Voiceover: [00:00:00] Welcome to Metcalf Money Moment. The podcast unlock financial clarity and confidence with expert insights to achieve your goals. Hosted by Jeb Graham, Ethan [00:00:15] Hutchinson and Eric Wymore. Each episode offers decades of combined expertise in wealth management, retirement planning, and more. Join us for practical strategies to inspire your financial journey.

Now, your host.[00:00:30]

Jeb Graham: Welcome to Metcalf Money Moment podcast. My name is Jeff Graham and I'm here with Eric Wymore and Ethan Hutchinson, who are partners and co-hosts of, uh, [00:00:45] of this show. And, uh, today. How you guys doing?

Ethan Hutcheson: Doing good j?

Jeb Graham: Yeah, doing well. Good. Good. We're, uh, day after tax day, uh, things have kind of cooled out for us.

Yesterday was a little bit crazy. Um. You know, and, and I know, I guess the last time we [00:01:00] recorded is funny. It's funny 'cause last time we recorded a podcast, just the three of us, we talked about market volatility and ways to kind of stay in the market. You know, when, when the market goes crazy. And the funny thing is, is we, we recorded that one in, in mid-March, right?

So this was basically the, the market had just gone down a [00:01:15] little bit. Uh, maybe, maybe five or 10%. We were just kind of talking about that. And then April 1st came along, uh, right after, right after April 1st. And that was when, uh, tariffs were enacted. Basically, Donald Trump kind of, kind of backed up some of the things that he had talked about [00:01:30] doing and the market did not like it at all for a couple of days.

And so we've just had a lot of volatility, uh, since that time. And, um, you know, so when, when we talked about what we talked about last podcast, I think it's a good thing to go ahead and continue that [00:01:45] conversation. And I know last podcast we actually referenced a couple of charts, uh, that we. Like, and we were talking the other day, as was, as Eric and Ethan and I were talking, we were like, you know, we could probably just go through, because all of us, every financial advisor out there [00:02:00] has their favorite charts that they reference when there's volatility out there.

Uh, because there's a, a million of them to reference. And I think there's a lot of 'em out there that help clients just kind of keep that long term perspective when the market's bouncing around. Um, and, and, and just to kind of [00:02:15] preface this, is, is, uh, you know, people have heard the saying that, that the grim reaper is undefeated, right?

That there's two things that are certain are death and taxes. Well, what I'll tell you too is, and we'll talk about this and we'll kind of show you in some of these charts, is that when you look at the history of the stock market, [00:02:30] stock market is also undefeated so far. And we're not guaranteeing that that's gonna happen for the remainder of the time, uh, that we're live.

But, uh, you know, we've had a lot of instances of volatility over the years and the stock market has always come back. Not only come back, but come back and gone to, to [00:02:45] new highs. And so. I think what we can do is just kind of pass it around. 'cause we were talking, we all three have different charts that we really like to reference and we, we reference a lot of the same charts, but, you know, we, we kind of have our favorites and I think, Ethan, we're gonna start with you, uh, to talk about the, these [00:03:00] bull and bear market charts.

Ethan Hutcheson: Yeah, yeah. It's, uh, it's interesting because we, we were, we did hit bull, uh, bear market territory a little bit. We had a little bit of stock market reprieve. So I, I guess now as, as we're recording this on April 16th, we're not technically. In a bear [00:03:15] market, but that could change in the next hour, you know?

So we never really know, uh, kind of forward looking what's gonna happen. But looking back historically, um, you know, I'm looking at a chart that, uh, first Trust puts out. Um, it's daily returns since 1942, and it talks about the [00:03:30] history of the United States bear markets and bull markets. Um, it's a really compelling graph because it shows, um, when these bear markets occur.

We talk about the duration of these bear markets and how long they last. So, [00:03:45] um, I'll run down the chart real quick. If, if you've got a, um, a 5% decline, how often does that happen? That happens about, on average, about three times a year and lasts about 39 days, so about a month. So 5% corrections, those happen pretty frequently.

Shouldn't even bat an [00:04:00] eye at those 10%. Corrections happen about every 16 months, and they last about 127 days. So 10% correction. A little more painful to kinda watch, but again, every 16 months, so about every year and, and some change [00:04:15] we're, we're having a, a 10% correction. You know, we could look at that as also opportunistic market's down 10%.

Let's go ahead and, and put some money into the market. I think that's kind of a contrarian view, but it, it's definitely something we try to educate our clients on. Uh, we'll skip [00:04:30] 15%, but going down 20% or more happens out about every five and a half years. It lasts about 335 days. The last occurrence, uh, that that happened was October, 2022.

So, so pretty recently. One thing we want to really [00:04:45] emphasize when, when these bear markets occur, the, the duration of the bear market, were uncertain. We, we don't know if it's gonna be 39 days or, or 335 days. There's really no way of, of telling how long they're gonna last. But what we do know is that when we're coming [00:05:00] out of these bear markets, bull markets tend to outlast, uh, bear markets as far as duration goes.

I know Eric, we were talking about this yesterday from 2009, all the way up to about 2020. [00:05:15] So looking at a, you know, 10 or 11 year timeframe. We had a pretty solid bull market run. I mean, there's volatility in there on occasion. You know, 2018, a little bit of volatility occurred, but. For the most part, that's about 11 years of very, very solid stock [00:05:30] market performance.

Yeah. Um, maybe

Jeb Graham: that, that might be the longest one in history, is I, I think it's one of the longest, if not the longest in history.

Ethan Hutcheson: It, it, it, it is. And then the, the, the longest one was from the late eighties to about the, the, the, uh, uh, tech bubble, uh, [00:05:45] internet bubble in, in 2001. So that was about 12 years.

So. Very, very long bull markets. And, and as investors, you know, recency bias comes into the equation. We think, wow, stock market's been doing great for 10 years, you know, it's gonna do great the next 10 years, and then covid happens. So we had a, uh, [00:06:00] very sharp 33% decline. And then after that we had about two years of another, uh, uh, bull market that occurred and that that bear market.

During Covid was about 35 days. So very, very short. So the, the, the overarching theme here [00:06:15] is these, these bear markets occur. They are regular, there are patterns. Um, there, there's no rhyme or reason one way or another. Sometimes it's just the economy, sometimes it's an event. But what we want to kind of push through and, and talk about on this podcast is they don't last forever.

You [00:06:30] want to stay invested because the second you miss out on that first 10% of recovery, that's where you can really hurt yourself from trying to time the market.

Jeb Graham: I would even add to that is, is almost not only staying invested, but but, but viewing those as an opportunity and not [00:06:45] something to be upset about.

Right. Because that's, and I know we're gonna go into that with Eric here in just a second when we're talking about diversification, but, but bear markets are the time where people can really buy things on sale and really make headway over time in their, in their portfolio.

Ethan Hutcheson: Yep.

Eric Wymore: And stock market is [00:07:00] the only place that nobody wants to buy anything when it comes on sale.

Ethan Hutcheson: That's right.

Eric Wymore: Yeah.

Ethan Hutcheson: Yeah, that's, that's a good, good analogy. Yeah. I know when I go to buy a t-shirt, if I know that it's gonna be 20% off next week, I'll buy the t-shirt next week. You know, I'll wait on it a little bit.

Eric Wymore: [00:07:15] Absolutely. And it's probably a good, good segue into to one of my favorite charts. It's, uh, what we call, this is basically a quilt chart.

Okay. So it's got a lot of different patterns on there that all come together that look like a quilt. The, [00:07:30] you know, before, I guess, lemme start that over again. So, um, one of the things that we, we wanna make sure that we do to help kind of coc or to, to mitigate some of that, those [00:07:45] drawdowns during that bear market is we wanna make sure that we have some kind of an asset allocation and asset allocation doesn't, you know.

Uh, um, doesn't eliminate any kind of a market decline. It just helps mitigate it a little bit. [00:08:00] And if you look at this, this chart coming up here, it's called Aquit Chart. And basically this is the, the, the returns of each, um, asset class over, since, you know, 2010 to the full year of 2024 plus the first [00:08:15] quarter of 2025.

And as you can see. In the early 2010s, the REITs real estate investment trusts were, were really top performers. And then, you know, if you see it towards the back half, there were some of the lower performers and, [00:08:30] and fixed income was a good performer a couple of years when the markets are down. And then when the markets are going really well, they're usually at towards the bottom.

You know, large cap has been a really strong, uh, performer over the last decade or so, and. [00:08:45] Obviously that's why when we have our asset allocation portfolio, that's usually the largest holding. Mm-hmm. And, and again, if you look at, you know, what an asset allocation model is, is it's got a little bit of everything got, you know, the bulk of it is in your large cap stocks.

It's got [00:09:00] some, some mid cap, it's got some small cap, it's got some international or, uh, developed markets. Got some emerging markets, as well as fixed income cash. And, and you can see that over time. [00:09:15] It's the single and double hitter. It's never the home run, it's never the strikeout. It's kind of right in the top to uh, uh, top performer.

Not the top, top performer. But anyway, it's always something to remember when, you know, when a client will say, well, why aren't we in [00:09:30] more of this? Well, that's a good question. You know, it's done well this year. Uh, what we probably would do is probably trim some of that. 'cause we do own it. We're gonna trim some of that and we're gonna put it in a performer that hasn't done well because we wanna remain balanced.[00:09:45]

And for those times when we are seen here over this first and second quarter of 2025, we really like to have an asset allocation portfolio 'cause it's stock very, very well. Yep.

Jeb Graham: I tell you, one thing that I love about that quilt chart too is like when you, when you look at it over the years, there's always, [00:10:00] almost every year or each new year, there's a new leader and there's occasionally there, there's one asset class that maybe takes a run for three years or two or three years, but.

It does make you realize that you wanna own everything because, or not necessarily everything, but you wanna [00:10:15] own a diversified portfolio. 'cause you just never know at the beginning of the year what's gonna be that leader and what's gonna kind of, kind of run like that. And it's just kind of fun each year.

I can't, I always look forward when that chart comes out, uh, because you, you get to kind of look back at the year and see what did, [00:10:30] what and how it compared to the year before and the year before that, and so on and so forth.

Eric Wymore: Yeah. Perfect examples. Large cap, you know, they did really well in 2023. 2024.

Your asset allocation portfolio didn't do, you know, didn't do as well compared to that. [00:10:45] Yep. Right. You fast forward to 2025 looking pretty short, you know, happy stuff with it. Exactly. That's why

Ethan Hutcheson: I always, I always like looking at cash on this 'cause you know, cash people wanna sell out when the market's down and go to cash and you know, find cash on this chart.

There's [00:11:00] only one year that I know of that cash was a good performer and everything else cash. It gets eaten up by inflation and other things.

Jeb Graham: What was the year? Was it 2022? 2018? 2018? Well, 22 cash was good.

Ethan Hutcheson: It had to be

Jeb Graham: up there Yeah. In 2022. But that's rare. Right. And [00:11:15] that's right. And by the way, in 2022, you could actually make money on cash, right?

Because they, 'cause you had a money market that was paying 5% or whatever. Uh, whereas in years past, you know, you haven't been able to specifically since basically the financial crisis through, through maybe [00:11:30] 2022 basically. Yeah,

Ethan Hutcheson: yeah, yeah.

Jeb Graham: So. Very good. Well, I, I think that's a good, uh, segue here into, uh, a couple other charts, and I'm gonna be pretty brief on both of 'em, but, uh, one of 'em is just called Crisis and Events, and I [00:11:45] know Eric, Ethan, you guys too, have had, uh, clients that in each one of these circumstances they'll call in and say, Hey, this one's different.

I feel like this is the one that, you know, the market's not gonna recover from. And I think this, uh, chart that First Trust put out [00:12:00] a couple years ago, which was in. A presentation that they had that, that called, uh, it was a client resource kit, just called Markets in Perspective. Okay. And they had the very first chart was called Crisis and Events.

And it talks about the s and p 500 since [00:12:15] 1970. Okay. And it goes through on this chart, basically it shows, you know, the graph of the s and p 500 that everyone's seen. That just kind of trends, trends up at, you know, maybe a little under a 45 degree angle over time. Um, but then it also lists all these big events that have happened [00:12:30] that have created.

Market turmoil. Okay. And just to, to name a few here. Um, and these are ones, you know, 'cause this goes from 1970 to 2025. Okay. But we've, we've had, you know, I, I was born in 1977, so if I'm gonna start at like [00:12:45] 1988, some of the things that I can kind of remember, uh, and that we've all kind of talked about and people thought that, hey, maybe this is the time that the stock market is gonna never recover and it always has.

Um, but you think about back in the late eighties, you had black [00:13:00] Monday. Uh, in the early nineties, uh, Iraq invades Kuwait. Uh, in the nineties you had the Oklahoma City bombing. Then we went, we went into, uh, the bull market ends and the tech bubble bursts. You know, beginning of two thousands, uh, we had [00:13:15] nine 11 terrorist attacks, and then we had, we, we invaded Iraq, uh, Lehman Brothers collapsed.

We all remember that one. That was a big deal, a great financial crisis. We had a Boston Marathon bombing, and then you had COVID-19 that happened in 2020. All of these [00:13:30] things, you know, as they occurred, the market reacted in certain ways, some of 'em bigger than others, like obviously the great financial crisis, 2008.

That was a really big one, uh, where the market, and it took a little bit to recover there. CO to, to Ethan's point earlier, it was really [00:13:45] quick. That bear market was what, 30, 30 days we said or something like that? Oh, yep. Um, but the bottom line is, is, is, uh, the market has always come back. It's always gone on to new highs so far.

Now we can't guarantee that's gonna happen in the future, [00:14:00] but if you're a status statistician, uh, you would say that, that the odds are that every time we go through one of these events, yeah, we're gonna have some market turmoil. And if you can kind of flip the, flip the script and think of that as a, an opportunity to buy some things at a [00:14:15] lower level, you know, historically that's worked out really well for you because the market's come up and it's, it's even gone on to, to higher to higher.

Numbers than they were before. And so, and, and by the way, during that entire time, the s and p 500, [00:14:30] between 1970 and 2025, the average return in the SP 500 was 10.8%. Um, so, so even though we had some big down years, like if 2022 is our most recent one that we can think of, the market was down 20 some percent.

Uh, and here we [00:14:45] are, you know, that if you look back from 1970, we're still averaging 10.8% in the SP 500.

Eric Wymore: So. I think even, you know, even as I look at at that chart and some of the, you know, you think about what you mentioned Black Monday earlier and think, you know, one [00:15:00] day 25% of the market was just wiped away one day.

But if you looked at 1987 as a whole, it actually

Jeb Graham: returned

Eric Wymore: positive. Yeah. Great. It always, and by the way, black

Jeb Graham: Monday makes what happened on April 1st of this [00:15:15] year, April 2nd. Not seem like that big of a deal. Right. Because we lost in that, in that circumstance, we lost. 10% over two days versus, you know, and it was after, was it after Black Monday?

I think that they started to put those stipulations as to when the, you know, right now if the, [00:15:30] if the New York Stock Exchange or the SP 500 is down, uh, I think it's 7% in a day, they actually halt trading for 15 minutes and then if it gets to 13%, they halt it again. And if you get down to 20%, they're closed for the day.

Which by the way, I used to think it was 10%. [00:15:45] 'cause 20% is a pretty big decline big day. That's, uh. That's where we're at. And so, so lastly, moving into one last chart. We talked about this, we referenced it on the last one. Uh, but I think it's such an important one. Uh, when we're in the middle of a down market and it's the annual returns [00:16:00] versus entry year declines, uh, it's JP Morgan Guide to the Markets and it just goes through, uh, all the way back again from 1980 through 2025.

It talks about each year how the market, stock market ended up at the end of the year versus how far it was [00:16:15] off. Its most recent high. Sometime during that year, I. Basically what it says is, despite average intra year drops of 14.1%, annual returns were positive. And 34 out of 30, or I'm sorry, 34 [00:16:30] out of 45 years.

And great example, we were talking about this yesterday, uh, when we were, when we were preparing for this podcast is, is covid year. Amazing example, right? At one point in time during that year, the s and p 500 was down [00:16:45] 35, 30 4% off of its most recent high. At the end of the year, it was up 16% from where it started the year.

Okay. Then now that's an incredibly drastic example. Uh, but there's, but if you go back even, uh, to [00:17:00] 2023, it's like it was down, we ended up with a, or 2024, we ended up with a 23% positive return on the s and p 500. But at one point in time it was down 8% off of its most recent high. So it's hard to get through a year without having some hiccups.

Right. And so, uh, I think. [00:17:15] Just stay. And what these are saying is staying the course over that long term, uh, has historically paid off. And, and there's not much of a reason, uh, to think that that's not gonna be the same this time.

Eric Wymore: Absolutely. I mean, I think that's the big question. You know, anytime [00:17:30] we get all the time, like, what's the market gonna do?

You know, the question is, we gotta give me time. How much time do I have? You know? Right. If you have one, Hey, flip a coin. Yep. You know? One year, there's a good chance it's gonna be positive. Yep. You know, over a sequence of five years and 10 [00:17:45] years, then there's a real good chance. That's right.

Jeb Graham: You know, there, there's been, I think only one rolling 10 year period where the s and p 500 was down and it was like just such a small window of time.

It was like between 2008 and the tech, you know, [00:18:00] somewhere in the tech bubble there, there was, if there was like a, a window of a couple of days where mm-hmm. That rolling tenure year was down. But over, over time it's been, it's been positive so. Well, I think, I think this was very productive podcast today.

And I think those are, those are all great charts. So if you're a [00:18:15] client, you're gonna see us referencing those if you come to us. You know, you know, worried about the market and that sort of thing. And, um, so guys, thanks for being on and, uh, this is Metcalf money moment. Sign it off.[00:18:30]

Voiceover: Thanks for tuning in to Metcalf Money Moment, the podcast. We hope today's episode provided valuable insights to help you unlock financial clarity, confidence, and peace of mind. For more expert advice and [00:18:45] resources, visit metcalf partners.com. Until next time, make every money moment count.

Disclaimer: Jeb Graham, Ethan Hutchinson and Eric Wymore are registered representatives with and [00:19:00] securities offered through LPL Financial Member FINRA SI PC Investment advice offered through W CG Wealth Advisors, a registered investment advisor, W CG Wealth Advisors and Metcalf Partners Wealth Management is AR separate entity entities from LPL Financial.

The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or [00:19:15] recommendations for any individual to determine which strategies or investments may be suitable for you. Consult the appropriate qualified professional prior to making a decision.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and invested into.