money and you put it in the stock market right now, in one lump sum, you're going to be making a mistake because again, this is a trick or treat stock market. There are so many things in the economy right now that we don't know if they're going to be a trick or a treat. We really don't. There are so many things in the world when it comes to war right now, we do not know how that is going to end and how that will affect the economy. We hear reports that the economy is really on fire and doing great. It's up five, almost 5%.

And so it seems like everything looks like it's a treat economically speaking. But is it, how can it be? How can it be when so many companies are closing their doors? How can it be when you have an 8% mortgage rate? How can it be when just nothing seems to be making sense? So that is why you have to go slowly. You have to feel secure with what you're doing. You have to be diversified. You should have some money obviously in defense Raytheon or whatever you want. You should have again dividend paying stocks that will give you a nice dividend one stock that everybody hates right now. That makes me kind of like it up to you. Be careful if you buy it. But Verizon, Verizon, I love Verizon. I love my phone that has Verizon paying an 8% dividend. Looks to me like the dividend is pretty secure.

Do you go from something like a Devon and, or a PXD and put some of it in Verizon right now? Especially when it is at. It's low. It's at, it's low. Do you? I don't know. Up to you, you're going to have to decide.

I like a stock by the name of reality income. Whose symbol is? Oh, take a look at that. Do you like an reit right now? Do you even know what they are?

Or as I've told you before, I like another REIT by the name of CareTrust symbol, CTRE. You might want to take a look at that one. I like Pfizer symbol PFE. However, the healthcare industry can be absolutely with the vaccines and everything can go down. But hey, I have time to wait

and if it goes down, hey, that only makes my dividend yield. If there are strong dividends, if they're ok, dividends, it still keeps them protected.

So there are things out there that you absolutely can be doing. But if you do it and they go down the stocks go down rather than being depressed, you should be so happy because then your dollars buy more shares and the dividend which is fixed then creates a higher yield for you. You have to be ok with it.

So one way that you can think about being ok on it think about that. You have a brand, you love to buy every piece of clothing that comes out by this brand. And this is the brand that you like to constantly dress him.

So you go in and you see something that you absolutely love, but maybe it's $100 and you think? Oh, well, I don't know. Maybe I'll wait till it goes to 100 and 20 to buy it.

Or maybe it should go to 100 and 50. Do you really want your favorite items to go up and up in value for you to buy them or aren't you thrilled when that $100 item all of a sudden is at $75. You know, the other day, Marcia, who comes to the house and gives me my manicure and pedicure because, you know, when you go in public, you gotta look good. You can't have dirty nails and things like that. And so she looks so happy. I said, why are you so happy? She said, look at my shoes. I said, yeah, she said, Susie, I had a client that came in and I saw these shoes on her and I loved them so much. I can't tell you.

But when I went to the store and I saw how much they were, it was like, I could never buy a pair of shoes that expensive.

And then I was shopping at the store where everything is just so inexpensive and there, the shoes were and they were $19. Now, I know Suze, that's still a lot of money, but I figured I could do that and she did and she was so happy.

And if you could kind of think like that when it comes to your financial portfolio and you take advantage of it, when it makes sense in the long run, when these stocks do turn around and go back up again, then you will be able to make incredible decisions with it.

So that's your Suze school for today. Was this podcast a treat or was it a trick? It was a treat. Are you kidding me? Anytime you listen to the Women and Money podcast, in my opinion, it is a treat.

So there's only one thing that I want you to do every single day and that is to say the following day, wherever I go, I will create a more peaceful. Think we need it joyful. Oh, we seriously need it, loving, loving world and to all those people in Maine and throughout the entire world, my prayers go to every single one of you.

So until Thursday, remember you are unstoppable.

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