How We are Mitigating Risk in these Volatile Markets

WEBVTT100:00:00.120 --> 00:00:03.560Good morning everybody. It's Sunday morning, eight o'clock. This is the Money200:00:03.560 --> 00:00:08.080Matter Show. We do appreciate everybodythere listens, either live right here on300:00:08.119 --> 00:00:13.080the radio, or listens on iHeartRadio, apps or wherever you're listening to our400:00:13.160 --> 00:00:16.760show podcast. If you're listening toa day two or three weeks later,500:00:16.839 --> 00:00:20.839that's great. A lot of peoplehave been listening it. And you know,600:00:20.920 --> 00:00:26.039we're going on thirty thirty five years, thirty five years almost thirty four700:00:26.120 --> 00:00:31.960years of doing this show, thirtyfour years. And I look at what's800:00:32.000 --> 00:00:38.359going on today and it's like youget this feeling every once in a while,900:00:39.560 --> 00:00:42.920and that feeling is is this markeygoing to stop going down? Is1000:00:42.920 --> 00:00:46.079the world going to continue to besuch a mess? Where we're going to1100:00:46.159 --> 00:00:48.119be and how we're going to getgoing? And what do I do with1200:00:48.119 --> 00:00:52.759my money? But there is anindicator that I'm going to tell you about1300:00:53.479 --> 00:00:58.840that's very interesting, and it's thatfear indicator that comes from clients. And1400:00:58.880 --> 00:01:03.960remember, a whole thing is riskreward. I want to tell you too1500:01:03.040 --> 00:01:06.599where we are in the risk reward. You know I've been talking about for1600:01:06.640 --> 00:01:11.560the last few months. At therisk was greater than the reward. So1700:01:11.599 --> 00:01:15.959where are we These are things inthe next twenty minutes or so I want1800:01:15.000 --> 00:01:19.719to discuss. I want to tellyou why I believe the market's going now.1900:01:19.840 --> 00:01:22.560I want to talk to you aboutwhere our support levels are. I2000:01:22.599 --> 00:01:25.640want to talk to you about whatwe are doing, what we've done,2100:01:25.760 --> 00:01:27.920what we're doing, what we're goingto do. Because if you don't have2200:01:27.959 --> 00:01:34.519a plan, it's not going tohelp you. A plan keeps you from2300:01:34.719 --> 00:01:41.079panicking, A plan keeps you fromdoing things at the wrong times. Fear2400:01:41.239 --> 00:01:44.959and greed, and you need advisorsthat are going to be able to help2500:01:45.000 --> 00:01:51.239you understand your plan while you're panickingor you're having emotions of fear or greed.2600:01:51.879 --> 00:01:53.599Happens on the other side too,that is strong enough to tell you2700:01:53.640 --> 00:02:00.640no, and that only comes withexperience, and we have the experience.2800:02:04.359 --> 00:02:07.360The show that's been going on thirtyfour years now has been brought to you2900:02:07.400 --> 00:02:13.680by Greenberg Financial Group. Greenberg FinancialGroup is both the residented investment advisory and3000:02:13.719 --> 00:02:16.639it broke a deal and registered withthe SEC members of SIPICK and members of3100:02:17.319 --> 00:02:21.960FINRA. We talk about a lotof things on the show. We talk3200:02:21.960 --> 00:02:27.240about different strategy ideas. We talkabout geopolitical, political, we talk about3300:02:27.280 --> 00:02:31.919economics, but everything has risk.Everything has risks to your money, to3400:02:31.960 --> 00:02:38.039your portfolio, and you need tounderstand every single time what you're investing in,3500:02:38.199 --> 00:02:40.400why you're investing in in it,and the impact that things have on3600:02:40.479 --> 00:02:46.719it. The biggest impact you've hadlately has been interest rates over the last3700:02:46.759 --> 00:02:50.080few years. If you just statedin those long term bond funds, you3800:02:50.120 --> 00:02:53.479have made a mistake because those thingsare not only down last year over twenty3900:02:53.479 --> 00:02:58.919percent, they're down this year anothertwenty percent. That because bonds are supposed4000:02:58.960 --> 00:03:01.039to help you put folio, butif you don't know what type of bonds4100:03:01.080 --> 00:03:07.360you're in or what you're doing,it can hurt your portfolio when rates are4200:03:07.360 --> 00:03:09.680going higher. So what do wehave right now? We have the Dow4300:03:09.800 --> 00:03:14.159Jones this week down over two percent, the S and P five hundred down4400:03:14.199 --> 00:03:17.599two and a half, now's backdown two point six and the equal weighted4500:03:19.199 --> 00:03:23.439S and P is now down twopoint four percent for the week. For4600:03:23.520 --> 00:03:27.080the month, the Dow is downthree point three percent, the S and4700:03:27.120 --> 00:03:31.879P five hundred is down four Nasdak'sdown four point four and the equal weighted4800:03:32.439 --> 00:03:38.199is five point six. Remember,the equal weighted is where most people when4900:03:38.280 --> 00:03:43.039you're looking at a balance portfolio therebecause you don't only in the magnificent,5000:03:43.280 --> 00:03:47.639magnificent seven stocks of technology, thebig tech that's what drove the market.5100:03:47.680 --> 00:03:51.360The S and P from the beginningof the year, that got it up5200:03:51.400 --> 00:03:57.039to eighteen twenty percent. Well,those same things that have moved up moving5300:03:57.159 --> 00:04:00.560down the Dow for the year nowit's down down two point two percent.5400:04:02.159 --> 00:04:06.159The S and P now is down, is up seven point two. NAZAC5500:04:06.199 --> 00:04:12.199that was up almost thirty eight percentis only up twenty percent. Sounds good,5600:04:12.319 --> 00:04:15.000but it is down from the highs. The Rustle is down seven,5700:04:15.360 --> 00:04:20.360which is more of a smaller capindex, and the equal weighted is down5800:04:20.439 --> 00:04:26.120five point three percent. I bringthat up because you can't just compare yourself5900:04:26.160 --> 00:04:29.439to the S and P and theNAZAC and the doll You gotta look at6000:04:29.439 --> 00:04:34.079what's the most stocks. The equalweighted SMP is down five percent. See6100:04:34.199 --> 00:04:39.079most people's portfolios when you look atit, you know you might be down6200:04:39.120 --> 00:04:42.879a little bit. Equal you seewhere it is from that standpoint, all6300:04:43.000 --> 00:04:46.519right, So what's driving is marketdown? We were I mean not too6400:04:46.560 --> 00:04:53.560far. Recently, we were aboutforty five forty six hundred looking to breakout.6500:04:54.720 --> 00:04:58.839Last three months down, August down, I taught September down, October6600:04:58.920 --> 00:05:03.720down. Why are they down?Well, it started with obviously overvaluations,6700:05:05.120 --> 00:05:10.319and now you're at the situation wherethere's been breakdowns of support. So technically6800:05:10.360 --> 00:05:13.720we've been breaking down. Then weget selling on top of that, and6900:05:13.759 --> 00:05:18.879now we have all the worldwide geopoliticalinput that's creating a real problem. And7000:05:18.920 --> 00:05:27.439then nationally we have inflation, andwe have a strong economy, and we7100:05:27.519 --> 00:05:30.240have good earnings, and we havethe FED talking next week. So where7200:05:30.279 --> 00:05:33.920did this all put us? Well, right now the S and P five7300:05:34.000 --> 00:05:41.240hundred is now closed down at theforty one hundred seventeen level. There is7400:05:41.279 --> 00:05:44.839some support right in this area onthe S and P forty one hundred.7500:05:45.160 --> 00:05:47.319If it breaks down, I cansee thirty nine to fifty to four thousand7600:05:47.720 --> 00:05:51.480being in an area that could bebought. On the upside, you got7700:05:51.560 --> 00:05:56.959some support or some resistance right asall these other support levels forty two fifty7800:05:57.040 --> 00:05:59.560to forty three hundred, and thenyou got to keep going. I don't7900:05:59.600 --> 00:06:03.120see rally in past maybe forty fourto forty five hundred. But that is8000:06:03.240 --> 00:06:08.879only an understanding that things are gettingbetter in the Middle East. Right now,8100:06:09.120 --> 00:06:13.279people are afraid of an escalation inthe Middle East, which is all8200:06:13.399 --> 00:06:17.519setting actually very very good earnings.I like the earnings that are coming out.8300:06:17.560 --> 00:06:21.360All the tech companies surpassed what theythought were going to be earnings.8400:06:21.839 --> 00:06:26.759But everyone saw a little bit ofcrack in something and they were selling them8500:06:26.759 --> 00:06:30.839off. In Nvidia, Meta,the only one that went up higher and8600:06:30.879 --> 00:06:35.600stayed up was Amazon, Microsoft,Apple. All of them up and then8700:06:35.680 --> 00:06:42.639down. Okay, because that's wherethe psychology is right now. The psychology8800:06:43.079 --> 00:06:46.319is to sell off until we havea better playing field. But you know8900:06:46.360 --> 00:06:51.959how these markets work. When youfeel comfortable the markets have already hit the9000:06:51.959 --> 00:06:57.600bottom and turned up, and thenyou're waiting for a better buying opportunity.9100:06:58.720 --> 00:07:04.079We invest on a risk reward basis. That's how we look at it.9200:07:04.120 --> 00:07:08.319I've been doing this for a verylong time. Is the risk greater than9300:07:08.360 --> 00:07:11.759the reward? Is the reward greaterthan the risk? Well, back in9400:07:11.839 --> 00:07:15.360June, when we're hitting you know, the forty five fifty, forty six9500:07:15.480 --> 00:07:19.439hundred level and stuff, I said, I'm not comfortable with this market going9600:07:19.439 --> 00:07:25.959into August September, October. I'mtaking money off the table. I'm mitigating9700:07:26.079 --> 00:07:30.839risk and I'm going to go aheadand wait it out because I believe the9800:07:30.959 --> 00:07:35.920risk was greater than the reward andit was turned out. Right. Well,9900:07:36.000 --> 00:07:42.839now where are we to me?We're balanced. Maybe a little bit10000:07:42.839 --> 00:07:46.279more risk here because of what's goingon, but it definitely the risk side10100:07:46.319 --> 00:07:48.759has come down and the reward sidersgo up, but not enough for me10200:07:48.879 --> 00:07:59.000to say go in and start buying. There's not enough there that tells me10300:07:59.240 --> 00:08:03.040yet I feel comfortable this is abottom and let's go what it does tell10400:08:03.079 --> 00:08:07.279me. I'm looking for a bouncebottom, which means, do I think10500:08:07.319 --> 00:08:09.600we can come off this fortuty onehundred level or so if things don't get10600:08:09.639 --> 00:08:13.600worse in the Middle East and moveback up you know, three five percent?10700:08:13.720 --> 00:08:18.160I do, And I think that'swhat I'm looking for, that opportunity.10800:08:18.720 --> 00:08:22.839So how do you play that fromhere? You play that? You10900:08:22.959 --> 00:08:26.120invest that way because if you hadthe cash on the side, right and11000:08:26.160 --> 00:08:35.360you're mitigating risk, and you mitigatedrisk by raising cash, reducing positions by11100:08:35.679 --> 00:08:41.600selling by buying the inverse funds buyinginsurance puts, selling calls, right,11200:08:41.720 --> 00:08:46.399that's kind of how you mitigate risk. That does not mean you lose,11300:08:46.639 --> 00:08:50.240don't lose money, you do,but you all set some of the losses11400:08:50.279 --> 00:08:54.840by being in some of these otherthings while the market's dropping. Well.11500:08:54.879 --> 00:08:58.840To take advantage of that, youneed to lessen your mitigating risk. That11600:09:00.200 --> 00:09:03.960the one thing I would do rightnow, and that's what we've done.11700:09:05.039 --> 00:09:09.240We've been in the SDS, whichis the invert for the S and P11800:09:09.360 --> 00:09:15.200five hundred, and we've taken offapproximately two thirds of our position and brought11900:09:15.240 --> 00:09:20.759it down to what we feel isa comfortable position that coming down lower or12000:09:20.840 --> 00:09:24.960sell it off and move on.And if it goes back higher, we12100:09:24.039 --> 00:09:28.399have the opportunity then to buy inlow on the SDS and look for other12200:09:28.440 --> 00:09:33.919opportunities. We also look for somestocks that we thought maybe are opportunities here12300:09:35.240 --> 00:09:39.720that we can maybe take advantage of, or maybe the indexes rebalancing the indexes12400:09:41.279 --> 00:09:46.480our models just to go ahead andparticipate, but not at where I say,12500:09:46.519 --> 00:09:48.399oh, the rewards greater than therisk. We're balanced right now,12600:09:48.600 --> 00:09:54.080and in this environment of being balanced, I leaned towards the risk side of12700:09:54.679 --> 00:09:58.399let's take off some of the mitigatehow we mitigated risk, which will reduce12800:09:58.440 --> 00:10:03.279our position on the short side,which means we won't make that much money12900:10:03.279 --> 00:10:07.279of the market on those things andmarkets coming down. But if the market13000:10:07.320 --> 00:10:11.519bounces, we're not giving back whatwe had on the mitigating which side,13100:10:11.559 --> 00:10:16.879which gives us an opportunity to participateto the upside. I do believe we13200:10:16.960 --> 00:10:22.120are setting ourselves up for maybe NovemberDecember move higher. Maybe I don't know.13300:10:22.200 --> 00:10:26.519We'll see. Last year in Decemberwas terrible. We got clocked.13400:10:26.919 --> 00:10:31.000All those good companies got killed andthen they rallied big. Remember a year13500:10:31.039 --> 00:10:35.840ago Amazon and Google and Apple andthe video. They were down in the13600:10:35.039 --> 00:10:39.600low hundreds to and under one hundred, and Microsoft from the two hundreds,13700:10:39.600 --> 00:10:43.360and Apple was about one eighteen wintwenty in the video got down to one13800:10:43.519 --> 00:10:48.960ten, one eighteen until they tookoff. Earnings, as I say,13900:10:48.960 --> 00:10:54.039have been good. That is verygood. I like to see earnings good.14000:10:54.320 --> 00:10:58.720The GDP number was good four pointnine percent, so there is some14100:10:58.799 --> 00:11:03.440good reasons to blue leave the underpinnings. But does that mean the Federal Reserve14200:11:03.519 --> 00:11:05.879and this is the flying the ointment, are they gonna look at and say,14300:11:05.919 --> 00:11:09.240I gotta raise interestrates more. Ifthey do, that's terrible. If14400:11:09.279 --> 00:11:15.200they just say, listen, it'stoo risky for us to just raise interest14500:11:15.279 --> 00:11:18.200rates. Here we see that inflation'sabating a little bit, the economy is14600:11:18.240 --> 00:11:24.080still pretty good. That's a nicelittle combination there. Oil prices are still14700:11:24.159 --> 00:11:28.919high, but the livable. Andlet's see what's happening in the Middle East,14800:11:28.440 --> 00:11:31.519because the worst thing they can dois raise interest rates. Middle East14900:11:31.720 --> 00:11:35.080escalates. Next thing, you know, oil jumps over one hundred dollars a15000:11:35.080 --> 00:11:41.039barrel, and our economy dumps.Nobody wants that to happen. Do I15100:11:41.039 --> 00:11:46.039think they're gonna lower interestrates right now? Absolutely not. Do I think they15200:11:46.080 --> 00:11:48.080can put a halt on it andsee what happens. I do. I15300:11:48.120 --> 00:11:52.000think what's gonna happen is allow thatto happen. We're gonna filter through this.15400:11:52.120 --> 00:11:54.960And my only thing is if we'regonna be involved, we're gonna be15500:11:56.080 --> 00:11:58.159part of this thing going on.Let's finish it. Do not make it15600:11:58.200 --> 00:12:01.440a Vietnam. Do not make it. And I kind of stand, get15700:12:01.639 --> 00:12:05.759done with whatever you're going to doand figure out now we are the toughest15800:12:05.799 --> 00:12:13.440if you're coming after us, youbetter watch out. Don't pussy foot around.15900:12:15.080 --> 00:12:18.240But an escalation, you know,will be a creator a problem.16000:12:18.480 --> 00:12:22.120So where are we going the moneys? We're taking off some of the things.16100:12:22.120 --> 00:12:26.679If we're not finding opportunities for certainpeople, some of the ghost stocks16200:12:26.679 --> 00:12:30.120will come down. And if theyalready investors, if we put it in16300:12:30.159 --> 00:12:35.120the money market fund earning five overfive percent right now, you can get16400:12:35.120 --> 00:12:39.360over five percent in the money marketfund while you wait to see what happens.16500:12:39.559 --> 00:12:43.399It's a perfect place. But that'salso been increasing over time, not16600:12:43.559 --> 00:12:48.159just with us, but across theboard with a lot of investors that is16700:12:50.000 --> 00:12:54.240one day going to be unleashed.Now I'm not in the situation that I16800:12:54.279 --> 00:12:56.720look at and say, oh,I'm the fear of missing out, because16900:12:56.840 --> 00:13:01.399as the markets are giving me opportunities, I will look to be able to17000:13:01.480 --> 00:13:03.480purchase some things. If it startsbreaking out, that's a different story.17100:13:03.720 --> 00:13:09.120Add on if it doesn't, thenwe'll go from there. But I want17200:13:09.159 --> 00:13:16.000to make sure that I have cashto buy if opportunities arise and markets continue17300:13:16.000 --> 00:13:22.120to go down. Now, shortterm bonds have become a big, big17400:13:22.159 --> 00:13:26.960part of our investment philosophy. Rightnow because we can get over five percent17500:13:26.080 --> 00:13:31.759for short term government and corporate Arated plus bonds. That is a great17600:13:31.840 --> 00:13:35.000thing. One year, two year, three years we get an alley average17700:13:35.039 --> 00:13:43.080over five. So we've increased ourfixed income portfolio, especially with the idea17800:13:43.120 --> 00:13:46.679that even if we have a bouncehere, I think we have a problem17900:13:46.679 --> 00:13:50.399into twenty twenty four. Don't knowwhy, don't know when. I do18000:13:50.519 --> 00:13:52.080think that some of the regional banks, not the big bank so much,18100:13:52.080 --> 00:13:58.039but the mid sized banks and smallbanks could have very many problems, especially18200:13:58.039 --> 00:14:01.559as real estate comes alan start comingdue, and they're at five percent,18300:14:01.639 --> 00:14:05.200four and a half percent, sixpercent, and they're going to be moving18400:14:05.679 --> 00:14:09.120to eight, eight and a half, maybe even nine percent now. The18500:14:09.159 --> 00:14:13.559season real estate investor, the onethat's been around a long time and has18600:14:13.639 --> 00:14:15.720money, they're gonna be able todo it. They have good properties,18700:14:15.720 --> 00:14:18.679they have income. The ones I'mconcerned about is the nouveaux rich real estate18800:14:18.720 --> 00:14:22.600people. And it happens all thetime. I watched it in two nineteen18900:14:22.679 --> 00:14:26.399ninety eighty eight to ninety two,I watched it in two thousand and four19000:14:26.519 --> 00:14:31.399to twenty ten, and the cyclecontinues. These people get rich they're young,19100:14:31.879 --> 00:14:35.679they can't do no wrong. They'vebecome millionaires, they're above themselves.19200:14:35.720 --> 00:14:39.960They're pounding themselves on the chests,and then they get cut pooed because of19300:14:41.039 --> 00:14:46.879things that they can't foresee and interesting. And then real estate starts becoming a19400:14:46.919 --> 00:14:50.679problem because if they're there, iftheir mortgages go up and they don't have19500:14:50.720 --> 00:14:52.840the money to pay the extra becausethey don't have the reserves, and people19600:14:52.879 --> 00:14:56.679start pulling out and not paying rents, there's where your problems start and begin19700:14:58.440 --> 00:15:03.399and also end, because then thebanks have to take back the properties.19800:15:03.960 --> 00:15:07.519People go bankrupt and go from there. We also have a problem with savings.19900:15:07.559 --> 00:15:13.159Our savings has been going down anddown, and people go, well,20000:15:13.200 --> 00:15:16.960you know, they're spending money.Well, why they're spending more money20100:15:16.960 --> 00:15:20.120because of inflation. I was listeningto CNBC in the morning and they're making20200:15:20.159 --> 00:15:24.919all these reasons why savings could begoing down, and they tried to actually20300:15:24.919 --> 00:15:33.240come up with a concept that said, you know, maybe some people just20400:15:33.320 --> 00:15:37.159aren't be affected. They feel prettygood and they're just taking money and they're20500:15:37.159 --> 00:15:41.159spending it because they feel comfortable thatthey have enough money. Another one said,20600:15:41.159 --> 00:15:43.879oh, there could they feel comfortablein their jobs because there's so many20700:15:43.960 --> 00:15:48.200job openings that people can get jobs. So there's take from the spendings.20800:15:48.519 --> 00:15:54.279No, that's not it. It'sthe third reason that's also affecting the second20900:15:54.279 --> 00:15:56.480pick of the reason, and thefirst reason they're taking money from. They're21000:15:56.519 --> 00:16:03.360spending their savings accounts because of inflation, and everything costs more money. So21100:16:03.559 --> 00:16:06.080if the people have a lot ofmoney and they're remodeling or doing things,21200:16:06.080 --> 00:16:08.879they're taking from their savings and buyand remodeling and doing so that's costing a21300:16:08.919 --> 00:16:12.399lot more. If they're at thelower end of the spectrum, they're just21400:16:12.440 --> 00:16:18.000taking that money so they can paytheir bills. Okay, their credit cards21500:16:18.399 --> 00:16:21.759are going higher and higher where they'regetting the money from. You got to21600:16:21.759 --> 00:16:23.919take from your savings to be ableto pay off your credit cards because eventually21700:16:25.000 --> 00:16:27.679the money you're making on a monthlybasis is not going to pay your credit21800:16:27.679 --> 00:16:33.639cards off. And then it's acycle that goes like that. I do21900:16:33.679 --> 00:16:37.519not know why we're trying to breakthe economy when the economy is so strong.22000:16:37.679 --> 00:16:42.919It's a balancing act, but wehave no help from a government,22100:16:45.360 --> 00:16:48.159the administration. Everybody else comes upwith all these reasons to spend money,22200:16:48.519 --> 00:16:55.039but no reasons to cut spending.We want to give money away to everybody,22300:16:56.120 --> 00:17:00.000but yet we still have our inflationaryproblems. You keep spending, mone22400:17:00.200 --> 00:17:03.200you keep giving money away. Ourinflation is not going away, and FED22500:17:03.320 --> 00:17:06.079is going to stay higher for longer, and I don't want to see that.22600:17:07.319 --> 00:17:10.319We're going to get a normalcy ininterest rates pretty soon, which means22700:17:10.359 --> 00:17:12.519the higher rates will be higher inthe lower than the lower rates. For22800:17:12.519 --> 00:17:15.759a very long time, our lowerrates have been higher than our longer term22900:17:15.839 --> 00:17:22.119rates, and that's an inverted yieldcurve that does set up at some time23000:17:22.160 --> 00:17:25.440that you have a recession if thatis to play out, and the normal23100:17:25.480 --> 00:17:27.759timeframe would be first or second quarterof next year. One of the reasons23200:17:27.799 --> 00:17:37.039I'm cautious, So what would stopthis market from going lower? Earnings have23300:17:37.039 --> 00:17:38.319been good, so that's good.That's in the back of people's minds,23400:17:38.319 --> 00:17:42.279so it kind of slowed it downa little bit. We have to see23500:17:42.279 --> 00:17:48.559a turnaround and and get the shortset the people that are short stocks covering.23600:17:48.599 --> 00:17:52.519That starts the impetus to go higher. We have to see a containment23700:17:52.519 --> 00:17:56.799of this Israeli war and not anescalation of the war in the Middle East.23800:17:57.920 --> 00:18:03.200Got to see our oil price isstarting to basically top out and maybe23900:18:03.480 --> 00:18:11.599just stay neutralized or down a littlebit. We got to see a government24000:18:11.640 --> 00:18:15.160that's finally got a Speaker of theHouse come together and start putting out,24100:18:15.519 --> 00:18:22.000you know, spending bills that makesense, not inflationary. We're gonna have24200:18:22.079 --> 00:18:25.400to do something to not shut downthe government. That's the next big thing24300:18:25.440 --> 00:18:29.720coming up, which I believe they'regoing to do. I hope. Otherwise24400:18:29.720 --> 00:18:30.759what are they gonna do. They'regonna go get rid of this Speaker of24500:18:30.799 --> 00:18:33.759the House too, if he agreesto trying to put a compromise together.24600:18:34.279 --> 00:18:38.920We need compromises. If we getcompromises, we can move forward. So24700:18:40.039 --> 00:18:44.799the markets right now at forty oneseventeen on the SMP, we got some24800:18:44.839 --> 00:18:48.599support in here. I think thirtynine fifty four thousand once you know,24900:18:48.640 --> 00:18:52.759it's another three percent down or so, there's good, good support there,25000:18:52.799 --> 00:18:53.799and I hope it doesn't break that. If not, then it's gonna go25100:18:53.839 --> 00:18:56.480down to thirty seven thirty eight hundred, which is, you know, another25200:18:56.519 --> 00:19:02.400five six percent from here. Nobodywants that. Could it happen? Yes.25300:19:02.839 --> 00:19:04.720So there's where the big question is. People say, well, Dean,25400:19:06.759 --> 00:19:08.240you know you Tonas and Ma andJune and stuff. You didn't like25500:19:08.279 --> 00:19:11.640the markets. You thought the marketswould go down. Why did you not25600:19:11.880 --> 00:19:21.039just sell everything? My answer iscrystal clear. I am not a market25700:19:21.079 --> 00:19:26.240timer. We are not a speculator. We are not trading accounts in and25800:19:26.279 --> 00:19:33.240out all cash down. We aresetting up allocations of portfolios that are dependent25900:19:33.799 --> 00:19:38.920on our client's risk reward. Now, what you cannot do is trade a26000:19:40.079 --> 00:19:45.759change your risk tolerance because the marketsare down, and when the markets are26100:19:45.880 --> 00:19:49.920up, change back to the fearand greed. So I know I told26200:19:49.960 --> 00:19:55.279you I was going to tell youan indicator. There's a handful of clients26300:19:55.680 --> 00:19:59.799that always love to be aggressive,but they get scared when it gets down26400:19:59.839 --> 00:20:03.200here they talk about selling everything.Everything's going to hell in hand basket.26500:20:03.200 --> 00:20:10.839But on the same token they're talkingabout, well, the AI situation,26600:20:11.000 --> 00:20:12.920the chip situation, this is good, that's good. You can't have it26700:20:12.960 --> 00:20:19.359both ways. So the markets createfear and greed. Why we go ahead26800:20:19.359 --> 00:20:22.960and find out what your risk tolerancesis is to be able to set up26900:20:22.000 --> 00:20:27.799a portfolio of when things in ouropinion are very very very attractive. We27000:20:27.920 --> 00:20:33.799increase the risk part of the portfoliobecause we think the reward is greater than27100:20:33.839 --> 00:20:38.079the risk. When the risk getsgreater than the reward, when the markets27200:20:38.160 --> 00:20:41.359move up and we have problems outthere and moving into August at the bark27300:20:41.400 --> 00:20:45.759to we reduce that risk. Wereduce that risk by cutting back positions,27400:20:47.079 --> 00:20:52.079increasing our cash position, buying more, increasing our fixed income position, hedging27500:20:52.119 --> 00:20:56.079the accounts, buy any inverse fundsthings that we do. Does that mean27600:20:56.119 --> 00:21:00.759we do not lose money? Thatdoes not mean that it means we will27700:21:00.759 --> 00:21:03.279lose money, but we will makemoney on the on the mitigating risk part,27800:21:03.400 --> 00:21:07.119which then we sell. We havemore cash, we look to go27900:21:07.160 --> 00:21:11.400forward the other way, we loseless than we would have if we didn't28000:21:11.400 --> 00:21:15.960mitigate risk. That's all that is. At some time you'll hear me on28100:21:17.039 --> 00:21:19.799here, and I've been here manytimes saying that over the thirty five thirty28200:21:19.799 --> 00:21:23.720four years that the reward is greaterthan the risk, and we're going to28300:21:23.799 --> 00:21:26.200start investing. So what does thatmean. Let's just take a fifty to28400:21:26.200 --> 00:21:33.720fifty portfolio, say your fifty tofifty portfolio. Maybe now you got forty28500:21:33.720 --> 00:21:40.160percent and one twenty percent in cashand forty percent in fixed income. Markets28600:21:40.200 --> 00:21:42.119come way down, we think thereward is definitely worth it. You go28700:21:42.200 --> 00:21:48.319up to sixty percent on a balancedportfolio, maybe sixty five. How depending28800:21:48.359 --> 00:21:52.880on a far comes down, youkeep your forty percent and you've got less28900:21:52.920 --> 00:21:57.640cash. Cash is king right now. Cash goes ahead and avoids the problem.29000:21:57.680 --> 00:22:02.200But you need some fixed income becauseas industrates come down, money markets29100:22:02.240 --> 00:22:07.200will come down first, and yourbond portfolio will hold you in there by29200:22:07.359 --> 00:22:12.119site stepping the dramatic rays and interestrates. With long term bonds going down29300:22:12.440 --> 00:22:18.319twenty percent a year, we've beenable to handle and maintain basically a decent29400:22:19.039 --> 00:22:25.000part of a portfolio. Everyone's returnsare different. Everybody's returns are different.29500:22:25.160 --> 00:22:27.079They're going to depend on what youhave invested. When you get invested,29600:22:27.279 --> 00:22:30.640what do you have in here?What he got in there? You know?29700:22:30.720 --> 00:22:34.160And three months, four months it'snot enough to look at. It's29800:22:34.200 --> 00:22:37.519frustrating when the markets go down.It's frustrating for you guys, it's frustrating29900:22:37.559 --> 00:22:45.599for us. And remember we're onthe same side as you. Our fee30000:22:45.680 --> 00:22:48.240is based on whatever the amount themoney is at the end. Of the30100:22:48.319 --> 00:22:52.680quarter. So if your portfolio goesdown, the percentage doesn't go high,30200:22:52.680 --> 00:22:56.480it stays the same the amount.The real dollars that we get are less.30300:22:56.559 --> 00:23:00.359You have less dollars, We haveless dollars. We want portfolios to30400:23:00.400 --> 00:23:04.240go up. If the portfolio willincreases by ten percent, we're going to30500:23:04.319 --> 00:23:08.519increase our fees. We don't havea higher fee, but on a dollar30600:23:08.519 --> 00:23:14.400amount, we go up because apercentage of a higher amount is higher than30700:23:14.599 --> 00:23:18.880a lower amount. It's that simple. We're all on the same page.30800:23:18.160 --> 00:23:22.359All we try to do if webuy, we sell, we reallocate,30900:23:22.400 --> 00:23:26.920we do whatever we mitigate risk isto protect the portfolios in order to go31000:23:26.960 --> 00:23:32.480ahead and maximize us what we canunder your risk reward tolerance. And that's31100:23:32.519 --> 00:23:37.359where we sit. We sit ina world of turmoil and chaos right now.31200:23:37.960 --> 00:23:42.160We will not go to total cash. We will hedge our portfolios.31300:23:42.799 --> 00:23:47.720We will neutralize the portfolios if youask us to. But you have to31400:23:47.720 --> 00:23:52.359be invested because we can come inon Monday morning, Tuesday morning, Wednesday31500:23:52.359 --> 00:23:55.400morning, next month, whatever thingsget resolved, next thing. In all,31600:23:55.440 --> 00:24:02.119the market is rallied a thousand pointsup two hundred points. NWA zac's31700:24:02.200 --> 00:24:04.759up five hundred points, and becausewe were trying to catch the bottom,31800:24:06.039 --> 00:24:10.359we miss anything turning around and goingthe other way. That is why we31900:24:10.400 --> 00:24:14.519are where we are right now.Risk reward is balanced much better than where32000:24:14.519 --> 00:24:17.480it was three months ago. Ifwe keep going lower, then the reward32100:24:17.559 --> 00:24:19.920get greater. We'll let you know, but right now we're cautious. We32200:24:19.960 --> 00:24:26.480will invest cautialty, look for opportunities, and take advantage of any ups and32300:24:26.519 --> 00:24:30.160downs. We'll be back. Iappreciate you listening to the Moneymatter Show.32400:24:37.880 --> 00:24:41.319Well, welcome back everybody. It'sthe Money Matter Show. And you know32500:24:41.400 --> 00:24:45.359what. I know how you're feeling, because we're feeling the same way.32600:24:45.039 --> 00:24:48.599Things will get better. Things willget better. As I was saying,32700:24:48.640 --> 00:24:52.599remember risk reward, risk reward.Where I thought the risk was greater than32800:24:52.640 --> 00:24:57.000the ward before, I'm saying it'smore balanced. But I'm still cautious,32900:24:57.440 --> 00:25:00.839and that just means we're not justjumping. Then we both fees here.33000:25:00.119 --> 00:25:04.759I had a veteran investor call meduring the week and said, Gee,33100:25:04.799 --> 00:25:08.039with those treasuries at five percent,maybe we ought to take some of the33200:25:08.079 --> 00:25:12.480equities and move them over to that. That's all your equities have averaged twelve33300:25:12.519 --> 00:25:15.799percent for the last one hundred years. How much of your twelve percent money33400:25:15.799 --> 00:25:21.160do you want to move over tofive That's a good way to put it,33500:25:21.279 --> 00:25:25.000Needless to say he didn't move anyIt should be allocation. I don't33600:25:25.000 --> 00:25:29.720have a problem with someone's we riskreward strategies there and you know they've got33700:25:29.720 --> 00:25:32.319a lot of cash and they youknow, we only have twenty percent and33800:25:32.400 --> 00:25:34.359fixed income, let's raise that tothirty percent or something of forty percent.33900:25:34.480 --> 00:25:37.680No, I'm okay with that,sure if they're too low, but I34000:25:37.720 --> 00:25:40.880don't like to go, oh we'llforty let's go to sixty only because things34100:25:40.920 --> 00:25:42.559are bad right now, and youcould you could probably make the argument this34200:25:42.640 --> 00:25:45.920is not a great time to beselling equities to buy fixed income. No,34300:25:47.160 --> 00:25:48.839and the money that we are thatwe have sold off and we raise34400:25:48.920 --> 00:25:52.880put in the money market fund rightnow and get over five percent. That's34500:25:52.920 --> 00:25:56.200nice because then that money is goingto be employed again if the markets come34600:25:56.240 --> 00:26:00.440down, rather than having to sella bond to go get it the first34700:26:00.440 --> 00:26:03.359time in years. We actually havesomewhere we can put the money that's doing34800:26:03.400 --> 00:26:07.599as well as anything. And that'sreally a nice thing. We see that34900:26:07.640 --> 00:26:10.359with all your money managers as well, so we know there's a lot of35000:26:10.400 --> 00:26:14.160dry powder out there right now earningthat safe money. When those interest rates35100:26:14.160 --> 00:26:18.480stop or start to decrease, thatmoney's going to find a place, it's35200:26:18.480 --> 00:26:22.160going to find a home. Well, we met with a client this past35300:26:22.200 --> 00:26:26.799week that a multimillion dollar account witha handful of holding all mutual funds,35400:26:27.359 --> 00:26:32.680all of his bonds when long termbonds had been for years down in the35500:26:32.759 --> 00:26:37.680last three years, down like fifteenpercent. Just and that's I don't know,35600:26:37.759 --> 00:26:41.400I don't know. How you chargesomebody a management feed to do nothing35700:26:41.359 --> 00:26:45.880seems seems seems kind of weird tome. So the big headline this week35800:26:45.000 --> 00:26:51.240was what probably the Mike Johnson fromShreveport, Louisiana that nobody'd ever heard of.35900:26:51.519 --> 00:26:52.519That was one of them. Butthe other one was the US sarting36000:26:52.519 --> 00:26:56.680the bomb ceria. And where we'regoing with all that going back to is36100:26:56.720 --> 00:26:59.920what's on everybody's mind right now,right and that is why on Froddy afternoon36200:27:00.039 --> 00:27:03.880we couldn't get us back into thepositive stuff there because sevenone's like, well,36300:27:03.920 --> 00:27:06.160we're going to the weekend Yep.We don't know what's going to happen.36400:27:06.160 --> 00:27:08.200I don't want to walk in aMonday and the bombs being dropped all36500:27:08.200 --> 00:27:11.519over the Middle East. Yeah,you're right, you're right. I think36600:27:11.599 --> 00:27:14.480that that was the hesitancy. OnFriday. It looked like it really wanted36700:27:14.519 --> 00:27:17.799to come back. Market looked likeit really and it's like a rubber band.36800:27:17.799 --> 00:27:21.119It just keeps getting pulled further andfurther and further back. Yeah,36900:27:21.279 --> 00:27:22.920and we've seen it where it getsworse and then you kind of know when37000:27:22.920 --> 00:27:26.119the bottom is there. It justkind of goes. What I think now37100:27:26.240 --> 00:27:29.720is you might have a two orthree percent move up and then come back37200:27:29.759 --> 00:27:33.480and test this again. But Ithink I think we can move up.37300:27:33.519 --> 00:27:37.319We can be three four, maybefive percent of maybe six of a lucky37400:27:37.440 --> 00:27:40.759six percent of here would be whatabout twenty fifty points, which about forty37500:27:40.759 --> 00:27:44.720four fifty forty five hundred. Wefinished what forty one and change, I37600:27:44.759 --> 00:27:48.799think said forty one Inames We hada forty two hundred was really good support37700:27:48.839 --> 00:27:52.640and held there three different times,and then it broke that on Wednesday morning37800:27:52.640 --> 00:28:00.000when Google reported disappointing growth in theircloud business. Although here's The interesting point37900:28:00.119 --> 00:28:02.519about it in then what business cloud? Oh? I thought you said,38000:28:02.559 --> 00:28:06.000cause and their cloud business. Ithink that the Google call meant that much38100:28:06.039 --> 00:28:08.599to them. The funny part aboutthis is Google got hammered by ten percent38200:28:08.680 --> 00:28:14.000and then lost another percent or twoin the following two days because of the38300:28:14.440 --> 00:28:18.640slowing growth of their cloud business.Did you realize Amazon had a really good38400:28:18.799 --> 00:28:22.920Friday because they came out with areport that their their cloud business was doing38500:28:22.960 --> 00:28:26.720well. Microsoft had a good weekbecause they came out and said their cloud38600:28:26.720 --> 00:28:30.839business is doing well. Right,Here's the interesting part about this. Google's38700:28:30.880 --> 00:28:36.519cloud business is growing faster than eitherof those two. That expenses. But38800:28:36.599 --> 00:28:38.519Google got hammered. Is there moreexpenses then maybe on the other side.38900:28:38.559 --> 00:28:41.960I don't know what it was,but Google got Google got hammered. There39000:28:41.960 --> 00:28:45.279has to be And there's also justexpectations Google might just people might think they39100:28:45.279 --> 00:28:51.559should be faster already there but theysold them all though. Microsoft went down39200:28:51.680 --> 00:28:55.680after it went initially up, thenwent down and and and then then it39300:28:55.799 --> 00:28:59.839rallied the NFL another twelve points onThursday, and then rallied again a Friday.39400:29:00.160 --> 00:29:03.519Apple went down. Meta went downafter being up. You know,39500:29:03.519 --> 00:29:07.440when they first announced. The onlyone that continued up after they announced was39600:29:07.440 --> 00:29:11.119Amazon, right. But also,I mean Google's issue is they're spending on39700:29:11.640 --> 00:29:15.000Baird, which is that chatcheep theirversion of chat Get. Yeah. And39800:29:15.079 --> 00:29:17.519so we saw that with Meta andthey were trying to get real big and39900:29:17.640 --> 00:29:21.720AI and all that and what wasreally virtual reality for Meta, and we40000:29:21.759 --> 00:29:26.920saw the sack get a huge cuthit because of spending too much on RNA.40100:29:26.000 --> 00:29:30.119Right. So now we have thesame thing happening with Google. So40200:29:30.119 --> 00:29:33.359maybe even though the cloud business isdoing well, they're spending too much money40300:29:33.519 --> 00:29:37.480and that money hasn't bring back anyprofitability because we know no one has really40400:29:37.480 --> 00:29:41.559figured out how to be profitable chatGBT yet or you know AI yet.40500:29:41.000 --> 00:29:45.480I think it's like spending like theEV charging stations, right, there's a40600:29:45.519 --> 00:29:48.359buildout process. It takes time toget all of that in place, and40700:29:48.440 --> 00:29:52.440when you're building it out, you'respending money on infrastructure and you're not getting40800:29:52.440 --> 00:29:56.839anywhere near the revenue that you're puttingout. You know how much Google,40900:29:56.160 --> 00:29:59.480you know how they're in that antitrust lawsuit right now, right, how41000:29:59.559 --> 00:30:03.160much do you think they paid justin general in twenty twenty one to be41100:30:03.200 --> 00:30:07.079the default web browser for phones anddefault search engine for web browsers and phones,41200:30:07.200 --> 00:30:11.599unless you think they paid in twentytwenty one twenty six billion dollars.41300:30:11.720 --> 00:30:14.599Twenty six billion dollars. And that'swhat they're saying. Is part of that41400:30:14.640 --> 00:30:17.759anti trusting too, which is goingon with Google, is that they're saying41500:30:17.759 --> 00:30:21.599they have an illegal monopoly on thesearch engine group. Well, they have41600:30:21.680 --> 00:30:26.000like nineteen billion dollars. They saythis year They've become a monopoly by default,41700:30:26.039 --> 00:30:29.039though I don't know that it's automatic. I always go to Google when41800:30:29.039 --> 00:30:30.480I want to google something, right, who goes? Yeah? But it's41900:30:30.599 --> 00:30:33.680this idea that say I'm going togo Google something, but you could go42000:30:33.759 --> 00:30:37.960on other ones. I mean,whose fault is that? I know I'm42100:30:37.960 --> 00:30:40.960saying that's how that's what it's BecauseGoogle did so well marketing, they should42200:30:40.960 --> 00:30:42.799be sued. Yeah, exactly.Obviously they just are a good company.42300:30:42.799 --> 00:30:45.839Like I'm gonna Uber, but youcould take a lift. It's like personal42400:30:45.880 --> 00:30:49.279emails. Almost everybody has a Gmail. You know, the corporation should do42500:30:49.680 --> 00:30:53.599They can become a collaborative and goto the government and say, listen,42600:30:55.400 --> 00:30:59.519you cut spending by a trillion.We'll match that trillion. We cutch it,42700:30:59.559 --> 00:31:03.440then we can cut the deficit bytwo trillion a year. Think about42800:31:03.480 --> 00:31:07.359that. Well, if they cutspending by a trillion bill however, the42900:31:07.359 --> 00:31:11.680corporations wouldn't have that money then toproduce on our RNA. They wouldn't have43000:31:11.720 --> 00:31:14.519money to I'm not looking to build. I'll talk about getting back into normal43100:31:14.640 --> 00:31:17.200normalcy. They'll be able to doit. Actually, at the end of43200:31:17.240 --> 00:31:19.119the day, we would be payingmore of everything we do to pay that43300:31:19.160 --> 00:31:22.319trillie. But here's the thing youwant. You want a collaborative thing that43400:31:22.400 --> 00:31:26.160we said. They don't want tojust pay taxes because they know the government's43500:31:26.160 --> 00:31:27.559not going to go ahead and dowhat they need to do. But they43600:31:27.759 --> 00:31:33.720everybody, and they want a deficitdown everybody. They just don't know how43700:31:33.759 --> 00:31:37.160to do it. They keep spending. It would be nice to see that43800:31:37.359 --> 00:31:40.000something. It's not gonna happen.But if you got all the I mean,43900:31:40.240 --> 00:31:44.720what's a few hundred billion dollars mostof these companies, if it's going44000:31:44.759 --> 00:31:48.640towards something that's going to help stimulatethe economy. Apple sitting on trillion dollars44100:31:48.640 --> 00:31:52.160of cash right right, and thebiggest problem we have on the federal level44200:31:52.279 --> 00:31:56.359is that what used to be twentyfive percent of our budget or twenty five44300:31:56.359 --> 00:32:00.440percent of our budget is now interestinterest expense. And that's not no and44400:32:00.480 --> 00:32:05.599that that's money that used to beused for defense and for other things that's44500:32:05.640 --> 00:32:08.599now going to have to go tointerest. Trying to get the federal debt44600:32:08.799 --> 00:32:14.359lower, to me seems like it'sprobably, boy, I don't know how44700:32:14.359 --> 00:32:15.880you do it. It's beyond me. I wanted to take a one second44800:32:15.920 --> 00:32:19.480on the S and P market becausewhen you look at the charts here,44900:32:19.519 --> 00:32:22.640you can see that there's a there'san elliot wave forming on this chart.45000:32:22.640 --> 00:32:27.599And so what an elliot wave isit? It's five legs, it's down45100:32:27.759 --> 00:32:30.359up, down, up, downright, and that's It's just very simple.45200:32:31.640 --> 00:32:37.319Nineteen eighties, he had one goodcall. One Well, what I'm45300:32:37.319 --> 00:32:40.480saying, well, hang on theelliot wave thing. Since nineteen eighty seven,45400:32:42.960 --> 00:32:47.200ever ever was right again. Hewas always barrashed the whole time.45500:32:47.480 --> 00:32:52.480After nineteen eighty seven and after twothousand, Oh my god, to get45600:32:52.480 --> 00:32:54.079it. I can care less aboutelliot waves that way. You've brought it45700:32:54.160 --> 00:32:58.640up, and I'm talking about theactual technical chart of it, because you45800:32:58.680 --> 00:33:00.519could see back when twenty twenty one, when the market started the drop,45900:33:00.559 --> 00:33:05.240there was five legs down, up, down, up, down, and46000:33:05.359 --> 00:33:07.839right now we're on the fifth legof the down. The reason we're going46100:33:07.880 --> 00:33:10.240to bring it up is we arehitting a very major support level at forty46200:33:10.279 --> 00:33:14.319one hundred in the S and P. We've had already five legs. It46300:33:14.519 --> 00:33:16.759is a time where you would expectthe market to find some type of footing.46400:33:16.839 --> 00:33:21.279The oscillator is the most oversold thatit has been all year, right,46500:33:21.279 --> 00:33:23.599and that's been a good indicator weare Dean. I think we would46600:33:23.640 --> 00:33:27.640have bounced on Friday if it wasn'tFriday. Yes, that's what it felt46700:33:27.640 --> 00:33:30.240like to me. It was kindof interesting the dovestocks. You mentioned Microsoft,46800:33:30.359 --> 00:33:34.440It actually finished a week up fourpercent, pretty good week. But46900:33:34.759 --> 00:33:37.799the big winner on the week ofthe dove stocks Verizon, a stock that47000:33:37.839 --> 00:33:42.359has done nothing because it didn't godown for how many years up eight and47100:33:42.400 --> 00:33:44.880a half percent. Well, youknow what, David, I want to47200:33:44.880 --> 00:33:47.480step back. You know, we'retalking about what's going on and stuff.47300:33:47.880 --> 00:33:50.960You know, Oh, it couldbe a good thing. So what we47400:33:51.079 --> 00:33:53.799do here is what we discuss themodel is you mitigate the mitigating risk we47500:33:53.880 --> 00:33:59.759had on we stopped reducing what we'vebeen doing for mitigating risk, the puts47600:33:59.799 --> 00:34:04.160up head on the insurance puts,we've rolled those out. Okay, give47700:34:04.240 --> 00:34:07.679us some more time value in them. The inverse funds, we've gone ahead47800:34:07.679 --> 00:34:15.119and cut that position down. Ithought two thirds, okay, by fifty.47900:34:15.920 --> 00:34:20.519And then what we've also done isthe calls that we have written stop48000:34:20.559 --> 00:34:24.960buying those back. Give the marketan opportunity to rally again. By just48100:34:25.000 --> 00:34:30.440taking off the mitigating risk, ithelps us city upside. Now if we48200:34:30.480 --> 00:34:32.400get lower and lower, then weand we think the rewards greater. Then48300:34:32.400 --> 00:34:36.679we can take advantage of some opportunities. And if people a little bit more48400:34:36.719 --> 00:34:38.639aggressive, we are taking advantage atsomething. If they were under invested,48500:34:38.679 --> 00:34:44.280we're putting a little money to workfor them too. Everyone's everyone's thing is48600:34:44.320 --> 00:34:47.199different, though, and at timelike this, the primary thing you ought48700:34:47.239 --> 00:34:53.400to be doing is looking at takingdefensive positions, reducing defensive positions and increasing48800:34:53.679 --> 00:34:59.320offensive positions. Not not all in, but if you've been cautious, if48900:34:59.320 --> 00:35:01.400you're sitting with some gosh, thisis the place to start putting it to49000:35:01.440 --> 00:35:07.360work talking about defensive positions. Uh, you know, Raytheon very attractive to49100:35:07.400 --> 00:35:09.840me right now with the fact thatit's come down for what one O six,49200:35:09.880 --> 00:35:13.559one away, one ten and theygot down to sixty eight, it's49300:35:13.599 --> 00:35:20.679bounced back up here. Well,what's so funny? Okay, up,49400:35:21.400 --> 00:35:28.760good, you're listening. I'm definitelylistening to where in the seventies here because49500:35:28.920 --> 00:35:32.119guess what, we're gonna have tokeep supplying what missiles? Who makes the49600:35:32.159 --> 00:35:37.639iron missiles? Onything on, Raytheon, and so even if they weren't using49700:35:37.679 --> 00:35:39.840them, they're using them now andthey're gonna get have to get replenished.49800:35:40.320 --> 00:35:45.119Interesting though, what I've what we'llcall we'll call back is something about how49900:35:45.199 --> 00:35:50.280Raytheon does it now rather than givingstraight the money what we do and when50000:35:50.280 --> 00:35:52.239we come back, I'm gonna I'llgive you a little bit of insight on50100:35:52.280 --> 00:35:55.039that. This is the Money BatteryShow and we all appreciate you listening.50200:35:57.519 --> 00:36:12.039Say it's only the Hey, welcomeback to the Money Mattery Show with Dave50300:36:12.119 --> 00:36:16.800Surewood, Dylan Greenberg, Todd Click. Yeah, it's glick. I went50400:36:16.840 --> 00:36:20.760back to my to a guy Ihad a college good friend of mind Todd50500:36:20.840 --> 00:36:22.719Lucky. That's what they almost said, is that what happens when you get50600:36:22.719 --> 00:36:25.360older, just names pop back inyour head that you're just so used to50700:36:25.800 --> 00:36:30.639make. That's what people. Yeah, this age not making stuff up.50800:36:30.679 --> 00:36:34.079I had a great friend, reallyclose friend named Todd Lucky, and that50900:36:34.440 --> 00:36:37.400just popped into my head. NameTodd Lucky. Yeah, that was his51000:36:37.480 --> 00:36:40.199name. Oh, for goodness,and myself, Dean, I can't remember51100:36:42.599 --> 00:36:45.199well for those for those listening,we obviously want to get a plug to51200:36:45.280 --> 00:36:50.679our Federal Employee event that's coming outDecember thirteenth, that's gonna be here in51300:36:50.719 --> 00:36:53.000Tucson. Already gotten a lot ofpeople signed up for the event, a51400:36:53.000 --> 00:36:57.480lot of interest, not a lotof resources here in Tucson available to federal51500:36:57.480 --> 00:37:00.920employees. So and that's literally whatI hear from the actual federal employee for51600:37:00.920 --> 00:37:05.119people signing up right now, they'relike, we're so glad someone here locally51700:37:05.159 --> 00:37:08.239able to educate us and go throughall of our benefits. So again we're51800:37:08.239 --> 00:37:13.760flying someone out a specialist to havethis education semin are brought to you.51900:37:13.800 --> 00:37:17.400It's completely free for federal employees.If you're anywhere within ten years before retirement,52000:37:17.440 --> 00:37:21.760you need to come to this event, understand everything that's available to you,52100:37:22.199 --> 00:37:24.800and then we'll You'll also get afree complimentary financial plan that comes along52200:37:24.840 --> 00:37:30.039with attending the event, So it'sdefinitely something you don't want to miss out52300:37:30.039 --> 00:37:31.159on. You can give us acall five two zero five four to four52400:37:31.239 --> 00:37:35.159four nine zero nine to sign up, or you go to our website and52500:37:35.440 --> 00:37:38.000follow the link to our event brightpage and sign up there as well.52600:37:38.119 --> 00:37:42.599You could also get a paid dayoff if your department allows it, if52700:37:42.599 --> 00:37:46.039you have that form SF one eighttwo. Okay, the big question is52800:37:47.039 --> 00:37:52.280do I get lunch? You getlunch, Let's just get provided during that52900:37:52.360 --> 00:37:53.920day. Yeah, so you're gonnagive me free lunch, I get a53000:37:53.960 --> 00:37:58.119paid day off, and I haveto come listen to how I'm going to53100:37:58.440 --> 00:38:00.559plan for my retirement and be richand a free financial plan, a free53200:38:00.559 --> 00:38:04.519financial Oh and we'll give it awaya free financial plan too. Yep.53300:38:04.719 --> 00:38:07.599And it's not just some it's notjust some roost to get you on a53400:38:07.639 --> 00:38:09.440list where we're gonna bug you forthe rest of your life, right,53500:38:09.440 --> 00:38:15.559and we've been We've been doing thisa long time. It works, guys,53600:38:15.599 --> 00:38:19.320It works. You know, everyonecan go to Poleetpole can do things.53700:38:19.320 --> 00:38:22.039I get it. Uh, we'vebecome pretty pretty intricate in how this53800:38:22.119 --> 00:38:28.239whole federal employee works and the retirementand what you need the insurance to.53900:38:28.800 --> 00:38:30.519You know, they call it thefeg lee. Well, yeah, if54000:38:30.519 --> 00:38:32.800you're a FED employee, you knowhow intricate your retirement is, how unique54100:38:32.800 --> 00:38:37.400it is compared to just regular civilianemployees worth the four O one K and54200:38:37.440 --> 00:38:39.719everything like that. You got thatVHP, the fag lee, your TSP.54300:38:39.920 --> 00:38:44.239It all wraps into one with yourpension, and it all wraps into54400:38:44.280 --> 00:38:47.599one with Social Security, and wetell you, we show you how that54500:38:47.719 --> 00:38:51.000all can look through in the retirementand if there's anything we need to do54600:38:51.320 --> 00:38:53.239prior to your retirement to get youready. And they're all different too.54700:38:53.239 --> 00:38:55.639If you're a border patrol, ifyou're air traffic controller, if you're a54800:38:55.679 --> 00:39:00.360normal civilian FED you all have differentvariations to your calculations, to your pension,54900:39:00.400 --> 00:39:04.559to your benefits. So we canhelp with every single one of those.55000:39:04.599 --> 00:39:07.039And so that's that's the value thatwe bring for that. Also,55100:39:07.239 --> 00:39:10.639next hour, we have a specialguest on the show, a medicare specialist55200:39:10.719 --> 00:39:15.760coming on. Obviously it's Medicare season, So we're very excited to bring some55300:39:15.079 --> 00:39:20.840information and education to you there.And his name is Pat Quigley. Pat55400:39:21.400 --> 00:39:23.440he just did my wife's Yes,he did. Okay, I can't believe55500:39:23.440 --> 00:39:28.119I'm married to a medicaid woman andyou you just filed for your Social Security55600:39:28.639 --> 00:39:31.079and he files for your Social Ihope everyone feels like I do. That55700:39:31.119 --> 00:39:35.079we're way too young for this stuff. Absolutely, Hey, speaking of that,55800:39:35.119 --> 00:39:37.920you want a fun fact, sure, what are the odds that live55900:39:37.960 --> 00:39:44.639in too ninety? Which is it? Is it unisex or is it specific?56000:39:44.719 --> 00:39:47.119Or let's do both sexes? Right? Okay, if you're a man,56100:39:49.400 --> 00:39:52.400I'm going to say, I'm goingto say twenty four percent. You're56200:39:52.719 --> 00:39:58.000too optimistic. Maybe by the timeyou guys get there, that's probably right.56300:39:58.079 --> 00:40:05.679Right now, sixteen percent of menmake it. No, i'd say,56400:40:07.159 --> 00:40:09.639what are you thinking? I justdon't think it's fair. No,56500:40:09.880 --> 00:40:15.079women, this is amazing women.Thirty four percent, So a third of56600:40:15.119 --> 00:40:16.599all women. Good job to adda third of all women make it to56700:40:16.679 --> 00:40:22.079age ninety. Again, everybody doubleeveryone that comes up with that statistic.56800:40:22.119 --> 00:40:27.840I want them to break it downagain between the fluent. Yeah, socio56900:40:27.880 --> 00:40:31.760economics because right, because I wantto know because if that's the case,57000:40:31.840 --> 00:40:36.840Okay, just say somebody that socioeconomically is more well off than somebody else57100:40:36.840 --> 00:40:42.840and they're living and average is sevenyears more. Well, I'm okay figuring57200:40:42.880 --> 00:40:45.559out whatever that is the food,the stuff, and that's what we saw57300:40:45.719 --> 00:40:50.239giving everybody. You know, yougotta sell, you know, especially if57400:40:50.280 --> 00:40:53.760it's food and the things that theygotta do. Because that that's where I57500:40:53.840 --> 00:40:59.639don't have a problem balancing out thesocio economic part. What you find is57600:40:59.679 --> 00:41:02.800it takes money to eat, right, I mean, poor people can't have57700:41:02.880 --> 00:41:06.000a different time to meeting. Right, Well, you have a lot of57800:41:06.000 --> 00:41:07.719money for a long time, thenyou're probably getting better healthcare for a long57900:41:07.760 --> 00:41:09.760time, and if anything pops up, you get the best health care to58000:41:09.760 --> 00:41:14.159help yourself rather than just putting itoff because it's expensive. But don't you58100:41:14.159 --> 00:41:17.360ever wonder to yourself, why didthese Hollywood stars live to be so old?58200:41:17.760 --> 00:41:21.639They almost all lived in their nineties. Right, they have money,58300:41:21.679 --> 00:41:25.000they got great healthcare. Theis theyhave their own shaft Jeanery right, absolutely,58400:41:25.039 --> 00:41:29.480right, So socioeconomic makes a bigdifference, You're right, Well,58500:41:29.559 --> 00:41:31.199they also have to have an appearanceto be on the big screen and stuff58600:41:31.239 --> 00:41:35.679like that too. Yeah, thedirectors and all they they might not be58700:41:35.719 --> 00:41:37.679there. See, if you breakit down, you get a better thing.58800:41:37.880 --> 00:41:39.239You put it all in one.I still not think it's fair that58900:41:39.239 --> 00:41:42.960it's almost double that women live longerthan the men. How about more than59000:41:43.000 --> 00:41:47.679double? Sixteen and thirty four.That's not right, that's not it's just59100:41:47.719 --> 00:41:51.239not right. Hey, you know, we remember we were talking about Mattel59200:41:51.280 --> 00:41:53.000when the whole Barbie thing came out, and we'll tell you come back.59300:41:53.039 --> 00:41:55.880I thought everybody was equal today.Why did they get to live more than59400:41:55.880 --> 00:42:00.480two times longer than I want tochange that. I want a congressional investigation,59500:42:00.599 --> 00:42:05.599right, yeah, congressional investigations.I just happened to notice Mattel this59600:42:05.639 --> 00:42:08.039week. I hadn't really paid muchattention to it when the whole Barbie craze59700:42:08.039 --> 00:42:10.519came out and the stock spiked,and I actually had a client call and59800:42:10.519 --> 00:42:13.320say, hey, maybe we gottabuy this, you know, I said,59900:42:13.360 --> 00:42:15.840no, this is a this isa poorly run company that's that's in60000:42:15.880 --> 00:42:21.760the final the late years of theirlife. Is this is an opportunity to60100:42:22.000 --> 00:42:25.199bail And I noticed that they cameup with an erning's report that was disappointing.60200:42:27.400 --> 00:42:30.719Soccer is up still up twelve percentthis year, down fourteen percent at60300:42:30.760 --> 00:42:36.840the open on Thursday after reporting strongBarbie earnings but reduced guidance for Q four60400:42:37.320 --> 00:42:42.239as the Barbie fad fades. Wehad warned about this stock. It's all60500:42:42.239 --> 00:42:45.719about Telerswift. Now tel Swift.How about Kelsey? He's kind of replace60600:42:45.800 --> 00:42:50.480the Gronk as the spokesman for theworld. He's on every commercial on TV.60700:42:50.679 --> 00:42:53.440Kelsey, I don't know. Gronkstill everywhere, so see what Gronk60800:42:53.480 --> 00:42:59.280did then, But he's not dumb. He invites Kelsey and tell a Swift60900:42:59.320 --> 00:43:04.440to his Halloween audio Kelsey. Kelsey'sthe booster boy boy. They talk about61000:43:04.480 --> 00:43:07.400changing somebody's life. You see piercommercials. No, Oh my goodness,61100:43:07.639 --> 00:43:15.599I get my flu shot and mycoach listening to vaccinine shot everything I should61200:43:15.639 --> 00:43:19.400say. They want to make youfeel guilty if you don't get a vax61300:43:19.440 --> 00:43:23.679shot when I don't even know wherethey get the idea from the water off61400:43:23.719 --> 00:43:28.000of a duck, apparently because they'renot. I was in my pharmacy.61500:43:28.480 --> 00:43:35.239Now I've I heard years ago thatthe flu shot reduces sudden cardiac death by61600:43:35.280 --> 00:43:39.280fifty It was a male clinic,right, right up, Okay, they're61700:43:39.320 --> 00:43:42.840a credible source. I'll get aflu shot. So I get a flu61800:43:42.880 --> 00:43:45.960shot every year strictly for that purpose. It doesn't stop me from getting the61900:43:45.000 --> 00:43:47.679flu. I've had the flu severaltimes, but it does stop me from62000:43:47.719 --> 00:43:52.039having sudden cardiac death. Obviously couldhere I am still yeah, you never62100:43:52.079 --> 00:43:54.440know that, I said, Isaid to a gall at the pharmacy use62200:43:54.480 --> 00:43:58.000a friend of mine. To dayopposite, I was talking to Jennifer to62300:43:58.000 --> 00:44:00.320the farmer, said hey, jen, how's the supply. I have a62400:44:00.400 --> 00:44:04.519COVID vaccine? She goes, wegot plenty at the pharmacy. So much62500:44:04.519 --> 00:44:07.320you became friends with them? Ohyeah, no, I'm friends with the62600:44:07.480 --> 00:44:10.199actually because they knew who he wasin the radio. I know you know62700:44:10.280 --> 00:44:16.679that that was. But I wasokay, I know you okay heard that.62800:44:16.800 --> 00:44:21.960I'm one of these guys that becomesfriends with pretty much everywhere I go62900:44:22.039 --> 00:44:24.639in terms of businesses. Right,I get to know the people. I63000:44:24.639 --> 00:44:28.440get to know their names. Uh. I walk into the restaurant, they're63100:44:28.800 --> 00:44:30.639high by name, you know,they called me by name. That's just63200:44:30.639 --> 00:44:36.199how I am. I just youknow, there every time I have a63300:44:36.239 --> 00:44:40.039little predictable, a little predictable everyTuesday at six o'clock, I would know63400:44:40.039 --> 00:44:45.159who you are. And okay,So so so last week, we had63500:44:45.159 --> 00:44:46.920a water main break in our areaand I'm president of the homewner, so63600:44:47.039 --> 00:44:51.039she was. I go over andI talk to the guys at the with63700:44:51.119 --> 00:44:52.320a water main break, right,and we're talking about it, and I'm63800:44:52.599 --> 00:44:57.159just shouldn't have about a number ofthings. And I get ready to leave63900:44:57.199 --> 00:44:59.239and he gives me a hug.So you know, that's how it goes.64000:44:59.280 --> 00:45:00.760So there you go. And thenhe asked you out to dinner.64100:45:02.000 --> 00:45:07.000Now, now let's not go there. Don't be that guy. Don't be64200:45:07.079 --> 00:45:10.440that guy. So we had acouple of things, and bitcoin just keeps64300:45:10.440 --> 00:45:15.280flying. Todd love to see itup twenty five percent in the last two64400:45:15.280 --> 00:45:17.519weeks. Yeah, twenty five percent. Last week. Oil was actually down64500:45:17.599 --> 00:45:22.159three dollars last week eighty eight bucks. So gold is gold right stabilized.64600:45:22.199 --> 00:45:24.880It was of six bucks nineteen eightyeight, had a good Friday. But64700:45:24.920 --> 00:45:28.880that's my point, right, ifyou look at golden bitcoin, not saying64800:45:28.880 --> 00:45:30.679that the same thing, because they'refar from it. It's just interesting that64900:45:30.679 --> 00:45:35.360they kind of had the same pathover these last three weeks they have.65000:45:35.400 --> 00:45:38.920It's been interesting, and the interstrates were actually fractionally lower on the week.65100:45:40.039 --> 00:45:44.360The spread between the ten year andthe two years nineteen basis points.65200:45:44.360 --> 00:45:47.159Now last week it was seventeen bases. We're getting to working towards that flat65300:45:47.199 --> 00:45:52.840line, which we talked last weekis good for the economy, right,65400:45:52.960 --> 00:45:54.960regardless of all this, yeah,regardless of how to have a plan,65500:45:57.079 --> 00:46:00.400that's all I know. I mean, if you're not planning for what you're65600:46:00.400 --> 00:46:04.079going to do ahead of time,you're never going to be able to do65700:46:04.119 --> 00:46:06.599it. The plan is so helpful. I say it in on two of65800:46:06.639 --> 00:46:08.920them. Sometimes you're talking about thefinancial plan. Now is your investment plan?65900:46:09.440 --> 00:46:12.920We as money managed have to havean idea of what we're going to66000:46:12.960 --> 00:46:16.840do. We've done it for ourportfolios. Okay. We don't sit there66100:46:16.840 --> 00:46:20.320and just say, ah, we'lljust see what happens. Oh, we'll66200:46:20.360 --> 00:46:23.639just wait an this to happen.We react to what happens and try to66300:46:23.679 --> 00:46:28.519put ourselves in a better position.So many people one of the biggest say,66400:46:28.559 --> 00:46:30.960one of the things things people keepsaying you know what, I like66500:46:30.760 --> 00:46:32.880You guys don't sit there and justsay, oh, don't worry about it.66600:46:32.880 --> 00:46:38.000They'll come back, or hey,you know what, your portfolio is66700:46:38.039 --> 00:46:40.480good, the allocation's good. Itmeets your thing. We don't need to66800:46:40.519 --> 00:46:45.280make any changes. You guys actuallyhave a risk reward type of strategy that66900:46:45.840 --> 00:46:51.519you never go to cash totally.But you obviously increase your risk when it's67000:46:51.559 --> 00:46:57.039lower and lowerer risk when it's higher. And you're not afraid to go ahead67100:46:57.360 --> 00:47:00.719and state what you think. Andsometimes you're right. Most of the time67200:47:00.719 --> 00:47:05.079you're writ Sometimes you're wrong. Yeah, went out not right on hunt.67300:47:05.079 --> 00:47:07.400If you want a business where you'reright one hundred percent, this is not67400:47:07.440 --> 00:47:12.960their job for you. Oh there'sa lot of people that want that everyone,67500:47:13.840 --> 00:47:15.760And you know what, the onlyplace you're going to get that is67600:47:15.800 --> 00:47:22.719an annuity. We can get anupside and no downside, but you limit67700:47:22.760 --> 00:47:24.880it to the upside, right,Right, If you're willing to take away67800:47:24.880 --> 00:47:28.079the downside, you're going to takeaway some of the upside, right,67900:47:28.119 --> 00:47:30.719So I'm cold to go up fifteenpercent. You're like, why didn't I68000:47:30.800 --> 00:47:34.800make that money? Very simple?You're in an annuity. They can't lose68100:47:34.800 --> 00:47:37.360on the downside and you can onlywin on the upside. And Todd Lady68200:47:37.480 --> 00:47:42.599is going to talk about one thatis actually pretty attractive for those that have68300:47:42.639 --> 00:47:45.760that mindset. We'll be right back. This is the Moneymatter Show. We'll68400:47:45.760 --> 00:47:55.719be back for the second hour.Thank you, it's welcome back. You're68500:47:55.719 --> 00:47:59.360listening to this Money Matter Show.We are at the top of the second68600:47:59.360 --> 00:48:01.320hour. I'm doing Greenberg. I'mhere with Dave Sherwood, Dian Greenberg,68700:48:01.360 --> 00:48:06.840Todd Glick, and Sebastian Borsini.Not a great weekend the markets last week.68800:48:06.880 --> 00:48:08.800We've been seeing that the last fewmonths now. For the week,68900:48:08.960 --> 00:48:13.000the Dow was down two percent,the Nazak was down two and a half69000:48:13.000 --> 00:48:15.840percent, the sm P five hundredwas down too and a half percent.69100:48:15.079 --> 00:48:19.320Russell two thousand, which is asmall cap I was also down two and69200:48:19.320 --> 00:48:22.960a half percent, and the equalweighted S and P five hundred was also69300:48:22.000 --> 00:48:27.079down to two point five percent.I'm feeling our theme here. I unfortunately69400:48:27.800 --> 00:48:30.599what happened. Yeah, you don'tlike that, No, I don't want69500:48:30.639 --> 00:48:32.239that. We've been seeing it aseasonality, a lot of it. We're69600:48:32.320 --> 00:48:37.440kind of we're coming into historically abetter time of the year coming into November69700:48:37.480 --> 00:48:40.960December, but we'll see if thatholds up. So far September and October69800:48:42.039 --> 00:48:45.599we're holding up to historics. Nowagain November one through January thirty first sixty69900:48:45.599 --> 00:48:49.519percent of all games for the year. Well, we hope that's the case70000:48:49.519 --> 00:48:52.440again. Absolutely, we're all inon the terrible last three months. Well,70100:48:52.440 --> 00:48:53.840you know, I love my economicreport, so let me run down70200:48:53.840 --> 00:48:58.000what happened throughout the week. Wehad the pending home sales that came out,70300:48:58.039 --> 00:49:01.079and they came in a lot hottererthan nexts which was very interesting because70400:49:01.079 --> 00:49:06.039the expectations was a drop month overmonth for September came in as a gain.70500:49:06.320 --> 00:49:08.920The previous month was a negative sevenpercent dropped, so showing some strength70600:49:08.920 --> 00:49:13.599there in the home on the homesales side, which isn't good for inflation,70700:49:14.119 --> 00:49:17.639right. Fed chair talked on Wednesday, Pal talked on Wednesday before the70800:49:17.679 --> 00:49:22.519preliminary GDP print came out on Thursday. That came in very hot. That70900:49:22.559 --> 00:49:25.119came in about four point nine.The expectations was four point two, so71000:49:25.719 --> 00:49:29.760from an inflationary standpoint, it didnot look good. But then on Friday71100:49:30.079 --> 00:49:34.920we got the PCE inflation report,and that was relatively nothing was really there.71200:49:34.960 --> 00:49:37.719I mean, it was just whereexpectations were. So we didn't really71300:49:37.719 --> 00:49:42.320see any inflation in the PCE showup. But we are seeing inflation continue71400:49:42.360 --> 00:49:45.559to stay here, stay sticky inthe overall economy, in the housing sector.71500:49:45.880 --> 00:49:49.519So definitely not what the Fed wantedto see. But interest rates didn't71600:49:49.559 --> 00:49:52.719respond, we saw they decrease.So it was an interesting week and that71700:49:52.840 --> 00:49:57.599Monday the market was flat. Tuesdaywas actually a real nice rally on Tuesday,71800:49:57.639 --> 00:50:00.079and interest rates came down. Oilprice has declined a little bit,71900:50:00.119 --> 00:50:06.119and okay, maybe this thing's over. Wednesday morning, Google reports that earning72000:50:06.840 --> 00:50:09.599disappointment, they dropped ten percent,took the entire market with it. Uh72100:50:10.679 --> 00:50:19.119Thursday, Friday, just Thursday GDP. But Thursday we had oil and rates72200:50:19.159 --> 00:50:22.000drop and the market drop, yes, which is fair, and I talked72300:50:22.000 --> 00:50:25.039about that because the market had beenmoving because of rising interst rates. Well72400:50:25.079 --> 00:50:30.480here oil industries drop, oil dropsboth of them pretty significantly, and the72500:50:30.480 --> 00:50:34.000market dropped, and we, oh, this isn't good. And then Friday,72600:50:34.039 --> 00:50:37.079of course, the continuation. Fridayreally did feel like it wanted to72700:50:37.119 --> 00:50:40.599come back and rally, but aheadof the weekend with the war going on72800:50:42.079 --> 00:50:45.599the US is bombing Syria. Youknow, yeah, you can't really can't72900:50:45.599 --> 00:50:49.639really bring yourself the courage to dothat, especially when you can sit in73000:50:49.639 --> 00:50:52.000five percent. Well, we havesome questions, you know that people can73100:50:52.159 --> 00:50:57.639can send to contact correct at Greenberg. The Greenberg is all ease, by73200:50:57.679 --> 00:51:02.199the way, Yes, contact atGreenberg Financial dot com. And you've got73300:51:02.199 --> 00:51:06.199some Sebastian Yes, we got twoof that in this week. We call73400:51:06.320 --> 00:51:08.199Sea Bass and one of our clientsthought that was such a cute nickname.73500:51:08.320 --> 00:51:12.880Been hearing it since Little League Baseball. Come on to see Bass. Let's73600:51:12.880 --> 00:51:15.239go. Okay, you got aquestion over there. Yep, this one73700:51:15.239 --> 00:51:17.559comes in from Bryan. Uh.Probably gonna be geared towards Todd here,73800:51:17.599 --> 00:51:22.480but question states, there's been alot of chatter about cryptocurrency lately. What's73900:51:22.480 --> 00:51:28.599your perspective on including digital assets ina diversified investment portfolio? Yeah, so74000:51:29.199 --> 00:51:32.239I've thought about this a lot,and I don't think for anyone you should74100:51:32.280 --> 00:51:37.039have more than three percent of yourportfolio in crypto or digital assets. And74200:51:37.440 --> 00:51:40.679specifically, I wouldn't put any moneyin anything other than bitcoin because it's the74300:51:40.679 --> 00:51:45.199most traded asset. You're a bigcrypto advocate, so three percent, yes,74400:51:45.440 --> 00:51:47.679but this is for your portfolio ifyou wanted to add it to a74500:51:47.719 --> 00:51:52.000diversified portfolio. It's like a stock, in my opinion, of a risky74600:51:52.039 --> 00:51:55.199stock, like a Navidia or anapp or a Google. You shouldn't have74700:51:55.239 --> 00:51:59.920more than three percent because if somethingbad happens, you never know, it74800:52:00.039 --> 00:52:01.199could really hurt your portfolio. Ifyou keep it to three percent, it74900:52:01.239 --> 00:52:05.159could drop fifty percent. You onlylose one point five percent of your account.75000:52:05.159 --> 00:52:07.440An asset they can go up andvalue twenty five percent in two weeks,75100:52:07.480 --> 00:52:10.760can also go down and value twentyfive percent. And let's let's let's75200:52:10.760 --> 00:52:14.239think you know a lot of peoplethat are like three percent. Not a75300:52:14.239 --> 00:52:16.239lot, Why would I even bother? Well, if if bitcoin did what75400:52:16.280 --> 00:52:20.519it's done in previous runs, thatthree percent will easily end up being nine75500:52:20.559 --> 00:52:22.719percent of your portfolio. Yes,and that's when you need to sell and75600:52:22.760 --> 00:52:25.920bring it back down to three.So this is a a very new space75700:52:25.960 --> 00:52:30.480and people need to be very cautious. I don't think anyone above the age75800:52:30.519 --> 00:52:34.639of sixty should really be looking inthis unless they're just doing it for fun.75900:52:35.440 --> 00:52:37.760But the younger people, they havetime, they have risk that they76000:52:37.800 --> 00:52:42.639can afford. But again, shouldn'tbe anything more than three percent right now.76100:52:43.119 --> 00:52:45.119Maybe in future years, when it'smore of autritional, it's more regulated,76200:52:45.360 --> 00:52:47.880you can make a case for alarger percentage, but right now,76300:52:47.880 --> 00:52:52.519again I look at it as avery risky stock. I agree. Another76400:52:52.559 --> 00:52:55.039one there. This one comes infrom Daniel. Given the current interest rate76500:52:55.119 --> 00:52:59.960environment? How should I approach fixedincome investments? Are there any specific bond76600:53:00.000 --> 00:53:02.719strategies that make sense right now?I think the one thing that we have76700:53:02.800 --> 00:53:07.159to be cautious of in this keepin mind interest rates are at a sixteen76800:53:07.239 --> 00:53:12.320year high. Now. When interestis get to a sixteen percent high,76900:53:12.599 --> 00:53:15.280the common thinking is, well,they're going to go to a twenty year77000:53:15.360 --> 00:53:19.800high and a twenty five year high. So the best return right now is77100:53:19.800 --> 00:53:22.119like on a one year I thinkone year that sweet spot to yeah,77200:53:22.159 --> 00:53:27.599twelve to fourteen months somewhere in thereis the highest rate. So let's put77300:53:27.639 --> 00:53:30.960it all there and then in twelveto fourteen months it comes due and then77400:53:30.000 --> 00:53:34.880I'll roll it over. Here's theproblem. At some point, the economy77500:53:34.920 --> 00:53:37.480is going to slow, the FEDis going to stop raising interest rates.77600:53:37.639 --> 00:53:42.960Things are going to return to normal, and I don't expect interest rates to77700:53:43.039 --> 00:53:46.039get back to where they were.They were at historic glows, but we're77800:53:46.039 --> 00:53:51.760at a sixteen year high. That'sa pretty good place to lock in rates77900:53:51.800 --> 00:53:54.599for a longer term. So whatwe're doing for most of our clients are78000:53:54.960 --> 00:53:59.840is something called a ladder where we'lldo twenty percent. Let's say we have78100:54:00.360 --> 00:54:06.400forty percent of the portfolio allocated tofixed income. We'll divide that in five78200:54:06.440 --> 00:54:09.000different tranches, eight percent each,right, and we'll put eight percent in78300:54:09.039 --> 00:54:14.119a one year treasury, eight percentin a two year treasury, eight percent78400:54:14.199 --> 00:54:17.800in a three year corporate. Becauseas you get out to three years,78500:54:17.840 --> 00:54:22.760the treasury yield drops below five,down around four point eight five, and78600:54:22.800 --> 00:54:27.800then four point six and four pointSo we can keep those rates above five78700:54:28.239 --> 00:54:32.119by going with corporate names like Walmart, Home Depot, Honeywell, Bristol Meyer.78800:54:32.199 --> 00:54:35.280I mean, those are some ofthe names we've bought in the last78900:54:35.280 --> 00:54:37.639week. So one, two,three, four and five year maturities.79000:54:38.360 --> 00:54:44.239Ultimately, when the yield curve corrects, the longer term maturities will have a79100:54:44.320 --> 00:54:47.000higher rate of interest. In themeantime, if rates begin to drop,79200:54:47.880 --> 00:54:51.599it's the best of both worlds.If rates were to continue to go up,79300:54:51.880 --> 00:54:54.519you have twenty percent of your portfoliocoming to every year. If rates79400:54:54.559 --> 00:55:00.480start to drop, you've got fortypercent of your portfolio that's four years or79500:55:00.519 --> 00:55:04.440more locked in. So that's kindof how we do the fixed income play79600:55:04.519 --> 00:55:07.280right now. And I would addon top of that that and this isn't79700:55:07.320 --> 00:55:10.119fixed income, so this is kindof shifting gears. But for people who79800:55:10.199 --> 00:55:14.719are in a more risk averse typeof scenario, there are a lot of79900:55:14.760 --> 00:55:17.599interesting annuity products available in the marketplaceright now. And for people who don't80000:55:17.679 --> 00:55:23.119understand how annuities work, it's anannuity company and they hedge their risk as80100:55:23.119 --> 00:55:29.280a company using bonds, and specificallya ten year bond. So the higher80200:55:29.320 --> 00:55:32.480a ten year bond gets, themore annuity company can offer you. Right80300:55:34.000 --> 00:55:37.119back back when instrate's really low,they can't offer you a lot of good80400:55:37.199 --> 00:55:40.480interest, any good crediting rates,and so people really don't go into nudies.80500:55:40.519 --> 00:55:44.199We're seeing all time sales and annuitiesthese last two years, some of80600:55:44.199 --> 00:55:46.400it because if here's some of it, because they're offering things that we haven't80700:55:46.400 --> 00:55:50.400seen in the marketplace for twenty plusyears. So I'll go into a couple80800:55:50.480 --> 00:55:53.039here right now. We've talked aboutthe MAGA multiple times on the show.80900:55:53.480 --> 00:55:59.440That stands for multi year Guaranteed Annuity. It's essentially just a CD A contract81000:55:59.719 --> 00:56:02.920with an annuity company. This isa five year product. They just increased81100:56:04.000 --> 00:56:07.280rates at a theme and that's thecompany we love because a rated great customer81200:56:07.320 --> 00:56:12.880service. Des Moines, Iowa,middle of the country. Right right now,81300:56:12.880 --> 00:56:15.760they just increase rates. It's nowat six point one for premiums above81400:56:15.760 --> 00:56:21.719one hundred thousand. So imagine gettingthat guaranteed locked in for five years,81500:56:22.280 --> 00:56:24.280and it can be compounded if youleave the interest in there. So a81600:56:24.400 --> 00:56:30.280very fascinating project there. Also wehave Lincoln has a very interesting five year81700:56:30.360 --> 00:56:37.880fixed indexed annuity where essentially, ineach year you have your money into the81800:56:37.960 --> 00:56:39.760S and P five hundred, you'reguaranteed not to lose in any given year.81900:56:42.039 --> 00:56:44.800Five years, five year withdrawal penalties. Okay, yes, you're in82000:56:44.840 --> 00:56:46.639it for five years. You're init for five years, but in each82100:56:46.719 --> 00:56:51.000year it's annual point to point,which means it's you're just looking at a82200:56:51.000 --> 00:56:52.159one year return of the S andP. I mean, if you start82300:56:52.199 --> 00:56:57.320in March, then in March ofthe next year's year one year correct,82400:56:57.320 --> 00:57:00.960and so let's use that March example. The smps that are even four thousand82500:57:00.039 --> 00:57:04.159dollars. If we go to themarks of the next year and the SMP's82600:57:04.199 --> 00:57:07.480at four thousand and two dollars,that's only what a point zero one percent82700:57:07.519 --> 00:57:12.679return. But because of this producthas something called the S and P five82800:57:12.760 --> 00:57:15.960hundred trigger. Instead of a pointone percent return, you'll get a ten82900:57:15.000 --> 00:57:19.239percent return. Essentially, as longas the S and P five hundred finishes83000:57:19.320 --> 00:57:23.199positive from the year before you startedthat contract anniversary, you will get the83100:57:23.239 --> 00:57:27.719full ten percent. If the Sand P finished negative twenty percent, you83200:57:27.719 --> 00:57:30.119don't get negative twenty on your portfolio. You get a zero percent return for83300:57:30.159 --> 00:57:34.760the year. If the S andP gained a positive twenty percent on that83400:57:34.880 --> 00:57:37.880year, you don't get twenty percent. You only get to ten percent.83500:57:37.119 --> 00:57:40.159So you're limited to the upside asDean said earlier, to that ten percent,83600:57:40.480 --> 00:57:44.079but you could you also have alittle bit of a juicer there where83700:57:44.079 --> 00:57:45.519if the S and P only earnedtwo, three or four percent in a83800:57:45.559 --> 00:57:49.800given year, you actually get afull ten percent return. And there've been83900:57:49.800 --> 00:57:52.480periods where the S and P fivehundred has been positive for twenty years in84000:57:52.480 --> 00:57:57.440a row, right, so youknow that would be ideal. There have84100:57:57.519 --> 00:58:02.079been only twice in the last seventyyears has it been down two years in84200:58:02.079 --> 00:58:06.800a row. So two years ina row you make nothing and then three84300:58:06.880 --> 00:58:10.639years you make ten percent. Sowhat we've been seeing happening is this can84400:58:10.679 --> 00:58:15.119be a kind of a bond alternative. Right. Obviously, bonds we are84500:58:15.199 --> 00:58:17.039using as a stability of our principle. We want to know that that's not84600:58:17.079 --> 00:58:21.639going to be degrading in principle andgiving us some interest. Essentially, it's84700:58:21.599 --> 00:58:23.599the same thing that the fixed indexannuity would do for you. You're guaranteed84800:58:23.639 --> 00:58:27.199not to lose in any given year. You're not going to lose principle,84900:58:27.280 --> 00:58:30.360but you have the possibility for somenice interest on top of that. So85000:58:30.559 --> 00:58:34.519there are a lot of cool productsout there in the marketplace. Come see85100:58:34.599 --> 00:58:37.679us, give us a call.We don't offer any products until we do85200:58:37.679 --> 00:58:40.440a financial plan because for us,we don't believe in products until we know85300:58:40.519 --> 00:58:44.920exactly what you need, how youneed it, and whether that product will85400:58:44.960 --> 00:58:47.000satisfy that it may not fit atall, exactly, it may not fit85500:58:47.039 --> 00:58:50.719at all. Just something you're thrownout there kind of a teaser, right,85600:58:50.840 --> 00:58:52.599and I'm like, yeah, youknow, we got this. How85700:58:52.639 --> 00:58:55.320about that? I mean, noone shops annuity products on their spare time,85800:58:55.440 --> 00:58:58.320right, so unless you listening tothe show, you're not going to85900:58:58.400 --> 00:59:00.800know the new updates. So wetry to give you some updates here and86000:59:00.840 --> 00:59:02.960there. Good point. How abouta little ev garage. I got a86100:59:02.960 --> 00:59:07.719little short one this week. Beat. Many have stayed away from evs due86200:59:07.760 --> 00:59:12.320to the high prices, but themarket for used evs has tripled in the86300:59:12.400 --> 00:59:15.360last two years as the number ofUS dvs sold. Get this, the86400:59:15.440 --> 00:59:22.400number of used evs sold this yearare greater than the sales of all new86500:59:22.519 --> 00:59:27.239electric vehicles. If you take outTesla. Wow, so everybody other than86600:59:27.320 --> 00:59:30.920Tesla, so take Tesla away.Tesla new car sales in twenty twenty three86700:59:30.119 --> 00:59:36.719are fifty percent above twenty two,and Tesla still is sixty percent of all86800:59:37.320 --> 00:59:40.360evs. So most electric vehicles soldin the secondary market are going to be86900:59:40.440 --> 00:59:45.000Tesla's and the price is at atwo and a half year low due to87000:59:45.039 --> 00:59:49.360the increasing number of vehicles they've tripled. Like I said, the inventory is87100:59:49.400 --> 00:59:52.960tripled. So if you're thinking aboutelectric vehicle, don't want to lay out87200:59:52.000 --> 00:59:57.679fifty sixty grand. There's some usedEV's that are out there, and there's87300:59:57.719 --> 01:00:00.400more and more of them all thetime. Of new evs. For the87401:00:00.400 --> 01:00:05.880third quarter rolls fifty percent year overyear, and now count toad for eight87501:00:06.000 --> 01:00:09.679percent of all sales, all carsales. Wow, so that's that's a87601:00:09.760 --> 01:00:13.199big working its way up there.Huh. Yeah, that's a big change.87701:00:13.199 --> 01:00:15.559I think we were starting off whenyou were kind at it was around87801:00:15.559 --> 01:00:20.199two four years ago, around twopercent of all sales. Now a date87901:00:20.400 --> 01:00:22.880we had, we had a lotof Ernie's reports to this week's week try88001:00:22.880 --> 01:00:28.119to run through them. Sure go. So obviously we had the I mean,88101:00:28.159 --> 01:00:30.360we talked a little bit about Google, So let's let's round that one88201:00:30.400 --> 01:00:36.239out. Google's cloud servicing had someissues with not being as profitable as investors88301:00:36.239 --> 01:00:39.800were liking, but largely it wasbecause of the spending that was being caused88401:00:39.800 --> 01:00:44.360from the Baird, which is theirchat GPT that they're trying to roll out.88501:00:44.960 --> 01:00:47.440Investors are kind of not impressed thatit's still really just text based.88601:00:47.480 --> 01:00:52.920I guess and they wanted to seesome other improvements in that space, and88701:00:52.960 --> 01:00:55.119they didn't see it just not generatingthe revenue at this point. Yeah,88801:00:55.280 --> 01:00:59.639that they hoped for. AT andT and Verison both came out with good88901:00:59.639 --> 01:01:04.960earninge which is has been a longtime. Those two stocks have fantastic dividends,89001:01:05.480 --> 01:01:08.920but they've just shown no growth thoughthey've been losing ground despite the dividend.89101:01:09.000 --> 01:01:13.480Did they say anything about the iPhonefifteen sales helping them in that aspect?89201:01:13.599 --> 01:01:17.599Absolutely? Absolutely, an iPhone fifteensales probably the strongest iPhone in a89301:01:17.639 --> 01:01:22.599long long time, really, becausewho was saying that that wasn't the case.89401:01:22.639 --> 01:01:24.480Someone was out there touting that therewas going to be some slow down.89501:01:24.559 --> 01:01:28.159Was it Cramer? I don't recallwho it was, but I know89601:01:28.239 --> 01:01:30.679that the way times are longer thanthey've been for any iPhone in a long89701:01:30.719 --> 01:01:34.719time, and it's the biggest updatein a while. So people want this89801:01:34.800 --> 01:01:37.159phone now. Yeah, and ifthey're on the iPhone train. I also89901:01:37.159 --> 01:01:39.760think people are overblowing the whole Chinathing with the government employees not able to90001:01:39.840 --> 01:01:43.280use Apple. I think there's alot of people in China that aren't government90101:01:43.320 --> 01:01:45.760employees. I would think. So, I have a couple of things,90201:01:45.800 --> 01:01:47.159probably more that hard government. Yeah, I have a couple of things.90301:01:47.159 --> 01:01:52.559On Amazon's earnings, Yeah, thatwas interesting. Amazon came out and after90401:01:52.679 --> 01:01:54.519market it popped five points, andthen it dropped five points, and then90501:01:54.519 --> 01:01:58.400it came back. It was upten points or five points. It's crazy.90601:01:58.480 --> 01:02:00.599Yeah, they beat revenue estimates byone point one percent and be guidance90701:02:00.639 --> 01:02:06.840by one point nine percent, roughlymet their AWS revenue estimates. Some highlights90801:02:06.840 --> 01:02:09.239from this earnings call. Amazon isconducting a series of operational tweaks to make90901:02:09.239 --> 01:02:15.159its fulfillment business more efficient. Keypiece of this is converting its national fulfillment91001:02:15.199 --> 01:02:21.079network into eight regional centers. Thisis being done at cut Milso Fulfilled part91101:02:21.079 --> 01:02:24.199of the team. The benefits ofthis change are exceeding optimistic expectations, so91201:02:24.519 --> 01:02:28.519to me, shorter delivery times andlower cost of serve. I think it's91301:02:28.519 --> 01:02:31.639a great thing to you know,see the cost cutting coexist with better customer91401:02:31.679 --> 01:02:36.480service. It was really a strongquarter. Also revenue. I mean,91501:02:36.519 --> 01:02:38.679did I see that right? Revenuetripled year over Yes, yes, I91601:02:38.719 --> 01:02:43.199mean that's that's that's incredible. Ican't I can't tell you the number of91701:02:43.239 --> 01:02:45.480stocks, and I think of acouple of month top of my head,91801:02:45.719 --> 01:02:52.639Whirlpool is one that hit the lowestlevel since the pandemic. Going back to91901:02:52.679 --> 01:02:57.079the pandemic, you know Advisor Modernafor obvious reasons. Whirlpool because back in92001:02:57.119 --> 01:03:00.719twenty one, we all wanted tofix our houses up. Since then,92101:03:00.760 --> 01:03:04.760it has fallen by fifty percent andit's back to where it was during the92201:03:04.800 --> 01:03:09.559pandemic. It's amazing how much thathad. The Metal Report to Metal Report,92301:03:09.679 --> 01:03:15.960yeah, I met a strong,strong report. It sold off initially92401:03:15.360 --> 01:03:20.679and then it came back. Thereport was on Thursday and it sold off,92501:03:20.719 --> 01:03:23.559and then of Friday, a strongstrong day on Friday. Yea to92601:03:23.599 --> 01:03:27.280where he's still spending a ton ofmoney in reality laves, which is it92701:03:27.400 --> 01:03:30.719metaverse yep, But that's just usualnow, it's not any surprise. So92801:03:30.719 --> 01:03:34.480I know Netflix reported last week,but it seemed like they were able to92901:03:34.519 --> 01:03:37.840hold that big gain that they thatthey had last week. Ford a lot93001:03:37.920 --> 01:03:40.519of struggles with Ford right now,with the UAW strike and everything. They93101:03:40.519 --> 01:03:45.639missed third quarter earnings expectations and that, and they pulled their whole guidance for93201:03:45.679 --> 01:03:49.599the year and they said it wasin due part to this UAW strike.93301:03:49.679 --> 01:03:54.239Even though they reached a tentative agreementon Wednesday, Yeah, earnings came out,93401:03:54.440 --> 01:03:58.199but they said I still hard himbecause it's been about six weeks they93501:03:58.199 --> 01:04:00.360were reached an agreement and they're sayingthat all this. Ford is the only93601:04:00.400 --> 01:04:04.320one that's reached it so far asof this recording. But they're talking to93701:04:04.400 --> 01:04:09.800GM and Stilantis. They're nearing adeal, but they're still not there yet.93801:04:09.840 --> 01:04:12.639Ford reached there as they said,it's going to be twenty five percent93901:04:12.760 --> 01:04:15.840increase in pay. In a payincrease that's over a five year period or94001:04:15.880 --> 01:04:19.400a five year period. It's goingto cost them. Its whole new agreement94101:04:19.400 --> 01:04:24.320could cost Ford about six point twobillion dollars something. And then they also94201:04:24.360 --> 01:04:29.239have the right to strike if Fordcloses the plans. They also have the94301:04:29.280 --> 01:04:31.639reinstate of their cola, which iscost a living adjustment. They have the94401:04:31.679 --> 01:04:36.039wages to go over twenty eight dollarsper hour for the lower starting positions and94501:04:36.039 --> 01:04:39.679get all the way at the fortydollars per hour, which instead of an94601:04:39.719 --> 01:04:42.519eight year period, they're reducing inthat down to a three year period.94701:04:43.480 --> 01:04:48.639Say they gave away a lot,a lot billion dollars during the six week94801:04:48.639 --> 01:04:51.920period of strikes, so they sayingit's worth it. But now this is94901:04:51.960 --> 01:04:56.519going to increase the cost per vehicleto about eight hundred and fifty to nine95001:04:56.559 --> 01:05:00.559hundred dollars more. Stock dropped toa new Oh yeah, it dropped twelve95101:05:00.920 --> 01:05:04.920Friday. They got a five percentdividend, which does appear to be secure.95201:05:05.639 --> 01:05:10.360It's well covered by earnings about double. The earnings are about double the95301:05:10.400 --> 01:05:14.400dividend, so the dividend does looksafe. It's actually after Friday's dropped is95401:05:14.440 --> 01:05:16.039about six percent. Yeah, It'sgoing to be interesting to see what their95501:05:16.119 --> 01:05:21.719electric sector does because I mean they'regoing it's nine hundred dollars more for labor95601:05:21.760 --> 01:05:25.760costs for per vehicle, right,It's that going to hit the labor Is95701:05:25.760 --> 01:05:29.079that going to hit the electric sidetoo? And like so many companies are95801:05:29.119 --> 01:05:32.039still struggling with the electric armies.It's new to them. And that's why95901:05:32.079 --> 01:05:35.639I've said before on the show,Tesla's been doing it for thirteen years.96001:05:35.679 --> 01:05:40.639Yeah, Ford went full in ontheirs. They're still struggling. They did,96101:05:40.880 --> 01:05:43.639and Toyota now is trying to goall in and they keep talking more96201:05:43.639 --> 01:05:46.000and more about the solid state batterythat's going to have a thousand miles and96301:05:46.400 --> 01:05:50.320charging ten minutes. But that's outthere a few years. When does Toyota96401:05:50.400 --> 01:05:53.840have a report? I swear I'venever seen an earnings report come out from96501:05:53.880 --> 01:05:57.280that. Yeah, I don't knowwhen their latest report is. Another interesting96601:05:57.320 --> 01:06:00.519thing on Friday was Jamie Diamond andnow he's going to sell a million shares96701:06:00.840 --> 01:06:04.199of JPM stock starting next year.And that's the first time he's ever going96801:06:04.239 --> 01:06:09.039to sell stock that isn't part ofsome expiring options. Wow, that during96901:06:09.039 --> 01:06:11.559the serio, So now it's gotin Yeah, during the CEO tenure which97001:06:11.559 --> 01:06:14.880started in two thousand and five.And is Jamie diming You're thinking he's the97101:06:14.920 --> 01:06:17.559best banker in the world. He'staking JP Morgan Chase to the top bank97201:06:17.559 --> 01:06:20.920in the world. They're thinking investorsgot all nervous to drop four percent.97301:06:20.920 --> 01:06:24.639That's stock drop four percent on Fridaybecause all of a sudden, I know97401:06:24.679 --> 01:06:27.320where he's selling a million shares nextyear. Are they thinking he's retiring.97501:06:27.360 --> 01:06:30.400He's sixty seven years old, maybehe's near in retirement. And also it's97601:06:30.440 --> 01:06:32.800one hundred and forty million dollars forthe stocks. You know, one of97701:06:32.840 --> 01:06:36.079the things that we talk about alot in this country is why can't we97801:06:36.119 --> 01:06:40.960all just get along? And Icame across something. This has nothing to97901:06:41.000 --> 01:06:44.199do with the stock market, butI thought it was brilliant. There's a98001:06:44.239 --> 01:06:46.760guy named Thomas Sowell, and he'san author, and he happens to be98101:06:46.800 --> 01:06:53.719a black Conservative, and he offereda simple explanation about why we agree disagree98201:06:53.719 --> 01:06:57.840about politics. We disagree about politics, he said, because we disagree about98301:06:57.920 --> 01:07:00.679human nature. Listen to this.I think it is pretty goo. One98401:07:00.719 --> 01:07:04.599school believes humans are malleable and canbe perfected. They believe that social ills98501:07:04.599 --> 01:07:10.559and evils can be overcome through collectiveactions and encourage humans to behave better.98601:07:11.039 --> 01:07:13.719They are puzzles that can be solved. We just need to do the right98701:07:13.760 --> 01:07:16.519things, say the right things,enact the right policies, spend enough money,98801:07:16.719 --> 01:07:20.079and social ills will be no more. That's one school, right,98901:07:20.679 --> 01:07:26.199Guess who that is? Liberals?Yeah. By contrast, the other school99001:07:26.239 --> 01:07:30.199believes that human nature is a universalconstant. No amount of social engineering can99101:07:30.320 --> 01:07:35.039change the sober reality of human selfinterest or the fact that human empathy and99201:07:35.119 --> 01:07:41.119social resources are scarce. People whosee things this way. Believe most political99301:07:41.119 --> 01:07:45.239and social problems will never be solvedwhen you look at it that way,99401:07:45.320 --> 01:07:48.719when you're approaching it, and thoseI thought those were. That was pretty99501:07:48.719 --> 01:07:53.920insightful on his part, and Iprobably thought about that around the edges.99601:07:53.960 --> 01:07:56.480But to put it in those terms, it makes all the sense in the99701:07:56.480 --> 01:08:01.920world. If you believe that humansare innately good, and all social ills99801:08:01.960 --> 01:08:05.920can be corrected and all crime canbe gone if we just do the right99901:08:06.000 --> 01:08:10.760thing, say the right thing,spend the right money, that gives you100001:08:10.800 --> 01:08:14.880a whole different outlook than if youbelieve in reality. I totally agree.100101:08:15.880 --> 01:08:18.159But like me and Sebat, wetalk about this all the time. At100201:08:18.159 --> 01:08:21.000the end of the day, whatcomes down to it for me is human100301:08:21.039 --> 01:08:26.319incentives. We all know humans workoff incentives, and if you give something100401:08:26.319 --> 01:08:29.119to a human, they're not gonnawork as hard. If you don't give100501:08:29.159 --> 01:08:30.560it to him, they're gonna workget We'll work harder to get it,100601:08:30.920 --> 01:08:34.880and overall the course of society,the course of humanity, we've seen that100701:08:35.000 --> 01:08:40.039the more the more struggle, themore success that comes out of it.100801:08:40.239 --> 01:08:44.760True. Look at the example inthe NFL Deshaun Watson. Okay, he100901:08:45.119 --> 01:08:46.279was sorry of an underdi I mean, he was a fourteenth overall pick.101001:08:46.319 --> 01:08:48.199He went to the Texas. He'sbut you have to play. You have101101:08:48.239 --> 01:08:50.920to do wealth in order to getyou a big contract. And he's playing.101201:08:50.920 --> 01:08:55.600He's doing well, he's doing allthis stuff. He gets two hundred101301:08:55.600 --> 01:08:59.920and thirty million dollars guaranteed to goplay for the Browns. He's played roughly101401:09:00.159 --> 01:09:02.279forty percent of the snap since hegot that. He doesn't and now there's101501:09:02.319 --> 01:09:05.640skeptics out there saying he doesn't evenwant to play football anymore because he doesn't101601:09:05.680 --> 01:09:09.560have any incentive to play because regardlessof what he does, they have to101701:09:09.560 --> 01:09:12.520pa him two hundred thirty million dollarsover the next five years. He doesn't101801:09:12.600 --> 01:09:14.960have to play. Well, ithurts yourself, right exactly. He says101901:09:14.960 --> 01:09:16.920he's hurt all the time. Theyhad multiple doctors now tell him that he's102001:09:16.960 --> 01:09:20.119not hurt and he is clear toplay if he wants to play. He102101:09:20.159 --> 01:09:24.560still says, no, I'm notplaying because he doesn't want to play because102201:09:24.560 --> 01:09:27.960he already got his money and hehas no incentive. There's no bonus structure102301:09:28.000 --> 01:09:30.560for his contract where you have tothrow this X amount of yards run for102401:09:30.600 --> 01:09:34.479this score. This touch anything.We talked about it with the You had102501:09:34.479 --> 01:09:39.960the example of the socialist teacher thatwas teaching his students and having the test,102601:09:40.000 --> 01:09:43.079and I mean you know the storybetter. I mean you could tell102701:09:43.079 --> 01:09:45.479it better than that. I rememberit, but not enough tell it right102801:09:45.479 --> 01:09:49.640now. Oh yeah, no,so it's the college professor got a couple102901:09:49.640 --> 01:09:54.279of sorry though good story. Beginningof the year, he said, Oh103001:09:54.359 --> 01:09:58.159yeah, I'm going to average outeverybody's great, so the class will get103101:09:58.159 --> 01:10:00.399the average test grade. So thesmart kids and all the kids that work103201:10:00.439 --> 01:10:04.439hard to study hard in the firsttest of the year study their usual most103301:10:04.640 --> 01:10:08.439they got a's. The other kidsthat are lazy and didn't want to do103401:10:08.479 --> 01:10:12.039is said, screw whatever, we'regonna get an average. They didn't study.103501:10:12.079 --> 01:10:15.359They got ss. So the firstaverage of the test was roughly a103601:10:15.560 --> 01:10:18.359high CE or beer or something likethat. He said. And then as103701:10:18.359 --> 01:10:21.159you went through the semester, Ithink they had four tests went through the103801:10:21.199 --> 01:10:25.600semester, the grades periodically got lower, and the average at the end of103901:10:25.640 --> 01:10:29.600the year was a D. Becausethe kids that studied hard and tried hard104001:10:29.640 --> 01:10:31.359and wanted to get a good grade, because that's what they're used to and104101:10:31.359 --> 01:10:34.359that's how they do all their studying. They said, screw it too,104201:10:34.720 --> 01:10:36.720Like, why am I going towork hard? Man? If that dude104301:10:36.720 --> 01:10:41.399gets the same test score as me, why would I work hard? Socialism104401:10:41.479 --> 01:10:45.000in the classroom. Socialism in theclassroom. And is evident that the grade104501:10:45.199 --> 01:10:48.800just just constantly went down, down, down, down down the average until104601:10:48.800 --> 01:10:53.000everybody was failing because they ain't care. Wow, humans will always work on104701:10:53.079 --> 01:10:56.119incentives. And if you don't believethat, then you just don't understand basic104801:10:56.199 --> 01:10:59.319human nature. Like a good discussion. Hey, maybe they're not going to104901:10:59.399 --> 01:11:02.119qualify for them MasterCard, then youknow, MasterCard report needs to hit.105001:11:02.159 --> 01:11:06.159You know, this is a weirdone, master How are you going to105101:11:06.199 --> 01:11:13.439tie this? This is so weird. Master Card hit an all time high105201:11:14.079 --> 01:11:16.920a month ago. A month ago. Since then, it had drifted eight105301:11:16.920 --> 01:11:24.159percent south. Dropped another five percenton Thursday on prospects for slower consumer spending105401:11:24.479 --> 01:11:31.039due to high credit card balances andthe resumption of student loan payments. Makes105501:11:31.079 --> 01:11:34.720sense, and that's amazing how youcan go from an all time high to105601:11:34.760 --> 01:11:38.439a boy, nobody wants to ownthis crap. Give it a year that105701:11:38.520 --> 01:11:44.319student loan payment could be a bigissue. Start a year because people are105801:11:44.319 --> 01:11:45.760going to start having to pay itback with their that's going to be a105901:11:45.760 --> 01:11:48.840lot increased. I'm saying a yearbecause it just started this month. Yeah,106001:11:49.239 --> 01:11:53.960and what we decided that what whatpercentage of the population that student loans106101:11:55.079 --> 01:11:59.720or something? It was pretty good. There wasn't forty three. I think106201:11:59.760 --> 01:12:02.840it's like thirteen percent of the populationhas student loan payments that they've got to106301:12:02.880 --> 01:12:05.760make. We're coming up to theend of this segment. We'll be back106401:12:05.800 --> 01:12:10.720with Pat Quigley. Yes, wewill talking about medicare and it is that106501:12:10.800 --> 01:12:12.920time of the year. And yeah, list of this one. This is106601:12:13.039 --> 01:12:15.279good stuff. We'll be back rightother just break. Thanks again for listening.106701:12:15.439 --> 01:12:20.600We'll be right back. Say it'sonly welcome back to the Money Matter106801:12:20.640 --> 01:12:24.159Show. My name is Todd Lick. I'm here with Sebastian Bors, CD,106901:12:24.319 --> 01:12:27.439David Sherwood, and Dylan Greenberg.Next segment, Well, we will,107001:12:27.600 --> 01:12:30.520I promise Pat quickly will this segment. No, but Pat's going to107101:12:30.560 --> 01:12:34.600be in an alignment. Yes,this is very confusing. We did.107201:12:34.880 --> 01:12:39.680We ran through all the earnings lastsegment. I want to just finish up107301:12:39.720 --> 01:12:43.119on this there's about twenty nine percentof S and P five hundred companies that107401:12:43.159 --> 01:12:46.560have reported third quarter results so far. Earnings are up eleven percent overall.107501:12:47.119 --> 01:12:51.319But is the interesting part. Youtake out the contributions from the magnificent seven107601:12:51.359 --> 01:12:57.239stocks, the average GPS growth woulddrop to a negative eight point six percent.107701:12:58.199 --> 01:13:01.119Just showing negative eight point six justshowing you how much the magnificence said,107801:13:01.199 --> 01:13:03.760that seems severe. Yeah, Imean, just got to keep that107901:13:03.800 --> 01:13:08.680in mind that this market's a littlefabricated by those magnificent seven. Yeah,108001:13:08.720 --> 01:13:13.960we are experiencing the second consecutive yeardown. I don't know if the SMP108101:13:14.079 --> 01:13:16.359is going to close positive or negative, but in reality, the equal weight108201:13:16.319 --> 01:13:21.279to S and P five hundred isdown the second consecutive year. And that's108301:13:21.319 --> 01:13:27.319only happened twice in the last seventyyears. Each time it happened, coming108401:13:27.359 --> 01:13:31.640out of that two year down wasa pretty strong rally. And so just108501:13:31.800 --> 01:13:36.079hang in there, don't be don'tbe I guess my cautious point here was108601:13:36.319 --> 01:13:41.239don't get don't be too conservative,Marcus. Come down ten percent, that's108701:13:41.279 --> 01:13:45.840the time to start getting a littlemore aggressive. Comes down fifteen percent,108801:13:45.079 --> 01:13:49.239you get more aggressive comes down twentypercent, you get even more aggressive.108901:13:49.520 --> 01:13:53.760Don't be concerned. Don't be thinking, boy, I got to get out109001:13:53.800 --> 01:13:56.159of this. This is just goingto go down and down and down.109101:13:56.479 --> 01:14:00.720It will reverse. Oh yeah,I was just gonna exactly. So adding109201:14:00.800 --> 01:14:03.159on to that, there's a studydone that I was saying the number one109301:14:03.159 --> 01:14:09.399factors behind American successful investments what Americansthink makes a successful investment in how they109401:14:09.520 --> 01:14:13.560found their successful investments. Thirty threepercent of investors. What do you think109501:14:13.600 --> 01:14:19.279They're number one goal or their numberone attribute was the number one successful investor109601:14:19.600 --> 01:14:28.079discipline? Uh? Yeah, takethe emotion out of it. Sebastian growth.109701:14:28.560 --> 01:14:31.640So it's investors attribute their greatest investingsuccess to patients through the volatility.109801:14:32.359 --> 01:14:35.680Yeah. So you stay patient ifyou guy, if you're comfortable with your109901:14:35.720 --> 01:14:39.479risk tolerance, you just stay patientthrough all of the ups and downs and110001:14:39.479 --> 01:14:43.079it will come out on top atsome point if you have the time.110101:14:43.439 --> 01:14:45.640And not only that, I meanfor I want to really spend a little110201:14:45.680 --> 01:14:48.399bit of time on twenty thirty yearolds and four year olds. If you110301:14:48.439 --> 01:14:53.439are starting an investment account, oryou're contributing to an investment account, time110401:14:53.520 --> 01:14:56.159is your most valuable asset, andin fact, you kind of want to110501:14:56.159 --> 01:14:59.039see the markets come down for awhile here because then you get a buy110601:14:59.079 --> 01:15:00.680in more and more, or andmore at the lower times. It's when110701:15:00.720 --> 01:15:04.039it's taken off like it did intwenty twenty that you're not getting as much110801:15:04.720 --> 01:15:09.159on fund your portfolio that you couldhave if you bought in more before it110901:15:09.199 --> 01:15:12.159took off. Right, So forthe twenty and thirty year olds, it's111001:15:12.199 --> 01:15:15.159different than the sixty and seven yearolds. Right, the twenty and thirty111101:15:15.199 --> 01:15:16.520year olds they want the market todrop because I means they're buying in lower111201:15:16.520 --> 01:15:18.880and lower. And like you sayall the time, Dave, there was111301:15:18.960 --> 01:15:23.159a one thousand, you were wearingthe caps on one thousand dow right now111401:15:23.279 --> 01:15:26.600one thousand, and now it's thirtythree thousand down, so down to thirty111501:15:26.640 --> 01:15:30.439three thousand, So we I meanimagine back when the dow was one thousand,111601:15:30.479 --> 01:15:31.800and then it came down big timeafter it hit a thousand, all111701:15:31.800 --> 01:15:34.760the way down to whatever it did. You wanted to see that because again111801:15:34.800 --> 01:15:38.199it went all the way up tothirty three. So when you are at111901:15:38.199 --> 01:15:42.239a twenty thirty year old, evenin your forties, this is a good112001:15:42.319 --> 01:15:45.720opportunity. You're exciting. This isexciting, right, It's exciting. And112101:15:45.800 --> 01:15:48.520you know, the thing I've beentelling people all week is if you take112201:15:48.560 --> 01:15:54.479the period from two thousand January oftwo thousand to December of two thousand and112301:15:54.680 --> 01:16:00.359twenty, right that twenty year period, you went through the tech bubble,112401:16:00.399 --> 01:16:04.359the nine to eleven slash tech bubblemeltdown where the market dropped fifty percent.112501:16:04.760 --> 01:16:10.079Then seven years later you go throughit again with the banking crisis, another112601:16:10.199 --> 01:16:13.439fifty percent decline in the market.If you'd have bought the S and P112701:16:13.560 --> 01:16:18.000five hundred before that started and justleft it alone, your twenty year average112801:16:18.039 --> 01:16:23.039would have been seven point two percentper year, and you had two of112901:16:23.079 --> 01:16:27.760the worst market crashes in history.That ought to tell you that what you113001:16:27.960 --> 01:16:32.520do when it's like this, asyou become more fully invested less defensive.113101:16:32.560 --> 01:16:38.239Dean mentioned in his monologue, wehad a ten percent inverse position, ten113201:16:38.319 --> 01:16:43.399percent betting to the downside. Wetook off about a third of that a113301:16:43.439 --> 01:16:46.680month ago. Today, Friday,I'm sorry, Friday, we took off113401:16:46.680 --> 01:16:50.800another third of that. If themarket were to drop from forty one hundred113501:16:50.880 --> 01:16:55.319down to four thousand or thirty nineto fifty. We take off the rest113601:16:55.359 --> 01:16:59.760of it. You buy insurance toprotect you from a calamity, right,113701:17:00.079 --> 01:17:03.199and if you feel like that thatessentially what we're doing is we're cashing in113801:17:03.239 --> 01:17:08.600on the insurance policy. People thathave cash on the sideline. We've been113901:17:08.680 --> 01:17:13.520putting that cash to work, notall in, but we're actually becoming more114001:17:13.680 --> 01:17:17.279invested every one hundred points down.That's what you do. There's an example114101:17:17.319 --> 01:17:21.479we always tell clients too. It'sthe idea that say Apple comes out that114201:17:21.520 --> 01:17:26.239I phone fifteen and they offer itout a twenty percent discount, you're going114301:17:26.319 --> 01:17:29.399to go buy one, gonna getIt's just not thousand dollars anymore, it's114401:17:29.399 --> 01:17:30.319eight hundred dollars. You're like,oh, that's a good deal. I'm114501:17:30.359 --> 01:17:34.279going to go buy that. It'sthe same idea in a stock. If114601:17:34.279 --> 01:17:38.359you're buying Apple stock and it's downtwenty percent, that's a twenty percent discount114701:17:38.359 --> 01:17:41.439from where it was. But forsome reason, it's the backwards thinking and114801:17:41.479 --> 01:17:45.319the emotional part of investing is alwaysdown twenty percent, it's going to go114901:17:45.319 --> 01:17:47.319to zero, and that's what's alwaysthought about, so you get too hesitant115001:17:47.359 --> 01:17:50.199to buy in when it's on thedownslope. But the idea is you're buying115101:17:50.199 --> 01:17:53.960it at a discount. If it'sa good company, your thought is going115201:17:54.039 --> 01:17:56.479to come back. It's not goingto just stay down and down and down115301:17:56.479 --> 01:17:59.399and down. It's just the markets. And I know we talk about bitcoin115401:17:59.439 --> 01:18:01.399earlier, but this is the bitcoincommunity has it right. When they when115501:18:01.399 --> 01:18:04.680the market's going down, they alwaysthey're on their Twitters, they're on their115601:18:05.000 --> 01:18:09.039now x, they're on their alltheir forums saying, oh, this is115701:18:09.079 --> 01:18:12.239the greatest opportunity. This is whenwe buy more. This is they love115801:18:12.279 --> 01:18:15.720it when it drops because they're buyingmore because in their mind they're thinking it's115901:18:15.760 --> 01:18:18.680going to go back up and theywant it to come down. Right.116001:18:18.680 --> 01:18:21.520And so when you see that bigred candle down and you're in your twenties116101:18:21.560 --> 01:18:25.560and thirties, forties, your eyesshould light up, especially if it's a116201:18:25.640 --> 01:18:29.479quality company, it says, andeven if you're older, and I'm not116301:18:29.520 --> 01:18:31.319saying, if you have enough moneyto live comfortably for the rest of your116401:18:31.359 --> 01:18:34.520life, you do not need totake any more risk. There'd be two116501:18:34.560 --> 01:18:39.760reasons to be in the stock market. One would be for to you don't116601:18:39.800 --> 01:18:42.399need to increase your net worth.So really the only there's two reasons to116701:18:42.399 --> 01:18:45.920be in the stock market, right, increase your net worth or entertainment.116801:18:45.720 --> 01:18:48.600Well, increasing your net worth goesaway, So the only reason to be116901:18:48.600 --> 01:18:51.640in the stock market is for entertainment. If the market's going down, that's117001:18:51.680 --> 01:18:56.479not very entertaining. So if youwere or to at that point, say,117101:18:56.560 --> 01:18:59.399you know, I'm seventy five yearsold, I'd like to just have117201:18:59.479 --> 01:19:03.159a one hundred percent tbls and tenotes and treasure and corporate bond. I117301:19:03.239 --> 01:19:06.239get that. I get that.I have no problem with that. But117401:19:06.279 --> 01:19:12.159we've got a very strange business inthat we have a big sale and nobody117501:19:12.159 --> 01:19:15.279comes in. We get prices backto the highest they have ever been.117601:19:15.640 --> 01:19:20.000Our phones are ringing off the hook. That's backwards. That's just backwards.117701:19:20.159 --> 01:19:26.439So one of the primary things thata money manager brings to the table is117801:19:26.479 --> 01:19:30.000we take the emotion out of investing. And so someone said, that's what117901:19:30.039 --> 01:19:33.560you're paying for. That's the primarything you're paying for with a money manager118001:19:33.920 --> 01:19:38.720is to take the emotion out.Yep, exactly. And that's what we118101:19:38.800 --> 01:19:41.239try and do best. We tryto do it all the time. We118201:19:41.319 --> 01:19:44.560do that, but we take theemotion out by going through the whole financial118301:19:44.600 --> 01:19:48.159planning. And also the thing that'sseven point two percent that did you mentioned118401:19:48.159 --> 01:19:53.640on that twenty year from twenty twentytwenty twenty, Imagine that six point one118501:19:53.760 --> 01:19:57.279five and you're like, oh,that looks really good. But then you118601:19:57.279 --> 01:20:00.960you have the two worst crashes inhistory and you still beat that six.118701:20:00.159 --> 01:20:03.600Yes, So just because you're gettingall these great rates thrown at you now118801:20:03.720 --> 01:20:06.439doesn't mean that they're always going tobe there. It doesn't mean that's going118901:20:06.520 --> 01:20:09.600to be the best rate that youcould have ended up with. Like I119001:20:09.640 --> 01:20:11.960said in one of the earlier segments, I had a client call me and119101:20:12.000 --> 01:20:15.079said, maybe we ought to takesome of the money out of stocks and119201:20:15.119 --> 01:20:17.880put it into this five percent bonds. I'm saying, well, stocks have119301:20:17.920 --> 01:20:21.800averaged twelve percent for the last hundredyears. How much of your twelve percent119401:20:21.840 --> 01:20:26.479money do you want to move tofive? Well that was the end of119501:20:26.479 --> 01:20:29.640that conversation. They say, yeah, you say you're right, And he's119601:20:29.640 --> 01:20:31.199his experienced investor. I mean,you know, he knows, he knows119701:20:31.199 --> 01:20:34.319better. I don't even know wherethat was was coming from with him.119801:20:34.520 --> 01:20:39.640Did you see where the China defenseminister was fired on Tuesday. I did119901:20:39.680 --> 01:20:42.960see that. It's interesting he's beenmissing for what two months? Two months,120001:20:43.000 --> 01:20:45.439he hasn't been seen in public,so they decided might as well fire120101:20:45.520 --> 01:20:50.520instance he's not coming in. Yeah, I'm sure two days ago. Well,120201:20:50.600 --> 01:20:55.720you know, there's odd things thathappened in China. I'm thinking that120301:20:55.760 --> 01:20:58.840it is odd though, that hehasn't come in for two months. Yeah,120401:20:58.880 --> 01:21:01.159And it's like the defense and they'realso the most surveilled state in the120501:21:01.239 --> 01:21:03.880world. I'm pretty sure. Well, maybe nor's creeds more, but I120601:21:03.880 --> 01:21:06.399mean, I'm sure they know wherehe is. I don't think you'd have120701:21:06.439 --> 01:21:10.600a hard time finding him in Chinaif you. I don't think the facial120801:21:10.640 --> 01:21:14.079recognition and all that. You know. Uh, you know. The economy120901:21:14.079 --> 01:21:18.039continues to be strong. That GDPest for Q three four point nine,121001:21:18.079 --> 01:21:24.680that was really strong. Monday oflast week we saw three merger announcements in121101:21:24.760 --> 01:21:30.239one day. You don't see thatkind of activity if corporations are concerned about121201:21:30.279 --> 01:21:33.239the economy rolling over. Well,exactly this time last year, we weren't121301:21:33.239 --> 01:21:36.319seeing a lot of m and as. Yes, it's nervous, yes,121401:21:36.359 --> 01:21:41.600absolutely so. All of the indicatorswe have is that we're on a pretty121501:21:41.680 --> 01:21:45.199nice glide path for the economy.What's caused is selling this past week or121601:21:45.239 --> 01:21:49.039the past two weeks really has beenthis this concern about the war. I121701:21:49.039 --> 01:21:53.680think the uncertainty of it. Whathappens if this blows up, you know,121801:21:53.720 --> 01:21:57.079and becomes a big, a bigdeal, uh, starts to go121901:21:57.119 --> 01:22:00.720outside of Israel's borders, significantly outsideof what if i Ran gets involved,122001:22:00.720 --> 01:22:04.840what if the United States gets involvedwith Iran? All of these things I122101:22:04.840 --> 01:22:11.199think are It's just fear and fear. Uh. The two biggest emotions for122201:22:11.359 --> 01:22:15.560moving the market are fear and greed. And fear is a much stronger emotion122301:22:15.119 --> 01:22:19.479than greed, which is why youalways hear people say the stock goes up122401:22:19.800 --> 01:22:25.760the stairway and down the escalator,because that's exactly what happens. Fear is122501:22:25.800 --> 01:22:30.399a much stronger emotion. We hada good intel left for dead a year122601:22:30.439 --> 01:22:35.199ago because PC cycle had run itscourse. Right, everybody that needed a122701:22:35.239 --> 01:22:39.880new PC during the pandemic got one, including me, you know, about122801:22:39.920 --> 01:22:43.399my second PC of my life.Uh. Don't use I don't think I'll122901:22:43.439 --> 01:22:46.239ever buy a PC. Don't uselaptops a lot. But the bottom line123001:22:46.319 --> 01:22:50.920is h The feeling was while they'rethey're done, you know, because everybody's123101:22:50.960 --> 01:22:57.560got all the lap and they've beenvery misguided in the types of chips that123201:22:57.560 --> 01:23:00.079they've been. They've been very poorlymanaged company. Uh, they've just been123301:23:00.159 --> 01:23:04.479the wrong place. They haven't hadthe auto ships, they haven't had the123401:23:04.479 --> 01:23:08.760cell phone ships, you know,they haven't had the chips for the growth123501:23:08.760 --> 01:23:12.279areas. It's just been the PC's. But it's interesting, it's up forty123601:23:13.119 --> 01:23:15.800in the last twelve months, asakIs gained another eight percent of the open123701:23:15.840 --> 01:23:20.960on Friday after a better than expectedquarterly report. It is kind of interesting.123801:23:21.359 --> 01:23:27.680We were had a we had aclient in the office on Friday and123901:23:28.199 --> 01:23:34.199he was wearing hokah shoes, right, and the whole hokah shoes. Todd124001:23:34.199 --> 01:23:39.199mentioned that he hadn't he hadn't seenthe Uh, I didn't, I didn't124101:23:39.199 --> 01:23:41.760know what they were. Yeah,and hokah shoes are all that right,124201:23:41.840 --> 01:23:45.720Yeah, they're are awesome. Allthe nurses wearing, the teachers wearing,124301:23:45.880 --> 01:23:49.479so everybody that knows something about shoesexcept me, everyone who stands on their124401:23:49.520 --> 01:23:54.479feet all day for a living.Yeah, hokah shoes. Yeah, they're124501:23:54.680 --> 01:23:58.479They're like pillows. And are theyDo you run in them? I do124601:23:58.640 --> 01:24:00.800that. They have really good trailrunning shoes. The trails are real rough,124701:24:00.800 --> 01:24:03.359you know, so I like extrapadding. But I wouldn't wear them124801:24:03.359 --> 01:24:06.800for regular running. But yeah,for trail running, they're great, fantastic.124901:24:06.800 --> 01:24:10.880In other words, it's funny becauseI had really had not pa any125001:24:10.880 --> 01:24:14.680attention to it, hadn't seen him. Decker Outdoor makes them? Right?125101:24:14.720 --> 01:24:16.319Is that where you buy them?No, you go to Hokah. I125201:24:16.399 --> 01:24:19.840think Decker just owns the brand Hokaonline. You go to Hokah. Yeah,125301:24:20.000 --> 01:24:24.560okay. Anyway, that the stockjump ten percent at the open on125401:24:24.600 --> 01:24:29.000Friday after reporting a strong quarter andstrong guidance, so apparently what you're saying125501:24:29.000 --> 01:24:32.800about it is just true. Yeah. Mrk rally four percent on Thursday in125601:24:32.840 --> 01:24:38.319a very weak market after a strongquarter, brings their shows back to unchanged125701:24:38.399 --> 01:24:41.560on the year. They had torally to five percent to get back to125801:24:41.640 --> 01:24:46.319unchanged on the year. We appreciateyour joining us on this Sunday morning.125901:24:46.399 --> 01:24:51.159Right, we'll be backgrafting break.Welcome back to everybody. It's the money.126001:24:51.159 --> 01:24:55.319Am out of the show last segmentand we have pac Quigley today,126101:24:55.680 --> 01:24:58.359Yes, we do. I don'tknow if you want to introduce the rest126201:24:58.399 --> 01:25:00.520of the people in the show.Tog Glick and David show, it's also126301:25:00.560 --> 01:25:04.479here. I know who you was, yes, but yes, the main126401:25:04.640 --> 01:25:08.399star here is Pat Quigley. We'revery excited to have you on the show.126501:25:08.960 --> 01:25:12.000Welcome. First off, thanks goodto be here. Yeah, I126601:25:12.000 --> 01:25:15.000mean, obviously this time of yearis the most crucial time for medicare and126701:25:15.039 --> 01:25:18.119it's your busiest time of year,so thank you for taking some time to126801:25:18.159 --> 01:25:23.920get out here with us today.We want to go over all the basics126901:25:23.960 --> 01:25:29.079and the complexities of medicare. Soreally we know that when you're working,127001:25:29.119 --> 01:25:31.600you're on your health employer plan andyou really don't really worry about health insurance127101:25:31.600 --> 01:25:33.680too much. You get what youget, you don't throw a fit,127201:25:33.760 --> 01:25:38.680right, correct, And then oncewe hit that retirement age around sixty five,127301:25:38.760 --> 01:25:43.119things start to change. So forthe average person maybe at sixty four127401:25:43.279 --> 01:25:46.520sixty five, who is still workingnot working, how does that come into127501:25:46.520 --> 01:25:50.840play, How does that phase inlife start for them? Well, first127601:25:50.880 --> 01:25:57.319of all, though with all transparency, both myself and my wife used Pat,127701:25:58.359 --> 01:26:01.479So that's a good thing if youtrust me, I wouldn't have him127801:26:01.520 --> 01:26:05.039on here and be using him ifthat's not the case. But he's helped127901:26:05.119 --> 01:26:09.800us tremendously, but I wanted youpeople to know that that was the case.128001:26:09.880 --> 01:26:14.960Full disclosure. Well, you know, honestly, what I see when128101:26:15.000 --> 01:26:16.920I talk to these people is justit's like a deer in headlights, fear.128201:26:17.319 --> 01:26:19.800I don't get this. It's tooconfusing. Where do I go,128301:26:19.880 --> 01:26:24.159what do I do? What's allthe link? It's a different language out128401:26:24.199 --> 01:26:27.520there, and you know, theyjust don't speak the language, and so128501:26:27.600 --> 01:26:31.000what I see is just fear,lack of understanding. You know, their128601:26:31.079 --> 01:26:34.840mailboxes are just getting buried with stuff. They don't know what to do with128701:26:34.920 --> 01:26:38.720it. They end up just stackingit on the kitchen counter waiting for an128801:26:38.760 --> 01:26:43.560answer to come to them. Soit's it's fear and confusion and frustration.128901:26:43.880 --> 01:26:46.359And you know what we see isour financial planning help relieve a lot of129001:26:46.399 --> 01:26:49.479that fear and frustration for them,because in our field as well, there's129101:26:49.479 --> 01:26:54.680a lot of complexities. People don'tunderstand the different investment returns, social security,129201:26:54.720 --> 01:26:57.760how that plays into their income andall that. So we see a129301:26:57.760 --> 01:27:00.520lot of the times when we dothe financial plan. There's some that comes129401:27:00.560 --> 01:27:03.760up called the Health Goal and itactually projects out how much it's going to129501:27:03.840 --> 01:27:09.239cost for medicare in retirement. Somaybe give let's start there, what's the129601:27:09.279 --> 01:27:13.600basic costs because I'm as far asI'm aware, Part A is normally free,129701:27:13.720 --> 01:27:15.399right, but the Part B isthe one that everyone you have to129801:27:15.439 --> 01:27:18.600pay for. Correct. I usedto say the same thing. A is129901:27:18.640 --> 01:27:21.520free. It's not free. Youpaid for it with your payroll right over130001:27:21.520 --> 01:27:24.880the years, so it's not free. But they don't have to pay a130101:27:24.880 --> 01:27:28.520premium at the time, so that'sfree. And then of course part B.130201:27:29.000 --> 01:27:31.359And let me back up real quick. You know, my understanding at130301:27:31.439 --> 01:27:33.760least my experience over the last thirtyyears with this is, you know,130401:27:34.039 --> 01:27:38.880especially the financial arena, I thinkit's changed for you guys in terms of130501:27:38.920 --> 01:27:43.439the planning for retirement. I thinkhealthcare and healthcare costs are a lot bigger130601:27:43.479 --> 01:27:46.520of an issue absolutely of people thanit used to be huge and one of130701:27:46.560 --> 01:27:50.239those things that almost nobody thinks about, right, and it can be a130801:27:50.479 --> 01:27:56.359deal breaker for a lot of peoplewhen they look at the costs. So,130901:27:56.560 --> 01:27:59.760you know, with the Part Bpremium, and of course you all131001:27:59.800 --> 01:28:02.680know how this works. But everyonethere's there's a set standard premium. This131101:28:02.760 --> 01:28:05.560year it's one hundred and sixty fourdollars and ninety cents per month for your131201:28:05.560 --> 01:28:11.960part B. Next year it's goingup to one seventy four seventy so it131301:28:11.960 --> 01:28:15.279tends to go up every year.But that's just for people depending on their131401:28:15.279 --> 01:28:18.640income. And as you guys know, there's something called ERMA, income related131501:28:18.920 --> 01:28:21.880you know, something something something,but it's basically on your income, and131601:28:23.199 --> 01:28:25.960you know, you can go fromone sixty four to ninety to over five131701:28:26.039 --> 01:28:29.479hundred dollars a month for your partB depending on your income. And that's131801:28:29.479 --> 01:28:30.800what a lot of people don't know. They just hear the one sixty four131901:28:30.920 --> 01:28:33.920ninety. They think that applies toeverybody, and then they find out about132001:28:34.000 --> 01:28:36.880ERMA and what they're making. Ithink the only thing is is if you're132101:28:36.880 --> 01:28:41.199on you're just living on Social Security, that's the only place you really get132201:28:41.199 --> 01:28:43.560it, because you've got to beon the what almost twenty four thousand dollars132301:28:43.680 --> 01:28:46.159or something. No, it's prettyhigh. It's pretty high, actually,132401:28:46.199 --> 01:28:50.479So it's for next year sixty fourthe one sixty four ninety applies to They132501:28:50.479 --> 01:28:55.720look at whether you're you're filing jointor single. If you're a single person132601:28:55.800 --> 01:28:58.680making under this is for next year. If you're making less than one hundred132701:28:58.720 --> 01:29:02.079and three thousand dollars a year yearadjusted gross income, then it'll be one132801:29:02.159 --> 01:29:05.960sixty four ninety albums. Well,next year one seventy four to seventy.132901:29:06.159 --> 01:29:11.359If you're a married couple making lessthan two hundred and six thousand dollars,133001:29:11.680 --> 01:29:15.640they just double it. Then you'llyou'll pay the one seventy one seventy four133101:29:15.680 --> 01:29:17.640to seventy. But if you're morethan that and it's tiered, it goes133201:29:17.720 --> 01:29:21.399up. You know, it'll beas high as five sixty five seventy five133301:29:21.479 --> 01:29:26.520per person for for it goes upfast, then it goes fast. It133401:29:26.560 --> 01:29:30.560goes fast. And a bracket foran individual is like you know, you133501:29:30.640 --> 01:29:32.640hit the five hundred once you crosslike two hundred fifty thousand, right,133601:29:32.720 --> 01:29:35.640yeah, And that's very quot whatwe look at in financial planning when people133701:29:35.640 --> 01:29:38.840are like, I want to doa ross conversion, Well great, but133801:29:38.920 --> 01:29:41.600no, that's earned income, Sowe need to make sure that doesn't put133901:29:41.640 --> 01:29:44.279you in a new Medicare bracket.Correct, right, understanding that so that134001:29:44.359 --> 01:29:46.399would be for just one year though, well, right, but some people134101:29:46.479 --> 01:29:50.159do multiple ross conversions. And alsohow IRMA works is it's a two year134201:29:50.239 --> 01:29:54.399look back. People don't realize thatit's not a one year look back.134301:29:54.439 --> 01:29:57.000It's a two year look back onyour income. Yeah, so actually the134401:29:57.039 --> 01:30:00.199system, it's an automated system.It's a two year look back. So134501:30:00.279 --> 01:30:02.680what we're twenty twenty three, Sosomebody that was going on to medicare right134601:30:02.720 --> 01:30:08.319now, they'd be looking at theirtwenty twenty one taxes and that's the automated134701:30:08.359 --> 01:30:12.239system. But they do have anopportunity to appeal that if the one year134801:30:12.279 --> 01:30:15.520look back would be different, butthat's not automatic. You have to appeal134901:30:15.560 --> 01:30:16.640it and they'll go back and lookat your one year look back and if135001:30:16.640 --> 01:30:19.359it saves you some money, you'reallowed to use the one year look back,135101:30:19.560 --> 01:30:21.800but then it goes back to thetwo year automatic. And this sounds135201:30:21.800 --> 01:30:25.600like kind of a dup at,but that a number you're giving that one135301:30:25.680 --> 01:30:30.279seventy four seventy that's per person,per person you had a man and wife,135401:30:30.319 --> 01:30:32.159that's each of you get there,correct, you know mine doesn't come135501:30:32.199 --> 01:30:35.720adjusted. I think it's around threehundred and forty bucks a month each and135601:30:35.760 --> 01:30:39.520that's the duct that's straight out ofyour sol security yes, right, yes,135701:30:39.800 --> 01:30:42.800yeah, if you're taking soci securityright, yeah, yep. And135801:30:42.800 --> 01:30:45.880that's actually a good point. Solet's say, for example, I'm sixty135901:30:45.920 --> 01:30:48.920six and I'm still working. DoI need to start Medicare? No?136001:30:49.039 --> 01:30:50.960You know, that's a great question. We get a call. It's a136101:30:50.960 --> 01:30:55.720lot of time. Padam turning sixtyfive, I have to sign up for136201:30:55.800 --> 01:30:58.840Medicare? What do I do?So they come in, they sit down136301:30:58.880 --> 01:31:00.560and we talk about it, andI said, well, are you working136401:31:00.640 --> 01:31:02.000yes? Are you going to continueto work? Yes? Do you have136501:31:02.039 --> 01:31:05.479group benefits? Yes? Well youdon't have to do anything. So there's136601:31:05.520 --> 01:31:09.039just a lack of knowledge out there. People think, sixty five, you've136701:31:09.079 --> 01:31:11.800got to do something. But ifyou're going to keep working and you're going136801:31:11.880 --> 01:31:16.319to keep using your employer benefits,you don't have to do anything. But136901:31:16.399 --> 01:31:21.600as a nine year of Medicare veteran, we want to do something. It's137001:31:21.640 --> 01:31:25.600so much better than the most corporateplans. Well, I'll tell you so137101:31:25.640 --> 01:31:29.680our company does you know, it'sprimarily medical I mean Medicare, but we137201:31:29.720 --> 01:31:31.520do group benefits, we do themarketplace. You know, it's all health137301:31:31.520 --> 01:31:36.600insurance related. But I will tellyou, by far, the most comprehensive137401:31:36.680 --> 01:31:43.840plans for healthcare is be found withinMedicare. It's not group benefits. Medicare137501:31:43.840 --> 01:31:48.840advantage is unbelievable. It is unbelievablecompared to group plans. It's spectacular.137601:31:49.119 --> 01:31:54.319Even though Medicare supplements depend on whichis another option for people. You know,137701:31:54.920 --> 01:31:58.800how many people know have an insuranceplan that will cover nearly ninety nine137801:31:58.840 --> 01:32:01.840percent of all your expenses for theyear. Oh, I'm a perfect example.137901:32:01.920 --> 01:32:08.119I came off my own healthcare plan. I didn't say that much money.138001:32:08.159 --> 01:32:10.399Maybe one hundred and fifty dollars onthe premiums. Yeah, yeah,138101:32:10.399 --> 01:32:13.760on premiums. But but it givesyou so much more. I don't have138201:32:13.760 --> 01:32:18.319to pay for drugs, right,except the ones at the corner. And138301:32:18.359 --> 01:32:21.720that's that's a good point because nowthat we've talked about A and bre's,138401:32:21.800 --> 01:32:26.399the alphabet suit continues with C andD. Correct parts C and D and138501:32:26.439 --> 01:32:30.239so you're on part D, DG. Right, Well, so we138601:32:30.279 --> 01:32:34.640got just let's make sure when wetalk Medicare, we're talking parts. When138701:32:34.680 --> 01:32:41.279we're talking medical gap plans, we'retalking plans. So under Medicare, the138801:32:41.319 --> 01:32:45.079government, we have parts A,B, C, and D under the138901:32:45.119 --> 01:32:48.760Medicare Options supplements, also known asmedic gap plans. You have ten different139001:32:48.760 --> 01:32:51.920plans and they give them a letter. Let's just make this more confusing.139101:32:53.520 --> 01:32:58.760Plans A through N. So you'reon a plan G, right, correct,139201:32:59.000 --> 01:33:01.399and then you stand for what thegreatness? Well, the greatest plan139301:33:01.399 --> 01:33:04.760you've got the Green Birch plan.I'll tell you I used this expression with139401:33:04.800 --> 01:33:10.359people. So G is the Cadillacfor all the different letters for the plans.139501:33:10.399 --> 01:33:14.359Funny you say that because when Iretired, when I want on Medicare.139601:33:15.319 --> 01:33:20.399Yeah, when I went on Medicare, I said to the guy I139701:33:20.439 --> 01:33:23.760was talking to as a friend ofmine, I said, I want the139801:33:23.760 --> 01:33:26.840Cadillac. So I had F.And of course they don't do F anymore.139901:33:26.920 --> 01:33:29.279Plan used to F used to bethe catalyact. And you want if140001:33:29.279 --> 01:33:30.319you're in F, you need toget out of it. You want to140101:33:30.319 --> 01:33:32.960get out of quick now if youcan, because for most people they have140201:33:33.000 --> 01:33:36.520to medically qualify. But yeah,you do. They had at one time140301:33:36.880 --> 01:33:41.680you could switch. No anyway,I would did F. For a number140401:33:41.680 --> 01:33:44.279of years. I was paying likeseven hundred bucks a month for yeah,140501:33:44.479 --> 01:33:47.439And then I went on a minuteheard about a Medicare advantage. When I140601:33:47.520 --> 01:33:50.760Medicare advantage three years ago. Ohmy god, no complaints. That's amazing.140701:33:50.800 --> 01:33:55.159I paid zero because you haven't hadto do anything you I paid zero.140801:33:55.279 --> 01:34:00.479It covers dential, it covers vision, it covers hearing. It pay140901:34:00.560 --> 01:34:04.279zero. But you have to usecertain providers No, not really, yes,141001:34:04.319 --> 01:34:08.880but they're all I've had no onesay explain to them why one is141101:34:08.920 --> 01:34:11.239better than the other. Well,I'm not going to say that, because141201:34:11.279 --> 01:34:15.720it depends on the person. You'renot getting that healthy and using because it's141301:34:15.720 --> 01:34:20.479in eighty twenty. If you're onoriginal Medicare only it's eighty twenty and and141401:34:20.760 --> 01:34:25.479people you know you have a deductibleright. That sounds familiar. It's eighty141501:34:25.560 --> 01:34:29.720twenty. Gee, that sounds familiar. But the difference is with group insurance,141601:34:29.920 --> 01:34:33.199employer insurance, you're twenty percent hasan annual cap maybe three four or141701:34:33.199 --> 01:34:38.560five six thousand dollars. Under originalMedicare, that be's not capped. So141801:34:38.640 --> 01:34:42.439if you don't have something a supplementor a medicap plan, I fill those141901:34:42.520 --> 01:34:45.760gaps. Your part B is unlimited, and so God forbid, you went142001:34:45.760 --> 01:34:50.359through something like chemotherapy, radiation,dialysis, that's twenty percent that can easily142101:34:50.359 --> 01:34:54.760get up to twenty thirty, fortythousand dollars for you. So that's the142201:34:54.800 --> 01:34:59.920you know, the big difference.But the main difference between a supplement is142301:35:00.079 --> 01:35:02.479and an advantage plan is. Witha supplement, you're maintaining original Medicare,142401:35:02.600 --> 01:35:04.960meaning you're still using the red,white, and blue card, but you've142501:35:05.000 --> 01:35:09.720bought a private insurance policy to paythe gaps Medicare doesn't. On the advantage142601:35:09.720 --> 01:35:15.239plan, you're actually getting given up, assigning your rights to your original Medicare.142701:35:15.279 --> 01:35:17.319And I always tell people you're kindof like giving it to one insurance142801:35:17.359 --> 01:35:21.319company and now that one insurance companyis responsible for your healthcare, not Medicare,142901:35:21.640 --> 01:35:25.399and that one insurance company is goingto give you one card and that's143001:35:25.399 --> 01:35:28.600the only card you use, allright, So summing it up, if143101:35:28.640 --> 01:35:32.600you're getting close to Medicare or haveMedicare and you're confused, give Pat a143201:35:32.680 --> 01:35:35.359call. Yeah. Well, andif you don't know, you know,143301:35:35.359 --> 01:35:38.479we can write your number down towhatever, but we'll get there. If143401:35:38.479 --> 01:35:41.000you call us, we have itsnumber. Yeah, I would tell you143501:35:41.039 --> 01:35:45.880I find someone you can trust that'sin the industry. It's that complicated,143601:35:46.279 --> 01:35:49.880and I can't tell you how often. It's probably daily somebody comes into my143701:35:49.960 --> 01:35:54.359office and I look at their mess, and you know they try to do143801:35:54.399 --> 01:35:58.840it themselves. Right, It doesn'tcost you anything to use a broker,143901:35:59.680 --> 01:36:01.159but you know, make sure it'sa good broker that works with all the144001:36:01.199 --> 01:36:04.399carriers. They've been in the business. You know, they're not driving around144101:36:04.439 --> 01:36:08.560in their car, you know,like a door salesman. You know there's144201:36:08.640 --> 01:36:11.840brick and mortar to their business andthings like that. All right, appreciate144301:36:11.880 --> 01:36:14.800it. I know he doesn't wantto say it. They do a great144401:36:14.880 --> 01:36:18.319job. All right. So we'llbe back next week with your money matters.144501:36:18.439 --> 01:36:20.960All right, you need us,you want to plan, you want144601:36:21.000 --> 01:36:27.119anything, We're here, Come seeus. We'll be back. Remember be144701:36:27.199 --> 01:36:30.079happy, yes, be healthy,important, and we all want to be144801:36:30.560 --> 01:36:40.199profitable. Say it's only able.