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Welcome to Financial Freestyle. I’m Ross Mack, and this is sponsored by Vanguard.Welcome to Financial Freestyle here on Yahoo Finance, and I’m your host, Ross Mack. Look, no matter where you are in your journey when it comes to building wealth, you can never stop learning and that’s why I am speaking to some of the most influential people in the world of finance, and today is no different, as I’m speaking to the chief editor of Investopedia, Mr. Caleb Silver. Caleb, my man, how you doing, bro?
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It is so good to be here. I’m such a big fan of the show, such a big fan of what you’re doing out there. It’s an honor for me to be here representing Investopedia. Thanks for having me.
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Well, I mustsay we both share this sentiment. It’s nothing but love. I truly appreciate you being on here and I’m also a fan. But to the people, right, to the viewers, who is CalebSilver?
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Well, I’m the editor in chief of Investopedia. I’ve been here for 9.5 years. I’m a business journalist. I’ve been in business journalism for over 30 years, Bloomberg, CNN. I’m also a, a film producer, a documentary producer, and a feature film producer and a, a cook, a short order cook. Uh, I’ve had a lot of careers in my 54 years, but this is one.That I really enjoy doing. I have the privilege of representing this great brand, Investopedia, trying to help make people smarter about money, trying to make people smarter about investing and wherever I go, you know, after I introduced myself, most people say thank you, like as if I created Investopedia. I’m just one of many here that have been doing good work at. It’s a real honor to represent the brand.And uh I’m a dad, and I’m an investor, and I’m just delighted to also be on the educational journey with you and your viewers as well, cause you never stop learning in the investing game.
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Can never stop learning. I, I was saying this earlier, the moment you stop learning is the moment you stop living. And I will say, I’m also a person I got to thank you, right to you as obviously the whole team at Investopedia because that is the holy grail when it comes to finance. I remember using that all my life, getting ready to go to an interview. All right, let me invest apedia of this and try to find a way to actually sound like I know what I’m talking about.
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You and me both, I should say.
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Yeah, no, without a doubt. But look, let’s actually, because clearly you got your finger on the pulse, right?Um, and being there over 9 years gives you a sense of like, you’ve seen the market go through some different times and clearly you guys just put out something, uh, with the investor sentiment survey, and I’m just curious, right?I want to walk through that, but more importantly, get a sense of how investors are thinking and actually taking into account tariffs, right? Because a month ago, you know, call it April 7th, April 9th or whatever, everyone thought the world was coming to an end. Dow Jones down 1700. But you know, some people running for the hills. We saw Warren Buffett, liquidators portfolio, etc. But you truly got your finger on the pulse, right? So can you let us know one, what this investor sentiment survey is and what are the people thinking?
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Sure, so we have our finger on the pulse of what people are thinking and worrying about as it relates to their investments because they’re coming to Investopedia with questions. Rarely do people come in the front door of the homepage. They come in through one of the side doors or the, the basement or the attic, because it’s a specific question. In the case of tariffs, first of all, let’s wait a second, what are tariffs? Then it’s the educational journey of, OK, I think I understand what tariffs are, I can go all the way back to the Smoot-Hawley tariffs if I want to, and learn about the early tariffss uh the country put on.Uh, European countries when in the beginning in its founding, but then how does it impact my portfolio? How does it impact my spending? How does it impact my budget? A lot of people are taking that very personally. Once they understand the economic concept, it always comes back, as you know, Ross, to the personal, OK, how does it affect me? So so many people are asking questions about what will this mean to rising prices? What does that mean in terms of a slowing economy? What does stagflation mean and how does my, how my, my portfolio react to that? What might a res.due to my portfolio. What’s the history of recessions and how the stock market has behaved? So, people come in with a big question, but they always want to drill down to what it means to them, and then what should they do about it? So, you talked, you asked about the survey every couple of months, we send out a sentiment survey to our newsletter readers. We got about 1.5 million daily newsletter readers reading something from, uh, our news team here, and we say, how are you feeling? Are you optimistic, pessimistic? Uh, what are you cautious about? What do you think is overvalued? What do you think’s undervalued? Where’s theOpportunity, uh, where you, where would you allocate an additional $10,000 if you had to, trying to really get to how people feel and what they might do with their money or what they’ve been doing with their money. And as you can imagine, the past few months put us on an emotional roller coaster, right? We’ve gone from pretty optimistic with the stock market at all-time highs, not really understanding that the entire economy was going to be flipped on its head to, oh my gosh, the stock market’s down 19%. Should I stay? Should I go? Uh, so fromOptimistic to very cautious to now with that 90 day trade truce, being a little bit more cautiously optimistic but reticent to go all in, put all their chips on the table, and that’s understandable. That said, we’ve also seen one of the fastest V-shaped recoveries in the stock market in history. They get faster and faster, Ross. These bear markets are very cute. They last like 23 weeks and then they’re gone. So in the time that you thought maybe I should do something, stock market probably already recovered, and that’s good news for individual investors.
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You know what’s interesting, and I love that you said that because, and I’m, you know, I’m just kind of back dating, right? You’ve been there for over 9 years, so that means you’ve effectively been there for Trump’s first term, you know, Biden, and now, you know, this again and Trump again, and I’m just curious, when you talk about these V-shaped recoveries, especially call it, you know, COVID 2020, can we get a sense of kind of, and obviously,You have over, I want to say you sent a survey out to like over 1.5 million people, so you guys are getting remarkable data. How was today’s, you know, survey compared to kind of 2020, um, and you know, especially, you know, whether it was the supply chain disruptions from a few years after that, like, give us a sense of like, what have you seen versus kind of what’s your outlook as you kind of synthesize the data that you’re getting likeWould you, you know, and obviously you can extrapolate, but are you thinking the market goes, you know, is it positive for the, for year end or negative or kind of like, how, how areyou looking at this?
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Sure, we also ask that question to our to our readers. Do you think the stock market is gonna be higher or lower in the next 6 months, 12 months? Also, a very important question we’ve been asking lately, which is, do you trust the capital markets more or less?Since the Trump administration took office, and just because of the uncertainty around tariff policy, the big drop in the stock market, what seems like a not so coherent strategy, people trust the capital markets less and less, and that that’s what you should expect when you see a big seller. So we started the survey back in COVID, right, when the firstRight in the beginning days of the shutdown, because that’s when fear was at its greatest and we wanted to get a sense of how people were doing. And of course, that was a huge peak in fear, right? People were very nervous about that. Stock market obviously crashed, uh, was down 27%, and you had the economy coming to a standstill. So we started back then. So if you take that as the extreme.And then you wrap it out over to 2022, right? 9%, 8.8% inflation. That was about, not as high as the Mount Everest called K2, if you will. And then you take it to today, and we’re past K2, not at the extremes of COVID, but very close to that. And what’s interesting, Ross, is that it matches consumer sentiment very closely as well. Consumers are as pes.optimistic now as they’ve been since 1991, since uh expectations for inflation are as high as they’ve been since 1981. Yet inflation is at 2.3%. So I think the smoke is a lot worse than the fire sometimes. The fear and the anxiety in our animal spirits make us think things are a lot worse than they actually are, andWe end up behaving like as if that is the case in some cases, but also, you find that some people take opportunities like this, a smaller percentage, and they get super promiscuous about investing, and they start not just meme stocks and crypto, but they start buying stocks that have been crushed 30, 40%.Or they take flyers on inverse ETFs or inverse volatility ETFs or leverage ETFs to try to take advantage of some of these movements. So it’s this entire white belt to black belt cascade of what investors are doing at different levels and at different age groups, and it’s completely fascinating.
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Yeah, that’s a great point, right? Like, tell me, what’s the profile of investors, right? Like cause clearly you’ve seen different investors andAs we continue to, you know, just have, now that investing is such a cool thing, right? You’re, you’re having a lot of people stepping in here and to your point, whether they’re buying leveraged ETFs or zero day aspirations. Like it’s the the the new profile of the investor, whether it’s the YOLO investor, the person that’s on Reddit, have you seen the overall investing ideology shift over your nine years?
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Yeah, great, great question. It really, really depends on which age group you’re looking at, but at Investopedia, as Dolemite might say, we have an 18 to 80.Uh, you know, experience just beginning or lazy. Uh, so we have them all over the place trying to do different things. And so if, if you look at younger investors who have maybe gone through that first cycle in the pandemic where they saw how fast the stock market recovered, and they saw meme stocks and crypto shooting off in all different directions because risk was on big time, well, they’re ready to get busy in this type of a market. They realized that this could be a time just givenUh, some of the dynamics in the market that might might be a good time to try some, uh, wild trades that a lot of people might think are exotic. That said, you get older investors, my age getting older, but even older than me, 60+, 65+, who are in defensive mode, right? They’re back on D, they’re in his own defense, protect my capital, protect my assets. How do I grow and protect my money at the same time? So you see a surging.Interest in CD rates, surging interest in money markets, surging interest in high yield savings accounts, and different ways to play defense while not totally giving up on offense. So, it depends who you are in the investing journey. And then you have some people who are right in the middle saying, wait, wait a minute. I was doing all the things that I was supposed to do, right? I was indexing, I was giving to my 401k every couple of weeks, and all of a sudden, the stock market falls out of the sky like that because the new president comes in with new economicPolicies, that doesn’t seem right. Maybe I should get out of here. Uh, the good news is most people didn’t, right? We just keep contributing to our 401ks with the same allocation over and over again, because that’s what we were told to do. So very few people sold out, but a lot of people had their finger on the button. And I have to admit, I’m an experienced investor. I’ve been through a few cycles. A couple of times I did too. Thank God I have a financial advisor that was like, this is not how we roll. We have rules around here.
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Got to stick to the rules. When you deviate, that’s when your portfolio goes down, right? So, question though, what, from your survey, what would you say that people are actually buying? Because once again, you got your finger on the pulse. What are thepeople buying?
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Yeah, it’s a great question. We, we, uh, have about 22, 23%, and I guess this is reflective of age group that are very, uh, intent on finding the best places to keep their money safe. And that means high yield savings accounts, CDs and money market accounts. That’s a preponderance. And then, just cause it was a little bit of a risk off environment, people were a little scared, a lot more diversification and index funds and ETFs and which ones do they go to? They go to the biggest ones because that’s all they know.Right? We go, we flock as investors together in herds. So you see the queues, you see the spies, you see the VTOs and the VOOs of the world attracting a lot of assets. And GLD, the gold ETF, getting a lot of interest from our readers as well, who are all active investors, mostly self-directed. And then, when you look at the individual stocks, this is about 18% of the audience that are out there trying to make big trades, trying to findor catch the bottom or catch the falling knife, as we say around here, Ross, they’re looking at stocks that got really hit hard, like Tesla, Nvidia, Palantirer, AMD, Amazon, Apple, Robin Hood, American Airlines, Ford, and Meta. So we look at what they’re buying and selling across all the different platforms, but also Vander research shout out to Vanda does a great job of tracking what retail investors are buying and selling too. So we combine that with our, with our sentiment survey and tellYou that the people that were buying were really trying to catch their favorite stocks that have been hit the hardest. And if you look at what’s happened over the past few weeks, turns out buying the dip was actually the right call this time around. We don’t encourage it. We encourage a dollar cost averaging, buying stocks that you like, no matter what the price, especially if they fall. But a lot of people got, uh, got a little, uh, risky out there on the plank and maybe may have had some good timing with some of these stocks for now.
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Yeah, this is the time by the dip has actually worked. But look, we’re gonna take a quick break and when we come back we’ll have more with Caleb Silver of Investopedia.Alright, welcome back to Financial Freestyle. I’m your host for Amack. And look, we’re talking to Caleb Silver of Investopedia, and we actually got to dig into Investopedia because, like I say, I’ve been using it for quite some time, but let’s actually understand the history, right? Because you guys have been around since what,the 90s now?
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Yeah, 1999, we’re gonna party like it’s 1999 around here, 25 plus years on the internet, man, Ross, that is like 250 really years.Uh, so we’ve been around since the early days of the internet, founded by a couple of guys up in Canada in Edmonton. Shout out to uh my, my people up in Alberta there, uh, who have this idea to put an investing dictionary on the internet because what was going on in the late 90s, the internet bubble, right? Internet stocks, the birth of NBC, the birth of Bloomberg TV where I originally worked andUm, people were retail investors were getting much more involved in the market and all of a sudden there was household stocks that people were trying to buy, and these were some of the big internet names back in the day, the Netscapes and the AOLs and the Yahoo’s of the world. Uh, these were the OGs, and we were a part of that group, so they had this idea to make a dictionary online and also put test prep for people.Wanting to enter the investing industry, whether the capital markets, uh, through the series exams, uh, and, and prep for CFPs. So that was a really good idea because guess what? Google started to point to Investopedia as a trusted source.
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Well, listen,congrats. That’s obviously a testament to you and the entire staff.Being able to stay relevant for, you know, 25 years. And obviously that’s not on accident. You guys are obviously finding ways to innovate. So I’m curious, right? How are you guys staying so relevant and obviously, you know, being able to innovate, especially when you got social media, kids, right, the younger generation, their attention span is getting shorter and shorter, and then on top of that now, right?Uh, we get AI, right? So like how are you guys, you know, competing and staying relevant when it comes to all these other, you know, the way consumers take in data now.
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I’ve seen the videos you do with your kids. They have a pretty good attention span. It seems like they’re learning from you in the car on the way to school. Um, but great question because
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it’syou, you see the good takes. There are a few other takes that don’t,that don’t work.
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You’re like me, you got 40 takes on the phone that you’re deleting at the end of the day.Um, so great question, because, you know, Gemini I can give you an answer to what is EI do, what is compound annual growth? Chat GPT can give you the top 10 index funds right now if you want, or, or, uh, you know, uh, what is, you know, the, the ratio for, uh, uh, the rule of 72, like all of that is very available as one time answers. So you can get what from Chatty GPT from OpenAI. You can get AI can provide you with what? But not with what now. And I think that’s ultimately.What people want. Sometimes people just want a very simple answer. What happened to the stock market, uh, during the 1970s and stagflation? Fine. But what they really are asking when they ask that question is, is that like now? And if that’s like now, what should I do to protect my portfolio? Or what should I do to take advantage of the situation? So there’s always a what now behind the what. And that’s where we’re trying to add more value as a trusted platform. People know the Investopedia name out there. Like I said, people thank me all the time, and I, I’m just honored, you know, it’s, it’s, uh,You know, it’s humbling, especially because I’m a part of the team, but what, why are they thanking me? Because we’re helping them solve a problem. People don’t like talking about finance. They don’t like talking about health, but as you know, Ross, those are the things that usually get us in the end. But when you start learning about it, and you start to understand the way these cycles work and what’s happened in similar situations or the best way to protect my money or grow my money, um, you know, you, you develop a loyalty to the brand. So we try to do that through investing journeys or content journeys. So beyond the question of what, what are tariffs.It’s gonna impact my portfolio. Is my 401k gonna be OK? is a whole journey of learning of, here are different ways to diversify your portfolio at a time like now. Here are different ways that you can take advantage of the situation and lower your taxes if you do it right. Are you eligible for a backdoor Roth IRA if you’re of a certain age? There’s all types of different solutions that people are looking for, getting them into that door and then getting them through those, that content experience. That’s what we do at Investopedia, right? We, everybody has the answer to the simple.Question, but nobody has the answer to the complicated what do I do now question. So we’ll use AI and we’ll use other tools to help us develop that even better, to help service our readers and our listeners and people that watch us on social media, because ultimately, people want a a practical tactical solution. They can listen to you and I talking about the markets all day long, but what they really want to know is, what should I do? And that’s what we try to do. We don’t give them stock picks. We give them the path to learning about their different options to make them a more educated investor.
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I love it. I love it.And, and clearly, right, like your, your company, your brand, and even what you do is about educating. And so what I would ask, right, is, what are some big misconceptions when it comes to finances that you think every American should know?
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Well, I think a lot of people wait too long to invest because they don’t think it’s for them, they don’t trust the markets, they would don’t think they have the money to do it, and they think they need, you know, $1000 to buy Amazon shares. Well, people don’t know that this industry’sa very long way. You can start investing yesterday with $50 if you want, even $20 if you want. Um, the whole point is to start, uh, and to start the compounding machine early because the difference between starting at $25.35 dollars, if you’re gonna invest for 40 years, given a 6% annual rate of return, which is pretty low, is about $400,000. So investing when you’re young and just starting the compounding train early.Helps you pay your future self, and people don’t understand that their investments work 24/7. You and I and and your and your viewers, we’re working 40, 50 hours a week, maybe 60, but our money works 24/7 all the time, all year round, so get that thing started early. Another misconception, misconception, and I get it, uh, media is probably to blame for this, uh, present company included is.The economy and the stock market are not the same thing, right? And the economy could be in a bad spot, or could be in a great spot, but we might have a uh a bad stock market, right? They, they are like cousins that show up at the same family reunion from time to time. Sometimes they walk down the same path and hang out, but most of the time they’re doing different things. So, how can the stock market be climbing back towards record highs again when GDP is slowing to a negative 0.3% from 2%.0.4%. Well, investors, especially the big ones, not you, me and your viewers, but the big ones that are putting hundreds of millions of dollars to work, they’re investing out 12 months, 18 months. They’re thinking about the best possible places to allocate their capital, given a bunch of different variables, right? That’s very different than how is consumer confidence? What’s retail spending like? Why isn’t the stock market falling off a cliff now that the US debt rating, uh,credit rating has been downgraded by Moody’s. Well, there’s different reasons for that. Investors are looking at a completely different picture, but if you are not invested and you don’t own assets, you’re gonna be left behind, right? The cost of living is just getting higher and higher. It’s getting harder and harder to earn more money. So the way to build wealth is through investing and owning assets and everybody has to have access to that. That means everybody has to learn about that and we do need to do a better job of teaching.
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So for the interest of time, last question. If you could go back and talk to 18 year old Caleb when it comes to the world of finance, or through the lens of finance, what would that conversation look like? What piece of advice would you give an eighteen-year-old youth?
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Uh, don’t think you’re smarter than everybody cause you’re not. Don’t be a stock picker cause you’re terrible at it. Start the compounding train early in an index fund or a bunch. I don’t know if we had ETFs back when I was 18, we were getting there, um.So I would have started that a lot earlier. I, I did think that I was the expert and I had the Midas touch, even though my last name is Silver, and I could pick the right stocks, and I picked all the wrong stocks. You know what? I did it again during the great financial crisis and I bought Lehman Brothers, stored investment bank.Been around for over 100 years in the midst of, you know, uh, the, the mortgage backed securities storm, very exposed, and I bought it at $80. Guess what? I bought it at $40 saying no way they’re gonna let Lehman Brothers go out of business. Guess what? I bought it at $19. I bought it at $9. I bought it at 2, and it went bankrupt, and I keep that ticker in myPortfolio in my account so I can look at it every time I look at my account to show that I am not smarter than anybody out there, and I gotta have rules when it comes to investing. So I’m giving you a long answer to a short question. Start investing in a diversified index fund early and let that money compound over time because that’ll make the future you, the 54 year old you want to give the 18-year-old you a big old hug.
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Uh I do appreciate that knowledge and those gems you just dropped on us. And I want to thank you for coming on. Caleb, like I say, I’m obviously a fan of you and obviously what you do. So we’re honored to have you here on Financial Freestyle. But that’s it for this episode guys. Make sure you tune in, like, subscribe, tell a friend to tell a friend, and until next week, see you
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there. This content was not intended to be financial advice and should not be used as a substitute for professional financial services.
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