The First Stocks We Are Buying In 2025 | Ep. 4

Episode Overview

• The hosts discuss maintaining a long-term investment mindset, framing bear markets as valuable buying opportunities rather than crises to fear.
• The conversation covers specific portfolio construction tactics, including combining broad-market and sector-specific ETFs like VOO and VGT, and weighs the pros and cons of lump-sum versus dollar-cost averaging for annual IRA contributions.
• The episode addresses the significant gap in financial literacy, even among finance professionals, and explores the psychological barriers that prevent people from investing.
• A central theme is the importance of setting clear financial goals and shifting one's perspective from viewing stocks as abstract tickers to seeing them as ownership in real businesses.

Key Concepts

• Bear Market Mindset: Viewing market downturns as opportunities to purchase high-quality companies at a discount, driven by a long-term investment horizon.
• Portfolio Construction: Combining broad-market index funds (VOO) with sector-specific ETFs (VGT) to leverage the outperformance of concentrated high-growth areas like technology.
• IRA Contribution Strategies: A debate between lump-sum investing at the beginning of the year to maximize time in the tax-advantaged account versus dollar-cost averaging (DCA) throughout the year.
• Brokerage Platform Choice: The importance of factors like customer service when selecting a brokerage, with a comparison between full-service firms like Schwab and platforms like Robinhood.
• Financial Literacy Gap: The observation that many individuals, including those working in finance, do not actively invest for their own future due to psychological barriers or a preference for speculative bets.
• Psychological Barriers to Investing: Common obstacles such as the perception that investing is overly complex, daunting, or boring, which prevents many from starting.
• Investor Mindset Shift: The crucial change in perspective from treating stocks as fluctuating ticker symbols to understanding them as ownership stakes in living, breathing companies.
• Goal Setting and Discipline: The role of setting clear, measurable financial goals and developing consistent habits as the foundation for long-term wealth creation.

Quotes

• At 0:47 - "What did I do? I bought. And how do I feel? I feel great." - Joseph explains his reaction to recent market dips at the end of 2024, demonstrating his "buy the dip" philosophy in practice.
• At 1:03 - "How am I going to feel in a strong bear market? I'm going to feel fantastic." - Joseph gives a direct and positive answer about his outlook on a potential bear market, framing it as an opportunity rather than a crisis.
• At 1:21 - "if you're in this game for the long haul, invested in high quality companies, you're in a good position." - Joseph offers this piece of advice to his audience, reinforcing the theme of maintaining a long-term perspective through market volatility.
• At 22:22 - "You're getting a much heavier concentration of some of those...S&P's heavy hitters like the Nvidias and whatever over in VGT, so it makes sense that it would deliver that much outperformance." - Ryan explains why a tech-focused ETF like VGT has outperformed the broader S&P 500 index.
• At 23:25 - "I think that VOO and VGT make a fantastic investment foundation." - Ari expresses his strong approval of combining an S&P 500 index fund with a technology growth fund.
• At 25:57 - "I am a lump summer. I... my first move, the first thing I'm going to be doing is loading up the IRA." - Ari describes his personal strategy of contributing the maximum amount to his IRA at the beginning of the year.
• At 28:02 - "If it's there, I'm probably just going to invest it... I'll be able to benefit from that dividend income immediately." - Ryan weighs the pros and cons of lump-sum investing versus dollar-cost averaging for his IRA.
• At 50:38 - "I don't, you know, my brother works in the world of investing as well... but he actually does not invest in the market." - The speaker expresses his confusion that his brother, who works in investment banking, doesn't personally invest.
• At 51:57 - "Entering 2025, like let's look at where we're investing our money, our time, you know, our energy." - The speaker encourages listeners to use the new year as a chance to reflect on and align their actions with their long-term goals.
• At 54:08 - "Investing is made to be so complicated. It's made to be so complex that not only do people not want to think about it to begin with because it's so boring, but it's also, it can be a bit daunting." - The speaker explains the psychological barriers that prevent many people from getting started with investing.
• At 55:33 - "You don't actually see that this is a living, breathing, hopefully growing company. You're not investing into a ticker symbol." - The speaker stresses the importance of shifting one's mindset from stocks as abstract tickers to understanding them as ownership in real businesses.
• At 59:22 - "Unless you want to be a slave the rest of your life... even when you're, you know, 65, 70, you'll be slaving away, which by the way, I have seen firsthand." - The speaker warns about the consequences of not investing for retirement.
• At 1:02:18 - "People are going to try to look rich and not be rich. I mean, that's what we're talking about right now." - The speaker critiques the common behavior of prioritizing the appearance of wealth over actually building it.

Takeaways

• Adopt a long-term perspective to confidently invest through market cycles, using downturns as opportunities to acquire quality assets at lower prices.
• Consider combining a core S&P 500 ETF (like VOO) with a concentrated growth ETF (like VGT) to create a foundational, growth-oriented portfolio.
• Choose a consistent annual contribution strategy for tax-advantaged accounts, whether lump-summing early to maximize time in the market or dollar-cost averaging to manage risk.
• Shift your mindset from viewing stocks as abstract tickers to seeing them as ownership in real businesses to better align with long-term value creation.
• Overcome the initial hesitation to invest by starting with small, manageable steps and focusing on education to demystify the process.
• Set clear, specific, and measurable financial goals at the start of the year to guide your saving and investing decisions and track your progress.
• Prioritize building genuine wealth through disciplined investing over the appearance of wealth through excessive spending.
• Understand that failing to invest for the future can have severe long-term consequences, potentially forcing you to work far beyond the traditional retirement age.