Helping Clients With AI Bubble Fears To Stay The Course: Kitces & Carl 181

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***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and YouTube Music.

Show Notes

• My First Million Podcast, with Howard Marks
• "The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money" by Carl Richards
• Repeat Until Broke by Carl Richards
• Kitces & Carl Ep. 160: Calming Clients With Anxiety About Trump Tariffs And Trade Wars
• 10 Clearnomics Charts To Help Explain The 2026 Market To Clients
• Clearnomics
• Exhibit A
• YCharts

Kitces & Carl Transcript

Michael: Well, greetings, Carl.

Carl: Hello, Michael Kitces. How are you?

Michael: I'm doing well. I'm doing well. I'm feeling good. We're getting into the very end of the year here, probably a little after the beginning of the year by the time this episode goes live. So pre-emptive Happy New Year for everyone who's hearing this to kick off 2026.

Carl: It seems like it's going so fast. I'm having a hard time keeping... The number of times I asked this year, is it 2025? Is it 2020? Like when I was going to write it. It's amazing. So, yeah, it's super exciting.

Michael: Wait, wait, wait. You write it?

Carl: Oh, yeah, that's right. I'm sorry, with a pen. And yeah, I was writing. Yeah.

Michael: What, do you sign checks or something like an old dude?

Carl: It's for the courier pigeons to pick it up. Yeah, it's all good. It's all good.

When Financial Advisors (And Clients) Face 'Scary' Markets [01:01]

Michael: So, look, in that technology versus courier pigeon theme, I thought for today's conversation, I feel like we're due for one of these conversations that I find as I look back over, I guess, the years of this podcast, we have this conversation about once every 18 to 36 months or so. I think it's time for a version of scary markets conversation. This one is it, right? It's some version of, are we in an AI bubble? And what are you doing about that, Mr. or Mrs. Advisor?

Carl: Yeah, it's interesting. By the time people hear this, you know what I mean? As fast as things are moving, it's going to be fascinating. But yeah, right now, I don't know if... I think there's kind of a.... It strikes me that there's sort of a spectrum of folks that listen to this podcast where investment management is still really important part of the function that they do as a financial planner. There are some financial planners that I don't... Investment management's either not part of what they do or it's...they talk about it in a way that these things hardly ever come up. But I think right now, it's one of those times where it's kind of hard to ignore. I mean, when my kids are asking me about Nvidia's place. Why is Nvidia 8% of the S&P 500? One of my high school – sorry, college-age – kids asked me that. It seems like it's in the air a bit.

Michael: Yeah. And you're right. Even as of now recording, maybe there'll be more of this in a few weeks when this goes live, but OpenAI needs several hundred billion dollars to just maybe break even three years from now if they also have a zillion percent growth rate in revenue, maybe. Oracle is already losing money on data centers that they agreed to fund and put chips in that couldn't physically be built in time with energy we literally don't have on the planet, maybe. It has echoes to me because I started right at the tech peak.

And I think it has echoes to clients, at least or especially to retired clients who were around with a portfolio in the late 1990s and early 2000s when we went through the tech bubble and the tech crash that... That conversation seems to be cropping up again, right? It usually comes back to pretty simple things, right? Carl, I'm afraid we're in a bubble. This is all I've got for retirement or I'm hoping to retire really soon. I don't want to blow up, right? This is often a retiree or near retiree conversation. So Carl, I'm afraid we're in a bubble. I think we need to go to cash.

Carl: Yeah, yeah. Yeah. Let's talk about this because it's so interesting. I just heard a clip from "My First Million," which is not an insignificant podcast. People listen to this podcast, right? "My First Million." And Howard Marks, who is one of my favorite investor philosopher people on the planet...

Michael: Yes. His notes are brilliant.

Carl: Yeah. Super clear thinker. And he pointed out this research that we see touted around every once in a while. It comes back, which is just a scattergram of P.E. ratios and forward-looking returns. What's the return ten years from today based on the P.E. ratio of today? So it's basically an entry point chart. And at current P.E. levels, over 23, 100% of the time, which isn't a huge sample size. So we can argue about all that stuff, right? A hundred percent of the time, it's between negative two and two.

Michael: Over what time period?

Carl: The forward ten. If I buy the S&P today at this valuation, 100% of the time, my return is going to be between negative two and two. Because we all know sequencing risk and when you buy matters and all that stuff. Now, here's the thing. The only reason I even bring this up is because I'm curious about two things that we can talk about, specifically how to talk about this. But I'm also very curious about the feeling we have as planners, advisors, investment-focused advisors. The feeling we have when people bring this data up to us, because there's a tendency, I've noticed in myself, there's a tendency to either be slightly cavalier about it, like, hey, we have a diversified portfolio. Market timing is dumb. I have that chart, fear, greed, repeat until broke.

Michael: You've literally drawn that chart. Yes.

Carl: Yeah. We call it the big mistake, right? All of these things.

Michael: I hear you once wrote a book about how investors sometimes buy and sell at the wrong time. It creates this, I think you call it a gap in returns due to their behavior in situations like this.

Carl: Yeah. And I think that kind of research and data, I think behavioral finance literature has led to it. It's led to it. And I've had this sense probably 15 years, a sense of smugness, sort of anytime you're scared or nervous or worried, you're acting inappropriately. And look at this silly little human's behavior.

Michael: You're dumb, wrong, irrational. Oh my gosh, let's have this conversation again.

Carl: Yeah, yeah, yeah, exactly that. That's the first thing I want to just point out. It would be a very interesting exercise for everybody who's listening. These are pieces of data. Whatever S&Ps – go look, whatever P is at – forward-looking returns at that entry point P.E. are typically low. Nvidia makes up... Pick your piece of data that's in the news. These aren't stories, they aren't myths. Pick your piece of data. And then just practice, do you have a calm, intellectually defensible way of talking about how you're going to respond vis-a-vis the portfolio design, right? Like, yes, I'm aware of that piece of data, Mr. and Mrs. Client, and here is how it's been taken into account. Here is why we're still going to do X. Whatever X is for you. X might be stay the course. X might be go to cash. I don't know what your X is, and I don't really think it serves a purpose to debate that here. It's just, do you have an articulated investment strategy that you can calmly walk a client through? Instead of feeling annoyed, threatened, right?

Michael: Can I be both?

Carl: Yeah, in fact, you totally can and probably are. So when you feel annoyed, threatened, bothered, noticing the feeling and then realizing, wait, this is a human. These are things they're hearing from reputable sources and/or the Financial Pornography Network and their friends. They're concerned. Guess what? They thought about it for a long time before they called you, I promise. And we can talk about the scary markets conversation in a minute. They thought about it for a long time. They're calling you, do you have a way? Can you articulate why your investment process is something I should stick to given this current market environment? That's a fun exercise.

Neutralizing Market Noise By Reminding Clients Of Process And Purpose [16:00]

Carl: So I'd move from, I think of it as a pyramid. I'd take them from the top of the pyramid, which is product and noise and markets. And I'm trying to take them down to the bottom of the pyramid, which is in my version, it's purpose. I don't care what you call it. Purpose, values, whatever. Then you move up goals. Based on that, you wanted to do this, this, this, and this. Do we still have that right? Has any of that changed? No. And then we move up from, I call that plan, purpose plan. And we move up to process. And here, I'm thinking specifically investment process. Do you remember based on those goals? So you're trying to remind them, this should not...

Michael: Take me through these. Don't skip through them. Take me through them. I need my refresher.

Carl: Plan is basically goals, right? Remember the goals. You want to do this, this, and this, and we've been saving this, this, and this. You're just going through some of the highlights of the plan. Because remember, you built your investment process. I'm assuming that your investment process is built on top of purpose and goals, right? The reason we designed this portfolio for you this way was to give you the highest likelihood of meeting...actualizing this purpose and these goals with the least amount of risk. So they're directly linked. And so now we move into that process of, okay, based on those goals, remember we designed this portfolio. Let's just say 60, 40 portfolio to help you meet those goals. And we thought very carefully about every piece of it. Each piece of this portfolio is intentionally put there. And we evaluate it on its own merits, of course, but equally as important, its contribution to the whole. Its interaction with the other pieces.

And you might remember 20 years ago when we first started working together, we had 80% in equities, stuff that grows a lot. And we only had 20% in what we call fixed income, stuff that doesn't move a lot. You could maybe call it safer. Now we have 60% of your money's in... So over time, we've been adjusting that. So this was very intentional because as we get closer to your goals. So you're just describing like, you know what that... I was going to use the hell word, but I won't. You know what you're doing. And by the way... So remember, each piece of this portfolio is there for a specific purpose. And the interaction and the interplay is very important to them in correlations, standard deviations, volatility, all that stuff's going into this mix.

And so then you're sort of saying, look, the fact that things are scary, it doesn't surprise me that we're having another scary market. Now I want to be clear, Michael, it surprises me that we're having it now. And the reason we're having it surprises me. I had no idea. Or else, we might've done something different if we'd known. But the portfolio was designed... And there's a lot more interaction here that's normally, but we're moving a little fast. The portfolio was designed with the weighty evidence of history. That's how we designed it. Embedded in the weighty evidence of history are some very scary markets. They almost sound...sometimes they sound quaint when we look back at them, but 2007, 2008, 2009 was very scary.

Michael: Yes.

Carl: 1999, 2000, 2001, 2002, very scary. And then there's been little emerging markets, and our relationship goes all the way back to Y2K, which sounds like a joke now, but we were very scared. Guess what?

Michael: Yes. We thought when the ball dropped on New Year's, everything was going to go dark in the giant global blackout.

Carl: So all that data was embedded in the data we use to craft your portfolio. So we know there will be scary markets. We have no idea when or why, but we know there'll be scary markets. And the only reasonable assumption that we can make is that they all start for different reasons. So, this time is different, actually, but they all... The only reasonable assumption we can make is that they all end. And that in that way, this time is not different. That's the only reasonable assumption we can make. Now I've had a couple of times where I've had to go in, like really go deep on that, which would be, okay, let's assume it is going to end different. This is the end of the world. What would be the appropriate portfolio? Well, probably guns and butter.

Michael: Yeah. I would note the...for better or worse, this to me feels...it feels more like 2000 than 2008. I mean, 2008 was like, I don't know if the monetary system is going to exist. It's like major Wall Street firms are coming down one a week. And I feel like for a lot of us, there was a, okay, I'm telling my clients to stay the course. I pray for the love of all that I'm actually right. Because otherwise, all the money is going to be gone, but I guess everybody's money is going to be gone. So we're back to guns and butter again.

Carl: I remember that feeling a lot. Yeah.

Michael: 2000 was different. The world wasn't imploding. Business still moves forward. Ultimately, the economy grows, but it really sucked to ride the stock market down 30 plus percent. It was a lot worse to ride the NASDAQ down. It was 50%, 60%, 80% in stocks.

Carl: 80%. Yeah.

Michael: Why do we need to own that? Why can't we just hang out in cash and bonds. Or heck, if you're saying, no, no, we own the diversified portfolio that's merely going to do between, oh, is it plus two and minus two? Okay. I can still buy a treasury for four on a ten-year that I just hold until it matures.

Carl: No, Michael, I hear you. And I think the '99-2000 is sort of an interesting case. In that process, investment process part, and this, to me, I think there's a little bit of fear. I'm a little concerned at some of the conversations I've been having lately about sometimes I feel like we can take some shortcuts on the investment management side because it's been pretty automated for so long that we may not know enough about what's going on that we're feel comfortable. I think back when we had to handcraft these portfolios, we kind of knew a little bit more of the interaction, but here we can say, look, you're right. The S&P 500 is expensive historically, right? But small-cap value, which... Okay. We'll dig into the process a bit.

Carl: So in that sliver of the triangle, purpose, plan, process, product. In the process piece, my old process would have been something really simple, like equally divided. And again, please don't debate this with me. Let's just use it as an example. Equally divided between large cap growth, large cap value, small cap growth, small cap value, international emerging markets, and real estate, right? On the equity side. And so we can say, Michael, you remember, small-cap value actually did okay.

Michael: Yeah, quite well after suffering through most of the late 1990s, but yes.

Carl: Yeah, no, you're exactly right. And we had actively been rebalancing into it all those late 1990s, remember? And that was no fun. We both had to kind of plug our nose and sell our large-cap growth stuff. And in fact, I can even remember...

Michael: Everyone thought you were nuts that you were rebalancing from large-cap growth to small-cap value and not buying more of the Munder NetNet fund.

Carl: And Elias Premier Growth, right? And we were moving money into Davis New York Venture, large cap value that only did 17 instead of 54. I remember we both sort of plugged our nose and did that. And so now you look now at the same sort of strategy that we're employing. Emerging markets are cheap relative to the S&P 500. And so we are...in fact, I can walk you through...

Michael: Okay, why don't we just get out of the AI bubble and put our money there, Carl?

Carl: Yeah. I think that's actually a really challenging question to answer, Michael. So thanks for bringing it up. The reason we don't do that is because the market... The reason we don't do that is because getting specific about timing leads to trouble. And so rather than trying to make wholesale changes, we've just found over the last 25 years, and I could go back even further, that just being disciplined in our rebalancing is the right way to deal with the... is the right way to prevent this from making a big mistake. So rebalancing is actually forcing us to sell high and buy relatively low in all these different places. And we're not just doing it in the equity piece. Remember, we're also... Your overall allocation was 60% in stocks. You're now at 63%. We're going to sell 3% of that. We're going to rebalance.

There's a way to have an intellectually defensible conversation. The way I always – and I'm still having these conversations with people – the way I always concluded these conversations was, listen, the way we manage money... And I feel like in order to have the conversations that you and I had to have in 2008, you had to feel this way. You had to say, you could look under every rock for the last 17 years, and you wouldn't find anything better than this. There's no repeatable process. There's nothing about what we do that I would be intellectually embarrassed for you to find. We've thought through it.

And having said all that, it reminds me a lot of what Winston Churchill said about democracy. It's the worst form of government ever created by the mind of man, except for all the others. And I feel that way about the way we invest. It's the worst way to invest except for all the others. And the reason it's the worst is we still can't get rid of this systematic risk. And that systematic risk is what drives our returns because we could get rid of it. We could just sit in cash.

How To Respond When Clients Want To Pull Out Of The Market [27:48]

Carl: So now if I got pushed on the, okay, great, why don't we just go to cash till this whole thing settles? Then we go down the whole conversation of that's a two-decision process. And maybe you'll get the first.

Michael: Take me down that conversation.

Carl: Yeah. So, okay. And I've only had to do this three times in 25 years. And I can remember exactly the one time. Yeah, I won't use their names because they're unique names, but get me out.

Michael: We'll call it Mork and Mindy.

Carl: Yeah. Morgan and Mindy were like, okay, cute story. That whole...this thing we just went through that took 45 minutes in real life. They were like, cute story, Carl. I get it. I totally understand it. I don't care. Get me out. And so I used to think of this as like the last...the kind of the last-ditch effort. And I would just say, okay, I hear you. Before we do that, I don't like to enter into a game without knowing the rules or a plan or a sort of an investment process without having a plan. When are we going to get back in? And so I would just say, let's have a conversation. You use the words, get me out till the dust settles. Cool. Let's put some framework around that. When would the dust feel settled? I mean, actually, I'm going to ask you that, Michael. When would you know...? What would be going on in the news when the dust is settled?

Michael: Cool. All right. Well, now that's the uncomfortable question to me that I want to answer. Oh, no, just the market's probably already gone down a bunch.

Carl: No, no, forget the markets. What would the news be? What would be going on in the news? What would the news be?

Michael: Well, I guess we're back in growth mode. We're past the decline and the bad stuff, whatever the...

Carl: So the news would be good?

Michael: Yeah, at that point.

Carl: The news would be good. How would your neighbors feel? What would the conversation at the cocktail party be?

Michael: Ooh.

Carl: Or the barbecue?

Michael: Hard, uncomfortable questions. I guess we're past it, right?

Carl: Well, and realize we're at the last hit. Yeah. And realize these are very uncomfortable. This can be slightly confrontational, and you already tried all the other things, right? So at this point you're saying...

Michael: Yeah. Well, I guess which is part of the point because this is a little confrontational, right? So, depending on my client, they're either going to be a little bit of reflective now and try to answer these hard questions, or they're going to get cranky that you're asking them hard questions.

Carl: Yeah. So here your options are either A, sell them out into cash and send the money somewhere, right? Or B...

Michael: I may as well kind of push this...escalate. I was going to say confront. That feels a little bit harsh.

Carl: I just think it's hard questions.

Michael: It's a little bit confrontational.

Carl: Yeah. Well, I think it's intellectually. I wouldn't have a problem saying, do I have permission to be professionally candid? Or you may fire me for what I'm about to say, but you should definitely fire me if we don't have this conversation. Okay. When the dust settles, what would it look like? And then I'd get them to describe it. And they normally say things. I remember having this conversation two or three times. The news would be better. My friends would be happier. The guys at the club would be talking about their investments again. And then the final question, which is...

Michael: The bad things would be in the past, and we wouldn't be talking about them anymore.

Carl: Then you say, which is again, you're only doing this because you love them and you're trying to make a difference and you are convinced that you're right about this, that if they make this mistake, they will regret it. Now, if any of those things are not true, then don't have this conversation. But if those things are true, then you can say at the end of that, hey, I don't mean to be sarcastic in any way or confrontational in any way. But if those things are true, the news is good. Your buddies at the club are talking, where do you think the market will be? Higher or lower?

Michael: Well, higher.

Carl: Okay. So you're asking me to enter into a plan. And again, this is like...

Michael: Oh, higher, higher, because what you're pushing them for is if this is where the market is now, when all the scary stuff is happening that you're talking about, if all of that is removed, does that mean the market's literally already more expensive than it is now? Wouldn't it have to be?

Carl: Yeah. And the time I was having this conversation, things had already gotten ugly. So it was truly scary. We're having an anticipatory scary market conversation here. The market hasn't gone down. So that's a little bit more challenging. But I think the point here, the way I would soften this a bit right now...

Michael: That's a good build up that what you're trying to get them to is to say, well, I guess if all the scary stuff is gone and we're past, the market must be higher than it is now when all the scary stuff hasn't happened. When the market is under the weight of all the scary news and stuff.

Carl: Yeah. And these specific clients were like, yeah, yeah, I totally see your point. And they didn't. And I said, I want you to pretend for your emotional sake that... You can do whatever you want. Pretend we went to cash. Because the conclusion of this conversation is, and I always phrase it this way, hey, if it's okay with you, based on everything we've talked about, I'd feel totally fine with just staying the course. Allowing them to participate in that decision. And again, I'm assuming that you believe this to be true. If you don't believe it to be true, it's a totally different discussion. And I think you can soften this a bit by saying, gosh, let's talk about when the dust settles. Like, okay, great. What do you think?

And then I think you could say, you know what, John, in those circumstances you just painted – Mork or Mindy, whatever your name is – I don't know where the market would be either. I don't know if it'd be higher or lower given where we are today. And that's why we don't make these kinds of bets because sometimes you think getting out and in cash relieves the stress. I found it's often you jump out of the pan and into the fire because now you have to make a very stressful decision. When are you going to get...? Unless it's a permanent decision. If it's a permanent decision, you're done forever. We're just going to ladder CDs. Maybe now's a great time to do that. It hasn't gone down yet, but I don't know if the markets are having another great four or five-year run, your buddies are talking about it. At least if you're like me, you're probably going to be feeling like you're missing out again. And then we're going to sell and we would have missed the two or three-year run. Ask people who sold in 2008 how the next three years felt. More or less stressful? Like, way more stressful@ Gosh, it was up to me... if you were gone and unreachable for the next five years, I wouldn't have a problem with suggesting we just stay exactly the course with some really disciplined rebalancing.

Talking Clients Through Market Fears As A Financial Advisor [29:38]

Michael: Well, I'd like to go there if we can. Help me communicate this. Look, I don't want to get too far into all the different ways that we can implement our investment process and philosophy, but I'm going to assume for almost all of us that are listening, our answer is not, yup, we already took you to cash. It's going to be some version of stay the course entirely, stay the course mostly, stay the course, but we're also doing these things, but mostly stay the course. I'm assuming we need to have some version of a "stay the course" conversation.

Carl: Just for the sake of, I'm going to just pretend I'm the old version of myself, and I'll walk you through that portfolio. And I'm not saying this is right or wrong. Please, these are so hard because I don't want anybody to miss the point, because they want to argue about any of the data. We're just an exercise here and for the exercise, we're going to pick this portfolio. So let's just go through scary markets conversation process first. Number one, I assume we have to make an underlying assumption that you already have something akin to a statement of financial purpose. You have a state...you have a financial plan, right, or an investment policy statement, something that serves as an anchor or a touchstone when people are feeling crazy, right? Because you've got to have a bigger yes. Because what you're asking people to do here is say no to something that feels existential. You're asking them to say no to behavior that feels life-threatening. And the only way to get them to say no is going to have to be linking them to the bigger yes.

So I think the bigger yes is a statement of some sort of values, purpose, goals, some combination of those, right? I obviously have an opinion about that, but something to draw them back to the thing...to the bigger yes, right? Why did we do this in the first place? Okay. That assumption aside. They call. This could also be in a meeting where you get a little...you kind of might be expecting it, but let's just say you get a little bit blindsided by it. It's just an update meeting, and you're going to go through the normal agenda and they sit down, they're clearly a bit bothered. It takes a few minutes, or they call you on the phone, and they say, "Geez, have you seen what's going on? This is crazy. The S&P 500 this, the S&P 500 this, I read in the thing. The seven stocks make up 38%. What are we doing?" Okay. That's now been stated. I think step number one is you greet that with empathy. To me, that's the...

Michael: So what am I saying?

Carl: In my mind, you have to say something true, and you have to find some way to be empathetic with it. And if I am ignoring the news, which is what I would typically do right now, I can say something that's true by saying, you know what, John and Sally, if I watch the news right now, I get... I hear you. I get nervous, too, if I watch the news right now. Yeah, there's a lot going on, right? So far I haven't said anything, A, a lie or B, something that I'm not... But I am empathetic to that. In fact, the other day, my daughter, who's in med school, brought it up to me, right? So I can empathize with the idea of being scared.

Then step number two, so we can move a little faster because we've been through this before, but step number two in my world, I call it the please hold method. So there's a little statement of empathy. Michael, thanks for calling. I hear you. It sounds like you're nervous and worried about what's going on in the markets. To be honest, when I hear some things about it, sometimes, like the other day at the gym, somebody had the TV on, and I heard it. Yeah, I get a little nervous too when I hear the news. I move into please hold. Hey, before we dive into it, I want to get into this, can I go grab your file? Can you just hold a second while I grab your file? If in person, I can say, hey, you know what? I forgot something. Or there's some notes that I need for this. I didn't realize we were going to have this conversation today. There's some notes I need. Okay. The purpose of the please hold method is to create some space between the stimulus and the response. They just did a really hard thing. They're in full flight or fight, right? They've been thinking about it for a couple of weeks and to give you a little space, just a little space. Okay. I know it's already up on your screen. You don't really need to...

Michael: Can I do this in a Zoom environment?

Carl: Yeah. I was just saying, hey, give me a second. I'm going to grab something. I just turned my camera off. And again, it could just be... And some really forward-thinking advisors will literally say, "Hey, you know, totally get it before we dive in" -- and they'll just call it out -- "I found it valuable to sort of like, let's just kind of reset for a second, right?" I've seen advisors do that. "In fact, I'm going to grab some tea. Would you like some?" So there's all sorts of versions of just buy yourself and them a little bit of space. Okay. Please hold.

Then the third version of it is connect them back to remind them of why you did this in the first place. Okay. Michael, I've got your file here before we dive into that. Because believe me, it's important to me too. I just want to make sure we're on the same page. When we first started working and pretty much every year for the last 12 years that we've been working together, we've reviewed this. Is it still true that your number one reason for money is time with your family, mainly outside, and serving your communities? Do I still have that right? And again, we're going to get there. And I keep reminding, because I don't want them to feel, "What does this have to do with my problem?" So, yeah. And you might even need to say, look... And what we actually decide to do here will depend on making sure we're on the same page, right?

Iterating To Better 'Scary' Conversations [35:16]

Michael: One of the things that always strikes me about these conversations and cycles, I guess, getting back to the comment you made at the beginning, right? A lot of the time, it's hard for us to not get frustrated about the conversation, or conversely, cavalier, or, oh my gosh, why are you asking me?

Carl: Dismissive.

Michael: Yeah. I joined in the midst of the tech crash. And weird stuff was already underway. This hit me more in the financial crisis cycle that it's my zillionth time having the conversation, and it's their first. And primary that, as you noted, they probably built up in their heads for days or weeks sometimes because they know what I'm going to say when they call. So they have to be pretty freaked out to actually call and push the conversation anyways when they know a stay the course conversation is coming. It was really hard for me to be as fresh and present the 17th time of having the same freaking conversation with the same points. Oh my gosh, I'm saying this over and over again. It's getting a little tiring and frustrating because it's a repeat conversation for me, but not for them. That, at least for me, I started making it into a little, let's say, game that I don't mean to trivialize it that way, but like, okay, that conversation went okay, but not great. All right. Next time the next client calls, I'm going to try this part a little bit differently.

I made that point three times about... I mean, back then, the stability of the financial system and how SIPC insurance works for brokerage accounts. I'm going to make a little graphic for that. So I've got a thing to pull out because I'm tired of trying to draw it with my hands or on a yellow pad, and just started coming to it as kind of the, I guess I'll say the game. Again, I don't want to trivialize the weight of this. Like okay, I'm going to be doing this 10, 15, 20 times or more because not every client's scared, but a lot are when things get scary. Like okay, I'm just doing good. Try to get incrementally better at this conversation every time. So, is there a new chart? Is there a new graphic? Now there's all sorts of tool. I can get Clearnomics or Exhibit A or YCharts, all these tools now that can give me more visuals and deliverables, even to put in front of clients to help with these conversations. The 2008 cycle, I feel like we had to make a lot of things in PowerPoint. There's more tools now, but they just recognize, okay, if it's the first scary conversation for them, and it's mine over and over and over again, if I'm going to not get bored with this or frustrated with the repetition of this, I need to try to find a way to make each one a little bit better.

Carl: Yeah, it's a really, really important point. And I just think to me... And by the way, I think this is a really hard job, this particular piece. This is what it means.

Michael: This is why we get paid the good bucks in the other eight of every ten years.

Carl: Yeah. This is what it means to deal with risk and to some level uncertainty. But I think that to me, a deep sense of compassion and love is actually the answer. I'm just trying to help somebody who's feeling nervous and scared and is having a natural response to that fear. That natural response is do something, and they're calling me. And I think that please hold method could be a little bit of your opportunity even for five seconds to go, oh yeah, that's right. I love that reminder of yours. This is the first time they're having this conversation with me, not the hundredth for me. And I need to treat this as if it's the most important conversation of the day. And can I leave these people feeling a little bit more safe, a little more secure.

And sometimes that means, you know what, pre-scary market, like we're talking about right now. Maybe we say, you know what, geez, it wouldn't hurt us to go to 55 from 60. There's plenty of room around the edges to...if the goal is to a lifetime...

Michael: To just adjust a bit or something.

Carl: Yeah, a lifetime of happy returns client versus losing a small battle. I think there's plenty of room on behalf of the client. So, yeah, I love that. And I hope that this isn't even something people are talking about, but I can't imagine given kind of the way it's in the news for us right now.

Michael: Awesome. Well, thank you, Carl. Thank you for walking us through the scary market conversation again.

Carl: Again, again, hasn't changed.

Michael: I need my refresher every 36 months. Stuff crops up.

Carl: Me too. So fun. Thanks, Michael.

Michael: Awesome. Thank you.