From Market Sell-offs to Risk Mitigation: Strategies for Portfolio Diversification and Financial Planning

1 00:00:05,080 --> 00:00:08,439 Good morning everybody. This is Sunday morning. It's s eight o'clock in the 2 00:00:08,480 --> 00:00:13,880 morning and Hits Money Matters Time seven ninety K and st is where you hear 3 00:00:13,919 --> 00:00:17,280 it. Whether you're listening on the radio, you're listening on one of our 4 00:00:17,480 --> 00:00:23,359 new technology advices, whether you're listening on Spot on the podcast. We just 5 00:00:23,440 --> 00:00:29,640 are appreciatives of all the people that are making our show be number one show 6 00:00:30,160 --> 00:00:35,200 on the weekends. Do appreciate it. Our ratings are great and it's helping 7 00:00:35,320 --> 00:00:40,039 us build a nice business here. And I can't I can't be more thankful 8 00:00:40,119 --> 00:00:44,840 for what's happened over the last thirty three years of doing this radio show and 9 00:00:44,880 --> 00:00:49,280 giving giving out the advice of what we think is going on. All right's 10 00:00:49,359 --> 00:00:53,920 where are we in this thing going on? The markets obviously had another little 11 00:00:54,000 --> 00:00:57,119 rough week that twice this week they were trying to get up. I mean 12 00:00:57,159 --> 00:01:00,640 the s andps were up forty fifty almost sixty points and they turned down for 13 00:01:00,759 --> 00:01:04,560 the day twice. The markets are having trouble moving forward and getting traction. 14 00:01:06,079 --> 00:01:11,239 We keep putting in higher, lower highs and lower lows. That type of 15 00:01:11,280 --> 00:01:17,879 formation usually breaks off and culminates with a sell off. That gives you a 16 00:01:18,040 --> 00:01:23,599 buying opportunity. We have been mitigating risk for a while. We definitely still 17 00:01:23,640 --> 00:01:29,760 mitigating risk as it's been coming down and breaking down through support, and as 18 00:01:29,799 --> 00:01:33,079 sometime when we get to support and the markets look like they can kind of 19 00:01:33,079 --> 00:01:38,000 bottom out a little bit, we'll take off some of that mitigating riskers hedges 20 00:01:38,879 --> 00:01:41,719 and we'll look to go the other way. One of the things you've got 21 00:01:41,719 --> 00:01:45,599 to be careful about is like a lot of portfolios we see have so many 22 00:01:45,640 --> 00:01:48,879 stocks in them. I mean, you know, I'm talking about hundreds and 23 00:01:48,959 --> 00:01:55,200 hundreds of stocks and a big portfolio and smaller portfolios maybe twenty five or thirty. 24 00:01:55,519 --> 00:02:00,680 It's very hard to mitigate your risk. It's very hard to do that 25 00:02:00,760 --> 00:02:06,799 unless you're sold everything all at once. I don't understand with today's ability to 26 00:02:06,879 --> 00:02:09,680 use indexes, whether it's the DAW, whether it's the NASDAC, or whether 27 00:02:09,680 --> 00:02:13,919 it's the S and P five hundred, that doesn't make up part of your 28 00:02:13,960 --> 00:02:19,319 portfolio that you can always hedge against or mitigate risk against while you hold some 29 00:02:19,360 --> 00:02:23,560 of the other stocks outside there. But that's just you know, changing with 30 00:02:23,639 --> 00:02:25,800 the times. I guess that's the way I look at it. You know, 31 00:02:27,280 --> 00:02:31,759 consolidation makes it a lot simpler and more nimble as we navigate what's going 32 00:02:31,840 --> 00:02:37,400 on, not just in our economy, not just in our country, but 33 00:02:37,560 --> 00:02:42,800 obviously around the world. As I said, this is the Money Matter Show 34 00:02:42,800 --> 00:02:46,280 and it is sponsored by Greenberg Financial Group. Greenberg Financial Group, it's both 35 00:02:46,280 --> 00:02:50,280 the registered investment advisory and they broke a dealer. We're registered with the SEC, 36 00:02:50,479 --> 00:02:53,639 members of fin and members of CIPPIC. On the show, we talk 37 00:02:53,680 --> 00:02:58,080 about different products, strategies, ideas and all and we all have opinions. 38 00:02:58,319 --> 00:03:02,599 I don't care what it is. You need to understand risks before you invest. 39 00:03:04,159 --> 00:03:07,000 It's such a great idea to understand the risk. And it doesn't matter 40 00:03:07,120 --> 00:03:13,439 what it does, it's you understanding it. If it goes up. People 41 00:03:13,479 --> 00:03:15,360 think if something goes up, it makes you let them, oh, yeah, 42 00:03:15,360 --> 00:03:19,120 I understood the risk, and as soon as it goes down they go, 43 00:03:19,199 --> 00:03:23,159 oh, I didn't understand the risk. Understand the risk because that allows 44 00:03:23,199 --> 00:03:30,520 you to figure out how much allocation of your portfolio you want in that scenario. 45 00:03:30,120 --> 00:03:34,599 Now, that's part of the process we do. We figure out what 46 00:03:34,680 --> 00:03:39,319 your risk is. We figure out not only by you going ahead and taking 47 00:03:39,400 --> 00:03:45,479 a basically an artificial intelligence task that gives you a whole bunch of different questions 48 00:03:46,840 --> 00:03:49,479 and then it kind of comes up with an answer. And those questions are 49 00:03:49,479 --> 00:03:55,360 based on your age, your cash flow, the ability of needing money or 50 00:03:55,439 --> 00:04:00,280 not, any events that are coming up in the small future, how you 51 00:04:00,319 --> 00:04:03,159 can invest for There's a lot of things that go into it. And the 52 00:04:03,280 --> 00:04:09,199 greatest part is when you do the risk allize everyone is in a different situation, 53 00:04:09,280 --> 00:04:12,000 so it's according to you and you get a risk, But then we 54 00:04:12,120 --> 00:04:17,079 talk it out what really is your risk tolerance and find out how you handle 55 00:04:17,160 --> 00:04:20,959 two thousand and eight, two thousand and one, how you handle two twenty 56 00:04:21,120 --> 00:04:25,920 how you handled any markets in two twenty two when they ended up going down? 57 00:04:26,000 --> 00:04:28,680 All now how you handling when they're going up. Of course, everyone 58 00:04:28,720 --> 00:04:32,240 feels good when it's going up. But if you're complaining and not happy because 59 00:04:32,279 --> 00:04:38,879 you're not making s and P or NASDAC type of returns and think that you 60 00:04:38,879 --> 00:04:42,120 can call the bottom and call the top, then you gotta read look and 61 00:04:42,199 --> 00:04:49,240 think about is that realistic? Mitigating risk is so important today's world of investing. 62 00:04:49,879 --> 00:04:53,199 Just sitting there and saying, oh, everything's gonna be okay, is 63 00:04:54,720 --> 00:04:59,600 one way to do it if you're young. But if you know you're approaching 64 00:04:59,600 --> 00:05:03,240 fifty sixty, or you're sixty five seventy or year seventy five, eighty or 65 00:05:03,360 --> 00:05:10,199 plus, we don't have the fortitude to say, oh, I just waited 66 00:05:10,199 --> 00:05:14,920 out five more years okay, or ten more years and wait for it all 67 00:05:14,920 --> 00:05:17,839 to come back. And you can do that, especially even not using the 68 00:05:17,879 --> 00:05:24,000 money. But big, bigger thing is you don't have the income that's constantly 69 00:05:24,040 --> 00:05:28,279 putting in new money to be able to average down. That's the thing that 70 00:05:28,319 --> 00:05:32,399 nobody talks about. Nobody talks about why you're working and you're putting money into 71 00:05:32,399 --> 00:05:38,480 a four one K retirement plan or investing when things go down you have more 72 00:05:38,519 --> 00:05:43,360 money coming off your paychecks or if your in all to reinvest the money at 73 00:05:43,399 --> 00:05:46,079 lower prices. So if you like the apple at one hundred and ninety and 74 00:05:46,120 --> 00:05:49,560 then it goes to one twenty, you can buy more because you have more 75 00:05:49,560 --> 00:05:55,800 money coming in. When you're not having more coming in a more income and 76 00:05:55,839 --> 00:05:58,720 you're spending what you have all you're the only way you get to do that 77 00:05:58,879 --> 00:06:01,720 is if you have care before the markets do fall, And how do you 78 00:06:01,759 --> 00:06:05,480 determine that. You have to determine it by the valuations of where you think 79 00:06:05,519 --> 00:06:10,120 the markets are, and you have to be okay if the markets go higher, 80 00:06:10,160 --> 00:06:13,079 even though you sold that, you're not going to be all upset about 81 00:06:13,120 --> 00:06:17,120 it, because eventually, at some time you live along enough, the markets 82 00:06:17,120 --> 00:06:20,319 are coming down again, and that money is sitting right now and the money 83 00:06:20,319 --> 00:06:25,680 markets or the or the treasuries government treasury is earning four and a half five 84 00:06:25,800 --> 00:06:29,800 five and a half percent, That money then can get put back to work. 85 00:06:30,160 --> 00:06:33,839 We weren't having that opportunity two three years, four years, five years 86 00:06:33,839 --> 00:06:38,319 ago. You were lucky to be getting a half a percent in the money 87 00:06:38,319 --> 00:06:42,480 market funds. At least now you can make some money while you're sitting waiting 88 00:06:42,800 --> 00:06:46,720 and being cautious, and you really can have a balanced portfolio. So the 89 00:06:46,720 --> 00:06:53,240 process we go through is finding out what you really have, what your intentions 90 00:06:53,240 --> 00:06:59,959 are, gathering everything together and putting a real financial plan together. And I'm 91 00:07:00,079 --> 00:07:02,680 in a real one, not one just to sell insurance, not one just 92 00:07:02,759 --> 00:07:08,079 to go ahead and get assets or sell you a product. One that is 93 00:07:08,800 --> 00:07:13,560 a living, breathing document that you're gonna have to go over and change over 94 00:07:13,639 --> 00:07:18,000 time. This is a snapshet of where you are today. Where you're on 95 00:07:18,040 --> 00:07:21,160 a year, two years, five years, ten years is totally different. 96 00:07:23,319 --> 00:07:26,000 And if you and if you're even older, you need a plan because what 97 00:07:26,040 --> 00:07:29,480 are you gonna do with the money? Are your beneficiaries right? Have you 98 00:07:29,519 --> 00:07:33,279 set it up correctly? Where's the money gonna go? Have you even talked 99 00:07:33,319 --> 00:07:39,920 to the people that are going to be getting your legacy? How do you 100 00:07:39,959 --> 00:07:44,519 want that managed? There's so many things that go into it, and they're 101 00:07:44,519 --> 00:07:50,879 tough questions, but we ask them and people answer them because it's it's it's 102 00:07:50,920 --> 00:07:59,519 private, it's confidential. But a plan is so important. I was looking 103 00:07:59,519 --> 00:08:05,000 at some stuff some research the other time. Only twenty nine percent of people 104 00:08:05,079 --> 00:08:11,519 have a financial plan, twenty nine percent and over sixty five percent say they 105 00:08:11,560 --> 00:08:16,879 should have one. So there's more than double the amount of people that say 106 00:08:16,879 --> 00:08:22,600 they should have one that actually have a real plan. I know. Now 107 00:08:22,639 --> 00:08:28,600 there's a lot of stuff on the internet you can go put together and read 108 00:08:28,639 --> 00:08:33,399 and do a financial plan, and some people can do that, but I'm 109 00:08:33,399 --> 00:08:37,840 not sure how you go and do a financial plan on the internet by plugging 110 00:08:37,879 --> 00:08:43,759 in some numbers without talking to someone or understanding it when really it's about building 111 00:08:43,759 --> 00:08:50,720 a relationship. Otherwise it's just numbers that frankly it don't really understand most people. 112 00:08:52,799 --> 00:08:58,720 Financial literacy is the lowest amount of literacy we have in this country. 113 00:09:01,120 --> 00:09:07,720 People don't understand it for good reason. Nobody teaches it on any level. 114 00:09:07,799 --> 00:09:11,320 And then when you get money, you're trying to learn, and some people 115 00:09:11,360 --> 00:09:16,960 do will learn very well, but there's a lot to it. As a 116 00:09:18,080 --> 00:09:22,399 person that has money that has to invest money, the number one thing you 117 00:09:22,440 --> 00:09:26,279 have to do is look to find someone that you actually feel you can trust. 118 00:09:26,279 --> 00:09:28,440 You interview them, you talk to them, You get their philosophies. 119 00:09:28,679 --> 00:09:31,200 Are they on board, do you have good energy? Do you feel like 120 00:09:31,240 --> 00:09:35,879 they're honest and upfront? Are they what kind of fees are they charging? 121 00:09:35,919 --> 00:09:39,159 Are they in the ballpark? And realm of being fair? Because that's all 122 00:09:39,159 --> 00:09:45,519 you ask as an investor. But I'm gonna tell you to ask one more 123 00:09:45,639 --> 00:09:52,559 question. How do you mitigate risk? If they tell you you buy it 124 00:09:52,600 --> 00:09:56,759 annuity, you don't worry about it because you can't lose any money. That 125 00:09:56,879 --> 00:10:00,159 might be that might be the right answer for you, but it might I'll 126 00:10:00,200 --> 00:10:03,000 be the right answer for you. Ask them how to mitigate risk. If 127 00:10:03,000 --> 00:10:05,159 they say it doesn't matter. The markets go down, they go up, 128 00:10:05,159 --> 00:10:15,600 and you're gonna be fine. Guess what you will be if you have time. 129 00:10:16,759 --> 00:10:20,000 But if it stresses you out because you're down twenty at thirty percent or 130 00:10:20,039 --> 00:10:24,000 even ten percent in today's in today's world, then that's not the right answer 131 00:10:24,000 --> 00:10:30,399 for you, and that's not the right portfolio for you. Find a good 132 00:10:30,519 --> 00:10:31,679 advisor, one that you trust. You can do it on your own, 133 00:10:31,679 --> 00:10:33,600 But how are you going to do it on your own if you don't really 134 00:10:33,679 --> 00:10:37,720 understand it. If you do, a lot of people manage your own money. 135 00:10:37,720 --> 00:10:41,120 It's great, they've learned, they learned, they did it, they've 136 00:10:41,159 --> 00:10:45,639 been putting it on. That's fantastic. Do it and it's good. But 137 00:10:45,720 --> 00:10:48,840 if you didn't and you don't have a plan. But even if you're doing 138 00:10:48,879 --> 00:10:52,120 managing it yourself, you should still try to have a financial plan. Have 139 00:10:52,279 --> 00:10:54,720 someone else look at it, check it out, see if it's worth it 140 00:10:54,759 --> 00:11:01,200 to you. That's the way you do it and they will benefit you. 141 00:11:01,799 --> 00:11:07,879 This comes from somebody that's been in the business for forty years and never really 142 00:11:07,919 --> 00:11:11,360 did financial plans until about four or five years ago. And the reason I 143 00:11:11,399 --> 00:11:18,279 didn't is because most of those financial planning programs were set up by insurance companies 144 00:11:18,320 --> 00:11:24,559 to sell insurance products, whether it's life insurance, disability insurance, or risk 145 00:11:24,559 --> 00:11:31,080 stuff and annuities high commissioned products. The programs now have all these things including 146 00:11:31,120 --> 00:11:35,000 as you're here, Dylan and Todd always talk about what IF's, what ifs 147 00:11:35,399 --> 00:11:39,799 meeting, what if this happens or this happens, what will happen to my 148 00:11:39,240 --> 00:11:43,200 portfolio? And I'll have them talk a little bit later about the Monte Carlo 149 00:11:43,919 --> 00:11:50,320 scenario. That means, I know, the first thing is saying hey Monty 150 00:11:50,360 --> 00:11:52,720 Carlo, you know, let's go to sell France or it's gambling of something. 151 00:11:54,000 --> 00:12:01,440 What it does It actually goes through all the different areas that can happen 152 00:12:01,320 --> 00:12:05,799 and gives you the probability of success of your financial plan the way it is 153 00:12:07,360 --> 00:12:09,120 or the way you get it to. So what we do is we work 154 00:12:09,200 --> 00:12:16,600 towards getting over a ninety percent effective rate on your portfolio will absolutely work for 155 00:12:16,639 --> 00:12:20,080 you if you did what the plan tells you to do, that's pretty cool. 156 00:12:22,960 --> 00:12:28,399 You still not have that ninety percent plus that the plan you put together 157 00:12:28,480 --> 00:12:35,720 with us will be effective. Obviously, things change, and that's why it's 158 00:12:35,840 --> 00:12:41,320 living, breathing document. You've got to change it when things change. People 159 00:12:41,360 --> 00:12:43,960 have health problems, people move, people lose their jobs, people have weddings, 160 00:12:43,960 --> 00:12:48,159 people have funerals, people want to travel, people spend more money. 161 00:12:48,200 --> 00:12:52,279 It's so many different scenarios that go into it, so you keep updating it. 162 00:12:52,360 --> 00:12:58,559 You meet with your advices. We work as a team. That means 163 00:12:58,559 --> 00:13:03,360 we all know every client, what their needs are, what they're looking for, 164 00:13:03,519 --> 00:13:07,639 how we need to manage the money and be able to do that, 165 00:13:07,679 --> 00:13:09,360 and that's what we do. We get you set up and then we go 166 00:13:09,399 --> 00:13:13,519 ahead and we actually manage the money. We don't point it off to somebody 167 00:13:13,519 --> 00:13:16,279 else. So that way, if you want to go ahead and kind and 168 00:13:16,320 --> 00:13:20,240 say, hey, I'm a little nervous here. I don't like what's going 169 00:13:20,279 --> 00:13:22,600 on in Washington. I can't stand Biden, or I can't stand this one 170 00:13:22,639 --> 00:13:26,799 or that one. I don't like the regulations. I can't handle the boom. 171 00:13:26,960 --> 00:13:31,000 Next day, we can fix it. We can lower your risk tolerance 172 00:13:31,039 --> 00:13:37,159 for you. We can mitigate more risk. The key that I see out 173 00:13:37,200 --> 00:13:43,159 there is the understanding of how to mitigate risk when the markets are too risky, 174 00:13:43,200 --> 00:13:48,519 which I believe they are now, but still be enabled to make some 175 00:13:48,600 --> 00:13:56,120 type of money above inflation when the markets are moving higher. And by mitigating 176 00:13:56,240 --> 00:14:00,279 risk, it doesn't mean all you just sit there markets go down. Also 177 00:14:00,399 --> 00:14:05,159 have to be aware of taking off the risk controls and when do you go 178 00:14:05,240 --> 00:14:07,279 the other way and become aggressive again in the markets, And how do you 179 00:14:07,360 --> 00:14:09,440 do that? And what do you buy and how do you do that? 180 00:14:09,559 --> 00:14:16,039 Stuff? That's experience. That's everyone that says, oh, it doesn't matter, 181 00:14:16,120 --> 00:14:20,320 just allocate. It's not a bad thing. I like experience because as 182 00:14:20,320 --> 00:14:24,840 a retail person, we're not trying to beat any institution and stuff. I'm 183 00:14:24,879 --> 00:14:30,960 trying to do what's right for you within your realm, within your feelings of 184 00:14:31,159 --> 00:14:37,879 risk and reward, and your ability to handle the markets going down ten twenty 185 00:14:37,960 --> 00:14:45,960 thirty percent and the markets going up and being able to participate. That sounds 186 00:14:46,000 --> 00:14:50,600 good. You know what we do here, and we do. We do 187 00:14:50,639 --> 00:14:52,879 the financial plan consultations for you for free or you have to do it's call 188 00:14:54,039 --> 00:15:00,480 us. Obviously enough people like what we say and what our proposals and they 189 00:15:00,519 --> 00:15:03,240 do business with us. But if they don't, they still get the plan. 190 00:15:03,399 --> 00:15:05,720 We don't hide the plan from you. We don't say all now you 191 00:15:05,840 --> 00:15:09,559 have to go ahead and do business with us to be able to get to 192 00:15:09,600 --> 00:15:11,519 plan. Oh oh, by the way, yes, the financial plans free, 193 00:15:11,559 --> 00:15:13,799 but if you actually want it, you gotta pay for No, we 194 00:15:13,879 --> 00:15:18,159 don't do any of that. My word is my word, and that's all 195 00:15:18,200 --> 00:15:22,240 you ever have in this life. We stick to it. The good news 196 00:15:22,320 --> 00:15:26,559 is people like what we say and do and trust us and build clients for 197 00:15:26,759 --> 00:15:31,159 us a long long time. We're not perfect, by no means that we 198 00:15:31,279 --> 00:15:33,960 perfect. We make mistakes, we lose money, we make money, we 199 00:15:33,440 --> 00:15:37,759 do what we say we're going to do. We're not always right, but 200 00:15:37,879 --> 00:15:41,120 we certainly are right more than we are wrong, and that's important. And 201 00:15:41,240 --> 00:15:45,320 we know how to mitigate risk, and we know how to set up income 202 00:15:45,360 --> 00:15:48,639 portfolios. And we have different type of models. We have models for people 203 00:15:48,039 --> 00:15:52,639 that need to subsidize their income. We have models for people that want protection. 204 00:15:52,000 --> 00:15:58,440 We have models for people that want aggressive growth. You tell us what 205 00:15:58,519 --> 00:16:02,440 you want and I'll show you what we do. And that, to me 206 00:16:03,639 --> 00:16:07,440 is why we continue to grow our firm week after week, month after month, 207 00:16:07,559 --> 00:16:15,600 year after year. So as we move forward here, you see a 208 00:16:15,679 --> 00:16:21,039 lot of things going on, and I think I think most of us are 209 00:16:21,080 --> 00:16:26,759 shaking our head with our government and what's going on with politically, and we're 210 00:16:26,759 --> 00:16:30,679 afraid of what's going to happen coming down the road. Here we all know, 211 00:16:33,200 --> 00:16:37,919 and it's so obvious that's happening. But I have to scratch my head 212 00:16:40,279 --> 00:16:47,159 when people out there are defending Joe Biden's record right now, they're defending it. 213 00:16:48,279 --> 00:16:51,600 People I know, friends that I know. They're defending that now. 214 00:16:51,679 --> 00:16:55,000 They know not to getting a very deep discussion with it with me because I'll 215 00:16:55,039 --> 00:16:57,440 just blow their doors off, all right, But at the end of the 216 00:16:57,559 --> 00:17:03,079 day, they think his track record right now as president, it's fantastic, 217 00:17:03,920 --> 00:17:07,680 without looking at any other caveats. They even told me that they look at 218 00:17:07,720 --> 00:17:12,279 the stock market, it's at all time highs. They said, what world 219 00:17:12,319 --> 00:17:18,720 are you living in? What world? First of all, we're not at 220 00:17:18,759 --> 00:17:23,039 all time high so don't say that we have rallied in twenty one only to 221 00:17:23,079 --> 00:17:26,200 fall in twenty two and we're not as high as we were in twenty two. 222 00:17:29,119 --> 00:17:33,440 But inflation, they refuse to talk about it. It's like a non 223 00:17:33,519 --> 00:17:41,000 event to them. The struggles that we have non event. The business is 224 00:17:41,079 --> 00:17:47,640 going out the credit card interest. The credit cards interest is off the chart. 225 00:17:47,759 --> 00:17:52,200 But the credit card debt is over a trillion dollars. We've never had 226 00:17:52,279 --> 00:17:56,519 that. Our country's debt is that is over a trillion dollars is thirty three 227 00:17:56,599 --> 00:18:03,960 trillion. They think they pulled out of Afghanistan and that we're not gonna war. 228 00:18:03,200 --> 00:18:07,680 They forgot the debacle that we went through. They forgot the debacle that 229 00:18:07,759 --> 00:18:11,680 we have now in Ukraine. And now we find out all these things that 230 00:18:11,759 --> 00:18:15,519 have gone on beforehand, with Parisma and everything else. If you don't think 231 00:18:15,559 --> 00:18:21,039 there's some other stuff that's going on with this whole war with Ukraine and Russia 232 00:18:22,240 --> 00:18:26,720 and finding out that they got paid by these people, who's gonna there's benefits. 233 00:18:26,920 --> 00:18:30,680 You watch enough of these shows, and I'm not a big believer in 234 00:18:30,799 --> 00:18:33,279 everything you see, but they have to have a story from someplace, and 235 00:18:33,400 --> 00:18:37,960 the stories of these corrupt contractors that are in bed with the government to make 236 00:18:38,039 --> 00:18:48,160 this money to make disturbances is not far fetched. It's not farfetched. I'm 237 00:18:48,240 --> 00:18:52,480 sure there's some Hollywood in all these things too, and a little exaggerations, 238 00:18:52,880 --> 00:19:00,440 but the idea that we have that we stir the hornet's nest then we bring 239 00:19:00,519 --> 00:19:03,559 in contractors who helped do this on the side, so a doesn't pin on 240 00:19:03,720 --> 00:19:07,839 our government to be able to benefit by billions and billions of dollars. I 241 00:19:07,880 --> 00:19:11,720 don't think it's so far. Fetch who's going to who is going to be 242 00:19:11,799 --> 00:19:19,599 there building Ukraine? And then then all the stuff with ev vehicles and everything. 243 00:19:19,680 --> 00:19:26,119 You saw po Terra, the one that they putting money towards another government 244 00:19:26,559 --> 00:19:30,839 president that putting money towards it. Obama did the same thing with Solar and 245 00:19:30,880 --> 00:19:33,079 the went out of business. And then and then biding things. Oh yeah, 246 00:19:33,119 --> 00:19:41,039 Potera, the electric car cover bankrupt, bankrupt, But that's Trump's full. 247 00:19:41,359 --> 00:19:51,400 All these things they blame on Trump are downgrade to our ratings for bonds. 248 00:19:52,759 --> 00:19:57,400 They blame on Trump. Are you kidding? This downgrade came? And 249 00:19:57,440 --> 00:20:00,400 then they say, well, we look what we passed. We passed the 250 00:20:00,480 --> 00:20:06,359 infrastructure, we passed this, we passed that. Guys, you had control 251 00:20:06,400 --> 00:20:11,440 of everything. I think it's horrible that when the Republicans have control of everything, 252 00:20:11,480 --> 00:20:15,880 we can't pass stuff, but you guys have that together. I'm over 253 00:20:15,200 --> 00:20:21,720 that's fine, but he can't get anything through that's worth it, damn. 254 00:20:21,880 --> 00:20:25,319 And every bill we have had so much crap in it, it's not even 255 00:20:25,400 --> 00:20:33,559 funny. This Secure Act two point zero. Okay, you don't think this 256 00:20:33,720 --> 00:20:38,160 is a a is a tax hike? Do you understand everyone that all has 257 00:20:38,240 --> 00:20:42,599 over one hundred and forty five thousand dollars salary starting next year? Right now, 258 00:20:44,400 --> 00:20:47,000 they're saying that you can't if you're over fifty, you can't do the 259 00:20:47,079 --> 00:20:52,319 catch up rule and put in seventy five hundred dollars. More So, if 260 00:20:52,319 --> 00:20:56,279 you're making money you want to put more money away like we've been doing, 261 00:20:57,680 --> 00:21:02,559 you can't do it so far. We'll see if they change that. So 262 00:21:02,680 --> 00:21:04,559 right now you can put out thirty thousand dollars in your four one K plan, 263 00:21:06,759 --> 00:21:08,519 but next year you would only be able to put away twenty two five 264 00:21:10,480 --> 00:21:12,319 If you make over one hundred forty five thousand dollars, they say, put 265 00:21:12,359 --> 00:21:17,559 the rest of the money into a roth four one K, And I'm trying 266 00:21:17,559 --> 00:21:19,839 to find out if it's also a roth ira, because you know, if 267 00:21:19,880 --> 00:21:22,279 you make over a hundred forty five thousand dollars right now, you can't put 268 00:21:22,279 --> 00:21:26,039 it into a roth ira. So are they going to change that rule? 269 00:21:26,119 --> 00:21:30,759 Probably not, because they don't want you at the end of the day. 270 00:21:30,000 --> 00:21:33,559 That's seventy five hundred dollars with the right offs that you got that you didn't 271 00:21:33,559 --> 00:21:37,720 have to pay on your salary. That now they're going to take taxes out. 272 00:21:38,200 --> 00:21:42,920 But I thought the limit was four hundred thousand. I will not tax 273 00:21:42,920 --> 00:21:52,119 to anybody that's making under four hundred thousand. Everybody over fifty making three hundred 274 00:21:52,200 --> 00:21:57,200 three fifty one fifty two hundred, that's trying to save money. That's a 275 00:21:57,279 --> 00:22:02,279 tax hike because you will not put that money away. You won't get to 276 00:22:02,359 --> 00:22:07,799 tax deduction. Think about that. Left and right. There's so many things 277 00:22:07,839 --> 00:22:12,440 that they keep saying he's done great. I don't see him. The regulations 278 00:22:12,559 --> 00:22:19,480 off the charts. They want to control everything. It's not good. People 279 00:22:19,519 --> 00:22:26,960 are getting upset and the end result is not going to be pretty. And 280 00:22:26,319 --> 00:22:30,960 this election coming up is going to be very important, very important on so 281 00:22:32,079 --> 00:22:37,200 many levels, and there's going to be a lot of infighting. There's going 282 00:22:37,279 --> 00:22:40,759 to be a lot of things going back and forth. The Republican Party is 283 00:22:40,799 --> 00:22:42,319 going to be split, They're going to be yelling at each other, but 284 00:22:42,480 --> 00:22:45,920 hopefully they know how to get together at the end, because you know the 285 00:22:45,000 --> 00:22:48,240 Democrats will get together. At the end, they'll yell at each other, 286 00:22:48,359 --> 00:22:52,400 they'll tell each other how horrible they are and bite again. But who's ever 287 00:22:52,480 --> 00:22:59,079 there At the end, they will support. We need to do the same 288 00:22:59,160 --> 00:23:07,960 thing we do. I'm concerned about our debt, concerned about regulations. I'm 289 00:23:07,039 --> 00:23:18,519 concerned about our strength of a country. I am very concerned that unions go 290 00:23:18,720 --> 00:23:22,759 through the roof right now because they know that Biden is a union type guy. 291 00:23:25,000 --> 00:23:27,200 Everyone wants to go and strike and wants so much money. Everyone that 292 00:23:27,359 --> 00:23:32,960 in the union that wants more money. That's inflationary. That is inflationary. 293 00:23:33,720 --> 00:23:36,839 We all want more money. You know how you get more money. You 294 00:23:37,000 --> 00:23:40,480 become indispensable to the people you're working for. You put in the time, 295 00:23:40,519 --> 00:23:42,240 the effort, in the years to do that, or you go out on 296 00:23:42,319 --> 00:23:45,640 your own. You take the risk and you do things that other people won't 297 00:23:45,680 --> 00:23:48,200 do and if it turns out great, If not, you're the one that's 298 00:23:48,240 --> 00:23:53,240 holding the bag. You're the one that loses. You're the one that gets 299 00:23:53,279 --> 00:23:57,880 the tax right off of thirty percent of everything you lost. Big deal. 300 00:23:59,200 --> 00:24:02,240 You lose a million and you get to write off three hundred thousand. Big 301 00:24:02,359 --> 00:24:06,759 deal. You have to be able to make it back. Everything is backwards 302 00:24:06,880 --> 00:24:10,759 right now. Socially, there's so many things out of backwards. Economically, 303 00:24:10,880 --> 00:24:17,359 they're off the charts backwards. But somehow the left just continues to support him 304 00:24:17,559 --> 00:24:21,960 and actually do it with a smile and praise him, which drives me crazy. 305 00:24:22,079 --> 00:24:23,960 We'll be back. This is the Money Matty Show, and we all 306 00:24:25,319 --> 00:24:40,279 appreciate you all listening. Say it's all a name. Welcome back everybody to 307 00:24:40,400 --> 00:24:44,680 the Money Matty Show. We got Dave Sherwood, Dylan Greenberg, Todd Glick, 308 00:24:44,799 --> 00:24:48,920 myself, Dean Greenberg here to bring you whatever information we have from the 309 00:24:48,960 --> 00:24:52,119 week, and of course Dave has a lot of stuff. So here we'll 310 00:24:52,160 --> 00:24:53,640 let him start. Come up with a name. I think you said he 311 00:24:53,720 --> 00:24:57,039 came up with a name for your EV. Well, you know we have 312 00:24:57,359 --> 00:25:00,960 we have an Evy segment every week, and you rabbit, I think that 313 00:25:02,160 --> 00:25:10,680 that you have. You have v d EV EV elect vehicle vehicle every week, 314 00:25:11,200 --> 00:25:12,039 and we're trying to come up with a little name. And I finally 315 00:25:12,119 --> 00:25:15,720 came up with it. But it's gonna be called ev Garage. Right that 316 00:25:15,799 --> 00:25:18,119 We're gonna actually was gonna go out in my garage and record the sound of 317 00:25:18,160 --> 00:25:22,319 the garage girl opening. It's okay, that's a little much. That that's 318 00:25:22,319 --> 00:25:25,359 a little much. That's what I was thinking of that gay, We're gonna 319 00:25:25,359 --> 00:25:29,279 blow your EV out of the water. That's probably not gonna happen. Yeah, 320 00:25:29,400 --> 00:25:32,799 well with what Well, first of all, you've been down on it. 321 00:25:33,759 --> 00:25:37,039 No, no, I'm not up or down. Let me clear, 322 00:25:37,279 --> 00:25:41,680 because you don't want to come on. Man, I'm not an EV supporter 323 00:25:41,839 --> 00:25:45,880 and I'm not anti EV. I'm a curious guy who's enjoying an experience. 324 00:25:47,000 --> 00:25:51,720 That's all an experiment. It's an experiment. We bring information later about it. 325 00:25:51,960 --> 00:25:55,160 We got it. We we did a homework this week on your ELD. 326 00:25:55,160 --> 00:25:57,480 You start the week right on Thursday, we got the CPI. I 327 00:25:57,559 --> 00:26:02,119 mean really, there was no big mark market movers in the first parts of 328 00:26:02,200 --> 00:26:04,720 the big news of the week tide since Dean told me to go first. 329 00:26:06,119 --> 00:26:10,160 The big news of the week is we broke our fifty three consecutive day hundred 330 00:26:10,160 --> 00:26:14,920 degree record streaks. That's just the big news. Actually, that big news 331 00:26:15,000 --> 00:26:18,799 of the week was in Maui. Right, What a tragedy, What a 332 00:26:18,880 --> 00:26:22,920 tragedy that with the beautiful city and like sixty or seventy people. Dad, 333 00:26:23,000 --> 00:26:27,119 are you I just can't even imagine being on Maui. Whenever you ever been 334 00:26:27,160 --> 00:26:30,759 in Mali? Oh yeah, okay, yeah, usually you don't leave like 335 00:26:30,240 --> 00:26:34,000 Tucson to California. Yeah, we don't talk about it. Well, I 336 00:26:34,039 --> 00:26:37,200 know you in South Dakota. You went a lot of places South Dakota. 337 00:26:37,559 --> 00:26:42,559 I went in North Dakota. Exactly. Getting back to the markets, Yes, 338 00:26:44,000 --> 00:26:48,079 we had the CPI on Thursday. Did it came in below expectations? 339 00:26:48,200 --> 00:26:53,279 It's still increased from last month. The market liked it opened up higher, 340 00:26:53,400 --> 00:26:56,720 but on Thursday we still ended up pretty much down, I mean pretty much 341 00:26:56,759 --> 00:27:00,279 reversed. Course, that's because the wholesale just came in higher than expected. 342 00:27:00,319 --> 00:27:03,079 Well, now we ended up on Thursday atas time. By Thursday we had 343 00:27:03,359 --> 00:27:07,720 opened up four hundred and fifty points. And I said to Dean, this 344 00:27:07,880 --> 00:27:11,960 is like coming back from vacation and thinking you gain ten pounds. You get 345 00:27:11,000 --> 00:27:15,079 on the scale and you only gain five pounds. You're still five pounds heavy 346 00:27:15,160 --> 00:27:18,240 year. You still have work to do. So it fus about my vacation 347 00:27:19,839 --> 00:27:25,039 that the CPI wasn't as bad as some had feared. It was still an 348 00:27:25,160 --> 00:27:27,640 uptick and it was the first uptick in a year. Yeah, it's been 349 00:27:27,680 --> 00:27:33,640 ticking steadily lower for a year. It was primarily driven by housing and rents, 350 00:27:34,400 --> 00:27:38,359 shelter cost. Shelter cost which one you're talking about shelter cost the CPI 351 00:27:38,880 --> 00:27:41,759 CPI right, CPI was driven by shelter costs. But did you hear what 352 00:27:41,839 --> 00:27:48,839 the PPI reason was higher than expect it? Now'll go ahead, financial services? 353 00:27:48,480 --> 00:27:52,799 Yes, I didn't. It was weird financial service. Of course, 354 00:27:52,119 --> 00:27:57,079 if everyone's making money, the fees will go higher because it's based on the 355 00:27:57,160 --> 00:28:00,920 amount of the money people have on the mounting. Yeah, when it goes 356 00:28:02,000 --> 00:28:04,000 down, then why didn't because is that the reason was going down? That's 357 00:28:04,039 --> 00:28:07,799 what they're using now, Dave. They come out with stuff, they talk 358 00:28:07,839 --> 00:28:11,240 about stuff that makes no sense. Is it not the interest that they have 359 00:28:11,359 --> 00:28:15,640 to pay with the financial services company increasing? That's not what they were talking 360 00:28:15,839 --> 00:28:21,799 They're talking about the the fees being hired. But I know what if the 361 00:28:21,880 --> 00:28:26,839 financial services company that the producers use as in strips go up, they cost 362 00:28:26,920 --> 00:28:30,519 more. That's not what they were talking about. Okay, I've got a 363 00:28:30,880 --> 00:28:33,279 David Stephen Leesman was like, I don't get this. Yeah, I got 364 00:28:33,359 --> 00:28:37,480 to look into this more. It makes no sense where we've all these years 365 00:28:37,519 --> 00:28:40,359 instead have been doing this. I've never heard this, But then why don't 366 00:28:40,359 --> 00:28:41,799 we talk about it when the PPI numbers coming down? He said, not 367 00:28:41,920 --> 00:28:45,359 one time? Right? Ever, Ever, I thought it was kind of 368 00:28:45,400 --> 00:28:48,559 interesting. I've looked it into the numbers. Is so what the big gainers 369 00:28:48,599 --> 00:28:52,599 are. Remember July of last year we were at eight point five, So 370 00:28:52,799 --> 00:28:56,039 three point two is better than eight point five for sure. Uh, year 371 00:28:56,119 --> 00:28:59,599 over your DNUS is year over year. It's important to remember that the biggest 372 00:28:59,680 --> 00:29:03,319 gains year over year motor vehicle insurance up seventeen point eight percent. And we 373 00:29:03,440 --> 00:29:07,000 know why. Anthony Figureau was on and he said, because the cost of 374 00:29:07,079 --> 00:29:11,799 reparing all these vehicles, with inflation having run away, it is very high. 375 00:29:12,720 --> 00:29:17,000 So the surance premiums, insurance preams are high. Second one I thought 376 00:29:17,079 --> 00:29:22,039 was interesting. Tax preparation and accounting up fourteen percent from a year ago. 377 00:29:22,920 --> 00:29:26,960 Yeah. Why isn't that weird? Yeah? Because rent went up tells it. 378 00:29:26,519 --> 00:29:30,200 They're coming up with stuff that I don't understand. How they get into 379 00:29:30,240 --> 00:29:32,799 the financial Well, we have to come up with reasons. So let's go 380 00:29:32,880 --> 00:29:36,000 into the financial services. Business. It shouldn't matter. I don't know. 381 00:29:36,039 --> 00:29:40,359 How about Number three was the food from vending machines at fourteen percent? Okay, 382 00:29:40,359 --> 00:29:42,480 I can understand that. On the on the decliners. Health insurance is 383 00:29:42,559 --> 00:29:48,319 twenty nine point five percent below a year ago. Oh really twenty nine I 384 00:29:48,359 --> 00:29:52,960 don't either. Well, I don't pay health costs. Yeah, gas hand 385 00:29:53,039 --> 00:29:57,759 to go down. Gasoline's twenty percent below last year, higher than it was 386 00:29:57,839 --> 00:30:00,680 a month ago, but lower and it was a year ago. NFL is 387 00:30:00,720 --> 00:30:07,039 dean down eighteen point six percent from a year ago. Kind of hard to 388 00:30:07,480 --> 00:30:10,240 just see that. It seems like it's cost a fortune to fly anywhere. 389 00:30:10,920 --> 00:30:14,519 Yeah, it looks like the rental prices didn't increase two months, but we 390 00:30:14,640 --> 00:30:18,640 did have the housing prices continue to increase. As a year over year, 391 00:30:19,160 --> 00:30:25,799 new listing of homes for sale fell sixteen sixteen point five percent, So continue 392 00:30:25,799 --> 00:30:29,599 to beat on that drum. There's just no inventory leading to that supply and 393 00:30:29,799 --> 00:30:33,200 demand dynamic of keeping the house prices high, which explains why shelter cost would 394 00:30:33,200 --> 00:30:40,480 have would have been elevated. Exactly. We got to hit on Tuesday, 395 00:30:40,480 --> 00:30:42,599 I believe it was when Moody's came out and downgraded to credit rating on a 396 00:30:42,640 --> 00:30:48,039 few banks, put a few others on watch higher interest rates, dean straining 397 00:30:48,079 --> 00:30:51,000 their balance sheets. As you know. The other thing that got hit with 398 00:30:51,079 --> 00:30:56,640 the chip stocks in a video AMD because of Biden a stroke of the pen. 399 00:30:56,880 --> 00:31:00,480 I'm not so sure. It's not a good idea. I don't know 400 00:31:00,559 --> 00:31:03,759 why. It's a one sided thing, you know what I'm saying. But 401 00:31:03,920 --> 00:31:07,480 basically it's limiting what they can sell to to China because they don't want all 402 00:31:07,559 --> 00:31:10,799 chips being used and they won't yeh. But did you see I mean that 403 00:31:10,880 --> 00:31:12,920 was Tuesday and or earlier in the weekend. Then later in the weekend video 404 00:31:12,920 --> 00:31:18,400 announced that there's five billion dollars worth the chips were bought by China tech giants 405 00:31:18,480 --> 00:31:21,519 like Ali, Baba, bay Do, ten Cent by Dance, all of 406 00:31:21,559 --> 00:31:25,240 them, and they're trying to buy at least one hundred thousand chips this year. 407 00:31:25,400 --> 00:31:27,680 It's that it's not their best one, it's a eight hundred. But 408 00:31:27,839 --> 00:31:30,759 they do like they don't want him using the new one. I think it's 409 00:31:30,799 --> 00:31:33,039 not Yeah, the h they're not letting him use the H one h one 410 00:31:33,160 --> 00:31:37,200 hundred one No, but this is they want this for AI. But they're 411 00:31:37,200 --> 00:31:40,039 not getting and Video's newest one, and then the one that they haven't even 412 00:31:40,119 --> 00:31:42,319 they just announced a new one, which was interesting. We're talking about that, 413 00:31:42,680 --> 00:31:47,119 and Video dropped about four percent the day they announced that they're coming out 414 00:31:47,119 --> 00:31:51,119 with a new chip to make AI even more powerful. It dropped. They 415 00:31:51,160 --> 00:31:53,039 haven't started shipping it or selling or anything. They just announced it. It 416 00:31:53,160 --> 00:31:56,480 dropped about four percent that day. And then the day after, five billion 417 00:31:56,519 --> 00:32:00,559 dollars worth of the older chip is getting shipped over to China to those big 418 00:32:00,599 --> 00:32:05,920 tech companies, right, and that's what what they they Biden prohibited them selling 419 00:32:05,960 --> 00:32:07,960 them the best chip, right, yeah, and so that you get the 420 00:32:08,359 --> 00:32:13,400 Class B and now they're prohibiting that. So they must be hurriling to try 421 00:32:13,440 --> 00:32:15,079 to get that before he shuts that on. And it's interesting to stock about 422 00:32:15,359 --> 00:32:20,640 the year, so they must be that must go into effect. And the 423 00:32:20,680 --> 00:32:22,279 week I was just saying, they want one hundred thousand and each by the 424 00:32:22,359 --> 00:32:25,400 end of the year. Yeah, what's going Then a move by Biden was 425 00:32:25,480 --> 00:32:30,000 to try to because then Video came up with this ohokay, Plan B right, 426 00:32:30,440 --> 00:32:32,000 yeah, which is a less powerful chip but still a good chip. 427 00:32:32,200 --> 00:32:35,119 Still put them behind the app all though. Yeah, yeah, now, 428 00:32:35,119 --> 00:32:37,079 and now he wants to get away to do away with that, which is 429 00:32:37,559 --> 00:32:39,440 I'm with you, Dean, I'm I think it's probably not a terrible idea. 430 00:32:39,960 --> 00:32:43,880 Yeah, I agree with that one. But what's good? So everyone's 431 00:32:43,880 --> 00:32:45,920 like trying to sell off in the video someplace in here. The video is 432 00:32:45,920 --> 00:32:50,680 going to stop going down. It might go down to three fifty to four 433 00:32:50,759 --> 00:32:52,680 hundred, right, but everyone thinks they can pick the bottom, pick the 434 00:32:52,720 --> 00:32:57,160 top. You own no video right now for the reasons you own it. 435 00:32:58,039 --> 00:33:02,319 Nothing's changed. They still have the AI chip that everybody needs. They'll charge 436 00:33:02,359 --> 00:33:06,680 more for that chip if they can't sell it to other places. Plus they 437 00:33:06,720 --> 00:33:09,319 have this other chip that's even bigger and better, So they're already replacing the 438 00:33:09,400 --> 00:33:13,200 chips that they have to the companies that need them. Yeah, and what 439 00:33:13,279 --> 00:33:16,720 that new chip is gonna do is help companies reduce their costs with their all 440 00:33:16,759 --> 00:33:21,039 their AI ambitions because of how powerful it is. They'll have to just pretty 441 00:33:21,079 --> 00:33:22,759 much by the one or something like that. It's a lot less, soill 442 00:33:22,759 --> 00:33:29,000 help them reduce the cost. But this is how I think, and I 443 00:33:29,079 --> 00:33:32,240 don't you know who knows. Obviously there's risking everything, but somewhere between three 444 00:33:32,400 --> 00:33:35,640 fifty and four hundred. If you don't own it, you try to look 445 00:33:35,680 --> 00:33:37,759 though, because I think what will happen has come down and as it gets 446 00:33:37,799 --> 00:33:43,720 closer to a turning periods, if it's it's gonna stock going up again because 447 00:33:43,759 --> 00:33:46,359 their earnings are probably gonna blow away estimates again. I mean, look, 448 00:33:46,440 --> 00:33:50,519 it went down ten percent last week. If you're looking for an opportunity to 449 00:33:50,720 --> 00:33:52,359 get feetwell within video, that's the time to looked at it. And it 450 00:33:52,400 --> 00:33:54,960 could go back down to two hundred. It could easily, But that's if 451 00:33:55,000 --> 00:33:58,640 you believe in the stock, you believe in the future that they're also a 452 00:33:58,759 --> 00:34:01,200 decade ahead with their AI in the chips. Then you keep buying it. 453 00:34:01,279 --> 00:34:05,359 As it goes down, you just keep lowering your unit costs until it starts 454 00:34:05,400 --> 00:34:07,159 taking off. The same way we were talking about it a year ago when 455 00:34:07,239 --> 00:34:09,880 it went all the way down from to one oh eight from three hundred. 456 00:34:10,480 --> 00:34:13,880 The same idea. It's a volatile holding though, I mean, it's the 457 00:34:13,960 --> 00:34:19,079 four hundred stock that moves ten fifteen twenty dollars a days ago two hundred dollars 458 00:34:19,480 --> 00:34:22,320 down, right, But you make you make that as part of whatever allocation 459 00:34:22,360 --> 00:34:23,960 you want, right okay, And then it goes up. You take some 460 00:34:24,079 --> 00:34:27,920 off the table, but you still hold something that's a core position. Right 461 00:34:27,960 --> 00:34:30,280 now. Yeah, you don't have to buy one hundred shares. We talked 462 00:34:30,280 --> 00:34:31,599 about all the time. If you want, you could. If you want 463 00:34:31,639 --> 00:34:36,079 a video to be three percent of your entire portfolio, it runs up the 464 00:34:36,119 --> 00:34:37,239 four and fifty dollars a share, all of a sudden, it's six percent 465 00:34:37,280 --> 00:34:40,039 of your portfolio. Sell the three percent of profits, and then you're back 466 00:34:40,079 --> 00:34:43,639 to where you started. But you have three percent of locked in profits. 467 00:34:44,239 --> 00:34:50,079 Right absolutely, absolutely. The interest rates edged up this past week, which 468 00:34:50,119 --> 00:34:54,760 it took gold down and gold down twenty six bucks golds ten percent lower since 469 00:34:54,840 --> 00:34:59,840 May, just since May. So they're on TV howking the heck out of 470 00:34:59,840 --> 00:35:04,800 it? And that always tells you whenever you hear the majority of the commercials 471 00:35:04,920 --> 00:35:09,159 talking about putting their money in gold and and and and being and I'm surprised, 472 00:35:09,199 --> 00:35:15,440 you know how all these uh these famous people we're advertising pitcoin and how 473 00:35:15,480 --> 00:35:19,079 they got in trouble? How did these guys want to go through that with 474 00:35:19,199 --> 00:35:22,599 gold? Now? Okay, because they're they're selling stuff, they're promoting something 475 00:35:22,880 --> 00:35:28,239 without a license seems like it, right, We can't do that. We 476 00:35:28,400 --> 00:35:31,400 need licenses. We just even talking this radio show the way we talk and 477 00:35:31,719 --> 00:35:37,639 be open and and give our opinions, it suppos have licenses. We've got 478 00:35:37,679 --> 00:35:39,599 seven tenths of a percent of spread on the ten year and two year, 479 00:35:39,679 --> 00:35:43,920 Todd, which is narrowing a little bit. It is. I don't know 480 00:35:44,039 --> 00:35:46,840 that it gets back to the normal yield spread anytime soon. That long end 481 00:35:46,960 --> 00:35:51,360 keeps deepening. All right, you'll listen to the money amount of show. 482 00:35:51,440 --> 00:35:58,159 We'll be right back with another segment to hopefully make you happy. Say it's 483 00:35:58,199 --> 00:36:07,280 all a bab Welcome back, everybody. This is the money about the show. 484 00:36:07,360 --> 00:36:09,320 We got everybody here today, Dave, Dylan, Todd, and myself. 485 00:36:09,920 --> 00:36:13,559 During the monologue, I told you we were going to talk about what 486 00:36:13,719 --> 00:36:16,760 the Monte Carlo. It really isn't me, and so I'm going to turn 487 00:36:16,800 --> 00:36:22,679 it over to Dylan and Todd, who work as off basically all our financial 488 00:36:22,719 --> 00:36:25,440 plans. They put him together and get to know everybody. Yeah, and 489 00:36:25,519 --> 00:36:30,239 Todd go into the details about what the Monty Carlo is, but the overview 490 00:36:30,360 --> 00:36:34,079 is that it is part of the financial plan in the sense that it gives 491 00:36:34,159 --> 00:36:37,199 us an idea of their probability of success with everything that we put into the 492 00:36:37,239 --> 00:36:40,880 beginning of the financial plan, your expenses, your social security, your current 493 00:36:40,920 --> 00:36:45,360 income, your expected expenses during retirement, your finance, your finances, your 494 00:36:45,400 --> 00:36:50,280 investments, and he houses, any rental properties. All of that gets brought 495 00:36:50,320 --> 00:36:55,000 into one picture. And then that's what comes to the Monty Carlos simulation, 496 00:36:55,079 --> 00:37:00,079 which Todd, Yeah, it's really fascinating for myself, I'm a geek it 497 00:37:00,159 --> 00:37:04,199 comes to this stuff because it really comes down to quantifying risk. It's a 498 00:37:04,360 --> 00:37:09,599 very hard thing for any business, individual organization to quantify how risky their portfolio 499 00:37:09,760 --> 00:37:13,400 is because there's so many ways to do it. One way to do it 500 00:37:13,559 --> 00:37:17,239 is to use a Monty Carlos simulation. And this is actually how gambling organizations 501 00:37:17,400 --> 00:37:22,000 use to find exactly how they're profitable or not on a certain game. Every 502 00:37:22,199 --> 00:37:28,280 game has a certain set of assumptions and possibilities of return based on different payouts, 503 00:37:28,360 --> 00:37:30,639 and then they can run that through the Monty car simulation and using a 504 00:37:31,320 --> 00:37:36,159 trial, say ten thousand different trials, they'll know exactly what's their expected profit. 505 00:37:36,360 --> 00:37:38,639 As a business. You can do that same thing for your financial plan. 506 00:37:39,159 --> 00:37:43,639 Can we have all the assumptions your social security, your pensions, how 507 00:37:43,719 --> 00:37:46,239 much you're putting away into the forward k, even down to the way you're 508 00:37:46,280 --> 00:37:51,840 allocated in your investment accounts. Based on all tho those assumptions, you're going 509 00:37:51,880 --> 00:37:54,159 to get a certain type of investment return. Obviously, if you're more conservative, 510 00:37:54,159 --> 00:37:58,280 you're gonna have a lower return less standard deviation, meaning you're gonna have 511 00:37:58,400 --> 00:38:00,639 less volatility. If you have more aggressive, you're gonna have a lot more 512 00:38:00,719 --> 00:38:04,760 volatility, but you should have also a higher rate of return in the long 513 00:38:04,880 --> 00:38:09,000 run. All of these assumptions will dictate how the Monty Carlo simulation comes out. 514 00:38:09,320 --> 00:38:13,400 And what it does is it takes a thousand different trials of your financial 515 00:38:13,480 --> 00:38:17,679 plan against a thousand different return possibilities. Obviously, most financial plans in the 516 00:38:17,719 --> 00:38:22,840 past have used things like a standard rate of return of seven percent every single 517 00:38:22,920 --> 00:38:27,199 year. We know that's not realistic. It's never gonna happen. You're gonna 518 00:38:27,199 --> 00:38:30,280 have down years, you're gonna have up years. So the Monty Carlo simulation 519 00:38:30,320 --> 00:38:32,440 allows us to see those up and down years, and we can actually take 520 00:38:32,480 --> 00:38:37,039 one of the worst case trials. There's really good ones, and there's really 521 00:38:37,079 --> 00:38:38,199 bad ones. We'll take one of the worst case and we'll show that to 522 00:38:38,320 --> 00:38:43,039 you and show you how your plan is able to survive or not based on 523 00:38:43,119 --> 00:38:45,559 the worst case scenarios. And then it can go even one step further. 524 00:38:45,920 --> 00:38:51,400 If we have things like tax planning strategies, if we have different strategies using 525 00:38:51,440 --> 00:38:55,760 annuities or investments for income, we can show what's the probability of success for 526 00:38:55,880 --> 00:39:00,760 using this strategy compared to another. What's the probability of success compared to using 527 00:39:00,840 --> 00:39:04,440 this tax strategy. Does it actually help us or hurt us in the long 528 00:39:04,559 --> 00:39:07,920 run. There's so many strategies out there, and it's hard to know which 529 00:39:07,920 --> 00:39:09,719 one is right for you until you actually put a number behind it, you 530 00:39:09,760 --> 00:39:14,679 actually put a plan behind it. And that's what really the value that we've 531 00:39:14,719 --> 00:39:17,760 been seeing clients obtained from the financial planning meeting is the peace of mind of 532 00:39:17,880 --> 00:39:22,639 knowing there's a lot smarter software doing the hard work for them and they can 533 00:39:22,840 --> 00:39:28,199 sleep nice. You know, they can sleep peacefully at night knowing that at 534 00:39:28,199 --> 00:39:30,679 the end of the day, it's not just some number they're picking, putting 535 00:39:30,760 --> 00:39:34,679 up in their head or creating some generic Excel sheet. It's a true in 536 00:39:34,880 --> 00:39:37,880 depth to the granular detail financial plan. And the reason we like to use 537 00:39:37,960 --> 00:39:40,800 one of the worst case scenarios is because if your plan works from one of 538 00:39:40,840 --> 00:39:45,800 the worst times, then the most likely it will work out in the long 539 00:39:45,920 --> 00:39:47,800 run and in reality, because you never know what's going to happen when you 540 00:39:47,880 --> 00:39:52,920 retire. If you decided to retire right before the dot com bubble, then 541 00:39:52,920 --> 00:39:54,280 all of a sudden you had two negative years in a row, big negative 542 00:39:54,360 --> 00:39:58,519 years in a row that could have affected your plan immensely. Well, if 543 00:39:58,559 --> 00:40:00,280 you can work out in the long run, it's nice to be able to 544 00:40:00,320 --> 00:40:04,039 see that. It gives you a little peace of mind. Dean and I 545 00:40:04,079 --> 00:40:07,880 have been doing this for forty years and we're both just blown away at the 546 00:40:07,119 --> 00:40:14,599 number of people that are taking advantage of this free offer. If you will, 547 00:40:14,679 --> 00:40:17,719 this free financial plan, Uh, just NonStop and you know, give 548 00:40:17,800 --> 00:40:22,280 us a call five two zero five four four four nine o nine. Talked 549 00:40:22,280 --> 00:40:25,119 to Todd, talked to Dylan, and set something up. Come on in 550 00:40:25,119 --> 00:40:30,960 and do it. There's no downside there obligation and it's awful popular. Yeah, 551 00:40:30,960 --> 00:40:32,320 I like my dad was saying, it's not something that we're gonna hold 552 00:40:32,320 --> 00:40:35,800 hostage. If you don't do business with us, we will give you the 553 00:40:35,840 --> 00:40:37,360 financial plan right after we're done. We'll email it to and it's yours to 554 00:40:37,440 --> 00:40:40,880 keep, and we can update it at any time too. Just different scenarios 555 00:40:40,920 --> 00:40:45,280 come up, and we're definitely here to help. Right, We've helped many 556 00:40:45,400 --> 00:40:47,199 people that we've never actually did business with, but we showed them in the 557 00:40:47,280 --> 00:40:51,039 right directions. You want a fun fact, let's hear it. Of course 558 00:40:51,320 --> 00:40:55,639 this is this one's surprised me. McDonald's right, sells more chicken than beef. 559 00:40:58,400 --> 00:41:00,599 I had no idea. That blows me. The chicken nuggets, I 560 00:41:00,679 --> 00:41:07,599 guess the chicken nuggets, which donald sells more chicken than than beef. They're 561 00:41:07,639 --> 00:41:12,360 the number two of cellar of Chicken in the in the world, behind Kentucky 562 00:41:12,440 --> 00:41:15,639 Fried Chicken interest more chicken than beef. I I thought I had to check 563 00:41:15,719 --> 00:41:19,599 it through or four different places. I couldn't believe that was true, but 564 00:41:19,679 --> 00:41:21,760 they do. Never would have thought that, but it does make sense. 565 00:41:22,159 --> 00:41:27,079 You know that it was illegal to pump your own gas in Oregon until last 566 00:41:27,119 --> 00:41:30,880 week. Last week? Yeah, what do you mean I can't pump your 567 00:41:30,920 --> 00:41:36,159 own gas? Yeah, for seventy seven years, you have been unable to 568 00:41:36,199 --> 00:41:38,840 pump your own gas in Oregon. That's how Mexico is. You can't do 569 00:41:38,920 --> 00:41:42,199 in Mexico. They have people out there and they're supposed to do it for 570 00:41:42,440 --> 00:41:45,039 it's a combination of two things, according to Oregon. But they did change 571 00:41:45,039 --> 00:41:50,559 it last week, leaving only New Jersey. New Jersey still will not allow 572 00:41:50,599 --> 00:41:52,920 you to pump your own gas. That's the only state you're talking about. 573 00:41:52,960 --> 00:41:54,840 I pump gas in New Jersey. You cannot pump your own gas in the 574 00:41:54,880 --> 00:41:59,039 state of New Jersey. It's illegal. It's the only state work it's illegal. 575 00:41:59,400 --> 00:42:01,920 I don't know, Dave, Okay, I don't know. He's somebody 576 00:42:01,960 --> 00:42:07,480 from New Jersey calls the office and when did that come about? Because I 577 00:42:07,800 --> 00:42:12,159 remember that it's always been illegal in New Jersey always. It's the last state, 578 00:42:12,320 --> 00:42:15,639 because you've been there how many times? It's the last it's in the 579 00:42:15,719 --> 00:42:19,039 legislation. I'm just on just like you know, I don't have to go 580 00:42:19,159 --> 00:42:22,360 somewhere. Didn't know what the facts are, the the and it's it's it's 581 00:42:22,400 --> 00:42:27,360 the last state. That uh. The article I was reading about Oregon voting 582 00:42:27,639 --> 00:42:32,360 and leaving only New Jersey as the only state where gas and it was a 583 00:42:32,599 --> 00:42:37,199 there was two thought from New Jersey. I don't remember anyone pumping my gas. 584 00:42:37,800 --> 00:42:42,599 Well, I think that's too much information to be honestly. My friends, 585 00:42:42,679 --> 00:42:44,559 my friend that lives there, so I'm gonna see what he's it's the 586 00:42:44,639 --> 00:42:49,199 g rated show. Stop that going for the week, though, I don't 587 00:42:49,199 --> 00:42:51,199 know if we talked about it you were coming up to the end of the 588 00:42:51,280 --> 00:42:52,639 first hour. The Dow was up for point six percent for the week. 589 00:42:53,039 --> 00:42:55,599 The S ANDP was down point three percent, and the NASDAC was down two 590 00:42:55,639 --> 00:42:59,519 percent, hit big by a lot of the big tech companies like Nvidia. 591 00:43:00,039 --> 00:43:02,440 The small cap Russell two thousand was down one point six percent, and then 592 00:43:02,440 --> 00:43:06,719 the RSP, which is the equal weight at SMP five hundred, was flat, 593 00:43:06,920 --> 00:43:09,280 completely flat for the week. Isn't that amazing? I haven't seen that 594 00:43:09,320 --> 00:43:15,400 in a while. Did you see Tabula RASI the last week? Tabular rassa 595 00:43:15,559 --> 00:43:19,519 is is Uh, there's a lot of University of Arizona's involved with them. 596 00:43:20,000 --> 00:43:24,440 Uh. It's a I guess a healthcare company, right, this will talk 597 00:43:24,480 --> 00:43:30,840 about a ride. Uh. This stock seven years of the public company has 598 00:43:30,880 --> 00:43:35,559 started at fifteen bucks. It rallied up to ninety one dollars and then it 599 00:43:35,679 --> 00:43:38,760 plunged to two dollars about a year ago. On Monday, they were taken 600 00:43:38,800 --> 00:43:45,039 over by Nautic Partner's private equity ten and a half bucks to share. There's 601 00:43:45,079 --> 00:43:50,000 a lot of there's a lot of twosonans who have been involved in Tabula rasa 602 00:43:50,159 --> 00:43:52,840 along the way, and uh, several of our clients have been involved with 603 00:43:52,920 --> 00:43:58,320 Tabula rasa. Uh. Tesla. Big news on Tesla this past week with 604 00:43:58,440 --> 00:44:04,599 their CFO leaving. That's right, he's stepping down effective immediately. He's been 605 00:44:04,679 --> 00:44:09,039 with Tesla since twenty ten. He's been the CFO since twenty nineteen. The 606 00:44:09,119 --> 00:44:14,119 good news is and whenever a CFO leaves, it always creates a little bit 607 00:44:14,159 --> 00:44:15,400 of concern. You know, what, does he know? What's he been 608 00:44:15,480 --> 00:44:19,559 doing? Uh, you know, because he's a pretty powerful person. Maybe 609 00:44:19,599 --> 00:44:22,360 it's just incompetent. Well, he's gonna still it looks the other side. 610 00:44:22,400 --> 00:44:27,079 It's always the company. Everyone looks at it. That's true, Ding, 611 00:44:27,199 --> 00:44:29,599 That's absolutely true. Whenever a CFO leaves, though, as you know, 612 00:44:30,360 --> 00:44:34,800 it generally creates a little bit of concern with the stock. He's gonna stay 613 00:44:34,960 --> 00:44:37,599 though until the end of the year to help with the transition. So obviously 614 00:44:37,639 --> 00:44:43,079 he's not getting fired. He's probably has enough one hundred million dollars accounts to 615 00:44:43,639 --> 00:44:46,159 handle things. Maybe he's got another another scenario that he's looking at and says, 616 00:44:46,159 --> 00:44:50,639 hey, you know it's this will be exciting. I'm tired of doing 617 00:44:50,679 --> 00:44:52,480 it. A lot of it seems like a lot of executives from big companies 618 00:44:52,559 --> 00:44:55,199 like that in amazonic Google, and I'll leave to go do more of the 619 00:44:55,239 --> 00:45:00,079 startup stuff. Yeah, the right, because it's smaller, they can do 620 00:45:00,199 --> 00:45:01,920 it. They were in control. They can. If they're gonna make money, 621 00:45:01,920 --> 00:45:05,280 they've already made money. But they can make a big, big hit 622 00:45:05,719 --> 00:45:08,480 and that's why they do it. Yeah, they Warren buffet over the weekend. 623 00:45:08,599 --> 00:45:14,039 Last weekend, company stock rally to an all time high after they reported 624 00:45:14,159 --> 00:45:19,599 a second quarter earnings were better than expected. Cash Hart has grown to one 625 00:45:19,679 --> 00:45:27,519 hundred and fifty billion dollars billion dollars and Occidental Petroleum is one of his biggest 626 00:45:27,599 --> 00:45:32,360 positions. Has done absolutely nothing nothing. Earnings were driven by a seventy four 627 00:45:32,400 --> 00:45:37,360 percent increase in insurance earnings and then what do we say was the number one 628 00:45:38,000 --> 00:45:45,480 increase in prices year over year? Insurance insurance. The insurance are the higher 629 00:45:45,559 --> 00:45:51,000 premiums and lower claims. THO was the insurance premiums that drove Warren Buffets the 630 00:45:51,280 --> 00:45:53,360 company to a new all time high. Higher interest rates are helping them out. 631 00:45:53,960 --> 00:45:59,920 Because you've got one hundred and fifty billion dollars that's now earning five percent 632 00:46:00,119 --> 00:46:04,119 entins did a zero. That'll make a little bit of a difference on your 633 00:46:04,159 --> 00:46:07,639 balance sheet, don't you know. It's not the one point five billion dollars 634 00:46:07,800 --> 00:46:13,280 that the Florida lottery person won. What would you do with one point five 635 00:46:13,480 --> 00:46:17,480 billion dollars? One point five billion, Well, okay, so you're only 636 00:46:17,519 --> 00:46:21,760 going to get a billion, you're only gonna get a billion, Create an 637 00:46:21,800 --> 00:46:25,800 indumbment on off the billion dollars. I would do good things with it. 638 00:46:27,199 --> 00:46:30,760 Unfortunately, it seems like the people that get it don't know what to do 639 00:46:30,880 --> 00:46:36,719 with it. They get just smothered by all these people that think they can 640 00:46:36,760 --> 00:46:38,719 tell them what to do, and they usually end up losing everything they have. 641 00:46:39,039 --> 00:46:43,280 Yeah, I had one earlier in my career. I had an auto 642 00:46:43,360 --> 00:46:46,840 mechanic that one one nine million, which back then was a big, big 643 00:46:47,000 --> 00:46:52,000 number twenty five years ago, and you know his wife was a hairdresser and 644 00:46:52,039 --> 00:46:54,679 he was a mechanic. First thing they do is buy a corvette. Second 645 00:46:54,760 --> 00:46:59,320 second thing they did was buy an RV. They started traveling around the country 646 00:46:59,440 --> 00:47:01,480 enjoying a lite and came to your two Cian Arizona. Though, I'm going 647 00:47:01,519 --> 00:47:07,280 to live here, and so they settled, settled here and h mostly real 648 00:47:07,400 --> 00:47:12,280 estate was what they what they were comfortable with, what they understood. Ups 649 00:47:12,440 --> 00:47:15,960 not participating in this year's rally Open lower on Tuesday, disappointing quarter lower guidance. 650 00:47:16,360 --> 00:47:21,800 Often Deane Ups is seen as an economic barometer. They also had that 651 00:47:21,920 --> 00:47:25,880 economic dispute with their labor. They're also increasing their benefits and everything their whole 652 00:47:25,880 --> 00:47:29,800 package. They're increasing it from an average one hundred forty five thousand dollars to 653 00:47:29,800 --> 00:47:31,559 one hundred and seventy five thousand dollars per comploy. All right, we'll coming 654 00:47:31,639 --> 00:47:34,920 up to the top of the hour. We'll be back to bring you the 655 00:47:34,960 --> 00:47:37,199 money amount of show. But by the way, Dave, I wanted a 656 00:47:37,239 --> 00:47:39,280 billion and a half, I'd buy a professional football team. I bet you 657 00:47:39,360 --> 00:47:43,639 would, right back. This is the moneybout of the show. Appreciate your 658 00:47:43,679 --> 00:47:52,000 living Living, watch listening and Levy and Levy. Welcome back everybody. It's 659 00:47:52,000 --> 00:47:54,000 the Money Matter Show, Second Hour. I appreciate your listening. Matter. 660 00:47:54,039 --> 00:47:58,920 You can listen on podcasts. You can listen by going to our radio show 661 00:47:59,280 --> 00:48:02,880 a website and just click on any of the of the shows that we have 662 00:48:04,079 --> 00:48:09,880 on there. And we also on TV and Saturdays. We have a different 663 00:48:09,960 --> 00:48:15,320 format, but we do some of those lie on the K and scls, 664 00:48:15,519 --> 00:48:17,599 So a lot of different ways to listen to us. And if you miss 665 00:48:17,639 --> 00:48:22,639 it, you just go to website and they're all on there. Yeah, 666 00:48:22,719 --> 00:48:25,400 So for those of you just turn tuning in to the Second Hour, the 667 00:48:25,519 --> 00:48:29,480 DAW was up point six percent for the week. Last week, the SMP 668 00:48:29,679 --> 00:48:32,599 five hundred was down point three percent, the NAVSDAC was down two percent, 669 00:48:34,159 --> 00:48:36,800 and the Russell two thousand, which is a small cap was down one point 670 00:48:36,840 --> 00:48:40,079 six percent. And then the RSP which is the SMP five hundred equal weighted, 671 00:48:40,559 --> 00:48:44,760 was completely flat point zero zero. Yeah, the eyes were all on 672 00:48:44,840 --> 00:48:49,039 That inflation number came out on Thursday, came in a below expectation, still 673 00:48:49,119 --> 00:48:52,719 increased from the last month reading. The interesting thing though, is if you 674 00:48:53,000 --> 00:48:58,400 x out shelter right, if you look at CPI quarter over quarter, and 675 00:48:58,440 --> 00:49:01,920 you take shelter away, inflation is basically gone. So right now, a 676 00:49:02,039 --> 00:49:06,519 lot of the inflation is being led by those shelter costs. I'll tell you 677 00:49:06,559 --> 00:49:07,920 it doesn't feel like it out in the real world, and I'm sure our 678 00:49:07,960 --> 00:49:10,719 listeners feel the same way. Every time I go to the grocery store, 679 00:49:10,719 --> 00:49:14,760 it seems like it's more. And I just got a deal that the Hulu 680 00:49:14,880 --> 00:49:17,519 subscription is going up and Disney Plus is gonna go up, and just had 681 00:49:17,519 --> 00:49:22,920 a lot of stuff going Panda Pandora, Pandora's going up, and like, 682 00:49:23,239 --> 00:49:25,760 are you kidding me? We all yeah, all streaming service. I mean 683 00:49:25,960 --> 00:49:30,719 a second job to pay for my streaming. When Disney Plus first came out 684 00:49:30,719 --> 00:49:34,079 a couple of years ago, it was six dollars. Now it's thirteen ninety 685 00:49:34,159 --> 00:49:37,760 nine. By the way, they even with the Dow out performing this past 686 00:49:37,840 --> 00:49:42,559 week. Year to date, the Dow is up six SMP five hundred, 687 00:49:42,639 --> 00:49:46,760 up sixteen. Yeah still and again that's the magnificence seven because the nasdac's up 688 00:49:46,800 --> 00:49:50,679 thirty. And to echo that point, I mean, if you look at 689 00:49:50,760 --> 00:49:52,239 value stocks. I don't know if you haven't with you, Dave, but 690 00:49:52,360 --> 00:49:58,559 many times we've seen throughout the year, that value is just underperforming vastly. 691 00:49:58,800 --> 00:50:01,960 If you're a conservative investor, and let's say you want blue ship dividend paying 692 00:50:02,039 --> 00:50:07,519 stocks, value stocks. Let's say you've got fifty percent of your portfolio there, 693 00:50:07,760 --> 00:50:12,480 and you've got fifty percent of your portfolio and treasuries. The treasuries are 694 00:50:12,519 --> 00:50:15,960 paying around five percent, So halfway through the year you made two and a 695 00:50:15,000 --> 00:50:20,320 half, but interest rates have edged a little higher, so you probably have 696 00:50:20,400 --> 00:50:23,199 only netted one and a half at this point, and your value stocks are 697 00:50:23,639 --> 00:50:30,480 are down, so you could honestly be flat on the year, have made 698 00:50:30,679 --> 00:50:35,360 zero in an environment where the Nasdaq is up thirty percent. It has been 699 00:50:35,519 --> 00:50:39,480 so single minded. Ye. And it's like if you don't know exactly what 700 00:50:39,599 --> 00:50:43,559 you're invested in, then that you're kind of probably sitting there with an advisor, 701 00:50:43,760 --> 00:50:45,079 or if you're at just one of the big wirehouses you don't have a 702 00:50:45,119 --> 00:50:49,400 specific advisor, you're probably confused while you're not up. But that's what you 703 00:50:49,800 --> 00:50:52,079 chose to do when you first allocated your say your four own cake. And 704 00:50:52,199 --> 00:50:55,199 we did have a call, right and I just have a call from a 705 00:50:57,840 --> 00:51:00,280 prospect who says that he's unhappy with this current advisor, and I said, 706 00:51:00,320 --> 00:51:05,599 the first thing you have to decide is whether it's the advisor or whether it's 707 00:51:05,639 --> 00:51:08,960 your allocation that you're unhappy with. So let's talk a little bit about what 708 00:51:09,119 --> 00:51:15,159 your allocation is. And maybe the advisor is doing a fine job. You're 709 00:51:15,239 --> 00:51:20,000 in the wrong allocation, and it doesn't. Everybody want to be in the 710 00:51:20,119 --> 00:51:23,639 exact right place. But if you're a conservative investor, you can't own the 711 00:51:23,760 --> 00:51:30,079 Magnificent seven as your entire portfolio. You couldn't throw an ETF like if the 712 00:51:30,239 --> 00:51:32,800 Spy or the Voo or something like that. But you're not gonna own a 713 00:51:34,039 --> 00:51:37,920 video or a ton of it outright, if you're conservative investors. It's too 714 00:51:37,000 --> 00:51:39,840 risky, right. No advisor, no competent advisor, will put you in 715 00:51:39,880 --> 00:51:45,079 a ton of video if you don't have a high risk tolerance. The primary, 716 00:51:45,599 --> 00:51:49,519 our primary thing we do here is try to match your investment tolerance with 717 00:51:49,639 --> 00:51:54,119 your portfolio. And that doesn't if you come in and you're a conservative investor, 718 00:51:54,679 --> 00:52:00,960 a balanced investor primarily interested in return of the money, not return on 719 00:52:01,159 --> 00:52:06,480 the money, you're not going to have a big exposure to an index like 720 00:52:06,599 --> 00:52:09,599 the NASDAC that's all over the place. Down thirty percent last year, up 721 00:52:09,639 --> 00:52:13,920 thirty percent this year. That's not where you're going to be. And it's 722 00:52:13,920 --> 00:52:15,800 all about the timing in your life too. I mean, if you're retired, 723 00:52:15,840 --> 00:52:19,920 you're probably not going to be that aggressive of investor. But if you're 724 00:52:20,000 --> 00:52:23,920 young, you probably will be able to muster the take on those big risks 725 00:52:23,960 --> 00:52:28,559 and the volatility of the nastac Yeah, I think if you're under forty years 726 00:52:28,599 --> 00:52:30,559 old, you need to be at least you need to be fully invested in 727 00:52:30,639 --> 00:52:35,960 the market, because really the only thing you need is we've seen I was 728 00:52:36,800 --> 00:52:40,679 a broker when the Dow Jones Industrial Average hit one thousand for the first time. 729 00:52:42,000 --> 00:52:46,079 I was there working as a broker when the Dow hit one thousand for 730 00:52:46,159 --> 00:52:51,360 the first time. We even had caps that said now one thousand. You 731 00:52:51,480 --> 00:52:53,599 know, it didn't, it didn't hold. It backed off, you know, 732 00:52:53,760 --> 00:52:58,000 got to one thousand and backed off, closed at nine ninety. But 733 00:52:58,079 --> 00:53:00,480 we hit a thousand. It was a really big deal. Now we're all 734 00:53:00,480 --> 00:53:06,639 the way down to thirty five thousand, two eighty one. So all you 735 00:53:06,880 --> 00:53:10,199 need to be successful in the stock market, assuming you're you're dealing in quality 736 00:53:10,719 --> 00:53:16,000 holdings, it's time and as a the QQQ has gone up about twelve hundred 737 00:53:16,039 --> 00:53:20,119 percent since two thousand and two, since the dot com bubble about it right 738 00:53:20,159 --> 00:53:22,920 after that. So now it's gone up roughly twelve And you went through the 739 00:53:23,159 --> 00:53:27,199 two thousand and eight it lost sixty percent, and then last year, I 740 00:53:27,199 --> 00:53:30,360 mean it lost thirty percent. Yeah, it's own twice. Yeah, and 741 00:53:30,480 --> 00:53:32,400 it just doesn't matter you just if you're young, you've just let it go 742 00:53:34,280 --> 00:53:37,440 and don't look at it, and don't time in your life, and don't 743 00:53:37,480 --> 00:53:39,239 try to tweak it. Don't don't, especially with your four oh one k 744 00:53:39,400 --> 00:53:43,760 don't it's so easy with the four. Maybe this year I need to put 745 00:53:43,800 --> 00:53:45,559 something in Europe. Maybe this year I need to have more fixed income. 746 00:53:46,000 --> 00:53:51,800 It's you're gonna do the wrong thing. Just if you're young under forty, 747 00:53:52,119 --> 00:53:54,840 Uh, just put it in the SMP five hundred and forget about it. 748 00:53:55,000 --> 00:54:00,599 Leave it alone, because that's going to give you the best performance with the 749 00:54:00,679 --> 00:54:01,719 least amount of stress. Yeah. What I mean the idea is like, 750 00:54:02,159 --> 00:54:06,159 especially for your retirement accounts, if you're young, put it in there and 751 00:54:06,239 --> 00:54:08,119 forget about it. You can have another brokerage account where you want to trade. 752 00:54:08,159 --> 00:54:10,239 Maybe you do you got into options, or you want to do some 753 00:54:10,320 --> 00:54:15,280 foreign trading and stuff like that, but you need to have your retirement plan 754 00:54:15,840 --> 00:54:17,320 if you're young. Just let us sit there and don't think twice about it. 755 00:54:17,679 --> 00:54:20,920 Ten and a half percent, yeah, ten and a half percent return 756 00:54:20,960 --> 00:54:23,639 over the last fifty years. That's every seven years. The is gonna double, 757 00:54:24,079 --> 00:54:28,639 right, every seven years. Your money's gonna double if you just leave 758 00:54:28,679 --> 00:54:32,719 it alone and don't screw up. Evy garage. It's time for the Evy 759 00:54:32,760 --> 00:54:37,679 garage. Before we get to the Evy come on, really, yes, 760 00:54:37,880 --> 00:54:42,480 because I wanted to finish my point with value is abnormally oversold. It's a 761 00:54:42,719 --> 00:54:46,360 huge I mean, we haven't seen this type of opportunity since twenty twenty when 762 00:54:46,440 --> 00:54:50,159 growth was just taking off. You could throw a dart anything, and value 763 00:54:50,239 --> 00:54:53,760 is really underperforming. So if you are looking to get into something in this 764 00:54:53,920 --> 00:54:59,639 market, obviously growth is kind of not there right now. The value stocks 765 00:54:59,679 --> 00:55:02,760 is where you should be looking because from a sector rotation point of view, 766 00:55:04,119 --> 00:55:07,880 it's two. When you say growth is not there, you mean growth in 767 00:55:07,079 --> 00:55:13,119 value stocks is not there, because growth is definitely there in the girl stocks, 768 00:55:13,239 --> 00:55:16,159 right, I'm saying the value in growth stocks are yeah, the value 769 00:55:16,199 --> 00:55:22,639 stocks are are showing the performing poorly. Last year, one of the most 770 00:55:23,519 --> 00:55:29,559 one of the worst performing stocks was Salesforce dot Com. It's now far and 771 00:55:29,599 --> 00:55:35,159 away the number one doll performers this year. Boying is another one. So 772 00:55:35,400 --> 00:55:39,159 and right now it's value value is last year Salesforce dot Com. And there 773 00:55:39,199 --> 00:55:45,039 are ETFs the values. So anyway, uh, EV garage Again, I'm 774 00:55:45,119 --> 00:55:49,159 not pro EV, I'm not anti EV. I'm a curious guy who's enjoying 775 00:55:49,199 --> 00:55:54,360 the experience. And there's a lot of our clients who call about EV's because 776 00:55:54,360 --> 00:56:00,559 of these segments that have emailed about EV's and I would invite you if you 777 00:56:00,679 --> 00:56:06,000 have EV questions, email me, call me. I'm six weeks into this 778 00:56:06,159 --> 00:56:09,960 experience and i feel like I'm getting to be a bit of of I have 779 00:56:10,000 --> 00:56:15,000 a good a good font of knowledge of what's right and what's wrong. And 780 00:56:15,079 --> 00:56:17,239 I'm I'm a very straight shooter. I'm not gonna lie to you and sau 781 00:56:17,400 --> 00:56:21,280 it's the greatest thing ever, and I'm also not going to tell you it's 782 00:56:21,480 --> 00:56:23,199 the worst thing you could possibly do. I'm gonna give you the pros, 783 00:56:23,199 --> 00:56:28,119 I'll give you the cons. In the EV Garage, this week is Texas. 784 00:56:28,760 --> 00:56:32,079 The Texas legislature and the governor signed to pass the law last week that 785 00:56:32,280 --> 00:56:39,000 assesses electric vehicle owners four hundred dollars additional when they register the vehicle, and 786 00:56:39,159 --> 00:56:44,599 it assesses them two hundred and more dollars per year to renew. Now that 787 00:56:44,719 --> 00:56:49,039 makes sense actually, because they're using the same roads as the people with internal 788 00:56:49,079 --> 00:56:52,039 combustion engines, but they're not paying for them. They're not paying the gas 789 00:56:52,159 --> 00:56:58,559 tax. What I have a problem with this Texas is gas tax is twenty 790 00:56:58,639 --> 00:57:02,199 cents a gallon, So two hundred dollars, which is your renewal, would 791 00:57:02,239 --> 00:57:06,679 be a thousand gallons. And if you're getting let's say twenty miles to the 792 00:57:06,719 --> 00:57:09,360 gallon, which I think is probably kind of an average, that's two that's 793 00:57:09,400 --> 00:57:15,480 twenty thousand miles a year. That's double what the average person drives. So 794 00:57:15,639 --> 00:57:19,199 the EV owners getting ripped off a little bit on this deal. And I 795 00:57:19,239 --> 00:57:22,800 don't think there's too many people in the Texas legislature worried about people who can 796 00:57:22,840 --> 00:57:28,639 afford an EV right now and hopefully they'll be cheaper in the future, not 797 00:57:28,840 --> 00:57:31,800 crying for people that own an EV. There are a few things that are 798 00:57:31,880 --> 00:57:36,000 wrong with an EVY. I found a new one. We know that they 799 00:57:36,039 --> 00:57:38,960 don't have a spare tire. That's to me, that's a huge negative for 800 00:57:39,079 --> 00:57:42,679 taking it out on the road, even if the battery would get you to 801 00:57:42,760 --> 00:57:45,800 San Diego. No spare tire, to me, is a real problem. 802 00:57:46,679 --> 00:57:50,920 You can buy a spare tire for five hundred bucks a spare tire kit. 803 00:57:51,000 --> 00:57:58,440 So no serious XM radio in many models, which is kind of a problem. 804 00:57:58,480 --> 00:58:02,199 I'm a big serious XM radio guy. Lucid is actually doing a campaign 805 00:58:02,320 --> 00:58:07,960 right now where they're going to have serious XM on their main screen. Uh, 806 00:58:07,119 --> 00:58:09,920 this is the promotional and Lucid, of course, is one hundred thousand 807 00:58:09,920 --> 00:58:17,360 dollar vehicle. It's not a forty thousand dollars Tesla Model three. But Tesla, 808 00:58:17,559 --> 00:58:23,559 the most technologically advanced vehicle on the road, has not figured out a 809 00:58:23,679 --> 00:58:28,400 way to have the hardware to pick up serious XM. What I learned this 810 00:58:28,480 --> 00:58:32,599 week one one more thing is most evs, if not all evs, do 811 00:58:32,840 --> 00:58:42,280 not have AM radio. No AM radio. It creates electro magnetic interference. 812 00:58:43,199 --> 00:58:46,559 Interesting, so U no no spare tire, no XM radio, and no 813 00:58:46,840 --> 00:58:52,239 AM radio. Well I found out something about electric cars tell me about it. 814 00:58:52,599 --> 00:58:57,599 As the demand for these evs rise, so will there are total emissions 815 00:58:58,320 --> 00:59:01,079 at least as long as we continue to lie on fossil fuels for the energy 816 00:59:01,159 --> 00:59:06,320 grid. In fact, when you factor in the emissions from the energy used 817 00:59:06,360 --> 00:59:10,199 to charge their batteries, evs actually emit about half the greenhouse gases of their 818 00:59:10,280 --> 00:59:17,119 internal combustion counterparts. That's also not including the cost the emission cost to the 819 00:59:17,199 --> 00:59:22,760 planet that was used for all the mines used to produce the battery, all 820 00:59:22,800 --> 00:59:28,280 the lithium, all that copper that has to be mind somewhere. Those miners 821 00:59:28,320 --> 00:59:32,760 are not using electric minor trucks and things like that, they're using fossil fuels 822 00:59:34,000 --> 00:59:37,599 to mind those things. Also, mining itself is produced greenhouse gases. So 823 00:59:38,039 --> 00:59:44,159 there is a lot to still be done until we actually make this thing work. 824 00:59:44,559 --> 00:59:46,119 Because at the end of the day, it's kind of like that picture 825 00:59:46,159 --> 00:59:50,800 I saw with a Tesla and a diesel generation sitting in the back of the 826 00:59:50,840 --> 00:59:53,760 tesla just charging the Tesla. It's like we're just doing you know, we're 827 00:59:53,800 --> 00:59:57,480 making ourselves look cool, I guess, but we're not really solving the problem. 828 00:59:57,840 --> 01:00:01,159 I think where what we're doing is we're lowering. I think when we 829 01:00:01,239 --> 01:00:06,639 talked about this a little bit last week, that is, if and I 830 01:00:06,880 --> 01:00:12,519 don't disagree with one thing you said, it's absolutely factually accurate. I'm wondering 831 01:00:12,559 --> 01:00:16,320 too, if you take a bulldozer to get x amount of lithium out of 832 01:00:16,400 --> 01:00:22,679 the ground, if that lithium can then produce fifty electric cars, that's a 833 01:00:22,679 --> 01:00:24,280 pretty good trade off. Well, it's it's it's fascinating you bring that up, 834 01:00:24,280 --> 01:00:30,400 because actually, when when these miners are building these, well, when 835 01:00:30,400 --> 01:00:34,519 they're mining it, the amount of lithium used for an all fuel cell electric 836 01:00:34,880 --> 01:00:40,400 EV battery is the same lithium needed to produce five hybrid batteries. So in 837 01:00:40,559 --> 01:00:47,079 terms of emissions cost per unit produced, the better bet would be doing hybrids 838 01:00:47,320 --> 01:00:52,440 because when a person has a hybrid eighty percent sixty to eighty percent at the 839 01:00:52,480 --> 01:00:55,320 time, it's the EV battery doing the work, which therefore you can bring 840 01:00:55,440 --> 01:01:00,920 down the emission per person that they're emitting using their cars down to sixty eighty. 841 01:01:00,199 --> 01:01:05,199 So if you have five people reducing their emissions down sixty to eighty percent 842 01:01:05,280 --> 01:01:08,079 compared to just one person reducing all of their emissions one hundred percent, well, 843 01:01:08,159 --> 01:01:12,159 that five people, you save a lot more and you save it on 844 01:01:12,239 --> 01:01:15,360 the front end too, So from a hybrid point of view, it makes 845 01:01:15,360 --> 01:01:20,519 a lot more sense right now until we see an incredible new EV battery being 846 01:01:20,599 --> 01:01:22,599 produced. At the end of the day. Even if we have a five 847 01:01:22,679 --> 01:01:25,679 hundred mile battery, yeah, maybe more people buy it, but you still 848 01:01:25,719 --> 01:01:29,400 need all that lithium for that battery to be produced. Well, I don't 849 01:01:29,440 --> 01:01:32,480 think the test. Toyota, of course, the largest car builder in the 850 01:01:32,559 --> 01:01:37,079 world, has been more focused on hybrid, and hybrid does make a lot 851 01:01:37,159 --> 01:01:40,880 of sense if they recently made the switch, made a new CEO or electric. 852 01:01:40,960 --> 01:01:45,039 I don't know it's gonna be all in, but but they've they've been 853 01:01:45,199 --> 01:01:50,599 more The new CEO is more embracing the EV technology and imagine it's going to 854 01:01:50,599 --> 01:01:52,079 be a full switch because their priest is their number one. Yeah, I 855 01:01:52,079 --> 01:01:57,079 mean that's been there, but they've again two weeks ago they announced that seven 856 01:01:57,199 --> 01:02:00,320 hundred and fifty mile battery in a solid state it's not lithium batteries, solid 857 01:02:00,400 --> 01:02:04,599 state batteries, So if you get a solid state battery, they can really 858 01:02:04,719 --> 01:02:07,199 goes into a solid state pardon what goes into a solid state an expert on 859 01:02:07,280 --> 01:02:09,119 that. I have no idea either, But those are the type of things 860 01:02:09,159 --> 01:02:13,880 where it's like it sounds fmion batteries, what is the bottom line, right, 861 01:02:13,960 --> 01:02:16,079 and what goes in? But these type of ideas are in many different 862 01:02:16,119 --> 01:02:20,360 industries where they look great on paper, but when you actually dig into the 863 01:02:20,400 --> 01:02:23,800 components, that's where you actually the devil's in the details, right. I 864 01:02:23,840 --> 01:02:27,880 mean, when you just pose a question, are these good for the planet? 865 01:02:28,360 --> 01:02:31,199 Okay, you can it's it's probably easier to say yes to that question. 866 01:02:31,760 --> 01:02:36,960 But when you actually ask the detailed questions around that general question, you 867 01:02:37,039 --> 01:02:40,599 start to paint a really different picture. Regardless, in twenty twenty, five 868 01:02:40,719 --> 01:02:46,000 percent of vehicle sales were electric one in twenty In twenty twenty one, that 869 01:02:46,159 --> 01:02:51,199 had doubled right to nine percent, are almost doubled twenty two. That's it's 870 01:02:51,239 --> 01:02:54,880 fourteen percent. So this year we're at eighteen percent so far, So we 871 01:02:55,239 --> 01:02:59,519 went from one in twenty to one in five. What's also because a lot 872 01:02:59,519 --> 01:03:01,199 of other com but these are producing electric cars? Now, oh yeah, 873 01:03:01,679 --> 01:03:06,119 I mean it's either either get in or be left behind, right, I'm 874 01:03:06,119 --> 01:03:09,239 sure I think that's probably the concern. But if these evs outpaced the rate 875 01:03:09,320 --> 01:03:14,679 of our renewable energy production. Well, then at the end of the day, 876 01:03:14,719 --> 01:03:17,000 we're still going to be using fossil fuels for these evs, So it's 877 01:03:17,079 --> 01:03:23,280 going to increase the emissions. I'm confused, And again I'm not pron you're 878 01:03:23,320 --> 01:03:30,320 saying that that as long as it's lithium ion batteries, the cost of mining 879 01:03:30,400 --> 01:03:34,559 the material, and it doesn't even have to be lithium dave because still if 880 01:03:34,599 --> 01:03:37,320 there's a mine of any I mean to be produced battery, it's going to 881 01:03:37,320 --> 01:03:40,039 be starting for a mine. Right, those trucks mining that is not running 882 01:03:40,039 --> 01:03:45,119 on electricity, they're running on fossil fuels as well. That entire operations running 883 01:03:45,119 --> 01:03:47,920 on fossil fuels. And still when you're charging your battery, that also is 884 01:03:49,039 --> 01:03:52,039 running on fossil fuels the majority of the time. So as we have all 885 01:03:52,039 --> 01:03:54,800 these people on evs, is that continues to increase more people are using that 886 01:03:54,960 --> 01:04:00,880 energy grid which relies on fossil fuels, which still emits things into the atmosphere. 887 01:04:00,039 --> 01:04:04,199 Well, they's absolutely true, and the two of the big arguments. 888 01:04:04,239 --> 01:04:08,079 Of course, one of the arguments is that the other side of that is 889 01:04:08,559 --> 01:04:14,280 most evs are recharging overnight when the energy grid is there, it's available. 890 01:04:14,320 --> 01:04:17,159 It's not that it's not there, it's that you're still burning. No, 891 01:04:17,239 --> 01:04:20,840 but it's producing the energy whether you use it or not. Right, I'm 892 01:04:20,880 --> 01:04:25,400 not debating or not we don't have enough energy capacity. That's not the debate 893 01:04:25,519 --> 01:04:30,039 I'm saying. But it's just it's not generating any additional pollution with charging overnight, 894 01:04:30,079 --> 01:04:33,360 because that's not producing because if we didn't have if we didn't have it 895 01:04:33,440 --> 01:04:39,119 in there anyways, and then we use it. Right, But it's going 896 01:04:39,159 --> 01:04:43,960 to produce the electricity whether whether they're whether it's being used or not. That's 897 01:04:44,000 --> 01:04:46,800 why the rates drop at night to try to people to use it. Yeah, 898 01:04:46,840 --> 01:04:49,719 so it's being produced whether use it or not. So they're using, 899 01:04:50,280 --> 01:04:54,960 they're not creating an additional pollution. I guess it's yeah, So you know, 900 01:04:55,159 --> 01:04:59,320 six to one half doesn't no other. When I look at Tesla selling 901 01:04:59,400 --> 01:05:02,760 five hundred thousand of these vehicles every three months and everybody else telling you know, 902 01:05:02,880 --> 01:05:10,239 ten whatever, the one thing that sticks in my mind is is that's 903 01:05:10,280 --> 01:05:15,239 a big step towards energy independence. In my opinion, that's a big step 904 01:05:15,280 --> 01:05:17,719 towards energy and it depends and you can tell by all of the negative ev 905 01:05:17,920 --> 01:05:21,719 articles you should seeing out there that they Okay, oil companies are getting very 906 01:05:21,760 --> 01:05:26,360 nervous, but I also is listening to a fascinating podcast about energy usage. 907 01:05:26,599 --> 01:05:32,199 No matter what we do as a world, our fossil fuel usage will continue 908 01:05:32,199 --> 01:05:35,840 to increase. And this is why those third world countries, which is a 909 01:05:35,960 --> 01:05:39,599 lot more of the world than we think it is, probably about fifty percent 910 01:05:39,639 --> 01:05:43,719 of the world. Those people aren't using fossil fuels like we are right now, 911 01:05:44,639 --> 01:05:47,360 Right per capita, we are using probably ten x the amount of fossil 912 01:05:47,360 --> 01:05:50,840 fuels any third world country person is makes time. So even if we cut 913 01:05:50,960 --> 01:05:58,159 our carbon foot down, they are coming into prosperity, right they're coming out 914 01:05:58,199 --> 01:06:00,400 of poverty into prosperity. We did the same thing, but we did it 915 01:06:00,440 --> 01:06:04,039 one hundred years ago. Now they're doing it, which means they're fossil fuel 916 01:06:04,039 --> 01:06:08,039 input increases. And there's a lot more of those people than there's are of 917 01:06:08,199 --> 01:06:12,599 us. Trust is the West Western country the world's maybe make up one two 918 01:06:12,639 --> 01:06:16,159 billion macs of the world. The vast majority are coming out of poverty just 919 01:06:16,360 --> 01:06:20,639 now. And as those people use more and more falsil fuels. They're outpacing 920 01:06:20,800 --> 01:06:26,960 our deductions. And I think anyone that thinks the electric vehicles, and this 921 01:06:27,119 --> 01:06:30,920 is from a Tesla owner, anyone that thinks electric vehicles are going to solve 922 01:06:30,000 --> 01:06:34,840 the planet's problems is mistaken. Well, it's anyone who thinks our fossil fuel 923 01:06:34,880 --> 01:06:38,960 input as a planet is going to go down. It's just not looking at 924 01:06:39,000 --> 01:06:42,199 the facts. Unless you want people to stay in poverty. No, that's 925 01:06:42,320 --> 01:06:46,000 that's the alternative. I like. I like the oil companies being concerned about 926 01:06:46,119 --> 01:06:53,400 the gas taxes and about not enough gasoline being purchased and not enough oil being 927 01:06:53,719 --> 01:06:57,559 used. I kind of like that. Actually it feels good. I had 928 01:06:57,599 --> 01:07:02,199 a client call me and asking and I don't mean to dominate this segment which 929 01:07:02,199 --> 01:07:06,840 I'm doing. Colin asked me about short selling, and we talk a little 930 01:07:06,880 --> 01:07:13,000 bit about short selling and what short selling really means. If you just a 931 01:07:13,159 --> 01:07:15,760 quick segment, if you believe a stock is overvalued, you might be able 932 01:07:15,800 --> 01:07:18,679 to borrow the stock and sell it without owning it. In other words, 933 01:07:18,679 --> 01:07:23,360 you're going to sell it short short because you don't own it. You have 934 01:07:23,599 --> 01:07:26,519 to get approval to borrow the stock if you want to sell it short. 935 01:07:26,920 --> 01:07:30,519 From the firm that has your account. You have to get that approval ahead 936 01:07:30,519 --> 01:07:33,360 of time. That's relatively new within the last few years. If a stock's 937 01:07:33,400 --> 01:07:36,079 in a free fall and everyone knows it's going to go lower, you may 938 01:07:36,119 --> 01:07:40,320 not be able to borrow the stock as all of that stock's already been alone 939 01:07:40,320 --> 01:07:43,159 because everybody knows it's going down and be able to buy it back cheaper. 940 01:07:43,440 --> 01:07:45,719 And that's the whole idea with short selling is you sell it at twenty because 941 01:07:45,719 --> 01:07:48,199 you're going to be able to buy it back at fifteen. It's just a 942 01:07:48,280 --> 01:07:53,239 reverse of how we normally think of things. The big negative with short selling 943 01:07:53,360 --> 01:07:57,360 is you're taking on unlimited risk when you buy a stock. The worst you 944 01:07:57,440 --> 01:08:00,280 can do is lose the money that you have invested. You know, you 945 01:08:00,320 --> 01:08:01,599 buy one hundred shares at the twenty bucks, you get two thousand dollars. 946 01:08:01,800 --> 01:08:06,119 That's the most you can lose. Right If you're shortest stock, you must 947 01:08:06,199 --> 01:08:10,679 buy it back at some point and there is no limit how high it can 948 01:08:10,760 --> 01:08:16,159 go. Great example is Carbona. The stock had gone from fifty eight to 949 01:08:16,439 --> 01:08:20,720 three in a period of about four months and looked like it was going straight 950 01:08:20,760 --> 01:08:26,920 to the scrap heap. You couldn't go wrong if you could somehow borrow carbon 951 01:08:27,039 --> 01:08:30,640 the stock and sell it because you knew you were going to be able to 952 01:08:30,680 --> 01:08:33,600 buy it back cheaper. Went from fifty eight to three. Guess what, 953 01:08:34,479 --> 01:08:39,960 it's stabilized there, and fortunately for you, you probably couldn't have borrowed the 954 01:08:40,000 --> 01:08:43,760 stock because there's so much had already been led out. But it has now 955 01:08:43,960 --> 01:08:50,239 reversed dramatically and rallied eight hundred and fifty percent this year. You had to 956 01:08:50,279 --> 01:08:54,520 buy it back at some point. If you haven't bought it back yet, 957 01:08:54,920 --> 01:08:59,600 you're down eight hundred and fifty percent plus the loan interests plus the loan interests. 958 01:08:59,680 --> 01:09:02,880 Right, it's a well on a short way saying I'm on a short 959 01:09:02,920 --> 01:09:06,039 sale. There's no loan interest. I don't pay a loan interest on short 960 01:09:06,079 --> 01:09:12,359 sale. You're borrowing money. No, I'm not borrowing money. I'm borrowing 961 01:09:12,520 --> 01:09:16,600 stock and the I think the firm must pay for that, because I've done 962 01:09:16,680 --> 01:09:21,520 some shorting in my life and I've never paid interest. So there's no something 963 01:09:21,920 --> 01:09:27,119 what was it arrow capital or whatever the guy killed with the game stop short? 964 01:09:27,439 --> 01:09:29,960 Right? Yeah, I thought they lost because they had to keep coming 965 01:09:30,039 --> 01:09:31,640 up with collateral well, I think they probably had to bor They probably borrowed 966 01:09:31,680 --> 01:09:35,159 the money to do the short But but the only thing you have to come 967 01:09:35,239 --> 01:09:39,159 up with on a short sale is the dividends. If there are any dividends 968 01:09:39,199 --> 01:09:42,760 are paid, you need to pay them, right, So that's the only 969 01:09:42,840 --> 01:09:45,920 cost of short selling though. But it is unlimited loss. It's extremely risky. 970 01:09:46,319 --> 01:09:50,239 It's a dangerous strategy. Stocks go up eighty five percent of the time, 971 01:09:50,600 --> 01:09:55,319 so you have an eighty five percent chance of losing money if you if 972 01:09:55,399 --> 01:09:58,680 your short stock. You'd like to talk to me a little more about it, 973 01:09:58,760 --> 01:10:02,039 I'm certainly available. But that's my little down and dirty on short selling. 974 01:10:02,880 --> 01:10:05,560 You know, I could take the last part of this segment and talk 975 01:10:05,560 --> 01:10:11,560 about the federal employees that we help so much, obviously with their pensions and 976 01:10:11,720 --> 01:10:15,720 TSP, FEDLEY, f EHB, A lot of it is a lot of 977 01:10:15,800 --> 01:10:20,079 it's different, right. Me and Dylan are actually going through an entire course 978 01:10:20,520 --> 01:10:26,119 in September where we're really going to get even more educated about it because we 979 01:10:26,199 --> 01:10:30,479 do care so much about the federal employees and understand that their situation is a 980 01:10:30,600 --> 01:10:33,880 lot more unique than many of the people we deal with. But you know, 981 01:10:34,800 --> 01:10:39,520 a lot of federal employees. They talk so much about the TSP site 982 01:10:39,640 --> 01:10:43,000 and the and the fact that they have so many issues in the past. 983 01:10:43,399 --> 01:10:47,439 Obviously you can speak more to this, Dylan. They re reinvigorated the site. 984 01:10:47,520 --> 01:10:49,439 Well, yeah, last year. I mean, if you're a federal 985 01:10:49,479 --> 01:10:53,560 employee getting ready for time, and I'm sure you've figured out by now that 986 01:10:53,880 --> 01:10:56,600 last year they made it all online. You can't really call anybody if you 987 01:10:56,640 --> 01:10:59,720 want to transfer money out of it. Two Hira, you gotta go online. 988 01:10:59,760 --> 01:11:01,680 You got to go through the whole process. The website has had issues. 989 01:11:01,760 --> 01:11:04,920 It takes a long time sometimes. Also, when you try and call 990 01:11:04,960 --> 01:11:09,560 a TSP agent to get help, you just get passed around a lot of 991 01:11:09,600 --> 01:11:13,119 the time. It's not the most effective way. It's not the most effective 992 01:11:13,479 --> 01:11:17,000 system they have. But that's why a lot of federal employees have been wanting 993 01:11:17,039 --> 01:11:18,960 to get their money out of the TSP as well. They can do in 994 01:11:19,039 --> 01:11:24,319 service rollovers if they're either over fifty nine and a half or in some cases 995 01:11:24,359 --> 01:11:27,880 fifty five, or they just want to retire and roll it over. Because 996 01:11:27,880 --> 01:11:30,680 the TSP is just a hassle to deal with. They can't actually help you 997 01:11:30,800 --> 01:11:34,880 with any planning or any advice or anything like that because they're not licensed to 998 01:11:34,920 --> 01:11:38,319 do like we're talking about earlier. They can just tell you what it's in 999 01:11:38,399 --> 01:11:41,439 and that's it. It's a super cheap option, but you're limited to your 1000 01:11:41,479 --> 01:11:44,159 option and that's why some people keep it in there because it is super cheap. 1001 01:11:44,199 --> 01:11:46,119 But then you start trying to plan for retirement, things get a little 1002 01:11:46,119 --> 01:11:49,359 more inch kid, things get a little more real because it's coming up and 1003 01:11:49,439 --> 01:11:53,319 nobody can help you. So you're kind of just winging it yourself. And 1004 01:11:53,399 --> 01:11:56,319 if you can do it, you're own. That's all you know that. 1005 01:11:56,399 --> 01:12:00,359 The TSP can be rolled into an IRA. It's a very seamless says. 1006 01:12:00,399 --> 01:12:02,119 The TSP site has gotten a lot better. It's a lot easier to do. 1007 01:12:02,279 --> 01:12:04,960 So if you want more information, feel free to call us about that 1008 01:12:05,039 --> 01:12:06,960 and we can help you all you can. Thank you guys, coming upon 1009 01:12:08,039 --> 01:12:10,520 a break here. The it's not that they don't want to help you, 1010 01:12:10,680 --> 01:12:14,720 they just can't help you there like practicing along without license. We'll be back 1011 01:12:15,159 --> 01:12:18,039 right after this break. Thanks for going, you say, it's only a 1012 01:12:18,239 --> 01:12:31,760 baby. Welcome back. You're listening to the Money Matter Show. I'm Dylan 1013 01:12:31,760 --> 01:12:34,800 Greenberg. I'm here with Todd Click, Dan Greenberg, and Dave Sherwood, 1014 01:12:34,840 --> 01:12:39,000 and before the break of the last segment, we were talking about the TSP. 1015 01:12:39,119 --> 01:12:42,520 We wanted to just clarify something that if you do so, say you 1016 01:12:42,640 --> 01:12:45,960 are over fifty five and you're you're you're somewhere in between fifty five and fifty 1017 01:12:46,039 --> 01:12:49,840 nine and a half, you can roll over your account if you stop it, 1018 01:12:49,960 --> 01:12:53,760 say you retire fifty six, you can roll over your account into a 1019 01:12:54,279 --> 01:12:58,920 IRA, but you will lose the power to take any money out without penalty. 1020 01:12:59,399 --> 01:13:02,119 If you were from TSP or from the federal government at age fifty six 1021 01:13:02,439 --> 01:13:06,159 and you leave your money in the TSP, you can withdraw that money without 1022 01:13:06,199 --> 01:13:10,439 penalty. You just have to pay the income tax like a normal distribution from 1023 01:13:10,479 --> 01:13:14,239 your TSP. But if you roll it into an IRA, you will incur 1024 01:13:14,399 --> 01:13:15,840 penalty if you want to take that money out before age fifty nine and a 1025 01:13:15,880 --> 01:13:18,800 half and after age fifty five. So we just wanted to clarify that. 1026 01:13:19,239 --> 01:13:23,000 Yeah, it's just a significant thing to be aware of because you do we 1027 01:13:23,079 --> 01:13:27,239 do run into people retiring early and if their thought processes you at fifty five, 1028 01:13:27,239 --> 01:13:29,199 I can get my money out of the TSP, if you rolled it 1029 01:13:29,279 --> 01:13:31,119 into an IRA, that's no longer the case. Yeah, and so in 1030 01:13:31,199 --> 01:13:33,960 that sense, maybe like if people are out there that we've had people just 1031 01:13:34,159 --> 01:13:38,239 leave a portion of their money in the TSP until they turn fifty nine and 1032 01:13:38,239 --> 01:13:41,319 a half, just in the off of sense that they need to get some 1033 01:13:42,199 --> 01:13:45,279 Yeah, we've we saw the market's been trending lower here in August. We 1034 01:13:45,479 --> 01:13:49,520 kind of we're concerned at at month and what was going to happen with the 1035 01:13:49,720 --> 01:13:53,439 with the market already up to twenty we talked about Disney at Yeah, I 1036 01:13:53,479 --> 01:13:56,760 wanted to talk about that. Yeah. They had an interesting week last week 1037 01:13:56,960 --> 01:14:00,239 ahead a mixed earnings report where they'd be revenue or they beat earnings at miss 1038 01:14:00,279 --> 01:14:03,319 revenue, and then they had a bunch of news come out, Like we've 1039 01:14:03,399 --> 01:14:05,479 been going back and forth, what are they going to do with ESPN? 1040 01:14:05,520 --> 01:14:09,239 Bob Iger said they're gonna sell it, then he said they're not going to 1041 01:14:09,319 --> 01:14:13,119 sell it. Then they said they're gonna move it into the streaming platform ESPN 1042 01:14:13,119 --> 01:14:16,600 Plus totally, and they had no plans of getting rid of the sports division. 1043 01:14:16,680 --> 01:14:21,119 Then last week it came out Barstool and Penn National Gaming, which teamed 1044 01:14:21,199 --> 01:14:26,199 up a few years ago for Barstool sports Book. Pen National Gaming is a 1045 01:14:26,279 --> 01:14:30,760 gambling not nationwide gambling company. They started, they got their feet wet with 1046 01:14:30,079 --> 01:14:34,720 online gambling with Barstool sports Book. They parted ways. Dave Portnoy, the 1047 01:14:34,880 --> 01:14:41,840 founder of Barstool, bought Barstool back for a dollar and from Penn National Gaming 1048 01:14:42,319 --> 01:14:45,159 and then the only then one of the stipulations was if he ever sells it 1049 01:14:45,239 --> 01:14:47,520 again, Penn gets fifty percent of the revenue. He has no plans to 1050 01:14:47,560 --> 01:14:50,880 sell, he said, And Penn National Gaming is going to realize the eight 1051 01:14:51,000 --> 01:14:55,920 hundred and fifty million dollars loss. But the one they did was take that 1052 01:14:56,039 --> 01:15:00,159 bar Stool sports book platform, the whole platform. They're gonna rebrand it as 1053 01:15:00,399 --> 01:15:03,039 ESPN BET. So now ESPN is going to be a gambling platform. And 1054 01:15:03,119 --> 01:15:08,600 that's all Disney. So Disney got into the gambling world this past week. 1055 01:15:08,760 --> 01:15:14,239 It was also interesting because I saw a report about Disney's effects they're having on 1056 01:15:14,359 --> 01:15:18,319 this strike that's going on in Hollywood with all the actors and writers. It's 1057 01:15:18,319 --> 01:15:23,319 actually a benefit for Disney, and it might not seem like that of first 1058 01:15:23,399 --> 01:15:27,600 value, but the reason is an analyst estimated that they could translate an additional 1059 01:15:27,720 --> 01:15:31,199 three to five billion dollars in free cash flow from the savings that could continue 1060 01:15:32,079 --> 01:15:36,359 from not producing shows. Right they're not spending the money on new shows right 1061 01:15:36,399 --> 01:15:40,479 now because there's no writers to pay. If there's no writers to pay, 1062 01:15:40,560 --> 01:15:45,439 that's more free free savings there. So from a free cash flow point of 1063 01:15:45,479 --> 01:15:48,319 view, it's probably not showed up in the numbers too much yet, But 1064 01:15:48,520 --> 01:15:54,479 in quarter four and quarter three when Disney eventually reports, it should start to 1065 01:15:54,520 --> 01:15:58,720 show up that they're saving money on the streaming side of the costs that streaming 1066 01:15:58,760 --> 01:16:00,319 has. Yeah, they're so they're saved money on that. They increased the 1067 01:16:00,399 --> 01:16:06,079 monthly price of thirteen ninety nine for Disney Plus. They also are down seven 1068 01:16:06,079 --> 01:16:10,520 point four percent from the last quarter to one hundred and forty six million Disney 1069 01:16:10,520 --> 01:16:14,359 Plus subscribers, which they keep losing subscribers. When we've talked about art theories 1070 01:16:14,399 --> 01:16:19,359 as to why, primarily India India because they lost the rights the Indian Premier 1071 01:16:19,479 --> 01:16:24,880 League of Cricket matches, right, That's why. That's the biggest reason. 1072 01:16:25,199 --> 01:16:28,079 So they lost that. They also had an interesting part of their report was 1073 01:16:28,520 --> 01:16:32,359 forty two billion dollars in one time of charges and impairments due to various different 1074 01:16:32,399 --> 01:16:38,600 things. It was the Disney Point content from the Disney Plus and it was 1075 01:16:38,680 --> 01:16:41,840 just ending third party licenses in agreements. They lost forty two billion dollars of 1076 01:16:41,920 --> 01:16:45,000 one time, So we're gonna be having that. That was a one off 1077 01:16:45,439 --> 01:16:47,439 and with the stock somewhat so down right, stock was up three percent for 1078 01:16:47,479 --> 01:16:50,399 the week. No, I mean just in the last year, ye like 1079 01:16:50,560 --> 01:16:55,520 not tracking with the SMP. It's priced about the same as it was at 1080 01:16:55,520 --> 01:17:00,279 the pandemic along just like right and then the pandemic, the park we're all 1081 01:17:00,319 --> 01:17:04,279 shut down, the cruise line was shut down, and it's it's priced at 1082 01:17:04,359 --> 01:17:09,279 that same level now as it was then. And now you have Bob Iger 1083 01:17:09,399 --> 01:17:12,720 back at the helm, and not only that but his his right and left 1084 01:17:12,760 --> 01:17:15,960 hand, uh, the two guys, both of whom were being talked about 1085 01:17:16,000 --> 01:17:21,479 as potential successors for him. It seems like a strong time to be looking 1086 01:17:21,520 --> 01:17:25,640 at it. They got an awfully strong team in place. Now it's gonna 1087 01:17:25,680 --> 01:17:30,159 take time, maybe three to six months for the stock to really go. 1088 01:17:30,760 --> 01:17:33,279 And I think what I would look for if I was wanting to be an 1089 01:17:33,359 --> 01:17:36,000 investor in Disney, as I would look for. You might want to take 1090 01:17:36,039 --> 01:17:40,680 a small position here and you know the eighty five ish area. That's that's 1091 01:17:40,720 --> 01:17:45,159 fine. If you want to one hundred shares, maybe you buy twenty five 1092 01:17:45,199 --> 01:17:49,039 shares in here and then and then wait, I want to see the newsflow 1093 01:17:49,239 --> 01:17:55,760 continue to be disappointing and the stock knock care. That's what I typically look 1094 01:17:55,840 --> 01:17:58,840 for on a reversal. Yeah. Another interesting part of that too was an 1095 01:17:58,880 --> 01:18:03,359 international parkside were the big highlight of the report, but domestic attendance and domestic 1096 01:18:04,119 --> 01:18:08,279 hotel bookings at the parks was down. And part of the region is because 1097 01:18:08,279 --> 01:18:13,239 they're just sky Those prices for those tickets are just skyrocketing. People getting tired. 1098 01:18:13,239 --> 01:18:15,039 They can't afford it. They can't afford a Disney vacation, family vacation 1099 01:18:15,119 --> 01:18:18,079 anymore, right, And we're starting to see that in the economy. And 1100 01:18:18,439 --> 01:18:23,279 we've we've we've been, in fairness, we've been a little too conservative over 1101 01:18:23,319 --> 01:18:26,560 the last sixty to ninety days, to be honest with you, could it's 1102 01:18:26,600 --> 01:18:30,640 been pedal to the metal with the Magnificent seven. And we keep waiting for 1103 01:18:30,720 --> 01:18:34,079 the next shoe to drop because we see an economy that's slowing, and when 1104 01:18:34,119 --> 01:18:40,159 you see a report from UPS where they're lowering guidance for the full year, 1105 01:18:40,760 --> 01:18:45,239 and then you see copper having this worst week this year. Copper is the 1106 01:18:45,880 --> 01:18:50,239 the commodity of the economy, right, It's used in more things than anything 1107 01:18:50,319 --> 01:18:55,880 else. So you've got that. You see a market where the price earnings 1108 01:18:56,039 --> 01:19:01,680 ratio is sixty five percent above normal, and you think there's got to be 1109 01:19:01,720 --> 01:19:05,720 a pullback here. September is historically the worst month of the year for the 1110 01:19:05,840 --> 01:19:11,119 market. August is generally pretty normal, but we're, you know, halfway 1111 01:19:11,159 --> 01:19:15,039 through August now, and we're kind of creeping up towards September October, and 1112 01:19:15,399 --> 01:19:19,760 October, interestingly, is historically is a fractionally higher month, but it's been 1113 01:19:19,840 --> 01:19:24,399 the home of three of the biggest crashes in history, so it has a 1114 01:19:24,439 --> 01:19:29,359 bad rep So we're coming into that September October period, which is typically problematic 1115 01:19:29,439 --> 01:19:31,880 for the market. With a market that's gained twenty percent on the year, 1116 01:19:32,279 --> 01:19:36,680 is overvalued, just be cautious, that's all right, and also with interest 1117 01:19:36,800 --> 01:19:42,920 rates still high. Goldman SA Goldman Sachs economists came out this week and said 1118 01:19:43,199 --> 01:19:47,079 each additional dollar of interest expense forces companies to lower their capital cap X, 1119 01:19:47,119 --> 01:19:51,439 which is their capital expenditures things they spend by ten cents and labor costs by 1120 01:19:51,479 --> 01:19:57,479 twenty cents. So there is a real fundamental impact of higher rates. Right, 1121 01:19:57,560 --> 01:20:00,439 It's not just that you're paying more on loans, but it leads to 1122 01:20:00,600 --> 01:20:03,319 other things in the business that you have to cut back on. We have 1123 01:20:03,479 --> 01:20:09,159 not seen that in the labor report at all. No. A solar company 1124 01:20:09,279 --> 01:20:14,039 came out Friday, Maxi and Solar came out. Their stock was up forty 1125 01:20:14,079 --> 01:20:17,039 percent the year. It plunged thirty percent at the open on Friday. They 1126 01:20:17,119 --> 01:20:24,840 gave a disappointing quarterly report, which they called because of weakening and consumer demand. 1127 01:20:26,199 --> 01:20:30,119 It's I mean, it's probably one of the ultimate discretionary purchases, solar. 1128 01:20:30,520 --> 01:20:35,119 Yeah, right, you don't have to have solar. So is that 1129 01:20:35,439 --> 01:20:41,199 a reflection of what's going on in the economy? You know, perhaps perhaps, 1130 01:20:41,960 --> 01:20:45,359 But Disney's in an interesting play here and reminds me a little bit of 1131 01:20:45,680 --> 01:20:49,039 Boyling a couple of years ago, where where nobody wanted anything to do with 1132 01:20:49,119 --> 01:20:55,079 it. And so Dutch Brothers they're like Dutch Bros. I shouldn't say Dutch 1133 01:20:55,119 --> 01:20:59,640 Brothers. It's not Dutch Brothers, Dutch Bros. And I always thought that 1134 01:20:59,720 --> 01:21:02,720 was short for brothers, which I probably is, but the name of the 1135 01:21:02,760 --> 01:21:09,600 company is Dutch Bros. Has not participated in this year's rally. Jumped twenty 1136 01:21:09,680 --> 01:21:13,880 five percent on Wednesday morning after reporting a strong quarter. They named a former 1137 01:21:14,439 --> 01:21:23,960 Starbucks CEO excuse me, a former Starbucks executive as your CEO to switch gears 1138 01:21:23,960 --> 01:21:28,159 a little bit. You want to know interesting thing about Canada's real estate Canada 1139 01:21:28,279 --> 01:21:31,960 real estate. Yeah, yeah, it's a bubble since in Canada. Yes, 1140 01:21:32,560 --> 01:21:39,279 the disposable income and housing prices in America have normally been correlated. Right. 1141 01:21:39,439 --> 01:21:41,640 The only time we've seen him get way out of whack was in two 1142 01:21:41,680 --> 01:21:45,159 thousand and eight. Well, in Canada, the housing prices compared to disposable 1143 01:21:45,239 --> 01:21:50,399 income are so divergent it's not even funny. And in two thousand and eight 1144 01:21:50,840 --> 01:21:54,439 it was very divergent, and it came down a little bit, but it 1145 01:21:54,479 --> 01:21:57,880 didn't come down nearly as much as the American market. And then it's continue 1146 01:21:57,920 --> 01:22:01,119 to skyrocket through the last fifteen years, and it is has a huge divergence 1147 01:22:01,119 --> 01:22:05,880 between the disposable income of a Canadian citizen and the actual price of the mortgat 1148 01:22:06,000 --> 01:22:11,079 of the price of the home. Now going the focus on the mortgages. 1149 01:22:11,159 --> 01:22:14,720 Over half of all mortgages in Canada are variable rate, which means they are 1150 01:22:14,840 --> 01:22:16,920 mostly talking about that a couple of months ago. That's not good. No, 1151 01:22:17,079 --> 01:22:20,600 they're most exposed to rising interest rates. What have we had rising instrates? 1152 01:22:20,680 --> 01:22:26,119 Right? A variable rate, fixed payment mortgage. Under this type of 1153 01:22:26,239 --> 01:22:30,439 range arrangement, your payment remains the same, though if rates go up you 1154 01:22:30,560 --> 01:22:34,039 pay more interest and less principle every month. It's also worth noting that there's 1155 01:22:34,079 --> 01:22:38,479 something called a trigger rate, which is the point at which one hundred percent 1156 01:22:38,560 --> 01:22:42,840 of your payment is going towards interest payments, so no principle is being paid 1157 01:22:42,880 --> 01:22:46,119 off if you're If you exceed that rate, the interest payments get piled onto 1158 01:22:46,199 --> 01:22:48,960 your loan, so at the end of the term you could end up being 1159 01:22:49,159 --> 01:22:55,640 owning owing more than what your equity has eroded. Finally, it's worth noting 1160 01:22:55,720 --> 01:22:59,840 that the outside the provinces of Alberta and I can't say this word Scott's Awashing, 1161 01:23:00,479 --> 01:23:03,600 which makes up only fifteen percent of the population of the country. Mortgages 1162 01:23:03,640 --> 01:23:09,520 in Canada are recourse loans, which means the lender can go after other assets 1163 01:23:09,720 --> 01:23:13,399 that the homeowner owns if the value of the mortgages sees the value of the 1164 01:23:13,479 --> 01:23:17,800 residential real estate. This may insulate banks somewhat to the pains, but obviously 1165 01:23:17,960 --> 01:23:23,399 the household would face a lot of danger. There another bubbles. China exports 1166 01:23:23,399 --> 01:23:27,560 suffered their biggest drop in three years in July, down fourteen percent. As 1167 01:23:27,920 --> 01:23:30,319 people are going elsewhere, Dean, We've talked about this lot on the show. 1168 01:23:30,399 --> 01:23:33,920 We want to see that happened. China reported a three tenths of a 1169 01:23:34,000 --> 01:23:40,039 percent drop in consumer prices, a drop in consumer prices in July. Wholesale 1170 01:23:40,119 --> 01:23:44,399 prices down four point four percent. That is not good. That is not 1171 01:23:44,520 --> 01:23:48,039 good. Deflation is more of a problem, Dean. I would argue than 1172 01:23:48,119 --> 01:23:54,680 inflation. They haven't deflation there absolutely. But you know the only something with 1173 01:23:54,800 --> 01:23:56,880 China, you never know what's true or not true. It's not okay, 1174 01:23:57,600 --> 01:24:00,760 and they have a whole different economy. They're just pumping the money where they 1175 01:24:00,840 --> 01:24:04,439 need to. They'll cut back on the jobs if everyone's successful to take over 1176 01:24:04,840 --> 01:24:09,159 their company. And just look at Olive Baba and Jack Ma. Never see 1177 01:24:09,199 --> 01:24:13,960 Jack maher anymore. You know what the global inflation rate is now global inflation 1178 01:24:14,199 --> 01:24:18,199 that encompasses emerging markets and developed markets. Obviously emerging five point five thanks higher 1179 01:24:19,239 --> 01:24:24,840 seven eight point six eight point six. Dean knows how to look at my 1180 01:24:24,880 --> 01:24:29,840 paper. Yeah, So obviously with develop emerging markets, those are the countries 1181 01:24:29,840 --> 01:24:32,399 that are coming kind of growing. They're not going to have howl higher inflation 1182 01:24:32,479 --> 01:24:35,199 than we do. All right, we have one more segment coming up. 1183 01:24:35,439 --> 01:24:40,800 We're going to talk to our today plan and Jonathan and get some more tidbits 1184 01:24:41,079 --> 01:24:45,319 on how to go ahead and plan for your future. Thank you for listening. 1185 01:24:45,399 --> 01:25:00,239 We do appreciate it. Say it's all a bab Welcome back your listening 1186 01:25:00,239 --> 01:25:02,560 to the final segment of the Moneymount of showing. Before we start with Jonathan 1187 01:25:02,600 --> 01:25:05,279 Sabilia, I did get an answer from my friend that lives in Jersey. 1188 01:25:05,720 --> 01:25:10,039 They pump their gas. They can't pump their own gas. They can pump 1189 01:25:10,119 --> 01:25:12,920 their own they cannot They have somebody pump their gas. Okay, so yeah, 1190 01:25:12,920 --> 01:25:15,680 that's the last place, last place. Yeah, there you go. 1191 01:25:16,119 --> 01:25:18,760 John. We had we had one place in town that could pump their own 1192 01:25:18,800 --> 01:25:23,760 gas, and I don't think they do it anymore. It was on in 1193 01:25:23,840 --> 01:25:29,640 what town here? It was on river and first I think the X station 1194 01:25:29,880 --> 01:25:32,479 had a choice sway and Craycroft will pump your gas. Yeah, it's a 1195 01:25:32,520 --> 01:25:35,840 family company, kind of good people. Yeah, that's kind of cool. 1196 01:25:36,159 --> 01:25:45,319 So John Jonathan Sabilia our state planner. I am so thankful and grateful to 1197 01:25:45,439 --> 01:25:47,640 have a resource in you, because, honestly, when you're doing a financial 1198 01:25:47,680 --> 01:25:53,680 plan, the one thing financial advisors can't do is implement in the state plan. 1199 01:25:53,840 --> 01:25:55,880 You could talk about in the state plan, but at the end of 1200 01:25:55,880 --> 01:25:58,520 the day, you need to be an attorney to implement it. So grateful 1201 01:25:58,520 --> 01:26:01,640 to have him as my partner here, great partners together, and welcome to 1202 01:26:01,680 --> 01:26:04,079 the show as you've been on before. Thank you, thank you, thank 1203 01:26:04,079 --> 01:26:06,960 you, thank you. Now. I read an article this week and I 1204 01:26:08,239 --> 01:26:12,039 was thinking about you a lot because baby boomers hold half of the nation's one 1205 01:26:12,119 --> 01:26:15,640 hundred and forty trillion dollars in wealth, okay, and I was breaking it 1206 01:26:15,760 --> 01:26:23,680 down by what each generation owns. This is interesting. Baby boomers their top 1207 01:26:23,760 --> 01:26:28,239 ownership is in equities, their seconds real estate, Their third is in pensions. 1208 01:26:28,760 --> 01:26:33,119 Generation X top is in real estate, seconds and pensions, third is 1209 01:26:33,199 --> 01:26:38,399 in equities. You work your way down to the millennials. Their top ownership 1210 01:26:38,520 --> 01:26:42,520 is in real estate, second is pensions, third is other assets. And 1211 01:26:42,600 --> 01:26:46,960 guess what's last stocks? Stocks? But don't even know why you're not counting 1212 01:26:47,039 --> 01:26:53,720 their pensions as being in stocks. They don't have money to have other investment 1213 01:26:53,800 --> 01:26:59,600 until they inherit money, right, Okay. The people that actually get older, 1214 01:27:00,439 --> 01:27:02,479 they're in stocks because they're taking the full one case and stuff and rolling 1215 01:27:02,560 --> 01:27:06,439 them into stocks and keeping them there and then and then they have investment portfolios, 1216 01:27:06,960 --> 01:27:11,319 all right. And that's why as you get older, you leave that 1217 01:27:11,399 --> 01:27:15,479 democratic side of things and can become a Republican because you realize taxes kill you. 1218 01:27:16,560 --> 01:27:19,760 Well, if we're take if we're talking about half of one hundred forty 1219 01:27:19,800 --> 01:27:24,640 trillion, we're talking to seventy trillion dollars over the next probably TOIL twenty forty 1220 01:27:24,680 --> 01:27:28,239 five, it's going to be transferring generations. Right, it's to generation X, 1221 01:27:28,319 --> 01:27:30,600 some of it's to millennials. And with that being said, we have 1222 01:27:30,840 --> 01:27:34,760 a safe harbor law. Is that the correct term? Was it safe sunset 1223 01:27:34,840 --> 01:27:40,079 law? That's what it is, sunset law, which could be lowering in 1224 01:27:40,560 --> 01:27:44,840 twenty twenty five the amount that is the exclusion for passing on to states. 1225 01:27:44,880 --> 01:27:48,119 Correct, So is there anything to be done? Now? What is the 1226 01:27:48,239 --> 01:27:53,079 things that for these baby boomers who hold half of the trillion, half of 1227 01:27:53,079 --> 01:27:55,800 the one hundred forty trillion dollars in wealth, what do they do to help 1228 01:27:55,920 --> 01:27:59,239 their generations that they're seemingly going to be passing on. In fact, eighty 1229 01:27:59,279 --> 01:28:01,560 five percent of these of this money is going to be passed on to actual 1230 01:28:01,680 --> 01:28:05,199 people, fifteen percent to charities. Obviously charities. There's a lot of things 1231 01:28:05,239 --> 01:28:08,800 you can do with that as well. Well. First off, I want 1232 01:28:08,800 --> 01:28:11,600 to say that I lived in Philadelphia for a while and I would go to 1233 01:28:12,000 --> 01:28:14,560 New Jersey and they would pump your gas. And it's one of the most 1234 01:28:14,640 --> 01:28:19,640 awkward situations is having another person's yea and they stand. It is just a 1235 01:28:19,720 --> 01:28:23,039 weird, weird feeling, and you have to wait, and then you got 1236 01:28:23,159 --> 01:28:26,000 to tip them, and it's just a whole deal. You know, you 1237 01:28:26,079 --> 01:28:28,800 think tipping's bad, now, imagine having to tip somebody for pumping your gas. 1238 01:28:28,880 --> 01:28:32,520 It's in New Jersey. Yeah, yeah, I think the gas was 1239 01:28:32,600 --> 01:28:36,640 pretty cheap though on the Jersey side, but I don't but this was years 1240 01:28:36,680 --> 01:28:42,800 ago. Who knows. As for the comment about the uh you know, 1241 01:28:42,880 --> 01:28:45,079 what is the best thing to do. Even with the sunset for revision, 1242 01:28:45,119 --> 01:28:47,960 there's gonna be a lot of people who are not going to be subject to 1243 01:28:48,039 --> 01:28:53,159 the estate tax. So the best thing you can do to avoid taxes is 1244 01:28:53,199 --> 01:28:58,640 don't give your kids gifts during their life without consulting an attorney or without consulting 1245 01:28:58,960 --> 01:29:03,359 uh CPA well or a tax repair. For instance, your house. You 1246 01:29:03,439 --> 01:29:08,600 know, if you have let's say you bought the house for one hundred thousand 1247 01:29:08,640 --> 01:29:13,079 dollars and now it's worth five hundred thousand dollars at your death, they get 1248 01:29:13,119 --> 01:29:16,000 a step up in basis. It becomes investment property. The kids get it, 1249 01:29:16,199 --> 01:29:18,399 and they turn around to sell it. They won't pay any capital gains 1250 01:29:18,399 --> 01:29:21,560 as long as they sell it, you know, within a reasonable time after 1251 01:29:21,680 --> 01:29:25,520 death, okay, because they'll get a step up in basis, which is 1252 01:29:25,560 --> 01:29:30,880 basically, whatever the fair market value of the home is at the data to 1253 01:29:30,960 --> 01:29:34,720 death of the original owner. That's what you inherit as a basis. And 1254 01:29:34,840 --> 01:29:38,640 so if it's five hundred thousand dollars a fair market value at the day to 1255 01:29:38,720 --> 01:29:42,760 death you sell it, turn around to sell it the next day, they 1256 01:29:42,840 --> 01:29:45,159 will pay no capital gains. What if they sell it then at lost on 1257 01:29:45,239 --> 01:29:48,119 the road, do they get to the tax loss even though they never paid 1258 01:29:48,159 --> 01:29:50,319 for the game. Oh, they don't get a tax loss for that they 1259 01:29:50,359 --> 01:29:54,239 don't sell. In other words, if you get a step up basis and 1260 01:29:54,319 --> 01:29:59,279 then it goes down and then you sell it, well you would you would 1261 01:29:59,359 --> 01:30:00,960 know, well you would get it, you would get a long term you 1262 01:30:01,319 --> 01:30:04,760 would get a loss, but it would be a capital loss, long term 1263 01:30:04,840 --> 01:30:09,399 long term loss. Because it's just like if they have same with stock, 1264 01:30:09,560 --> 01:30:12,359 right, and then they sell them when it goes down, then they're achieving 1265 01:30:12,399 --> 01:30:15,680 the loss after that. Sure, how many no sentence giving it away until 1266 01:30:15,119 --> 01:30:17,760 exactly no longer here. Yeah, so many clients have we seen it? 1267 01:30:17,920 --> 01:30:21,399 Have capital gains of one, two, three hundred thousand dollars on a single 1268 01:30:21,439 --> 01:30:25,880 position. And I'm going to give something to my kid. No, you're 1269 01:30:25,920 --> 01:30:28,880 not, No, you're not. No, don't do it. The last 1270 01:30:29,079 --> 01:30:33,800 CPA firm I worked for, we actually did a trust return for in the 1271 01:30:33,880 --> 01:30:39,640 state return. Dad died. He bought Apple stock back in the eighties for 1272 01:30:39,800 --> 01:30:42,640 five thousand dollars. It was worth a million dollars when he died. But 1273 01:30:42,720 --> 01:30:44,880 he, you know, just sat there, and he was a guy living 1274 01:30:45,079 --> 01:30:47,039 you know, by his own means, didn't sell any of it during his 1275 01:30:47,159 --> 01:30:51,159 life. Kids got a million dollars, you know, because dad decided to 1276 01:30:51,239 --> 01:30:56,960 invest properly, and because of the step up in basis, they turned around 1277 01:30:56,960 --> 01:31:00,880 and sold it and paid no taxes on it. Right. So when it 1278 01:31:00,960 --> 01:31:04,399 comes to charities, I think that's a more niche group obviously. But AF 1279 01:31:04,520 --> 01:31:10,079 had had clients who want to look at looking at giving some of their assets 1280 01:31:10,119 --> 01:31:12,800 to charities. What are some of the things they can be looking at there? 1281 01:31:13,079 --> 01:31:15,119 So you would probably want to, Okay, there are things that will 1282 01:31:15,199 --> 01:31:19,359 be taxable at your death. So if you have multiple assets, you have 1283 01:31:19,439 --> 01:31:23,079 a home, and you have stocks, and then you have a four oh 1284 01:31:23,159 --> 01:31:27,039 one k, you would probably want to allocate the four oh one k to 1285 01:31:27,119 --> 01:31:31,439 the charities. Why because that's a taxable item at your death. Because it's 1286 01:31:31,479 --> 01:31:36,279 a it's basically a contract, all right, So your beneficiaries will be paying 1287 01:31:36,359 --> 01:31:40,079 taxes on money they pull off from a four oh one k. So if 1288 01:31:40,119 --> 01:31:43,720 you allocate the four oh one k to the charities, they're the ones that 1289 01:31:43,760 --> 01:31:46,720 will be in. Charities don't pay taxes, so your state won't be paying 1290 01:31:46,720 --> 01:31:49,800 it and then the remainder, you know, the house the stocks that we're 1291 01:31:49,800 --> 01:31:53,840 talking about, those goes to the kids with the step up in basis and 1292 01:31:53,880 --> 01:31:56,880 they wouldn't pay any taxes. Yeah, and four oh one k is also 1293 01:31:56,920 --> 01:32:00,039 would be the same thing with an IRA correct. Yeah, step up in 1294 01:32:00,119 --> 01:32:02,720 basis. One of the things that that Biden was talking about when he was 1295 01:32:02,800 --> 01:32:05,640 first electric president, if you remember there or not, he said the guy, 1296 01:32:05,720 --> 01:32:10,399 the guy could have a million dollars gain, it's taxable, and he 1297 01:32:10,439 --> 01:32:13,319 gets in the car wreck on the way the way to a meeting and that 1298 01:32:13,880 --> 01:32:17,199 becomes zero not rights. So many ways to start taxing. That's been there 1299 01:32:17,560 --> 01:32:20,800 on a few things. But what he's not telling you is that you've been 1300 01:32:21,039 --> 01:32:24,880 being taxed the whole time on everything you earn, the money to invest, 1301 01:32:24,960 --> 01:32:27,680 the money that you already get taxed on, and then he wants to tax 1302 01:32:27,760 --> 01:32:30,359 you again and not let you get that one benefit that you get and avaising 1303 01:32:30,439 --> 01:32:35,000 it. They want to take wealth against away from anything being passed. One 1304 01:32:35,239 --> 01:32:39,520 set. There's a lot of things in life that are very confusing deing. 1305 01:32:39,720 --> 01:32:42,319 So on that note, what do you think is going to happen there with 1306 01:32:42,399 --> 01:32:45,840 the sunset of the what is it eleven million going back down? It's right 1307 01:32:45,840 --> 01:32:51,920 now about twelve point nine million dollars, and it'll go down. I've heard 1308 01:32:51,960 --> 01:32:57,279 speculation between five to seven million dollars. And that's first state tax. As 1309 01:32:57,319 --> 01:33:00,520 long as your a state is under twelve point nine. You said twelve point 1310 01:33:00,600 --> 01:33:02,840 nine right now, then there is no estate tax. Correct. It used 1311 01:33:02,840 --> 01:33:06,640 to be six hundred thousand. It used to be very low back in the 1312 01:33:08,039 --> 01:33:13,880 early eighties. I think it was one million during Bush and then it jumped 1313 01:33:14,000 --> 01:33:18,359 up pretty significantly, uh during the end of the Bush term. Uh, 1314 01:33:18,520 --> 01:33:23,920 and then I think Trump got it up to about eleven point eleven million dollars 1315 01:33:24,000 --> 01:33:27,680 per person during his during his reign. So now it's twelve nine. It's 1316 01:33:27,720 --> 01:33:30,800 well two to inflation. It goes up. It goes up every year. 1317 01:33:30,000 --> 01:33:36,000 Yeah, what is it? What do you tax that? After you have 1318 01:33:36,279 --> 01:33:42,520 over that limit? You tax? So somebody has a business that's worth twenty 1319 01:33:42,560 --> 01:33:45,640 million dollars, they don't have the seven or eight million dollars. That's a 1320 01:33:45,840 --> 01:33:49,880 third three point two million dollars checker cutting the government and they don't have it. 1321 01:33:50,039 --> 01:33:54,319 Then what happens they have to sell the business? Correct? Yeah? 1322 01:33:54,359 --> 01:33:58,600 The biggest for the biggest No, I said, that's the problem that we 1323 01:33:58,720 --> 01:34:01,560 have. There's no caveats. It's like, if you that's the reason they're 1324 01:34:01,600 --> 01:34:04,399 trying to change, they change it. I mean, but then when you 1325 01:34:04,479 --> 01:34:08,039 do some planning, you get some insurance, you get some life insurance, 1326 01:34:08,119 --> 01:34:12,079 you know, to cover these state taxes. One of the biggest areas was 1327 01:34:12,439 --> 01:34:15,840 hit by this is the family farm South Dakota, boy And so I'm familiar 1328 01:34:15,880 --> 01:34:21,079 with that. The farms, especially in those areas, have have gotten extremely 1329 01:34:21,239 --> 01:34:25,680 valuable. And but if you're not, you should be, you know, 1330 01:34:25,800 --> 01:34:28,560 doing the proper planning. I mean they're they're not, but it's still course 1331 01:34:28,640 --> 01:34:32,920 money for those three five million dollar contracts, insurance contracts, insurance contracts exactly. 1332 01:34:32,960 --> 01:34:35,199 It's not like I can go out and just go get term for that. 1333 01:34:36,079 --> 01:34:40,039 But that's just an avenue of one way of you know, defeating the 1334 01:34:40,159 --> 01:34:42,920 estate tax. There's other ways, family limited partnerships. You know, you 1335 01:34:43,000 --> 01:34:45,520 could throw that piece of property, that farm, that farmland to a family 1336 01:34:45,560 --> 01:34:49,760 limited partnership and squeeze it down and value. When I say squeeze, uh, 1337 01:34:49,880 --> 01:34:53,560 this might be a little too technical to talk about on this segment, 1338 01:34:54,039 --> 01:34:59,199 but you can sometimes due to uh, the I R S rules, you 1339 01:34:59,279 --> 01:35:02,479 can take twenty million dollars piece of real estate and squeeze it down thirty percent, 1340 01:35:02,680 --> 01:35:10,199 so it'd be worth fourteen million dollars because of lack of marketability, last 1341 01:35:10,279 --> 01:35:14,960 lack of transferability. So let's make it simple. If you're in a situation 1342 01:35:15,119 --> 01:35:16,920 that you think over the next few years you're gonna have more than seven million 1343 01:35:16,960 --> 01:35:23,920 dollars, you need to start looking at your state plan again. Oh absolutely, 1344 01:35:24,119 --> 01:35:26,840 okay, because it's not to twelve point nine. I'm looking at where 1345 01:35:26,840 --> 01:35:29,439 it's going to be in a couple of years because if they're still letting you 1346 01:35:29,520 --> 01:35:30,960 know, the lower because this is the way they're going to get taxes and 1347 01:35:31,199 --> 01:35:33,399 well, and one of the things you can do, and they you weren't 1348 01:35:33,399 --> 01:35:36,439 able to do in the past, is you could lock in that twelve point 1349 01:35:36,520 --> 01:35:40,920 nine million dollars. Okay, and one day. One way you could lock 1350 01:35:40,960 --> 01:35:46,560 it in is you know, gifting your some of that money into a spousal 1351 01:35:46,680 --> 01:35:49,880 trust for the benefit of your spouse, and you could lock in that twelve 1352 01:35:50,199 --> 01:35:54,800 twelve point nine. So if it goes down to five million, you're still 1353 01:35:55,079 --> 01:35:58,600 have the twelve that twelve million locked in. Well, that's good, and 1354 01:35:58,680 --> 01:36:01,479 that's why you got to look at now Stay planned. Jonathan's right in our 1355 01:36:01,520 --> 01:36:05,319 office, right next to Dave. It's that easy. Just call us an 1356 01:36:05,359 --> 01:36:09,960 appointment, sit down with them, and we'll figure out what we need to 1357 01:36:10,039 --> 01:36:13,600 do for you. That's what the whole financial planning and stay planning investing part 1358 01:36:13,760 --> 01:36:16,960 is. We finally got it to where I wanted this to goal and this 1359 01:36:17,119 --> 01:36:21,479 has been my vision for thirty years, Dave, thirty years. All right, 1360 01:36:21,520 --> 01:36:26,119 we'll be back next week. We're your money matters. We always want 1361 01:36:26,159 --> 01:36:30,119 to be happy, we always want to be healthy, and every day we 1362 01:36:30,319 --> 01:36:39,800 try to be profitable. Don't say it's all ab