Are We in a Recession? Separating the Headlines From History

Recession fears make for scary headlines, but how worried should you actually be? In this listener-question episode, Ryan tackles whether the economy is in a recession and how today's picture differs from the 2008 financial crisis.

He and Aaron put the current worry in historical context, explaining what a recession really is, why this moment looks different from 2008, and why a long-term investor does not need to react to every alarming headline. Calm and grounded, this is a follow-up to their earlier talk on market crashes, and the message is steady: zoom out, stick to your plan, and focus on what you can control.

Find "Your Fiscal Physical" the book on Amazon

If you have suggestions or feedback, please email us at: Podcast@AlchemyWealth.com

And, as always, Stay the Course!

Transcript

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Welcome And Listener Question Setup

SPEAKER_01 0:01

Welcome to the Fiscal Physical Podcast. Jonathan State Tweet is Mr. Town with the founder of Alchemy Wealth Management and author of your Festival Festival, Ryan Nelson. Tune in to gain valuable insights and practical tips as we simplify complex financial concepts into digestible lessons. From budgeting to retirement planning, this podcast is your go-to resource for mastering financial literacy.

Aaron Hoisington 0:33

Welcome everybody. This week's episode of the Fiscal Physical Podcast. My name is Aaron. I am here with uh Ryan Nelson, founder of Alchemy Wealth Management, published author. He's got all sorts of accolades. You guys know the drill here. If you've been a longtime listener, or maybe it's your first time, if so, welcome in. But uh first off, Ryan, how are you doing today? I'm doing well. How are you doing? Not too bad, man. Not too bad. I'm excited to be here, excited to dive into this episode we got this week. And uh uh it's it's one of my favorite kind of episodes here that we have some listener engagement. Absolutely. That uh that fire you up as much as it fires me up. Oh, yeah, I love these questions. Oh yeah, these are always fun to see. It's it's interesting to see like what our listeners have gotten from it, what they continue to get from it, and what questions that individuals just have in general. So, how this is gonna work, you guys are probably familiar with this. I'm gonna go ahead and uh we're gonna pause and you're gonna hear the uh the question on your end, so everybody can listen to the melodious voice of a gentleman by the name of Sander, and then we'll come back and uh break it down. Does that work for you, Ryan? Let's do it. All right, everybody hang tight.

A Listener Asks About Recessions

SPEAKER_00 1:37

Hey Ryan and Aaron, awesome job on the podcast, boys. Weekly listener. Definitely love all the information and topics you guys talk about every week. I want to submit this question for you boys. So I've been seeing a lot of trends and talking points about we are heading to recession. We are in a recession. So we're trying to figure out well, my big question is what's the difference between the 2008 recession versus the 2026 recession? So it sounds like it well, in the 2008 recession, it was related to the housing market, but I'm still trying to figure out what the 2026 recession is all about. I'm just seeing it, and and it's funny because I got a haircut this past week, and my barber said like he kind of noticed there's not a lot of people are coming to his barber shop, and it just seems like a lot of people are saving their money at this point. So I just wanted your thoughts on that. Awesome, thank you, and stay the course.

Perception Versus Market Reality

Aaron Hoisington 2:44

All right, thank you so much, Sand. And I really want to, really, really do want to thank all the listeners who tune in and also send us these questions. If you guys are interested in getting your question live on air, please let us know. We're gonna be we we almost love to find different topics and seek different things on uh what you guys want to know. So uh Ryan, so uh it's interesting, this this kind of topic of of recession. We've we've covered it in uh in different podcasts previously, you know, looking back on our different episodes. I think we covered it a little bit in episode 67, episode 110, but I think it's a good one to uh to cover of where we're at right now. So what what are your thoughts on this, my man? Like what what do you think when when people say recession, you know, uh the news might say it, but does it does it mean that everything's gonna crash or what what's going on?

Ryan Nelson 3:28

Yeah, so funny enough, the the so we both personally know Sander, of course, right? Yep. And uh so since he's uh a a good friend of both of ours, I'll I've I feel obligated to uh bust his chops a little bit. Sure, sure, sure, drag drag him a little. Yeah, yeah, of course. And so the funny thing is, so the the day we received this list this listener question, I pulled up, uh, you know, I was like, uh I feel like the market's doing okay. But so I pull up the stock market. How do you think the stock market was doing that day? I'm guessing it it's crushing it that day. Yeah, it was at all-time highs. Oh time highs. It literally hit all-time highs that day. So what's kind of funny is it and one thing I think I want to call out before we dive into this episode about recessions, but there often is this disconnect between perception and reality. So Sanders' not alone here. He he mentioned he was talking to his barber, and there's you know, probably multiple people involved in this conversation, all discussing the same few the same topic, having the same feelings, feeling, and actually believing that we are in a recession when the actual facts are we are not at that point in time and at the time point of this recording, we were not in a recession. Right. And so what's kind of interesting is again, there's this perception of what's going on in the market, and then this reality of what's going on in the market, and those things are not always exactly aligned. So I find that kind of just interesting. That's that's funny. I'm sure Sandal will get a kick out of that too. He's a good sport. Oh, absolutely. Yeah, he he he exactly. But so anyway, so let's let's again, so I I would argue at this exact point in time, as we're recording this episode, and as we got the the listener question, we are not in a recession. That being said, recessions are normal, so we will be in a recession at some point in the future. So let's talk about what in a recession is.

The Real Definition Of Recession

Ryan Nelson 5:03

So a recession is when the economy shrinks two quarters in a row. So typically, well, well, I will say it so it is a definition. The definition is it shrinking two quarters in a row. So it's not just a feeling, right? You don't, you know, I I know he mentioned that his barber felt like there were less clients coming in the door. That is not a recession. The the fact, if you look at our GDP, how that is doing over the course of the last few quarters, that is how a defection recession is defined. So there's an organization out there called the National Bureau of Economic Research, so it's always abbreviated NBE N B E R. They are who makes the call if we're in a recession or not. Okay. And again, it's typically if the economy has shrunk the last two quarters in a row, and they often make that call months later. But again, my point, recessions are normal. We have many of them, we've recovered from all of them. And again, the fact that when we got this listener question, we were at market highs, you can imagine we've had many, many, many recessions in the past. If we were at market highs at this point in time, that means we must have recovered from every single past recession, right? So kind of interesting. But yeah, so it and if we think about how often we have these, so since World War II, we've on average had a recession about every six years. So that gives you an idea of how frequent they are. About every six years we'll have a recession, statistically speaking, sure. Um, in the past.

Aaron Hoisington 6:24

Yeah, that that makes sense. And in something that Sander had mentioned there, and it seems like a common thing of I mean, I'm curious to get your breakdown on it, of why people always jump to 2008 when they when they think of recessions like that. Seems to just be the hot button topic. I don't know. I know I know Sanders around my age too, so we were like 18, 19, 17, somewhere in there at that point. So I don't know if that was like our first like experience with the economy, or what why do you think most people jump to that to compare it?

Why 2008 Still Sets The Tone

Ryan Nelson 6:50

Yeah, I mean, well, they do they a lot of people call it the Great Recession, so it was more extreme than most. There's other recessions that you know, you'll have two quarters of shrinking GDP, it bounces, you know, maybe it's not that severe of shrinking, and it bounces right back the next quarter, and you forget about something like that a lot faster than uh a recession that takes multiple, multiple quarters and is much deeper, right? So not all recessions are created equal, and the 2008 or the Great Recession, as some people refer to it, was more severe. That being said, so the 2008 was a banking and housing collapse. So there was a specific cause for that recess for that recession. And now in response, I should say, to that recession, there's been a lot more regulatory oversight. So banks have put more steps into place to try to make sure and avoid, if at all possible, that happening again. Sure. Right. So there's a lot of now steps in place for that exact same type of recession. It'd be harder for that to happen again. Anything's possible, but one of the the sayings I love is that like history doesn't repeat itself, but it does rhyme. I think that was a Mark Twain or somebody. I think it was Mark Twain. All right, I'll look that up. Yeah, check, check, trust my verify. Somebody said it. Somebody said it. Yeah, if nobody said it, let's just go ahead and credit it to me. Absolutely. Uh but so history doesn't repeat itself, right? But it does rhyme. So each of these recessions, you know, there will be another one in the future and another one after that, and another one after that. And a lot of times they feel the same. They're not necessarily the same, but a lot of times the feeling is the same, right? And so that's why I think a lot of people gravitate back towards the the most severe one in their recent recollection, which would be 2008. So I think that's why a lot of people come back to 2008. No, that makes sense.

Aaron Hoisington 8:32

I mean, it you can only you you go on based on like what you you know what you know, or you feel what you feel. So it's like, you know, something that maybe happened in the 1990s, psh, I have no idea about, but like I think about something that happened in 2008. I still think about that. I was in high school, so I'm like, oh, I know people who like lost their houses or these certain things that went through that. So it kind of sticks and holds that impact. So yeah, it's interesting about uh to think about that. Um but with that in in in in mind, if we're in a recession or we're not in a recession, what what do you tell somebody, I guess, when you have a client who comes in and and says, Oh, you know, I see my balances are been dipping for two straight quarters or three straight quarters or what it is, like um, how do you how do you help them balance that, I suppose?

Coaching Clients Through Market Drops

Ryan Nelson 9:13

Yeah, so if a client reaches out and they're concerned about their portfolio being down, let's say. So first, like if a client were to reach out right now and they were concerned about the recession, it's really just an education topic, right? It's it's informing them that we're actually not in a recession and that this disconnect exists between sort of the perception of what's going on and the reality of what's going on. And you know, it's maybe an evil game I play, but a lot of times when a client calls in and has a question like that or something, I'll tell I'll just ask them, like, you know, how much do you think your account's down like year to date? And it's funny because a lot of times they'll say 10%, 15% or something. And then in a scenario like this, their account might be up 10%. Right. And so it's like their perception is their account was down 10 or 15%. And then when I tell them, no, your account's actually up 10% this year, it's like, oh wow, okay. The data's telling a very different story than I thought, which is kind of interesting because it's like, why, how, how is that possible? How could their how could they believe their account is down when the actual objective truth is their account is up? And the reality is like like news sells fear, right? Fear sells and negativity sells. And so when you think about the news outlets, like they're financially incentivized to put more negative news and fear out than positive news. And so, you know, in general, most of us we're consuming more negative news, even if the market tends to be up, you're consuming more negative news that informs your belief system, and all of a sudden you start believing that, oh, the market must be down, when sometimes the objective reality is just the opposite of that. So oftentimes it's just an education thing. If somebody were to call in now, again, I would just walk them through the sort of education of like the reality of what's going on in the market. Now, that being said, there will be a recession again at some point in the future. So it is possible that their accounts are down 20% and they call in, right? If they if it that would take a completely different response. That we we would recognize the fact that the market's down and we would also let them know that we've planned for this, right? Like if we have a comprehensive financial plan, we know that this is typical. We mentioned earlier that we think this, or like historically speaking, this has happened about every six years. We're not building a plan thinking that this is never gonna happen in the future. Like we, we, you know, air quotes, we quote unquote know that this will happen again in the future. And so we're planning for it to happen. So when it does happen, it's completely fine. It's still part of our plan. We're still on track for our retirements, and oftentimes we re-level set, reframing the conversation around are we on track for our goals? Most of the time when we see like our portfolio down 10% or down 20%, that hurts us, right? Emotionally, that's painful. But why is it painful? Like if we dig deeper, it's like, oh, because we think it means we won't be able to retire or we'll run out of money or we'll have to work longer. And so when we can reset and and actually, if our goal is actually to retire at a certain age or stay retired or spend X amount of money, and we can reframe it and say, Okay, your account's down 10%, and we're still able to achieve your retirement goals, then it starts to like give us that freedom to stay the course, right? Take a step back, take a deep breath and and stay steady. So yeah, that's what I'd walk through, walk a client through.

Aaron Hoisington 12:15

I think that's important too, because uh you're a big proponent of like you mentioned, stay the course and and having these plans. Nobody knows what's gonna come tomorrow or whatever, and and but it's like being prepared for these certain situations. And I think you've mentioned it before, maybe I have, I can't remember, but it's like control what you can control. Yeah, I think that's a big piece of like uh like okay, like I can't personally control what the market's gonna do tomorrow, but what I can control is being on top of my, you know, the the the financial planning piece of it too, you know, maybe I'm 63 about to retire. Do I want to have you know 90% in like volatile stocks at that point, or should I have like the the more of the lifeboats at that point and be kind of coasting home, like you know, more safer investments? I think it's important to to balance that like panic with like control. I think it's like it's almost an interesting kind of kind of like you mentioned, but you've mentioned many a time, spreadsheet answer, real life answer. And I think your job and one you do very well is like bridging that gap between like, hey, this is what the it says, this is what you're feeling, totally valid. But you know, how do we prepared for that? And I think that's a big thing with whether you're with Alchemy Wealth Management or a different financial institution, like ensuring that that's done is just gonna make you help you sleep at night a little bit better versus like these during these. I'm quoting right now, recession that's according to Sander. Thank you. Yeah, exactly.

Ryan Nelson 13:31

But yeah, so overall I'd say, yeah, recessions are normal, they're survivable. It itself is not really a big process, it's just part of it, or it's not a big issue, it's just part of the normal process. Today is not 2008, and I would say, as always, you know, stay the course and just ignore the noise even through recessions, and you'll be you'll be just fine.

Aaron Hoisington 13:50

Awesome. I appreciate it, Ryan. Thank you so much. We'll go ahead and uh take a pause here. Everybody uh hang tight with us. We'll be right back on the other side of this.

SPEAKER_01 13:57

And now

Favorite Products We Endorse

SPEAKER_01 13:58

to put the personal in personal finance.

Aaron Hoisington 14:04

Welcome back, everybody, to this side of the fiscal physical podcast. This is still Aaron, still here with Ryan. And uh today, Ryan, I got a question for you. You ready?

Ryan Nelson 14:13

Yeah, let's do it.

Aaron Hoisington 14:14

All right, so what is one product or company or something that you would happily endorse? It could be a brand, a gadget, a product, something like that. I'm I'm curious what you what you what you what you find value in when it comes to that.

Ryan Nelson 14:28

Yeah, so there's this training company I got involved with a while back. It's called Tridot. This was like, I don't know, five plus years ago, like before the Chat GPT AI boom. But basically they're like AI for training. Oh, cool. And you know, I've always wanted like, man, when you do a workout, why can't like why can't your this training system, this computer, like kind of analyze that workout and then and then kind of from that workout data identify like, you know, if you're exhausted, if you're healthy, if you're getting faster, if you're getting slower, and then like create new workouts based on that, right? And like way oversimplified, but that's more or less what TriDot could do. So it's a Trath on training platform. They recently lost r launched Rundot, but it's this, it's so it's a fitness training company's Rundot and Tri Dot, and it's helps basically train for endurance events and it uses this AI backbone to do it. So yeah, I've been a huge fanboy of Tri Dot for like five, five years, probably more. But so I I love those. I also love Garmin. I've had a gar I think I've worn a Garmin watch. Like I was trying to think about it. I don't ever it's been like every day for like 10 or 15 years. I don't even know, right? I've had so many of their watches and their customer service. I personally have have always had amazing experiences with their customer service. Like big piece. Yep. Yeah, they they have replaced many watches for me for free, and they've just always been like really, really good and fair to me. So I'm uh those who know me also know that I'm a huge Garmin fanboy as well. So those are maybe my two or two companies that come top to mind that I'm that I love and would be happy to if yeah, I'm always sponsor us. Yeah, yeah, right. And I'm always uh I'm always uh telling people to uh to hop on those bandwagons. What about you?

Aaron Hoisington 16:05

Yeah, it it's it's funny too for the listeners out there. Obviously, this isn't live televised. You're wearing a tri-dot hat right now, too, which is funny. I know. I don't know if that was planned or not when we did this, but I was like, oh, he's got a hat on. For myself, uh you know, I was thinking about there's a lot of products that I like. There's only a few that like if I if I endorse something or or talk about something, like I'm like, I I it has to get me pretty excited, pretty fired up. And uh so one of the things is uh first off, I I've worn the same shoes since I was like 15. Sure. These uh Adidas pretty worn out, huh? Yeah, they're very worn out. I should probably get a new pair. That's why I need a sponsorship. Yeah. Uh but I wear these like Adidas shoes that fit my feet really well. I got pretty narrow feet, and I've tried other shoes and such too, but these these just really fit well, and I'm just very comfortable in them, and I know what I'm gonna get. So huge fan. I literally like every year I'll buy like like every like eight, I get about eight months, eight to nine months a few set of them. So I'll buy like one to two pairs a a year. But this year I actually I normally go with these white ones with the black stripes. I just switched up and got black ones with white stripes. So smart. Yeah, so I'm really branching out here doing some fun stuff. The other one is I got a young kid, I got a two and a half year old, and we've had a couple of car seats with him. There's this one, it's called even flow, and it's like a it's like a car seat you can like it swivels like in so you don't have to like just like weasel your kid into it. You can turn it like at and so it sounds stupid or whatever, but it's a huge So and it rotates 90 degrees so it faces the door when you put the kid in, and you can re-rotate it. I can rotate it the other way too. It rotates like it it goes like a 180, I suppose. 38 or 60. 360, yeah. I don't know if yeah, I think it'll go all the way around, yeah. And so it's kind of cool. So if like your kids get in on the other side of the car, like you can rotate it that way too, or you want to like I don't know, he wants to get out the other side of the car, like you can just make it happen. So it's been a huge game changer. I have like a normal one that's in my car, and then in our other car, our family car, we have that one, and it's just I I recommend it to everybody. It's a little expensive, but I'm like, oh, it's totally worth it. Like you're gonna save your back, and it's just gonna be an even easier, you know, the transition for everybody. So that's awesome. Big proponent of those guys. Probably got other ones that I'm out there too. It's probably probably could get sponsored by a food company somewhere. I do like to eat there. But pizza barren. Pizza Baron. Ooh, now we're talking. Now we're talking. Yeah. But awesome. Appreciate it, Ryan. Thank you so much for sharing.

Closing Thoughts And How To Reach Us

Aaron Hoisington 18:17

Thanks, everybody out there who's listening. Let us know. Weigh in. I'd love to hear what you guys' products, uh, what you like to endorse and use on a daily basis. And hope you guys uh learned something today. And uh these episodes drop every Tuesday morning. Make sure to set your watch to that. And uh with that, Ryan, I'll uh turn it over to you.

Ryan Nelson 18:34

Yeah, thanks again, Stander, for for sending in the question. And as always, stay the course.

SPEAKER_01 18:40

Thank you for joining us for the Fiscal Physical Podcast. Until next time, happy listening. And as always, stay the course. If you have a question or topic suggestions, please email us at podcast at alchemywealth.com. If you enjoyed today's discussion, subscribe to the podcast to ensure you never miss an episode. And consider leaving us a rating and review on your favorite platform. This helps other listeners like you find this channel. For more resources, you can visit Alchemy Wealth Management's website at www.alchemywealth.com or find your physical physical the book on Amazon. We'd be remiss if we didn't mention the personal finances just then. First of all, please don't take anything we say as advised. The printed content is for informational and entertainment purposes only. It's not an offer or a solicitation, nor should it be construed or relied upon for tax, legal, or investment advice. It doesn't consider your personal financial situation or objectives and may not be suitable for you.