About this Video

• Video Title: ‘Ride the coaster’: Dave Ramsey shares message of calm amid stock market storm
• Channel: Fox Business
• Speakers: Jackie (host), Dave Ramsey (guest)
• Duration: 00:05:24

Introduction

This Fox Business interview features Dave Ramsey offering advice on navigating stock market volatility. He emphasizes remaining calm and avoiding panic selling during market downturns.

Key Takeaways

• Hold onto investments: Ramsey advises against selling stocks during market dips, emphasizing that losses are only realized upon selling.
• Long-term perspective: He encourages investors to maintain a long-term outlook, citing historical data showing market recovery from previous significant drops.
• Avoid market timing: Ramsey cautions against attempting to time the market, suggesting that most attempts to do so are unsuccessful.
• Consider risk tolerance: While advocating for long-term investment, he acknowledges that those nearing retirement may need to adjust their portfolio risk levels.
• Don't panic: Ramsey repeatedly stresses the importance of staying calm and not making rash decisions based on short-term market fluctuations.

Dave Ramsey uses the following examples to illustrate market recovery after significant drops:

• The 2020 pandemic market drop: The market dropped 34% in two months but fully recovered and yielded a 16% return that year.
• The S&P 500 over the last 25 years: He notes there were 6 down years within that period, but long-term returns were still positive. He cites examples of a 26% rate of return in 2023 and a 23% rate of return in 2024, and a 78% rate of return over the last 5 years including the current time, averaging 15% annually.

Ramsey mentions the VIX (Volatility Index). He explains that when the VIX goes way up, stocks go way down. He notes that three times in the past 35 years, the VIX has spiked significantly: in 2009 (the financial crisis), in the spring of 2020 (the pandemic), and recently (yesterday, at the time of the interview). He suggests that these spikes might represent potential buying opportunities, but he also acknowledges the difficulty of perfectly timing the market bottom.

Dave Ramsey acknowledges that people closer to retirement might be more nervous about market fluctuations. He suggests that at a certain point, those nearing retirement should consider reducing the risk in their portfolio and diversifying into less volatile assets like bonds for greater safety, especially if they are heavily invested in stocks. However, he personally, at age 64, disagrees with this standard financial planning advice and chooses to remain fully invested in the market.