Ep 45. What is Market Breadth & Concentration Risk? Why Should YOU Care?

Jess: You might have seen some headlines that are something like inflation is at all time highs.

Jessie: More and more consumers are tapping into their savings.

Jess: They're living paycheck to paycheck.

Jessie: It seems really hard out there.

Jess: The average person is struggling.

Jessie: And you see headlines that say the stock market's making new all time highs, as in the Dow Jones, the S&P 500.

Jess: They're hitting record highs.

Jessie: And actually, the S&P 500 year to date is up 17 percent, 16.96 percent alone.

Jess: And there is a reason those two headlines can't exist at the same time.

Jessie: And it creates a tale of two markets.

Jess: But you know what I'm talking about? Yes, I do.

Jessie: I need an explanation of this, because on TikTok and in my life and all over social media, I see the struggles like they're real paycheck to paycheck.

Jess: Right.

Jessie: But the stock market and like my personal S&P investments are continually getting higher.

Jess: I think I checked my account and it was 20 up, 20 percent today, which is like record high, which is crazy.

Jessie: So I need you to make it make sense.

Jess: Yeah, absolutely.

Jessie: And there is a reason for it.

Jess: That's tale of two markets.

Jessie: So cue the intro music.

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Jessie: You're listening to Market MakeHer, the self-directed investing education podcast on a mission to make you an informed, self-directed investor.

Jess: We break down how the stock market works from her perspective.

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Jess: Like today, we're talking about what's happening in the market, why it matters and how it could impact your portfolio.

Jessie: I'm J.C.

Jess: Sage filling in for Jesse Dinduy today.

Jessie: And my job is to ask the questions, remain curious and make sure that there is no financial jargon.

Jess: Yep.

Jessie: And I'm Jess Inskip.

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Jessie: I've worked in finance for 15 years, provide market commentary on CNBC, Fox Business, Yahoo Finance, Schwab Network, many more.

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Jess: All right.

Jessie: You ready? I'm ready.

Jess: All right, Jess.

Jessie: What does market breadth even mean? I genuinely have never heard that term.

Jess: All right.

Jessie: So market breadth just means broader participation.

Jess: And it's the way we measure the stock market overall, like looking how many components in the S&P 500 have advanced and how many have declined.

Jessie: It's also referred to advanced decline.

Jess: It's a technical indicator and it's market breadth.

Jessie: But since the S&P 500 is literally a collection of companies, you want to know how many are going up versus how many are going down.

Jess: And I'm going to pause to explain any terms there.

Jessie: Do you want to explain the S&P 500 real quick? Sure.

Jess: So the S&P 500, a lot of times when people are looking at the stock market, how is the stock market doing? Or if you're investing for the first time, you end up in IVB or SPY, which is the S&P 500.

Jessie: The S&P 500 is an index that measures the stock market and it happens to be market cap weighted.

Jess: But it's made up of 500 companies and it's the biggest companies within the U.S.

Jessie: overall.

Jess: So when we're looking at how is the stock market doing, we're really looking at 500 companies and trying to understand their market performance.

Jessie: That's what the S&P 500 is.

Jess: So market breadth, it's the measurement of the S&P? It can be.

Jessie: So what we look at is how many stocks are up and how many are down.

Jess: So right now, if we look at year to date, there are 500 stocks in the S&P 500, right? 346 of those stocks are increasing in value.

Jessie: 157 decrease.

Jess: That is a positive number.

Jessie: That means there's room for the stock market to breathe because more companies are increasing versus companies decreasing.

Jess: That's what it means by breadth.

Jessie: You're not relying on a line leader.

Jess: And that line leader has been the Magnificent Seven or those big tech stocks.

Jessie: But market breadth means that more companies are increasing in value versus those companies that are declining in value.

Jess: That's what it really means.

Jessie: Is market breadth a measurement of stocks or is it when the measurement is positive? It's a measurement.

Jess: And you would say market breadth is positive when the measurement is positive.

Jessie: And then you would say it's negative if the measurement is negative.

Jess: So, for example, last month in June, it was a negative number.

Jessie: There were 201 components of the S&P 500 that were up and there were 301 components that were down.

Jess: More down than up is negative.

Jessie: It's really that simple.

Jess: Basically, you're looking for, okay, if the market's going up, is it everything in the market or is it just a few companies? That's all it is.

Jessie: Oh, so right now, tech companies are going up a lot.

Jess: That's right.

Jessie: And that's the driving force of, say, why the S&P is going up.

Jess: That's right.

Jessie: Exactly.

Jess: And the reason why that's extremely important, we have a really, really narrow rally.

Jessie: Or if you hear the Magnificent Seven is holding up the stock market or everyone is talking about Nvidia, all of this is because the anatomy of the S&P 500, it's not a one-for-one measure.

Jess: Bigger companies have the ability to move the stock market more.

Jessie: And right now, since the S&P 500 is 30% technology, it creates this type of concentration risk.

Jess: But in order to gauge it, because I'm going really far ahead of myself, all we want to do to simplify it is say, okay, there's 500 stocks in the S&P 500.

Jessie: Of those 500 stocks, since the S&P 500 is up 17% year to date, are all of those stocks up or is it just a couple that are carrying the stock market? Example, the stock market is up, but it's being carried by, say, the tech companies.

Jess: There could still be a negative market breath.

Jessie: Right.

Jess: Yes.

Jessie: So when you say, okay, there's headlines of people living paycheck to paycheck, inflation is super high, but then there's also headlines of the stock market is rallying and doing really well.

Jess: That is why.

Jessie: Because a handful of stocks, mainly technology, so seven security, it's really six, were carrying the stock market.

Jess: The other weren't doing really well.

Jessie: They actually haven't even had earnings growth.

Jess: That's expected to have earnings growth this earnings season we're in right now, which is why those headlines exist.

Jessie: Not all the companies were doing well.

Jess: There's a lot of churn underneath the surface.

Jessie: If you were just kind of peel it back.

Jess: You ever been in a team project where one person carries the team? That's what's been happening.

Jessie: But now there's signs of broader participation all of a sudden, just now where tech is selling off because we had a sell off in NVIDIA last week and people are moving into other things, which is good.

Jess: We want to see the whole team participate, not just the people who carry the team to give us an indication that it's actually healthy.

Jessie: Could you define NVIDIA for people? NVIDIA.

Jess: So NVIDIA is one of the top, the top three stocks within the S&P 500.

Jessie: So the S&P 500 is market cap weighted, which we'll talk about in a very brief moment in a lot more detail.

Jess: But NVIDIA is really the AI narrative.

Jessie: The hyperscalers are really holding up the AI narrative, which is Google, Microsoft, Amazon, Apple.

Jess: Those are considered hyperscalers because a lot of their spending is into NVIDIA.

Jessie: And since their spending is pulling up a stock, that's one of the top three, it's making the market go up.

Jess: That's why we would reference NVIDIA.

Jessie: I've never heard the Magnificent 7.

Jess: Magnificent 7.

Jessie: So that's where these seven stocks, it even became an index, they are holding up the entire stock market.

Jess: And that's called the Magnificent 7 because they've been up over a hundred percent, whereas the stock market hasn't done so well in comparison.

Jessie: So it's the Magnificent 7 because it's doing magnificent in comparison to the rest of the market.

Jess: So seven stocks.

Jessie: Market breadth is how are the 503 stocks in the S&P doing? How many stocks are advancing and declining within that index? And that gives you an indication of market, like how much room does it have to breathe if something bad were to happen? And we didn't have a lot before because it was only seven stocks carrying the market.

Jess: Market breadth means that more stocks are increasing than stocks are decreasing.

Jessie: So market breadth is a measurement.

Jess: Positive market breadth means that more stocks are increasing.

Jessie: People measure this through something called the advanced slash decline.

Jess: So the advance means that it's positive and the decline means that it's negative.

Jessie: Yep.

Jess: So advances versus decline.

Jessie: You could pull that up as an indicator if you're ever in the technical world, but you don't have to.

Jess: More market breadth means that the market has more room to breathe and that is what is happening now.

Jessie: That's right.

Jess: And it wasn't before, which is why we saw all those headlines.

Jessie: The stock market was doing really, really good, but not all the stocks in the stock market were doing really well.

Jess: Things are getting better, which correlates with the inflation numbers that we see coming down.

Jessie: And then this broader rotation, like it starts this whole domino effect of things within the stock market.

Jess: But the reason why this is important, because market breadth is improving and we see it's improving, that gives strength to rallies.

Jessie: And what I'm looking for now is follow through on report card season, which is earnings, which we're in right now.

Jess: We had positive earnings held up by a few stocks.

Jessie: We need to see earnings follow through for the other.

Jess: But the reasoning behind that we need to talk about is market caps and the way it's weighted.

Jessie: Does that make sense? Yes.

Jess: It's loading.

Jessie: It's loading in my head.

Jess: Got it.

Jessie: Okay.

Jess: News says the stock market is doing good.

Jessie: The S&P is doing good.

Jess: But people in the real world are like, actually, finances are not that good.

Jessie: And it's because, say, a few stocks are pulling, like in a team project, one person is pulling all the way in the team project.

Jess: So we can say, oh, the stock market is doing well.

Jessie: But then the deeper question is, what is the market breadth right now? That's right.

Jess: Because the S&P 500 is market cap weighted, meaning Microsoft makes up 7% of the index.

Jessie: Apple makes up 6.9%.

Jess: NVIDIA is 6.5%.

Jessie: And the way that it works is the bigger market cap you have, the bigger piece of the pie you have, the more ability you have to move the index.

Jess: It's not a one for one ratio.

Jessie: And market cap just means the value of the company overall.

Jess: So you take the last price of the company, multiply it times the shares outstanding, so how many stocks are available for Apple, NVIDIA, whatever, multiply it by that share price.

Jessie: That's the value of the company.

Jess: And so if you're a bigger company, you have more weight in the S&P 500, which makes sense because Apple is a huge company, has a lot of jobs.

Jessie: If they were to go under, that would really cause a lot of issues within the overall economy and market overall as in comparison to somebody that is a smaller company.

Jess: That's how there can't be a lot of participation, meaning only seven stocks can do really, really well and still hold up the market because the S&P 500 is market cap weighted.

Jessie: Literally, the top 10 stocks make up 30% of the portfolio right there, which is insane if you think about it.

Jess: That is pretty crazy.

Jessie: The top 10 stocks make up 30% of the S&P portfolio.

Jess: If you have a bigger piece of the pie of the S&P 500, you're a bigger company, you have the ability to move the market more.

Jessie: Microsoft is 7% of the S&P 500, Apple is 6.9, and NVIDIA is 6.5.

Jess: That right there is almost 20%, right? Yeah.

Jessie: That's three stocks, three technology securities.

Jess: Those three stocks, if they're doing really well and rallying like NVIDIA did and like Microsoft has, then that held the stock market up even though the other companies weren't doing well.

Jessie: The way that we'd gauge that one way is the market breadth, but there's actually another index and it's called the S&P 500 Equal Weight Index.

Jess: Have you ever heard of that one before? No, I haven't.

Jessie: Year to date, the S&P 500 is up 17%, the S&P 500 Equal Weight is up 7%.

Jess: There was this divergence of the two starting really, I'd say in May-ish, started diverging more and more and more.

Jessie: That's because of the top heavy technology and NVIDIA's rally, to be honest.

Jess: What the Equal Weight does, instead of saying, okay, you're the biggest company, Microsoft represents 7%, it does not.

Jessie: It assigns equal weight to every company.

Jess: It's another way to look at market breadth or broader participation.

Jessie: All right, words.

Jess: Yes, go.

Jessie: My words? You tell me if I'm understanding.

Jess: The S&P 500 is made up of 500 companies, but each of those companies are worth different monetary value, which is their market cap.

Jessie: Yes? Based on market cap, that gives it a different weighting.

Jess: Yes.

Jessie: It has more effect when Microsoft goes up or down on the S&P, aka the stock market.

Jess: So if there were cookies in a...

Jessie: I don't know why I'm thinking of cookies, but if there were cookies in a cookie jar, Microsoft would be like two cookies and other companies would be like half of a cookie.

Jess: Microsoft has more weight, but then the S&P will weight.

Jessie: The S&P Equal Weight is like if all of these companies are one cookie, how are they doing? Yeah, exactly.

Jess: That's exactly right.

Jessie: So if you were looking at them from an equal perspective, being worth one cookie, it was really only up 7% year to date, and it wasn't always that way.

Jess: We're just now doing that.

Jessie: So you could look at this and you could see, oh, the S&P 500 has been making all these higher highs, but the S&P 500 Equal Weight has not.

Jess: And that's lack of breadth.

Jessie: The Equal Weight is doing like 7%, which is still like a regular deal.

Jess: It is.

Jessie: Back between March and May, it made a high and so did the S&P 500, but it couldn't really overcome that until just now.

Jess: Whereas the S&P 500 started going higher and higher and higher, the Equal Weight is just hanging out.

Jessie: And that's called lack of breadth.

Jess: That's the way we would visually see lack of breadth right here.

Jessie: So why it's important to look at the S&P 500 market cap weight versus the Equal Weight is I like to visually see broader participation.

Jess: And if there's any divergence, like there was beginning in May, that's telling me that we were very top heavy.

Jessie: We were very concentrated on technology.

Jess: But now, since the market was narrow and it's broadening, I can visually see that because the Equal Weight is making higher highs too.

Jessie: So it's just a gauge and a visual representation.

Jess: But in order to understand that, we got to know how the anatomy of these indices are comprised, really.

Jessie: The S&P 500 that we all know is market cap weighted, which means that the larger companies have a bigger piece of the pie.

Jess: So any company that is in the S&P that is worth more than, say, another company has more weight in the S&P.

Jessie: Right.

Jess: That's right.

Jessie: Can move the market more.

Jess: Can move the market more.

Jessie: So if Microsoft, which is a big player in the S&P, goes up or down, it moves the entire S&P up and down more than, say, a company that is worth less.

Jess: That's exactly right.

Jessie: Exactly.

Jess: Doesn't move one for one.

Jessie: But if you want to know what it would look like if it moves one for one, you can look up the S&P 500 Equal Weight, and that will tell you.

Jess: And that will give you more of an idea what the breadth is.

Jessie: Broader.

Jess: Yeah.

Jessie: Broader participation or breadth, all synonymous.

Jess: Yes.

Jessie: I think I got it.

Jess: Yes.

Jessie: So what does that mean for my individual portfolio? Why do I need to pay attention to this? OK.

Jess: So I love this question, and that's where we should talk about concentration risk.

Jessie: When you are creating an investment portfolio, I have a rule of thumb.

Jess: This is not investment advice whatsoever, but it starts with budgeting, then your emergency fund, then step three is investing.

Jessie: And then that also can vary depending on your personal situation.

Jess: Personal finance is personal.

Jessie: This is not that.

Jess: We don't know anybody's personal finance situation whatsoever.

Jessie: So what I've personally done outside from, again, not going into account types, you start with passive investing.

Jess: You should have at least $10,000 in a passive fund of some sort.

Jessie: But again, your situation could be different.

Jess: This is mine.

Jessie: But once you're there, you could start exploring stocks.

Jess: You could start exploring even increasing sector exposure, or you can really adjust things.

Jessie: Because remember, when you're looking at something passive like SPY, the S&P 500, it's an index fund that's marrying the S&P 500, the QQQ, whatever you're in.

Jess: When you go on your brokerage firm, you'll see weights of the S&P 500.

Jessie: I know we haven't talked about sectors yet, and I don't want to get into too much detail today.

Jess: But since 30% of the S&P 500 is technology, you could see on Fidelity.com or a lot of different places or even portfolio managers, they would say market weight, or they would say overweight, or they would say underweight.

Jessie: And you could adjust based on your personal preference, and you can even get some insight.

Jess: Meaning when you've hit that 10,000 mark, where you've got something passive, and then you want to start exploring more, you need to know how the stock market works, and you need to understand if there's concentration risk.

Jessie: And there was concentration risk before.

Jess: People are trimming off of technology.

Jessie: That's why there's a sell-off there and buying into the other things, thus creating broader participation.

Jess: And we see that reflected in the S&P 500 equal weight.

Jessie: So that's how you can see what people are doing, what you could do too visually, if that makes sense.

Jess: But concentration risk means, since there are three stocks that make up 20% of the S&P 500, Nvidia, Microsoft, and Apple, that's highly concentrated.

Jessie: If they stop falling, the line leaders quit, the people holding up the projects, you could be screwed for lack of a better term.

Jess: To mitigate your concentration risk, if you have big rallies in that portion of your portfolio, you could sell off pieces of technology and buy into other places.

Jessie: That way you lock in those gains when there is those rotations or turnings that we're talking about.

Jess: But this is more of a stock market update and understanding component, and then we can talk about practical application when we talk about portfolio allocation.

Jessie: Can you apply concentration risk to something else? Like another thing? All right.

Jess: I live in Florida.

Jessie: Let's say my entire wardrobe was bathing suits and really light linen dresses.

Jess: My wardrobe was lacking diversity.

Jessie: I don't have pants.

Jess: I don't have a sweater.

Jessie: I might have basics and things like that.

Jess: I'm over-concentrated with the thought that it's always going to be hot outside.

Jessie: If it's super cold, I'm not prepared because of what I own.

Jess: In order to prepare myself for when things change, like the weather literally changes, I need to have other components within my wardrobe or within my closet besides bathing suits and linen dresses.

Jessie: I tried that.

Jess: Did that make sense? Concentration risk is when an investor is putting- You have too much in one thing.

Jessie: Is putting most of their money in one thing.

Jess: That's right.

Jessie: Is there concentration risk in buying something like the S&P 500? Yes, there was because it was very top-heavy and it was narrow because the S&P 500 was only gaining because that magnificent seven we're gaining, not because everyone else was.

Jess: So now we have to see the other stocks start participating.

Jessie: Otherwise, it is too top-heavy and there's still concentration risk.

Jess: If the AI narrative, something happens like tariffs, which is very possible because it's an election year, then that could cause that to collapse and then the whole market would.

Jessie: So concentration risk is when there is too much value in one thing and if that thing goes down, your investments all go down.

Jess: Yeah, that's right.

Jessie: Kind of like if you put all your money in an individual stock, if that one stock goes down, all your money goes down.

Jess: Right now with the entire market, S&P, it's all on the magnificent seven.

Jessie: So if something happens to those and many of those are tech companies, then the entire American stock market is at risk.

Jess: Stay with us.

Jessie: We'll be right back.

Jess: Ready to plug into the future? Join myself, Sean Leahy, and me, Andrew Maynard, on Modem Futura, where we explore the technologies shaping our futures.

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Jessie: Subscribe to our channel wherever you get your podcasts.

Jess: We'll see you there.

Jessie: See you then.

Jess: Okay.

Jessie: That's right.

Jess: That's right.

Jessie: That's right.

Jess: And that's what was happening.

Jessie: But just now, just now, everyone started participating.

Jess: Does that make sense? The other 493 stocks, who's everyone? The other 493 stocks, because now we see the S&P 500 equal weight go up too, because the S&P 500 was making higher highs, like records, but the S&P 500 equal weight was not.

Jessie: Yes.

Jess: We need to see both.

Jessie: I get it.

Jess: I know what's going on.

Jessie: Yay.

Jess: All right.

Jessie: Great.

Jess: Got it.

Jessie: Okay.

Jess: Perfect.

Jessie: And now I understand why I should care as well.

Jess: So tell me.

Jessie: I know the so I know the problem because myself personally, I'm 20.

Jess: Most of my money is in the S&P 500 or Target Date Fund, like very low risky.

Jessie: I don't really need to be thinking about anything.

Jess: But you're telling me that I do need to be thinking about things because of concentration risk.

Jessie: Or at least understand how it works.

Jess: At least understand how it works.

Jessie: Yes.

Jess: Is there something I should do? Is there something that I should now learn knowing that I am currently in concentration risk, even with my S&P 500 investment? So this is where you can be prepared and understand.

Jessie: Right now, we're in earning season.

Jess: Like literally today, Google reported, so many stocks are reporting.

Jessie: If you were to take out the Magnificent Seven from the S&P 500, this is the first time that we are expected to see earnings growth from the other 493.

Jess: So if that doesn't happen, you might log into your portfolio and you'll see that it's going down.

Jessie: But it's very likely to happen because remember the market's forward looking and it pulls in all these other things and you've got the inflation picture and there's so much going on.

Jess: But everyone had concentration risk because technology was holding up the stock market.

Jessie: Now, we need everyone else to participate.

Jess: And it's just more information when you log in.

Jessie: Everyone is still very exposed to AI.

Jess: It may come down, but that's normal.

Jessie: There are 5% drawdowns.

Jess: They are 12 to 13 a year.

Jessie: That is normal for the market to go down 5%, 12 times a year.

Jess: Because remember, it doesn't go up like this.

Jessie: It goes up like in a, it's not a V-shape, K-shape, whatever the word is.

Jess: Zigzag, cerulocosm.

Jessie: Mountain.

Jess: That's mountain.

Jessie: Yeah, exactly.

Jess: That's it is understanding concentration risk, the fact that you had it.

Jessie: But if you don't have a huge amount, don't worry about it.

Jess: Just dollar cost average in.

Jessie: Keep going.

Jess: It might go down.

Jessie: Great.

Jess: Buy at a lower price.

Jessie: That just means keep buying consistently.

Jess: It's just good that I know this now.

Jessie: I don't foresee any changes in my investment strategy, but it's very good that I understand this.

Jess: Yeah.

Jessie: But if you had a huge amount in there, I'd say, hey, JC, it's time to explore maybe small caps or something else like that.

Jess: But where you are in your investment journey, you're not at that place yet.

Jessie: And that's okay.

Jess: You saying, JC, I think you should look at small caps.

Jessie: What does that mean? Yeah.

Jess: So this is where we'll get really deep into the weeds, and we probably need a different episode on it.

Jessie: We've recently had a cooler inflation print.

Jess: So inflation's coming down faster than we thought.

Jessie: Because inflation was coming down faster than we thought, the market immediately reacts.

Jess: Yields came down.

Jessie: The stock market rallied like crazy.

Jess: And there was more participation.

Jessie: This is really what spurred it.

Jess: And then you could see that the probability of the Fed cutting rates actually increased to the next meeting.

Jessie: So not the one next week, but the one following.

Jess: There's a 96% chance that they'll cut rates.

Jessie: And if they cut rates, that's going to be good for smaller companies.

Jess: And that's also good for consumers as well.

Jessie: When we were in this restrictive Fed environment, so interest rates going up really high, they're the ones that have just been beaten up.

Jess: They're cheap in valuation perspective.

Jessie: That will take me half an hour to explain every term I just said.

Jess: It's technically an opportunity right now.

Jessie: But it's a little more riskier in comparison.

Jess: And you don't want to take on more risk until you start building your nest egg.

Jessie: Does that make sense? Yeah.

Jess: When you say mid cap, you mean middle amount of money.

Jessie: Is that what you mean? So there's small cap, mid cap, large cap, and mega cap, and micro cap.

Jess: And that's just the sizes of companies.

Jessie: Microsoft is a mega cap.

Jess: They're over $3 trillion of value.

Jessie: So mega capital is so much money? Yes, right.

Jess: Because it's all in the name, right? So capitalization is cash value, capital.

Jessie: And then small cap is a much smaller amount.

Jess: They're still big companies, but they have a market value of $250 million to $2 billion.

Jessie: I feel so girly.

Jess: It's fine.

Jessie: It's totally fine.

Jess: I like to eat this crazy finance bro thing, and I'm like, small money companies.

Jessie: That's all it means.

Jess: I just figured that out.

Jessie: People don't have to complicate it.

Jess: I love that.

Jessie: That's great.

Jess: That's what we're here for.

Jessie: You're saying small money companies because it looks like small money companies are going to be making profits in the earnings calls or the earnings season? Yeah.

Jess: That's right.

Jessie: Because the small caps have been beaten up.

Jess: They're really low in price.

Jessie: They were the ones that were punched down on the floor crying after all of this inflation, seriously.

Jess: And now they finally have had a moment to recover, so they might be doing okay now.

Jessie: They look better physically, from a fundamental perspective.

Jess: Their bruises are healing.

Jessie: That's a good analogy.

Jess: I like it.

Jessie: I learned so much this podcast episode.

Jess: Concentration risk means that a specific section of the stock market is producing a lot of money right now, and the rest is not producing a lot of money for themselves and investors.

Jessie: And it is risky because if they fall on their face, everyone invested in them falls on their face, including, say, you, because they're doing really well, so you're probably invested in them.

Jess: But if they fall on their face, you fall on your face.

Jessie: That is a concentration risk.

Jess: Right now, that's technology because of AI.

Jessie: But if something goes off with AI or there's any kind of laws made to make AI progress harder, that could hurt your investments, and that will hurt the S&P to reduce your concentration risk.

Jess: If that is something you want to do, you can look at additional sectors and even look at portfolio manager recommendations.

Jessie: Was that right? Beautiful.

Jess: That was great.

Jessie: Okay.

Jess: New concept today.

Jessie: What's the breath like? Yes.

Jess: And it is important for when you make it past the passive investing aspect, if you want to understand how the market actually works.

Jessie: And a large part of our audience, actually, that listens to the podcast works in finance, and they want to understand these concepts.

Jess: So we want to make sure that we describe them as well.

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Jess: And until next time, keep learning, keep earning, and keep breaking those barriers.

Jessie: Yay! Remember, investing involves risk.

Jess: There is always potential to lose money when investing in securities.

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