May 5, 2025 • 43 mins
The GDP numbers are out for Q1. Their results are mixed, depending on the category we isolate and evaluate. Host John and Giuseppe tell us which way these numbers could tip the economy. Then, signs of hardy spending, bonds and fixed income, and looking ahead to Q2. The Wise Money Guys.
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Speaker 1 (00:00):
The Wise Money Guys Radio Show is brought to you
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Speaker 2 (00:13):
Welcome to the Wise Money Guys radio Show. I'm your
co host, John Scambray and I'm here with my partner
just Hoping viscontent and we are certified portfolio Managers, which
means we are investment experts at helping people who are
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have a question or would like more information after listening
(00:35):
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(00:57):
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If you just want to email us a question, you
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(01:18):
any investment decisions, contact your advisor if it's not us
or your tax professional. Also keep in mind that at
no point is there ever a time where investments can
guarantee that you will never lose money. All investments have
(01:41):
the potential for risk and to lose principle. In fact,
if any advertisement or person says, uh, you know guaranteed
this guaranteed, that run the other direction.
Speaker 3 (01:55):
All right.
Speaker 2 (01:56):
With that, One of the main big topics I think
we need to talk about, and it seems to be
just dominating the news, is GDP is well GDP, but
in the context of are we headed for a recession?
And we believe we know the answers, and we also
(02:17):
believe we know the answers because of data, not narrative
data being the information that we see that either would
suggest that we are in a recession or headed to
a recession, or does the data suggest otherwise, And that
will be part of what we talk about today.
Speaker 3 (02:38):
It was very.
Speaker 2 (02:41):
Top of mind for our workshop yesterday. In fact, in the.
Speaker 4 (02:46):
Middle of this week actually seems like yesterday, Yeah, was
it yesterday?
Speaker 2 (02:51):
Today's tomorrow? Today's tomorrow is yesterday.
Speaker 4 (02:55):
I don't know how many times this happens, at least
every few weeks, every day blends together, but yeah, it
was Wednesday April through end of April, which that's when
the GDP data came out and the contraction of the
GDP for Q one, So it was very timely during
that workshop and then also the start of the earnings
(03:19):
for the NAG seven because Microsoft and Meta had reported
after hours on Wednesday to really kick things off on
the big names in the S and P five hundred and.
Speaker 2 (03:29):
So we're definitely gonna dive a little bit more into
the weeds on recession, whether we're in one, headed for
one or not. And then also whatever the outcome is,
recession or no recession, what sort of investment strategies do
we like and are providing and doing for our clients,
(03:52):
both retired and not retired. And then we always like
to talk somewhere in the show maybe a specific area
of investments or a specific investment that we like. So
a lot of good stuff to find Saturday morning, so
you'll want to stay tuned for the whole show again.
(04:12):
Called nine one six ninety six seven thirty five hundred
for more information or to arrange a no obligation consultation
which would include a retirement analysis and a portfolio review,
and we do that absolutely free of charge, and that's
super valuable important, especially times like these, especially when they
(04:37):
take us up on that. So just diving in. So
if you look at the data, now, let's let's talk
about what the inflation data is suggesting, the unemployment data
is suggesting. The yield curve is is it negative or normal?
And what that means? Our interest rates going up or
going down? Our energy price is going up or going down.
(05:00):
These are all barometers of future GDP. Is that positive
or negative? These are all the things that go into
Giuseppe and I making pretty bold statements as to whether
or not we believe we're in a recession, headed to
recession or not. And so why don't you tackle some
(05:22):
of those because these are also a lot of the
things that we tackled. Put my shoulder pads on first,
on where the economy is right now, and if we
come full circle and we analyze why these things are
important is because this is what impacts making money. This
is what impacts you know, your retirement, your investment assets,
(05:47):
your ability to you know, live the same style of
life that you're living right now for a twenty or
thirty year or more retirement and so diving right in.
You know, what is some of the things that came
out over the last week or two regarding you know,
(06:09):
some of these things, jo Seppi, like employment, interest rates,
the yield curve, earnings you already mentioned, but are they
are earnings good? Are earnings bad? You know, so on
and so forth.
Speaker 3 (06:20):
What do you see. That's a whole lot of questions here, John, But.
Speaker 2 (06:24):
We well, we have to pack in a whole lot
of information in less than an hour.
Speaker 4 (06:28):
Yeah, let me let me tackle GDP since that's hot
off the press and it's hitting the newsreels and the
word recession surfacing because Q one came in. It was
the first quarter with a GDP that was contracted, basically
coming in as a negative number since twenty twenty two
(06:51):
at point zero three percent. If you look under the
hood of the data that made up that number, it's
not as bad as you think. And this is not
what everybody is talking about. I mean, there are some
new sources out there that are bringing this up, but
(07:13):
a lot of it is kind of the front running
because of the teriffs and the imports, which is a
detractor of GDP. You take that out and you look
at some of the other important aspects of what makeup GDP.
Speaker 3 (07:24):
Consumer spending still grew.
Speaker 4 (07:27):
Wasn't a super strong number, but it is the positive number,
about one point eight percent. So that's great because consumer
spending is about seventy percent of what makes up GDP,
not as much government spending, which is a good thing
because we want more organic growth. And there was a
big amount that came from private sector investment.
Speaker 2 (07:48):
In the area in the.
Speaker 4 (07:50):
US, which is great. We want a lot of that.
We want a lot more of that. And so when
you combine all those numbers together and come up with
an average and taking the imports out in the front
running basically for the tariffs, then you come up to
about three percent. As far as where Q one came in, now,
I don't want to have it where every quarter data
(08:11):
and say you can take this out and take that on,
so on and so forth. But there are certain things
you got to look at depending on the situations and
the environment and the timing of things. And right now,
what's unique about the timing of Q one is that
is we knew tariffs were coming.
Speaker 3 (08:27):
We don't know how big they were going to be.
Speaker 4 (08:29):
As far as you know the different countries and how
much this administration was going to tack on, and I
think companies and corporations have the same feeling, so they
you know, load it up, and that I think is
kind of an outlier. Now we'll see if it carries
carries forward into Q two. You know, one quarter does
(08:50):
not make a trend. It could just be a standalone,
but if it's two quarters or three quarters, it ends
up being becoming a trend. And that's something that you
worry about. Technically, recession, you'd have to have two quarters
that contracted, which would make up a recession well, and
more than contracted, they'd actually have to be negative growth.
What is negative? It was negative point zero three. But
(09:12):
if you take out, if you take out the you look.
Speaker 2 (09:14):
Like huh huh, go on, go on.
Speaker 4 (09:18):
But if you take if you take out like I said,
the the basically the imports, which is a detractor in
the front running of tariffs, which contributed to that, and
you look at more of the private sector investment and
you add up those numbers that come up with the average.
Speaker 3 (09:33):
It's basically three percent for Q one.
Speaker 4 (09:35):
So positive looking under under the hood, breaking it apart
standalone we'll see what happens with Q two. I think
overall it's over it's an overreaction of what the media
has put out there and pointing to, oh, we're in
a recession or we're going towards recession.
Speaker 3 (09:54):
Too early to call that right now.
Speaker 2 (09:56):
So so many things go in to us making a
determination of what investments you should or should not be
in based on the data that is being provided, not
narrative but data. The facts and the facts are what's
important when deciding what people's money should be in, especially
(10:23):
once we know what their minimum return to objective is,
what your goals are, your quantifiable goals are in essence,
and once we know those and we've analyzed what's going
on and the data out there, then we determine what
sort of investment strategy and investment categories you should be in.
(10:44):
You're listening to John Scambray and Joseppie Viskani, and the
conversation we were having and started was whether or not
we're headed for a recession or are in one or
I and just to answer real quickly, don't belie leave
Not only do I not believe or in a recession,
I also don't believe a recession is going to happen,
(11:07):
and let me tell you why. So some of the
things that Giuseppe talked about definitionally you know GDP, if not.
Speaker 4 (11:17):
Should we can call like websters. It's like you can
add it to their dictionary or the source.
Speaker 2 (11:24):
Remember when Bush would say strategery, I don't think strategy though, No,
it was. It was Bush too, George w Anyway, so
you know GDP, yes, if you if you factor in imports,
which we don't want, GDP is slightly negative. However, if
(11:46):
we look at unemployment, there's never been a recession with
unemployment in the threes or the fours and gd excuse me,
unemployments at four point two percent. Also, there's not been
a well maybe there has been. I don't know for sure,
but as far as I know, there has not been
(12:07):
a recession when the yield curve is normalized. And what
I mean by that is typically we see this inverted
yield curve, which simply means that shorter term annual rates
are higher on investments than longer term rates. And right
(12:28):
now we are in a completely normal yield curve where
the longer you invest your money into, say fixed income,
the higher the annual rate, the shorter, the maturity of
the fixed income investment, the lower rate. That's a completely normal,
healthy yield curve.
Speaker 4 (12:48):
I just want to later on or add on to
this first on unemployment, because you mentioned four point two
threes and fours, so people might be asking, and we
had this conversation at the workshop as well as what
level does it become unhealthy? And if you look at
past recessions, we'll have to twenty twenty is an outlier
because that just spiked up like crazy over fourteen fifteen percent.
Speaker 3 (13:10):
And a heartbeat.
Speaker 4 (13:12):
But if you look at the previous recession in two
thousand and seven, two thousand and eight, in two thousand
and seven beginning two thousand and eight, actually January two
thousand and eight, and that's kind of where if you
if you look at a chart of unemployment and you
know beer Liberate statistics and you and you look at
the recessionary periods, it's a gray shated bar. The beginning
(13:33):
part of that gray shated bar of that recession January
two thousand and eight, and unemployed was that five percent
at that point, and so that's typically a.
Speaker 3 (13:41):
Worry some number. Is when you get into the five
percent range.
Speaker 4 (13:45):
As far as unemployment, we're like, uh oh, you know
what's going on here is do we have a problem?
And so right now we don't see that with four
point two percent unemployment rate the yield curve. Interestingly enough,
the typical is one it inverts. That's usually the cautionary
uh oh, are we going to recession now? It's not
(14:06):
a perfect timing method because it can be well, none
of these twelve sixteen, right, twelve sixteen, eighteen months, sometimes
twenty four months after then a recession happens. And typically
when it does normalize or it becomes positive, it goes
from negative to positive. Usually that's the point when a
recession happens. Now we're not in that range. And the
(14:27):
unique thing is, well, is it different this time? Right,
because that's going to be the other question, is is
it different this time?
Speaker 2 (14:32):
Well?
Speaker 4 (14:33):
One thing that's different is we've had crazy, unprecedented and
we haven't used that word in a long time, but
because it was out used in the.
Speaker 2 (14:40):
First couple of years of COVID, especially by all the
political Oh yeah, this is unprecedented.
Speaker 4 (14:47):
Everything was. I mean, we the whole world shut down.
That was unprecedent. We had massive amounts of stimulus. Unprecedent,
we had the new economic theory of MMT modern monetary
theory where you just continue print dollars and demand will
will will surface from it.
Speaker 3 (15:04):
So this is somewhat of an experiment almost.
Speaker 2 (15:06):
Yeah, right, Well, the real the concern for heading into
a recession from me is more about the dollar destruction
and the fact that we're still spending at pandemic levels
the government. And and again I hope Republicans do what
they said they're going to do. They were hired to
(15:28):
cut spending, you know, try to balance the budget and
cut taxes and pay for those tax cuts.
Speaker 3 (15:35):
And so far.
Speaker 2 (15:36):
You know, you always get these Republicans that talk a
big game and and and we lean conservative, but you
always get these Republicans that talk a big game and
then when they get in power, they do nothing. They
have the power of the purse, they completely control, you know,
the narrative, and that the data coming out is suggesting
(15:58):
that they're not doing but they said they were going
to do. They have budget reconciliation that they literally could
use even with a slim majority to pass the tax cuts,
like no tax on tips, you know, no tax on
social security, those are the two biggie. There was never
tax on tips or social Security. The fact that they
(16:18):
had the tax both to pay for all the ridiculous
spending and overspending in the government is why we had
those taxes. So all you need to do is go
back to you know, times pre pandemic, you know, pre
financial and real estate crash. I mean, nobody even says
(16:39):
you have to decrease the spending. You just have to
decrease the rate of growth on spending. Right, put a
line in the sand that says this is the maximum
that we are going to spend, and don't go over
it and get low and behold, stop racking up your
credit cards. The economy would just explode, you know. Positive
(17:00):
and so, but again looking back at some of the
other things that tip typically could cause a recession is
stubborn super high inflation. But stubborn super high inflation is
typically driven by high energy prices, high gas prices, high
oil prices, high utility prices. All of those things have
(17:23):
come down around the entire country, except for California, who
added more gas tax this year, which you know is
the reason why our gas hasn't come down. But it's
still not in the mid to high fives where it was.
Speaker 3 (17:37):
And we're possibly going to get a couple of refineries
offline too.
Speaker 2 (17:41):
So that is all just specific to California. The economy
as a whole is benefiting from lower oil prices, lower
natural gas prices because true to Trump's word he said
he was going to pump you know, production up, he
has and the price of oil has come down and
(18:01):
broke into the high fifties, currently hovering around the low sixties.
But the price of oil got down to fifty eight
dollars a barrel, and that is huge, and that's actually
getting rid of inflation, and that's actually had a positive impact.
And the more recent inflation numbers had come out a
few weeks back, because that was negative when all the
(18:23):
other components that make up CPI or inflation overall, headline
inflation was positive and so it came in lower than estimates,
whereas all the previous data towards the end of last
year in the beginning of this year were harder than estimates,
which was a pain point for the Federal Reserve because
they're backed up in a corner and thinking maybe they
have to raise interest rates. But with energy coming down
(18:46):
softer than inflation data than estimated and now you add
in you know, the negative number GDP number Q one.
Now it could put the Federal Reserve into position where
they could cut rates. Even though Jerome Palace saying we're
staying pat, well, he's staying pat because he's a political hack.
(19:06):
He and Janet Yellen are completely political. They say they're
a political they are not. Look at some of the
statements he said recently was just a political hack job
by him. And the simple fact of the matter is
that the that the Federal Reserve and their their inflation
(19:27):
indicators and they back out food and energy to support
their narrative that you know, higher inflation is a real
problem now and it's the Trump policies, which is basically
what Jerome pal said, that all the tariffs are going
to cause higher inflation when actually the data doesn't support
(19:48):
like you've been saying that there's higher inflation because inflation
is led by higher energy and oil prices and that's
just not the case. So but if you back out
food and energy, oh lo and behold, you know there's
things that have gone through the roof, like eggs, like
homeowner's insurance in California. So on and so forth. But again,
(20:10):
whether or not this stuff is leading to recession, which
would then be bad for your investments, It's that the
data isn't there supporting that we're in. I hate to
say it, it's actually supporting a soft landing, right, I mean,
if you're gonna use things I know, I know that
(20:31):
are absolutely not a real thing.
Speaker 3 (20:33):
Is it the sky blue shirt that you wear in today?
Speaker 2 (20:35):
This is a beautiful sky blue shirt. Check us out
on YouTube search for the Wise Money guys and you
can see my beautiful sky blue shirt. But the fact
of the matter is I don't believe we are headed
for a recession, and if we are, or have been
in one, the data certainly doesn't support that. And use
(20:55):
your eyes, that's what I mean. Have you been Have
you been in an empty costco or an empty airport
or And here's a real minor thing that is very
suggestive of how people are viewing the economy. You know,
the movie box office last weekend just had a fourth record,
(21:20):
not the all time record for box office in one weekend,
but the fourth all time record for one weekend according
to the news that I watched. And that isn't indicative
of people who are cutting back because one of the
first things you would cut back is spending twenty dollars
on a movie ticket and ten dollars on a thing
(21:41):
a popcorn. Yeah, so you know, use your eyes. We
use our eyes, we read, we use our eyes, we listen,
we analyze before we make decisions on what to buy
or invest in. And right now, the stock market vaulvolatility,
what it has been for consumers is the opportunity to
(22:06):
buy low and sell high. I mean I bought Microsoft
when it dipped here over the last couple of weeks,
and then I just sold out of Microsoft because you know,
it had a phenomenal earnings report and it went from
three sixty five when I bought it to four thirty
when I sold it, and that's just fantastic. So, you know,
(22:30):
by the dip has been is continuing to be what
we believe for our clients and what we believe, you know,
you should do because the sky is not falling. You know,
we've talked a lot about the indices and where they're at.
You're listening to the wise money guys, John Scambra and
Joseppi Visconti, and we were really getting into the weeds
(22:53):
on why there may or may not be a recession. Again,
I don't believe a recession is even coming. There's just
too much spending and too much you know, driving this
economy in a potential positive way.
Speaker 4 (23:10):
I think the important thing is a spending part, as
a spending part is not coming from government deficits spending
like it has been at It's coming from uh, you know,
private sectors in other countries putting an investing money in
the US, which is going to provide and help more
or a wealthier for us. Because you want organic growth,
you don't want just you know, you know fluff.
Speaker 3 (23:31):
Yeah.
Speaker 2 (23:31):
I love the fact that imports are way down. And
I love the fact that the investment in America is
a two trillion dollars new two trillion dollars of new
investments into the United States to drive manufacturing jobs and
consumption and services here in the United States. We're not
(23:56):
even talking about that yet. And what that means to
you know, future revenues, uh for for the government and
the ability to put some of these other tax cuts
and and and and balancing of the budget, the things
that will need to be done and put into place. Well,
that two trillion investment and Trump's policies are what gonna
(24:18):
are going to allow that to be possible, to cut
tax on tips, to cut tax on social security. It's
it's doing. He's accomplishing exactly what he said he was
going to do, and once the market realizes it, because
they continue to see positive earnings from our large companies,
(24:41):
We continue to see low unemployment, We continue continue to
see high consumer spending. We continue to see you know,
inflation coming down or staying now in the two's. You know,
if you look at c P I P c I,
p P I, you know, all those different INFLA reads
are now in the twos. You know, that's all healthy
(25:04):
for a robust stock market and for a robust return
on your investments.
Speaker 4 (25:11):
But I'll preface it, and this as optimistic as it sounds,
you know, doesn't mean that we're completely out of the
words and all uncertainty is thrown aside, and you should
go out there and just put all your you know,
if you had cash on the sidelines or what have you,
and put all of it to work and go into
one hundred percent stock portfolio because it is a very
(25:32):
selective environment and for a while for you know, twenty
three and twenty four we had good, good years in
good markets. It was very narrow, narrow, meaning that it
had narrow breath because it was really dependent upon those
magnificent seven or magnificent ten names.
Speaker 3 (25:46):
Out there leading the market.
Speaker 4 (25:49):
And so now you know that's what helped drive kind
of this this market down in the indices the way
they went down twenty to thirty, almost thirty percent of
the Nasdaq one hundred. So you have to be selective
of the investments out there, and you want to be
smart about the way you're going about it and diversifying
your assets so you're not going all in one asset
(26:10):
class or the other. And the ninety day delay that
Trump has put out there, he has to finesse this
and he's going at it. And the reason why we
have a lot of volatilities going out. He's going at
it hard and fast. He's not teasing the situation, dragging
it out. Interesting. I have a whole group chat. I'll
put it out there with some cousins and some friends.
(26:32):
And some of them are you're Italian and you have cousins.
Come on, I don't believe it. And we're talking about
but but you know, some of them are in the
financial industry just like us, And so we have this
commentary back and forth and really, you know, the worrysome
and some some are emotional like oh why is he
going at this hard?
Speaker 3 (26:50):
Or why is he going? And you know, I put
it out there.
Speaker 4 (26:54):
I said, well, look and Nvidia is putting a you know,
they're building facilities out here now exactly.
Speaker 2 (27:00):
Had never would have done that.
Speaker 4 (27:02):
Had it been kind of a trickle effect or drawn out,
I kind of do this at a slow process. Do
you think corporations would have acted upon and said likely
like somebody like in video or you know, Taiwan semi conductors.
Speaker 2 (27:16):
The auto industry, I mean, the auto industry is making
drastic changes. I mean we've got people think, oh it
takes it'll take years to No, We've got factories that
are sitting empty or factories that are running at you know,
a quarter or half capacity. I've researched this a lot.
And to get automobile back to its heyday of manufacturing,
(27:39):
We've already got the infrastructure for it.
Speaker 3 (27:42):
It's retool it. It's there.
Speaker 2 (27:44):
We just literally just i mean just emptied Detroit and
we can literally reinvigorate it right back to what's already
there infrastructure wise.
Speaker 4 (27:55):
Yeah, so I think I think all in all, I
think this transition process and the way it's going about
trying to do it hard and fast is because it
needs to be done hard and fast.
Speaker 2 (28:06):
We don't forget about the political reasons for needing to
do it hard and fast, because there's no guarantees that
the mid terms. You know that that you know, well,
that's the.
Speaker 3 (28:16):
Yeah, I get that.
Speaker 4 (28:17):
But aside from that, just focusing on the economy and
what needs to be done and transitioning and trying to
get the US back on the map, right is these
things need to be done. But I think my point
is is that the uncertainty is still out there, and
this ninety day delay is a very important ninety days
to make things happen and negotiations happen. Because on the
other side of that, right, if the ninety day delay
(28:39):
turns into we're going to revert back to the elevated
tariffs that we had because we didn't do enough deals,
that would cause more volatility in the.
Speaker 3 (28:46):
Market, for sure, without a doubt.
Speaker 4 (28:48):
And if it drags on, then those those things could
cause some certain things within the market and the economy
to break and then have a recession take place.
Speaker 3 (28:56):
That's just my thought.
Speaker 4 (28:57):
No, no, but I think right, I think enough deals that
can be had within the ninety day delay which are
enough to be satisfactory, and then say, okay, we're just
going to stay with a ten percent blanket tariffs that's
going to bode well, and then focus on the tax
cuts and all the deregulation and having growth for companies.
Speaker 2 (29:15):
Let me summarize what you just said, you know in
two words only, well, in one word alpha, and what
I mean by that is your advisor's alpha. And let
me define alpha as the experience, knowledge and capabilities that
your advisor bring to the table, because what you just
(29:36):
said is that selection of the type and category of
investments are more crucial now than they were in twenty
four or twenty three or twenty or nineteen or any
good Bowld market period. That your advisor and their skill set,
(29:57):
their knowledge and experience of what to do in the
type of environment that we're in is crucial. So if
you're going it alone or you're working with somebody who
has limited experience or doesn't have the track record and
results and understanding or capability, because we have capabilities that
(30:21):
many advisors don't have or are allowed to have. Quite frankly,
then give us a call at nine one six ninety
six seven thirty five hundred. We do free retirement analysis
at a portfolio review for anybody who takes the time
to sit down with us. We want to make that
hour or hour and a half you know, worthwhile to you.
(30:44):
Whether you decide to hire us or not, that doesn't matter.
We want to help as many people as we possibly can.
Hopefully you're in a position and have the means to
hire us, but if not, that's okay because the reality
is is that, based on everything we're talking about, we
don't want to see people blow themselves up. We also
(31:07):
don't want to see people run and hide from investments
because they're just so weary of losing money that they
don't know how to make money when the opportunities like
they are now are out there. And quite frankly, value
and dividend stocks are still a great trade. Fixed income
(31:29):
bonds and alternatives are still a great trade. And what
I said that we would talk about was strategy, and
that's what I'm talking about now. There's great stocks out
there that have both upside and pay you great cash
flow while you're in them, and that's a big piece
(31:50):
of what we believe you should be in. And if
you want some specific ideas, then you need to come
and see us. But then also the fixed income and
the alternative structures and strategies space has been phenomenal. If
you don't have fixed income or alternative strategies that produce
(32:11):
income inside of your portfolio, you are literally missing out
from anywhere from seven percent to over twelve percent annually
often paid broken down monthly in your portfolio from a
cash flow perspective, and a lot of those incomes, especially
if it's in the fives, is guaranteed by the bank
(32:35):
or the issuer. Now that's not guaranteed by the United
States government, and there's always risk a default with anything,
but a rated companies that are backing these investments are
paying anywhere from mid fives up into the twelve percent range.
You absolutely need to give us a call. If you
(32:56):
don't have cash flow from your investments pain you you
know of stock like market return, you need to call
us at nine one, six ninety six, seven thirty five
hundred and more importantly, you need to keep listening to
the wise money guys you know, we've been having a
very important conversation with you all this morning. But here's
(33:18):
what it boils down to. So one of the things
that I said and we've been talking about, is your
advisor's alpha. Now, the proof is always in the putting.
So one of the things we were showing people at
the workshop, okay, the portion of money that we have
of our clients that are in stocks, what is our
(33:39):
alpha and simply what is that portfolio doing for our
clients compared to the endsy Because that's really all alpha
is is how, how and at what level are you
outperforming a benchmark. And in this case, we were showing
clients how our core portfolio that I've got to give
(34:01):
all the credit in the world to Giuseppi. He's the
one who sets up the screens and the filters and
runs the rebalancing monthly, so on and so forth for
this core stock piece. Now keep in mind, when we say,
you know, core stock piece, everybody's percentage of what they
have in stocks is different. R You know, there's five
(34:21):
categories of investments, stocks, bonds, real estate, alternatives, and cash.
No matter what you have, they fall in one of
those categories. We're just going to talk a little bit
about just the stock piece and then what our core
portfolio of stocks is doing compared to the S and
(34:42):
P five hundred.
Speaker 4 (34:44):
Yeah, so basically just regurgitating what we discussed in our
workshop on Wednesday night, which actually turned out, you know,
pretty decent.
Speaker 3 (34:53):
Yeah. I always had and it's always.
Speaker 4 (34:56):
Great engaging with new people and getting some questions and
you know, I think that's kind of the fun part
of the.
Speaker 2 (35:02):
It is the caven enjoy the after Well, that's what
I'm saying. People, Okay, yeah, people are just we know
we did a good job. When people are coming up
and telling them about they're now right on the spot
telling us about their situation, right, we know that what
we said resounded with them and that we did a
good job.
Speaker 4 (35:20):
And so the portion that we talked about the core portfolio,
the core portfolio essentially what it is is a it's
a basket of thirty stocks.
Speaker 3 (35:28):
And so the thirty stocks.
Speaker 4 (35:30):
Is made up primarily a big portion twenty of the
names are going to be dividend paying stocks. So that
is that's going to be the requirement of the twenty stocks,
is that they have to be dividend payers. Then the
other ten stocks is going to be more growth oriented.
Sometimes they do pay dividends, but it's not a requirement
that those ten stocks pay a dividend. And so originally
(35:52):
I built this back in April, and well I built
it earlier, but tracked it live April first of last year.
And it was actually good timing because April of last
year was one of the market when we had a
pullback of the market. Last year didn't have very many
but that's when we had a little bit of a pullback.
Speaker 2 (36:08):
But also give yourself some credit because we've had one
of the wildest market you know, markets that stock markets
that I can remember, even you know, going back to
the pandemic, are beyond where the volatility level of stocks
on an average basis has been wild. We were just
showing people that and talking about that the S and
(36:31):
P at one point was down over twenty percent, you know,
this year from peak to trough, peak to trough and
a matter of down almost thirty percent.
Speaker 3 (36:40):
And a matter of trough and no matter, that's a
matter of the timeline of two months.
Speaker 2 (36:44):
So keep that in mind when Giuseppe's telling you about
our core stock holdings, that what this has done in
a twelve month period when stocks have fluctuated plus or
minus more than twenty percent. That's that's just huge. So
it can't stress enough how well, and from an alpha perspective,
(37:05):
the value that we provide as far as our investment
selection for just this one piece.
Speaker 3 (37:10):
And that's why it's important.
Speaker 4 (37:11):
And this just goes back to your point and what
we were talking about earlier is just selection is very
important in this current market environment right now. And also
being paid what you what you mentioned quite a bit
and you mentioned a lot in workshop, is being paid
for your time being invested in something, right, not just
buying Nvidia and then hoping it goes back to one
(37:33):
hundred and forty hundred and fifty bucks per share. You
know that'd be great, but you got to wait for
it to go up and then you got to cash
it out, especially if you need some cash flow needs.
So the basket of thirty stocks is reviewed the ten
growth right, and it's reviewed monthly, and there's a whole
process that that you know is done on a monthly basis.
Speaker 3 (37:55):
Won't dive into that, but.
Speaker 4 (37:58):
Sometimes stocks can kicked out, some some new ones get
kicked in, sometimes a month over a month, it stays
the same, so you know, they're just not a buy
and hold process whatsoever. It's it's actively managed. And from
the period of time when it was tracked live on
April first until just yesterday, the end of April, it
(38:19):
has grown eleven point six percent. All the while it
pays an average current yield as far as all the stocks,
a dividend yield of about three point four percent. Now
when you measure that against what the indices have done, right,
you can go into the spy. SPY is the CDTF
that's S and P five hundred tracking cap weighted and
(38:39):
during that same period of time that went up six
point two percent, Yeah, in a year a little thirteen months,
thirteen months, and then which is it? And then the
dividend yield of that is like one point just under
one point three.
Speaker 2 (38:52):
Percent, Yeah, which is you know, not great?
Speaker 4 (38:55):
No, well, because it's had, like you said, it's had
some recent big swings on the downside and is trying
to recover from that right now.
Speaker 3 (39:02):
RSP is another industry that we look at because that's the.
Speaker 4 (39:04):
Equal weight S and P five hundred ETF that and
that same period of time is up less than one
half of a percent.
Speaker 3 (39:13):
Yeah, with a dividend of like one point six percent.
Speaker 2 (39:16):
So again that suggests on how important your advisor is
because if you're just you know, picking the five hundred
stocks equally weighted, again, can your it's basically done a
year if your earnings are underperforming inflation and over a
long period of time, The answer is no.
Speaker 4 (39:37):
So now past past performance does an equal future results.
But you know, I think what it's shown through that
period of time and from specifically the period of time
that was tracked live, is it tracked it live just
before there was a pullback in the market in April
of last year and then wrote out the rest of
(39:58):
the year, which there was another pullback in August September
and then the recent turmoil and volatiley that we've all
been experiencing. And yet through all of that, it's had
a decent return. And that's through selection. Right in comparison
to the benchmarks as well, it's it's been it's had
a higher yield by you know, at least two almost
(40:18):
three times dividend payout than than the benchmarks as well.
Speaker 3 (40:23):
And that's what you were looking for.
Speaker 4 (40:24):
You're not really looking for, you know, it's not built
for Hey, I want to beat the S and P
five hundred. It just happened to do that during this
period of time. There may be some years that it doesn't.
Speaker 2 (40:32):
I mean, there was a lot of effort and it
is a lot of effort going forward into those results.
So again, don't don't downplay them because.
Speaker 3 (40:40):
Oh and I'm not.
Speaker 4 (40:41):
But that's that's the difference is, you know, it does
take work, right, It does take It does take the
capability to be able to do this, and not every
every advisor has the capability to want to do this.
Speaker 2 (40:54):
Say less than half or are half due and half don't.
Speaker 4 (40:59):
And some some have the capability to do it, but
then they don't want to put the time into doing
it right because it's because it does take time, for sure.
Speaker 3 (41:06):
Yeah.
Speaker 2 (41:07):
So at the end of the day, you know, to
just kind of summarize what we've been talking about today.
First and foremost, there are some some less than you know, uh,
less than likely scenarios where we could go into recession.
And if the data continues to be what it is
(41:28):
from an interest rate, uh, from a from a consumer,
consumer spending, unemployment, all these things, then that is why
we don't think there's going to be one and why
we also believe that that stocks and investments should end
up you know, doing pretty decent overall this year, especially
(41:49):
in the second half, especially if they do manage to
pass well they've already passed it now or they're in
the markup period of this tax bill. And so it
went to the Senate, it's come back to the House,
and now it's going to go from the House back
to the Senate and then to the President's desk and
that should get done by hopefully, you know, mid June,
(42:12):
and if that comes in or comes to fruition, yeah,
stocks are going to go through the roof.
Speaker 3 (42:19):
And then so we.
Speaker 2 (42:20):
Talked about you know, that there's five categories of investments
what those are, and that we really like the fixed
income space and the alternative space and that you should
definitely have those in your portfolio and that doesn't matter
if you're conservative or aggressive because those are low volatility,
I mean lower alternatives are yeah, alternatives not all, they're
(42:44):
not all egal but the ones that we use is
definitely yeah, And definitely the fixed income is a lower
you know, a roller coaster ride to stocks, although twenty
twenty two it wasn't, but still the point.
Speaker 4 (42:56):
Is how you invest in them, so so being in
funds for directly into bonds.
Speaker 2 (43:01):
So the point is is that what your advisor does,
what your advisor knows, what your advisor's experiences are, are
crucial to winning this year and beyond, especially as things
continue to get wild on a geopolitical you know stage.
So call us at nine one, six ninety six, seven
(43:25):
thirty five hundred and you've been listening to John Scambering
to Seppi Visconti the wise money guys. I hope you
enjoyed it, and uh, I hope you have a wonderful weekend.
Speaker 3 (43:36):
I'm great weekend. Talk to you next week.
The Wise Money Guys Radio Show is brought to you
by One Source of Wealth Management SEC Licensed three one
nine zero seven eight. For disclosures and more information, visit
our website one Source WM dot com.
Speaker 2 (00:13):
Welcome to the Wise Money Guys radio Show. I'm your
co host, John Scambray and I'm here with my partner
just Hoping viscontent and we are certified portfolio Managers, which
means we are investment experts at helping people who are
retired or about to retire manage their money. If you
have a question or would like more information after listening
(00:35):
to the show, give us a call at nine one
six nine six seven thirty five hundred. For more important
information on our company, you can visit our website by
going to wisemoneyguys dot com. At the bottom of the page,
you'll see disclosures and other information to help you make
(00:57):
a decision potentially to call us or sit down with us.
If you just want to email us a question, you
can email us at the very complicated question at wismoneyguys
dot com. Again for more information, called nine one six
ninety six seven thirty five hundred. As always, before making
(01:18):
any investment decisions, contact your advisor if it's not us
or your tax professional. Also keep in mind that at
no point is there ever a time where investments can
guarantee that you will never lose money. All investments have
(01:41):
the potential for risk and to lose principle. In fact,
if any advertisement or person says, uh, you know guaranteed
this guaranteed, that run the other direction.
Speaker 3 (01:55):
All right.
Speaker 2 (01:56):
With that, One of the main big topics I think
we need to talk about, and it seems to be
just dominating the news, is GDP is well GDP, but
in the context of are we headed for a recession?
And we believe we know the answers, and we also
(02:17):
believe we know the answers because of data, not narrative
data being the information that we see that either would
suggest that we are in a recession or headed to
a recession, or does the data suggest otherwise, And that
will be part of what we talk about today.
Speaker 3 (02:38):
It was very.
Speaker 2 (02:41):
Top of mind for our workshop yesterday. In fact, in the.
Speaker 4 (02:46):
Middle of this week actually seems like yesterday, Yeah, was
it yesterday?
Speaker 2 (02:51):
Today's tomorrow? Today's tomorrow is yesterday.
Speaker 4 (02:55):
I don't know how many times this happens, at least
every few weeks, every day blends together, but yeah, it
was Wednesday April through end of April, which that's when
the GDP data came out and the contraction of the
GDP for Q one, So it was very timely during
that workshop and then also the start of the earnings
(03:19):
for the NAG seven because Microsoft and Meta had reported
after hours on Wednesday to really kick things off on
the big names in the S and P five hundred and.
Speaker 2 (03:29):
So we're definitely gonna dive a little bit more into
the weeds on recession, whether we're in one, headed for
one or not. And then also whatever the outcome is,
recession or no recession, what sort of investment strategies do
we like and are providing and doing for our clients,
(03:52):
both retired and not retired. And then we always like
to talk somewhere in the show maybe a specific area
of investments or a specific investment that we like. So
a lot of good stuff to find Saturday morning, so
you'll want to stay tuned for the whole show again.
(04:12):
Called nine one six ninety six seven thirty five hundred
for more information or to arrange a no obligation consultation
which would include a retirement analysis and a portfolio review,
and we do that absolutely free of charge, and that's
super valuable important, especially times like these, especially when they
(04:37):
take us up on that. So just diving in. So
if you look at the data, now, let's let's talk
about what the inflation data is suggesting, the unemployment data
is suggesting. The yield curve is is it negative or normal?
And what that means? Our interest rates going up or
going down? Our energy price is going up or going down.
(05:00):
These are all barometers of future GDP. Is that positive
or negative? These are all the things that go into
Giuseppe and I making pretty bold statements as to whether
or not we believe we're in a recession, headed to
recession or not. And so why don't you tackle some
(05:22):
of those because these are also a lot of the
things that we tackled. Put my shoulder pads on first,
on where the economy is right now, and if we
come full circle and we analyze why these things are
important is because this is what impacts making money. This
is what impacts you know, your retirement, your investment assets,
(05:47):
your ability to you know, live the same style of
life that you're living right now for a twenty or
thirty year or more retirement and so diving right in.
You know, what is some of the things that came
out over the last week or two regarding you know,
(06:09):
some of these things, jo Seppi, like employment, interest rates,
the yield curve, earnings you already mentioned, but are they
are earnings good? Are earnings bad? You know, so on
and so forth.
Speaker 3 (06:20):
What do you see. That's a whole lot of questions here, John, But.
Speaker 2 (06:24):
We well, we have to pack in a whole lot
of information in less than an hour.
Speaker 4 (06:28):
Yeah, let me let me tackle GDP since that's hot
off the press and it's hitting the newsreels and the
word recession surfacing because Q one came in. It was
the first quarter with a GDP that was contracted, basically
coming in as a negative number since twenty twenty two
(06:51):
at point zero three percent. If you look under the
hood of the data that made up that number, it's
not as bad as you think. And this is not
what everybody is talking about. I mean, there are some
new sources out there that are bringing this up, but
(07:13):
a lot of it is kind of the front running
because of the teriffs and the imports, which is a
detractor of GDP. You take that out and you look
at some of the other important aspects of what makeup GDP.
Speaker 3 (07:24):
Consumer spending still grew.
Speaker 4 (07:27):
Wasn't a super strong number, but it is the positive number,
about one point eight percent. So that's great because consumer
spending is about seventy percent of what makes up GDP,
not as much government spending, which is a good thing
because we want more organic growth. And there was a
big amount that came from private sector investment.
Speaker 2 (07:48):
In the area in the.
Speaker 4 (07:50):
US, which is great. We want a lot of that.
We want a lot more of that. And so when
you combine all those numbers together and come up with
an average and taking the imports out in the front
running basically for the tariffs, then you come up to
about three percent. As far as where Q one came in, now,
I don't want to have it where every quarter data
(08:11):
and say you can take this out and take that on,
so on and so forth. But there are certain things
you got to look at depending on the situations and
the environment and the timing of things. And right now,
what's unique about the timing of Q one is that
is we knew tariffs were coming.
Speaker 3 (08:27):
We don't know how big they were going to be.
Speaker 4 (08:29):
As far as you know the different countries and how
much this administration was going to tack on, and I
think companies and corporations have the same feeling, so they
you know, load it up, and that I think is
kind of an outlier. Now we'll see if it carries
carries forward into Q two. You know, one quarter does
(08:50):
not make a trend. It could just be a standalone,
but if it's two quarters or three quarters, it ends
up being becoming a trend. And that's something that you
worry about. Technically, recession, you'd have to have two quarters
that contracted, which would make up a recession well, and
more than contracted, they'd actually have to be negative growth.
What is negative? It was negative point zero three. But
(09:12):
if you take out, if you take out the you look.
Speaker 2 (09:14):
Like huh huh, go on, go on.
Speaker 4 (09:18):
But if you take if you take out like I said,
the the basically the imports, which is a detractor in
the front running of tariffs, which contributed to that, and
you look at more of the private sector investment and
you add up those numbers that come up with the average.
Speaker 3 (09:33):
It's basically three percent for Q one.
Speaker 4 (09:35):
So positive looking under under the hood, breaking it apart
standalone we'll see what happens with Q two. I think
overall it's over it's an overreaction of what the media
has put out there and pointing to, oh, we're in
a recession or we're going towards recession.
Speaker 3 (09:54):
Too early to call that right now.
Speaker 2 (09:56):
So so many things go in to us making a
determination of what investments you should or should not be
in based on the data that is being provided, not
narrative but data. The facts and the facts are what's
important when deciding what people's money should be in, especially
(10:23):
once we know what their minimum return to objective is,
what your goals are, your quantifiable goals are in essence,
and once we know those and we've analyzed what's going
on and the data out there, then we determine what
sort of investment strategy and investment categories you should be in.
(10:44):
You're listening to John Scambray and Joseppie Viskani, and the
conversation we were having and started was whether or not
we're headed for a recession or are in one or
I and just to answer real quickly, don't belie leave
Not only do I not believe or in a recession,
I also don't believe a recession is going to happen,
(11:07):
and let me tell you why. So some of the
things that Giuseppe talked about definitionally you know GDP, if not.
Speaker 4 (11:17):
Should we can call like websters. It's like you can
add it to their dictionary or the source.
Speaker 2 (11:24):
Remember when Bush would say strategery, I don't think strategy though, No,
it was. It was Bush too, George w Anyway, so
you know GDP, yes, if you if you factor in imports,
which we don't want, GDP is slightly negative. However, if
(11:46):
we look at unemployment, there's never been a recession with
unemployment in the threes or the fours and gd excuse me,
unemployments at four point two percent. Also, there's not been
a well maybe there has been. I don't know for sure,
but as far as I know, there has not been
(12:07):
a recession when the yield curve is normalized. And what
I mean by that is typically we see this inverted
yield curve, which simply means that shorter term annual rates
are higher on investments than longer term rates. And right
(12:28):
now we are in a completely normal yield curve where
the longer you invest your money into, say fixed income,
the higher the annual rate, the shorter, the maturity of
the fixed income investment, the lower rate. That's a completely normal,
healthy yield curve.
Speaker 4 (12:48):
I just want to later on or add on to
this first on unemployment, because you mentioned four point two
threes and fours, so people might be asking, and we
had this conversation at the workshop as well as what
level does it become unhealthy? And if you look at
past recessions, we'll have to twenty twenty is an outlier
because that just spiked up like crazy over fourteen fifteen percent.
Speaker 3 (13:10):
And a heartbeat.
Speaker 4 (13:12):
But if you look at the previous recession in two
thousand and seven, two thousand and eight, in two thousand
and seven beginning two thousand and eight, actually January two
thousand and eight, and that's kind of where if you
if you look at a chart of unemployment and you
know beer Liberate statistics and you and you look at
the recessionary periods, it's a gray shated bar. The beginning
(13:33):
part of that gray shated bar of that recession January
two thousand and eight, and unemployed was that five percent
at that point, and so that's typically a.
Speaker 3 (13:41):
Worry some number. Is when you get into the five
percent range.
Speaker 4 (13:45):
As far as unemployment, we're like, uh oh, you know
what's going on here is do we have a problem?
And so right now we don't see that with four
point two percent unemployment rate the yield curve. Interestingly enough,
the typical is one it inverts. That's usually the cautionary
uh oh, are we going to recession now? It's not
(14:06):
a perfect timing method because it can be well, none
of these twelve sixteen, right, twelve sixteen, eighteen months, sometimes
twenty four months after then a recession happens. And typically
when it does normalize or it becomes positive, it goes
from negative to positive. Usually that's the point when a
recession happens. Now we're not in that range. And the
(14:27):
unique thing is, well, is it different this time? Right,
because that's going to be the other question, is is
it different this time?
Speaker 2 (14:32):
Well?
Speaker 4 (14:33):
One thing that's different is we've had crazy, unprecedented and
we haven't used that word in a long time, but
because it was out used in the.
Speaker 2 (14:40):
First couple of years of COVID, especially by all the
political Oh yeah, this is unprecedented.
Speaker 4 (14:47):
Everything was. I mean, we the whole world shut down.
That was unprecedent. We had massive amounts of stimulus. Unprecedent,
we had the new economic theory of MMT modern monetary
theory where you just continue print dollars and demand will
will will surface from it.
Speaker 3 (15:04):
So this is somewhat of an experiment almost.
Speaker 2 (15:06):
Yeah, right, Well, the real the concern for heading into
a recession from me is more about the dollar destruction
and the fact that we're still spending at pandemic levels
the government. And and again I hope Republicans do what
they said they're going to do. They were hired to
(15:28):
cut spending, you know, try to balance the budget and
cut taxes and pay for those tax cuts.
Speaker 3 (15:35):
And so far.
Speaker 2 (15:36):
You know, you always get these Republicans that talk a
big game and and and we lean conservative, but you
always get these Republicans that talk a big game and
then when they get in power, they do nothing. They
have the power of the purse, they completely control, you know,
the narrative, and that the data coming out is suggesting
(15:58):
that they're not doing but they said they were going
to do. They have budget reconciliation that they literally could
use even with a slim majority to pass the tax cuts,
like no tax on tips, you know, no tax on
social security, those are the two biggie. There was never
tax on tips or social Security. The fact that they
(16:18):
had the tax both to pay for all the ridiculous
spending and overspending in the government is why we had
those taxes. So all you need to do is go
back to you know, times pre pandemic, you know, pre
financial and real estate crash. I mean, nobody even says
(16:39):
you have to decrease the spending. You just have to
decrease the rate of growth on spending. Right, put a
line in the sand that says this is the maximum
that we are going to spend, and don't go over
it and get low and behold, stop racking up your
credit cards. The economy would just explode, you know. Positive
(17:00):
and so, but again looking back at some of the
other things that tip typically could cause a recession is
stubborn super high inflation. But stubborn super high inflation is
typically driven by high energy prices, high gas prices, high
oil prices, high utility prices. All of those things have
(17:23):
come down around the entire country, except for California, who
added more gas tax this year, which you know is
the reason why our gas hasn't come down. But it's
still not in the mid to high fives where it was.
Speaker 3 (17:37):
And we're possibly going to get a couple of refineries
offline too.
Speaker 2 (17:41):
So that is all just specific to California. The economy
as a whole is benefiting from lower oil prices, lower
natural gas prices because true to Trump's word he said
he was going to pump you know, production up, he
has and the price of oil has come down and
(18:01):
broke into the high fifties, currently hovering around the low sixties.
But the price of oil got down to fifty eight
dollars a barrel, and that is huge, and that's actually
getting rid of inflation, and that's actually had a positive impact.
And the more recent inflation numbers had come out a
few weeks back, because that was negative when all the
(18:23):
other components that make up CPI or inflation overall, headline
inflation was positive and so it came in lower than estimates,
whereas all the previous data towards the end of last
year in the beginning of this year were harder than estimates,
which was a pain point for the Federal Reserve because
they're backed up in a corner and thinking maybe they
have to raise interest rates. But with energy coming down
(18:46):
softer than inflation data than estimated and now you add
in you know, the negative number GDP number Q one.
Now it could put the Federal Reserve into position where
they could cut rates. Even though Jerome Palace saying we're
staying pat, well, he's staying pat because he's a political hack.
(19:06):
He and Janet Yellen are completely political. They say they're
a political they are not. Look at some of the
statements he said recently was just a political hack job
by him. And the simple fact of the matter is
that the that the Federal Reserve and their their inflation
(19:27):
indicators and they back out food and energy to support
their narrative that you know, higher inflation is a real
problem now and it's the Trump policies, which is basically
what Jerome pal said, that all the tariffs are going
to cause higher inflation when actually the data doesn't support
(19:48):
like you've been saying that there's higher inflation because inflation
is led by higher energy and oil prices and that's
just not the case. So but if you back out
food and energy, oh lo and behold, you know there's
things that have gone through the roof, like eggs, like
homeowner's insurance in California. So on and so forth. But again,
(20:10):
whether or not this stuff is leading to recession, which
would then be bad for your investments, It's that the
data isn't there supporting that we're in. I hate to
say it, it's actually supporting a soft landing, right, I mean,
if you're gonna use things I know, I know that
(20:31):
are absolutely not a real thing.
Speaker 3 (20:33):
Is it the sky blue shirt that you wear in today?
Speaker 2 (20:35):
This is a beautiful sky blue shirt. Check us out
on YouTube search for the Wise Money guys and you
can see my beautiful sky blue shirt. But the fact
of the matter is I don't believe we are headed
for a recession, and if we are, or have been
in one, the data certainly doesn't support that. And use
(20:55):
your eyes, that's what I mean. Have you been Have
you been in an empty costco or an empty airport
or And here's a real minor thing that is very
suggestive of how people are viewing the economy. You know,
the movie box office last weekend just had a fourth record,
(21:20):
not the all time record for box office in one weekend,
but the fourth all time record for one weekend according
to the news that I watched. And that isn't indicative
of people who are cutting back because one of the
first things you would cut back is spending twenty dollars
on a movie ticket and ten dollars on a thing
(21:41):
a popcorn. Yeah, so you know, use your eyes. We
use our eyes, we read, we use our eyes, we listen,
we analyze before we make decisions on what to buy
or invest in. And right now, the stock market vaulvolatility,
what it has been for consumers is the opportunity to
(22:06):
buy low and sell high. I mean I bought Microsoft
when it dipped here over the last couple of weeks,
and then I just sold out of Microsoft because you know,
it had a phenomenal earnings report and it went from
three sixty five when I bought it to four thirty
when I sold it, and that's just fantastic. So, you know,
(22:30):
by the dip has been is continuing to be what
we believe for our clients and what we believe, you know,
you should do because the sky is not falling. You know,
we've talked a lot about the indices and where they're at.
You're listening to the wise money guys, John Scambra and
Joseppi Visconti, and we were really getting into the weeds
(22:53):
on why there may or may not be a recession. Again,
I don't believe a recession is even coming. There's just
too much spending and too much you know, driving this
economy in a potential positive way.
Speaker 4 (23:10):
I think the important thing is a spending part, as
a spending part is not coming from government deficits spending
like it has been at It's coming from uh, you know,
private sectors in other countries putting an investing money in
the US, which is going to provide and help more
or a wealthier for us. Because you want organic growth,
you don't want just you know, you know fluff.
Speaker 3 (23:31):
Yeah.
Speaker 2 (23:31):
I love the fact that imports are way down. And
I love the fact that the investment in America is
a two trillion dollars new two trillion dollars of new
investments into the United States to drive manufacturing jobs and
consumption and services here in the United States. We're not
(23:56):
even talking about that yet. And what that means to
you know, future revenues, uh for for the government and
the ability to put some of these other tax cuts
and and and and balancing of the budget, the things
that will need to be done and put into place. Well,
that two trillion investment and Trump's policies are what gonna
(24:18):
are going to allow that to be possible, to cut
tax on tips, to cut tax on social security. It's
it's doing. He's accomplishing exactly what he said he was
going to do, and once the market realizes it, because
they continue to see positive earnings from our large companies,
(24:41):
We continue to see low unemployment, We continue continue to
see high consumer spending. We continue to see you know,
inflation coming down or staying now in the two's. You know,
if you look at c P I P c I,
p P I, you know, all those different INFLA reads
are now in the twos. You know, that's all healthy
(25:04):
for a robust stock market and for a robust return
on your investments.
Speaker 4 (25:11):
But I'll preface it, and this as optimistic as it sounds,
you know, doesn't mean that we're completely out of the
words and all uncertainty is thrown aside, and you should
go out there and just put all your you know,
if you had cash on the sidelines or what have you,
and put all of it to work and go into
one hundred percent stock portfolio because it is a very
(25:32):
selective environment and for a while for you know, twenty
three and twenty four we had good, good years in
good markets. It was very narrow, narrow, meaning that it
had narrow breath because it was really dependent upon those
magnificent seven or magnificent ten names.
Speaker 3 (25:46):
Out there leading the market.
Speaker 4 (25:49):
And so now you know that's what helped drive kind
of this this market down in the indices the way
they went down twenty to thirty, almost thirty percent of
the Nasdaq one hundred. So you have to be selective
of the investments out there, and you want to be
smart about the way you're going about it and diversifying
your assets so you're not going all in one asset
(26:10):
class or the other. And the ninety day delay that
Trump has put out there, he has to finesse this
and he's going at it. And the reason why we
have a lot of volatilities going out. He's going at
it hard and fast. He's not teasing the situation, dragging
it out. Interesting. I have a whole group chat. I'll
put it out there with some cousins and some friends.
(26:32):
And some of them are you're Italian and you have cousins.
Come on, I don't believe it. And we're talking about
but but you know, some of them are in the
financial industry just like us, And so we have this
commentary back and forth and really, you know, the worrysome
and some some are emotional like oh why is he
going at this hard?
Speaker 3 (26:50):
Or why is he going? And you know, I put
it out there.
Speaker 4 (26:54):
I said, well, look and Nvidia is putting a you know,
they're building facilities out here now exactly.
Speaker 2 (27:00):
Had never would have done that.
Speaker 4 (27:02):
Had it been kind of a trickle effect or drawn out,
I kind of do this at a slow process. Do
you think corporations would have acted upon and said likely
like somebody like in video or you know, Taiwan semi conductors.
Speaker 2 (27:16):
The auto industry, I mean, the auto industry is making
drastic changes. I mean we've got people think, oh it
takes it'll take years to No, We've got factories that
are sitting empty or factories that are running at you know,
a quarter or half capacity. I've researched this a lot.
And to get automobile back to its heyday of manufacturing,
(27:39):
We've already got the infrastructure for it.
Speaker 3 (27:42):
It's retool it. It's there.
Speaker 2 (27:44):
We just literally just i mean just emptied Detroit and
we can literally reinvigorate it right back to what's already
there infrastructure wise.
Speaker 4 (27:55):
Yeah, so I think I think all in all, I
think this transition process and the way it's going about
trying to do it hard and fast is because it
needs to be done hard and fast.
Speaker 2 (28:06):
We don't forget about the political reasons for needing to
do it hard and fast, because there's no guarantees that
the mid terms. You know that that you know, well,
that's the.
Speaker 3 (28:16):
Yeah, I get that.
Speaker 4 (28:17):
But aside from that, just focusing on the economy and
what needs to be done and transitioning and trying to
get the US back on the map, right is these
things need to be done. But I think my point
is is that the uncertainty is still out there, and
this ninety day delay is a very important ninety days
to make things happen and negotiations happen. Because on the
other side of that, right, if the ninety day delay
(28:39):
turns into we're going to revert back to the elevated
tariffs that we had because we didn't do enough deals,
that would cause more volatility in the.
Speaker 3 (28:46):
Market, for sure, without a doubt.
Speaker 4 (28:48):
And if it drags on, then those those things could
cause some certain things within the market and the economy
to break and then have a recession take place.
Speaker 3 (28:56):
That's just my thought.
Speaker 4 (28:57):
No, no, but I think right, I think enough deals that
can be had within the ninety day delay which are
enough to be satisfactory, and then say, okay, we're just
going to stay with a ten percent blanket tariffs that's
going to bode well, and then focus on the tax
cuts and all the deregulation and having growth for companies.
Speaker 2 (29:15):
Let me summarize what you just said, you know in
two words only, well, in one word alpha, and what
I mean by that is your advisor's alpha. And let
me define alpha as the experience, knowledge and capabilities that
your advisor bring to the table, because what you just
(29:36):
said is that selection of the type and category of
investments are more crucial now than they were in twenty
four or twenty three or twenty or nineteen or any
good Bowld market period. That your advisor and their skill set,
(29:57):
their knowledge and experience of what to do in the
type of environment that we're in is crucial. So if
you're going it alone or you're working with somebody who
has limited experience or doesn't have the track record and
results and understanding or capability, because we have capabilities that
(30:21):
many advisors don't have or are allowed to have. Quite frankly,
then give us a call at nine one six ninety
six seven thirty five hundred. We do free retirement analysis
at a portfolio review for anybody who takes the time
to sit down with us. We want to make that
hour or hour and a half you know, worthwhile to you.
(30:44):
Whether you decide to hire us or not, that doesn't matter.
We want to help as many people as we possibly can.
Hopefully you're in a position and have the means to
hire us, but if not, that's okay because the reality
is is that, based on everything we're talking about, we
don't want to see people blow themselves up. We also
(31:07):
don't want to see people run and hide from investments
because they're just so weary of losing money that they
don't know how to make money when the opportunities like
they are now are out there. And quite frankly, value
and dividend stocks are still a great trade. Fixed income
(31:29):
bonds and alternatives are still a great trade. And what
I said that we would talk about was strategy, and
that's what I'm talking about now. There's great stocks out
there that have both upside and pay you great cash
flow while you're in them, and that's a big piece
(31:50):
of what we believe you should be in. And if
you want some specific ideas, then you need to come
and see us. But then also the fixed income and
the alternative structures and strategies space has been phenomenal. If
you don't have fixed income or alternative strategies that produce
(32:11):
income inside of your portfolio, you are literally missing out
from anywhere from seven percent to over twelve percent annually
often paid broken down monthly in your portfolio from a
cash flow perspective, and a lot of those incomes, especially
if it's in the fives, is guaranteed by the bank
(32:35):
or the issuer. Now that's not guaranteed by the United
States government, and there's always risk a default with anything,
but a rated companies that are backing these investments are
paying anywhere from mid fives up into the twelve percent range.
You absolutely need to give us a call. If you
(32:56):
don't have cash flow from your investments pain you you
know of stock like market return, you need to call
us at nine one, six ninety six, seven thirty five
hundred and more importantly, you need to keep listening to
the wise money guys you know, we've been having a
very important conversation with you all this morning. But here's
(33:18):
what it boils down to. So one of the things
that I said and we've been talking about, is your
advisor's alpha. Now, the proof is always in the putting.
So one of the things we were showing people at
the workshop, okay, the portion of money that we have
of our clients that are in stocks, what is our
(33:39):
alpha and simply what is that portfolio doing for our
clients compared to the endsy Because that's really all alpha
is is how, how and at what level are you
outperforming a benchmark. And in this case, we were showing
clients how our core portfolio that I've got to give
(34:01):
all the credit in the world to Giuseppi. He's the
one who sets up the screens and the filters and
runs the rebalancing monthly, so on and so forth for
this core stock piece. Now keep in mind, when we say,
you know, core stock piece, everybody's percentage of what they
have in stocks is different. R You know, there's five
(34:21):
categories of investments, stocks, bonds, real estate, alternatives, and cash.
No matter what you have, they fall in one of
those categories. We're just going to talk a little bit
about just the stock piece and then what our core
portfolio of stocks is doing compared to the S and
(34:42):
P five hundred.
Speaker 4 (34:44):
Yeah, so basically just regurgitating what we discussed in our
workshop on Wednesday night, which actually turned out, you know,
pretty decent.
Speaker 3 (34:53):
Yeah. I always had and it's always.
Speaker 4 (34:56):
Great engaging with new people and getting some questions and
you know, I think that's kind of the fun part
of the.
Speaker 2 (35:02):
It is the caven enjoy the after Well, that's what
I'm saying. People, Okay, yeah, people are just we know
we did a good job. When people are coming up
and telling them about they're now right on the spot
telling us about their situation, right, we know that what
we said resounded with them and that we did a
good job.
Speaker 4 (35:20):
And so the portion that we talked about the core portfolio,
the core portfolio essentially what it is is a it's
a basket of thirty stocks.
Speaker 3 (35:28):
And so the thirty stocks.
Speaker 4 (35:30):
Is made up primarily a big portion twenty of the
names are going to be dividend paying stocks. So that
is that's going to be the requirement of the twenty stocks,
is that they have to be dividend payers. Then the
other ten stocks is going to be more growth oriented.
Sometimes they do pay dividends, but it's not a requirement
that those ten stocks pay a dividend. And so originally
(35:52):
I built this back in April, and well I built
it earlier, but tracked it live April first of last year.
And it was actually good timing because April of last
year was one of the market when we had a
pullback of the market. Last year didn't have very many
but that's when we had a little bit of a pullback.
Speaker 2 (36:08):
But also give yourself some credit because we've had one
of the wildest market you know, markets that stock markets
that I can remember, even you know, going back to
the pandemic, are beyond where the volatility level of stocks
on an average basis has been wild. We were just
showing people that and talking about that the S and
(36:31):
P at one point was down over twenty percent, you know,
this year from peak to trough, peak to trough and
a matter of down almost thirty percent.
Speaker 3 (36:40):
And a matter of trough and no matter, that's a
matter of the timeline of two months.
Speaker 2 (36:44):
So keep that in mind when Giuseppe's telling you about
our core stock holdings, that what this has done in
a twelve month period when stocks have fluctuated plus or
minus more than twenty percent. That's that's just huge. So
it can't stress enough how well, and from an alpha perspective,
(37:05):
the value that we provide as far as our investment
selection for just this one piece.
Speaker 3 (37:10):
And that's why it's important.
Speaker 4 (37:11):
And this just goes back to your point and what
we were talking about earlier is just selection is very
important in this current market environment right now. And also
being paid what you what you mentioned quite a bit
and you mentioned a lot in workshop, is being paid
for your time being invested in something, right, not just
buying Nvidia and then hoping it goes back to one
(37:33):
hundred and forty hundred and fifty bucks per share. You
know that'd be great, but you got to wait for
it to go up and then you got to cash
it out, especially if you need some cash flow needs.
So the basket of thirty stocks is reviewed the ten
growth right, and it's reviewed monthly, and there's a whole
process that that you know is done on a monthly basis.
Speaker 3 (37:55):
Won't dive into that, but.
Speaker 4 (37:58):
Sometimes stocks can kicked out, some some new ones get
kicked in, sometimes a month over a month, it stays
the same, so you know, they're just not a buy
and hold process whatsoever. It's it's actively managed. And from
the period of time when it was tracked live on
April first until just yesterday, the end of April, it
(38:19):
has grown eleven point six percent. All the while it
pays an average current yield as far as all the stocks,
a dividend yield of about three point four percent. Now
when you measure that against what the indices have done, right,
you can go into the spy. SPY is the CDTF
that's S and P five hundred tracking cap weighted and
(38:39):
during that same period of time that went up six
point two percent, Yeah, in a year a little thirteen months,
thirteen months, and then which is it? And then the
dividend yield of that is like one point just under
one point three.
Speaker 2 (38:52):
Percent, Yeah, which is you know, not great?
Speaker 4 (38:55):
No, well, because it's had, like you said, it's had
some recent big swings on the downside and is trying
to recover from that right now.
Speaker 3 (39:02):
RSP is another industry that we look at because that's the.
Speaker 4 (39:04):
Equal weight S and P five hundred ETF that and
that same period of time is up less than one
half of a percent.
Speaker 3 (39:13):
Yeah, with a dividend of like one point six percent.
Speaker 2 (39:16):
So again that suggests on how important your advisor is
because if you're just you know, picking the five hundred
stocks equally weighted, again, can your it's basically done a
year if your earnings are underperforming inflation and over a
long period of time, The answer is no.
Speaker 4 (39:37):
So now past past performance does an equal future results.
But you know, I think what it's shown through that
period of time and from specifically the period of time
that was tracked live, is it tracked it live just
before there was a pullback in the market in April
of last year and then wrote out the rest of
(39:58):
the year, which there was another pullback in August September
and then the recent turmoil and volatiley that we've all
been experiencing. And yet through all of that, it's had
a decent return. And that's through selection. Right in comparison
to the benchmarks as well, it's it's been it's had
a higher yield by you know, at least two almost
(40:18):
three times dividend payout than than the benchmarks as well.
Speaker 3 (40:23):
And that's what you were looking for.
Speaker 4 (40:24):
You're not really looking for, you know, it's not built
for Hey, I want to beat the S and P
five hundred. It just happened to do that during this
period of time. There may be some years that it doesn't.
Speaker 2 (40:32):
I mean, there was a lot of effort and it
is a lot of effort going forward into those results.
So again, don't don't downplay them because.
Speaker 3 (40:40):
Oh and I'm not.
Speaker 4 (40:41):
But that's that's the difference is, you know, it does
take work, right, It does take It does take the
capability to be able to do this, and not every
every advisor has the capability to want to do this.
Speaker 2 (40:54):
Say less than half or are half due and half don't.
Speaker 4 (40:59):
And some some have the capability to do it, but
then they don't want to put the time into doing
it right because it's because it does take time, for sure.
Speaker 3 (41:06):
Yeah.
Speaker 2 (41:07):
So at the end of the day, you know, to
just kind of summarize what we've been talking about today.
First and foremost, there are some some less than you know, uh,
less than likely scenarios where we could go into recession.
And if the data continues to be what it is
(41:28):
from an interest rate, uh, from a from a consumer,
consumer spending, unemployment, all these things, then that is why
we don't think there's going to be one and why
we also believe that that stocks and investments should end
up you know, doing pretty decent overall this year, especially
(41:49):
in the second half, especially if they do manage to
pass well they've already passed it now or they're in
the markup period of this tax bill. And so it
went to the Senate, it's come back to the House,
and now it's going to go from the House back
to the Senate and then to the President's desk and
that should get done by hopefully, you know, mid June,
(42:12):
and if that comes in or comes to fruition, yeah,
stocks are going to go through the roof.
Speaker 3 (42:19):
And then so we.
Speaker 2 (42:20):
Talked about you know, that there's five categories of investments
what those are, and that we really like the fixed
income space and the alternative space and that you should
definitely have those in your portfolio and that doesn't matter
if you're conservative or aggressive because those are low volatility,
I mean lower alternatives are yeah, alternatives not all, they're
(42:44):
not all egal but the ones that we use is
definitely yeah, And definitely the fixed income is a lower
you know, a roller coaster ride to stocks, although twenty
twenty two it wasn't, but still the point.
Speaker 4 (42:56):
Is how you invest in them, so so being in
funds for directly into bonds.
Speaker 2 (43:01):
So the point is is that what your advisor does,
what your advisor knows, what your advisor's experiences are, are
crucial to winning this year and beyond, especially as things
continue to get wild on a geopolitical you know stage.
So call us at nine one, six ninety six, seven
(43:25):
thirty five hundred and you've been listening to John Scambering
to Seppi Visconti the wise money guys. I hope you
enjoyed it, and uh, I hope you have a wonderful weekend.
Speaker 3 (43:36):
I'm great weekend. Talk to you next week.
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