Like The Days Before Y2K

Those were the days. And now they are coming back to us again; 1999. Hosts John and Guiseppe see a need for market diversification. Lets do that together. Plus, a 60 / 40 blend, Risk vs Return, and Golden Nuggets. The Wise Money Guys. 

Episode Transcript

(00:00):
The Wise Money Guys radio show isbrought to you by One Source of Wealth
Management SEC licensed three one nine zeroseven eight. For disclosures and more information,
visit our website One Source WM dotcom or call nine one six nine
six seven thirty five hundred. Welcometo The Wise Money Guys. I am

(00:22):
your co host John Scamberan. I'msitting here with my partner, just sipping
Wisconsin and we are certified portfolio managersout of Granite Bay, California, who
specialize in helping people who are retiredare about to retire manage their retirement investments.
If you like our show and wantto get together for a no obligation
consultation called nine one six ninety sixseven thirty five hundred. Again that numbers

(00:46):
nine one six ninety six seven thirtyfive hundred. All right, let's jump
right into the markets. Because alltime eyes, all time hizes. My
god, it's feeling eerily similar tonineteen ninety nine. As I was sitting
at my desk at at Dean Witter, h Morgan Stanley, Dean Witter.
It became at the time just beforey two K, just before y two

(01:07):
K, and that every day itwas you know, you know, the
Y two K preparedness. But butmore importantly, it was what Alan Greenspan,
the Federal Reserve Board chairman and thef o MC was doing at that
time with interest rates and trying tocurb uh inflation and an overheating, exuberant

(01:30):
stock market they called it. Butthe but GDP was was growing, you
know, at a at a prettyfast clip. Stocks were flying, stocks
were flying, uh labor, youknow, rates were increasing. You know,
unemployment was was very low. Imean, everything was overheating and and
and and and going pretty rapidly.And so compare and contrast that to right

(01:56):
now, very similar, except forthe types of companies that were overvalued then
were drastically different from a financial perspectivethan they are now. I mean,
yeah, you know, we've talkeda lot about the S and P five
hundred and it's you know, averageprice to earnings and its valuation right now.

(02:23):
But again, if I look back, it was drastically more exaggerated then
than it is now, because thesecompanies now have real earnings, they have
real revenue, real profit, realfree cash flow. You know, yeah,
just some of the core things necessaryfor an elevated or an increasing stock

(02:46):
price. Yeah, how much longercan it? The stand us off?
Yeah, you wonder at one.Look you look at the chart of the
price and it's like, you know, it looks like I used to go
to this greater my when I wasa kid. Yeah, in Santa Clair.
Yeah, the tidal wave, doyou remember that thing? Of course,
we shoots you off in like eightmiles an hour or something like that.

(03:10):
You go through that loop and yougo straight up that and then stick
and straight up that stick. Someof these stocks, some of these AI
stocks look exactly like the tidal waywas just a straight up exactly right.
And so you know, one ofthe things we'll spend some time on today
is you know which regret is theright regret? You know, the regret

(03:31):
that you got out of things tooearly and they went up a little bit
higher, or the regret that yougot out of things too late and they
went drastically lower. Now, we'vealways aired, and I believe that most
people on a fixed or passive income, most people who are retired in in

(03:53):
one way, shape or another,should have the regret that they got out
a little bit too soon, versethat they didn't get out soon enough.
And then watched you know, thevalue of their assets that generates their income,
you know, so on and soforth go drastically down. And I
think that's where we're at. Well, the other thing is is you get

(04:15):
to align yourself back to your originalrisk tolerance. Right. So maybe you
got into investing, you're like,well, my risk tolerance is moderate.
But then you see some of thesestocks, maybe you protect you know,
protecting some of them or indices,and they're just going up and up and
up, and you have like thisfomo, right, fear of missing out.
So you continue to add. Butnow your risk has changed from where

(04:36):
it was before when you started,and it's a good time to rebalance and
take emotion out of it because thingsmove and you know, ebbs and flows,
and like you said, you don'twant to have these healthy gains and
then all of a sudden, wehave a ten or twenty percent you know,

(04:58):
ten percent pullback or twenty per correctionor or worse, who knows.
I mean, there's there's still headwindsout there. It's not being talked a
lot about, but they're definitely outthere still. Yeah, And I would
say that that most people aren't preparedfor any sort of pullback here, right,
they've the greed emotion has has definitelytaken over for a lot of people.

(05:25):
And they think, you know,when you when you see an S
and P five hundred or a Nasdaquh, you know, continue to break
all time highs, that you knowthey have diversification. And the reality is
that buying the S and P fivehundred et F or fund or whatever the

(05:46):
whatever the investment is that you useto track the S and P five hundred
or the Nasdaq one hundred or oror the rustle or this, that and
the other, but more specifically tothe S and P five hundred and than
ASDAK, you only have you know, half a dozen companies that are responsible
for more than fifty percent of therun up in the indice's value. Yeah,

(06:11):
and so you know, as asquickly as those things went up is
as quickly and actually even more rapidlythat they could actually go down because they're
what's dependent on those names, andif those names don't perform, continue to
perform, or they falter or theyhave you know, a significant pullback,

(06:33):
then it's going to drag the restof that index down. We were talking
a little earlier on a chart thatwe're overlooking. There's an ETF that tracks
the Magnificent seven and year to datethat's up you know, thirty over or
yeah, over thirty five percent.S and P five hundred is up.
I think it's over fifteen percent orso. But then the equal weight S

(06:55):
and P five hundred, which meansit gives no deference to you know,
any of the five hundred companies.They all have the same impact on the
S and p's value. And whatwhat was that? That's up a little
over four percent year today. Andthen the Russell two thousand index, which
is you know, a whole listof small companies, which is really the

(07:18):
bread and butter of the American economy, that's slightly negative. It's like negative
point two percent. So massive differencebetween the Magnificent seven, which is you
know, a combination when you haveit in a fund over thirty five percent
year to date versus the small companies, which is really the bread and butter

(07:40):
of the of the American economy downright, is negative year today exactly.
And this is where key mistakes aremade and many many people we see it
day in day out. You know, here's some of the common mistakes being
made First, a lot of peoplewho have money think that by having money

(08:05):
at multiple firms that firm diversification youknow, will help you from a performance
or from a cost perspective. Itdoes not. In fact, it hurts
you. If you have, saya half a million dollars at one firm

(08:26):
and a half a million dollars atanother firm, you're missing out on the
breakpoint of a million dollars at onefirm from a cost perspective. Also,
you know, diversifying by firm doesn'tgive you true diversification. In fact,
you may be overlapping and taking ontoo much risk because chances are you might

(08:50):
have similar investments at firm A asyou do at firm B, and you
then have too much exposure you know, to stocks or particular stock in stocks
you know, or over exposure infunds that have the same top holdings because
at one firm, you know,you have some of the big name funds,

(09:15):
whether it's Fidelity or black Rock orVanguard, doesn't matter, and then
at another firm you have again Fidelity, black Rock, Vanguard, on and
on and on, and the topten holdings. Now they're different brand funds,
different names of the funds, butyet the top holdings are some of
the top you know positions in theS and P five hundred and your correlation

(09:39):
is perfect, meaning you don't wanta perfect correlation, you want a nate
correlation to truly have diversification. Andthat's what as professional money managers, as
certified portfolio managers, we focus onis finding investments that have a it'd be
nice if they had an negative correlation, but at least a low correlation to

(10:03):
each other, so that if themarkets, or I should say, win
the market, the stock market inthis case goes down, not all of
your money goes down. In fact, one of the positions that we really
like is an alternative investment that hasa very low correlation to the S ANDP

(10:24):
of five hundred and in fact,what did it do in the last few
two and more importantly, in adown twenty percent year where the S and
P was down twenty percent, thiswasn't down at all. Right, Yeah,
And that's that's important because that's whatyou're looking for. Right when we've
had a great year last year sofar, it's been a great year this

(10:48):
year, but we still have someheadwinds. We still have some some you
know, things out there that cancause a correction or pullback or potentially a
recession. This was down or thiswas actually up a half percent, and
twenty twenty two when the S andP five hundred was down over eighteen percent
and the bond index was down overthirteen percent. If you like our show

(11:09):
and our conversation that we're having withyou today and want to learn more about
how we could possibly help you callednine one six ninety six seven thirty five
hundred, again that numbers nine onesix ninety six, seven thirty five hundred.
There's absolutely no obligation whatsoever, andwe'd be happy to sit down with
you for an hour or whatever timeit takes to get to know each other

(11:31):
and see if there's a fit forwhat we do with what you need.
So called nine one six ninety sixseven thirty five hundred. So you know,
the fifty to fifty blend or thesixty forty stock bond blend that was
so popular, I think is goingto be even more crucial. With one
twist, this low correlation you know, or or alternative investment that you know

(12:01):
will be crucial for any sort ofpotential you know, correction or pullback,
and you know a lot of thesethings are there there. They're hedge funds,
their their private equity, their privatecredit. There's lots of different things
in them, but they really giveyou access to stuff that unless you're literally,

(12:22):
you know, a billionaire, youcould never have, you know,
as an investment in your portfolio.And so sometimes yeah, I mean,
especially alternative, you either have tobe a credited investor or a qualified purchaser,
and a credit investor is a littlebit easier to to make that mark,
but then a qualified purchasers you haveto have five million and liquid investment

(12:46):
assets. And because of our sizeand the access of services and investments that
we have through our partner UH inthis case Charge Schwab, we're able to
get people into investments, as joSeppi said, where you don't have to

(13:07):
have five million dollars or you don'thave to have you know, an income
of a declared income of over twohundred and fifty thousand, and so that's
the difference basically between the two.And so this is going to be a
crucial component, like I said,to the blended portfolio, where you take

(13:28):
advantage of great fixed income rates becauseyou know, a bond at five percent
or better is still traditionally a greatrate, you know, for sure,
you know, especially where we're at. You know, after two thousand and
eight, I mean, bonds werepaying two maybe three percent for five years,
you know, yeah, not forone year they were paying half of

(13:52):
one percent. Yeah, you know, So you basically just put the bonds
in your portfolios as a buffer becausein a general market, you know,
when stocks go up, bonds godown, and vice versa. And that
happened in two thousand and eight whenstocks went down, bond value bonds helped
to buffer that blow if you hadsome bonds in your portfolio. But in

(14:16):
twenty twenty two it didn't work.So I think a fifty to fifty or
sixty sixty forty portfolio is going tobe better served now than in twenty twenty
two because we are in a highinterest rate environment and at some point we're
going to be moving lower. Isit because the Feds are going to lower
the interest rates and create a softlanding? Is it because the recession ensues

(14:37):
because they waited too long and theybreak something in the financial system and they
have to they're forced to, youknow, lower interest rates to stimulate the
economy again. Who knows and whoknows exactly when that's going to happen.
But nevertheless, I think we're closeto the point that interest rates are going
to be moving down rather than continueto move up as we've been witnessing in
twenty twenty two. And so thosebonds and a portfolio are going to serve

(15:00):
its purpose and actually can have somepretty attractive growth returns themselves, you know,
when you're getting into them now beforethat event takes place. Yeah,
I mean, most of the timewhat we see as people come in after
procrastination, when something has already happened, when something has already you know,
broken, when the bond market hasalready you know changed, the price has

(15:26):
gone trust rates, the yields hasgone down, and they miss out on
opportunities to de risk and rebalance theirportfolio because right you're looking at your statement
right now, you're retired, it'sgonna let's fine, you know, and
and and you move on and andso often people don't pay attention until they

(15:50):
see, you know, the headline, whether it's on the regular news or
or or a financial news channel orwhatever, and they see that, you
know, oh, oh gosh,the market you know was shut down today
because you drop ten percent and whateverthe case may be, is everything wait
for that to happen, and thengo oh yeah, well, at that

(16:12):
point, all you did is giveup ten, twenty, you know,
maybe even thirty percent of the valueof your worth, at least in investments,
when you could have prevented it.It doesn't mean that by rebalancing,
by getting defensive, by hedging yourbet. We use a lot of different

(16:33):
strategies to still help make money,but as I say, it, reduce
risk or at least mitigate risk.Move you know where money is potentially moving
to, Which which you know isis the better regret in my opinion,
right again, two regrets being thatgosh, I wished I would have stayed

(16:59):
in longer because I'm out on afew points of extra return, or the
regret that man, I wished Iwould have got out sooner because I would
have had a lot more money.Yeah, you know, it's like it's
like I wish I would have listenedto my wife when I bought my house
in twenty sixteen and put a poolin then, versus trying to look to
put a pool in. Yeah.In fact, I told the little guy

(17:25):
that you know, you might bedoing a pool at some point here.
And speaking of pools, boy,I mean my wife I said to me,
never buy a house without a swimmingpool. I mean, were talking
about the costs of things going up. It's just insane. And we just
recently, we just recently looked atyou know, if we have one section
of a house, it's not old, mom, it's getting older now.

(17:48):
It's it's amazing how time flies.But it's twenty so it was built in
twenty sixteen, okay, and sonow we're approaching eight years old, right,
right, right, And so there'sone section the house carpet like,
all right, we got it's timeto place. We got to do something
to read a new carpet. Andin one section house we did some engineered
wood. And I could really likethat engineered wood. Maybe we do the
same thing. So I went tothe same exact place of where we got

(18:11):
the engineered wood. Oh yeah,it's not the same price per square foot.
It's gone up one hundred percent.Of course, it has learn from
it. And we literally but weliterally we literally did it. It wasn't
pre COVID. We did it liketwo years ago, right, but literally

(18:32):
it's in a year from now it'llbe one hundred percent more and and that
kind of just you know, I'mjust going to leave the concrete and I'll
paint it. I did that inour in our previous house, we we
did stay in concrete. It wascord. We just tore the floors up.
Well, there's a lot more intoit than that. Yes, we
where there was tile. That wasa lot of work, you know,

(18:53):
grinding and getting the uh you haveto get your your concrete back down to
it a perfect smooth surface where youfix the imperfections and the cracks and you
polish it out and they grind itall out. And I did all this
labor mostly myself, but then wehired somebody who was a concrete a stained

(19:14):
concrete specialist, because that's where theskill comes in. The easier part was,
you know, breaking out the tileor taking out the wood or the
tarpet, doing the demo, whichsaves a lot of money. Just put
some heavy metal, get some coffeeand just go nuts. But the way
they designed it and it had patternsand the gloss, it was amazing.

(19:37):
And then we put area rugs youknow over that, and by far and
away we got more compliments on thatthan any house we had ever remodeled.
Yeah. Yeah, and we gotthe highest price per square foot in our
neighborhood when we sold that house intwenty and seventeen. Maybe I'll do that.

(19:57):
What if I do that in myback sheet. By the way,
what if I do that in mybackyard and I'll paint a picture of a
pool. I just put a sprinklerin the middle. Now, you're listening
to the wise money guys, andthis is valuable stuff right here. But
the reality is is that everything isgoing to be drastically more expensive. And

(20:18):
the last thing that you can affordto do if you're retire is watch your
portfolio go down in value. Thehigh interest rate environment that we're in isn't
here for to stay. Now,well we go back to the zero interest
rate environment that we're in. No, and gosh, you do not want
that to happen, because the inflationthat we just saw would be nothing compared

(20:41):
to what would happen if they easedmonetary policy so much so that you know,
we triggered a whole new wave ofhyperinflation to a level that we've never
seen before. On top of that, at debt levels that we've never seen
before that would have to be paidfor. I think it would get down
to zero because there would be adeep enough recession causing down we would literally

(21:07):
making collapse or something so bad thatthat would warrant that. And we don't
think that's going to be the case. But when you're looking at the S
and P, you're looking at thevaluation of it. You're looking at that
it's not broad based, it's verynarrow and most people have, you know,
funds that are tied to the Sand P five hundred, or tied

(21:30):
to the top companies of the Sand P five hundred. You could easily
see a ten twenty percent, youknow, correction to the S and P
five hundred. Whatever the trigger iscould be a number of different things.
They're all potentially out there, bythe way. And then when you see
interest rates and policies to get interestrates lower, and then the prices of

(21:52):
bonds go through the roof, you'regoing to wish you had rebalance from stocks,
had bought bonds, had bought alternatives, And we're here to help you
do those and make those tough decisionsnow so that you don't make crucial mistakes
with your hard earned retirement dollars callednine six nine six seven thirty five hundred.

(22:17):
Absolutely no obligation whatsoever, and Ipromise you you will enjoy the time
that we spend together. We've neverhad anybody walk away going and I wish
I wouldn't have sat down and learnedwhat I learned and had that conversation with
John and Giuseppe. So call nineone six nine six seven thirty five hundred.

(22:38):
All right, we need to divemore into the types of things that
people could do to again continue tomitigate risk, continue to take advantage of
the investment opportunities that are out there. So this one that we really like
that we're putting in people's portfolios.Again, we mentioned how it did in

(23:00):
twenty twenty two. The nice thingis from an income perspective, it also
kicks off a monthly income. Correct, Yeah, seven seven percent right now.
The distribution yield is seven percent ayear, and it spits out that
income on a monthly basis, Yeah, which is nice. So's it's great
for consistency. It's great for theretired folks that want a stream of income

(23:23):
from the portfolios, all the whilehaving something that's you know, not correlated
with bonds and stocks and helps tofurther, you know, truly diversify their
portfolio for those volatile years like twentytwenty two. Yeah, and a lot
of people don't want to take income, but in essence they do anyway,

(23:47):
when they're over, you know,seventy one years old and they have a
lot of their assets in iras becausethey rolled over their four one ks or
whatever their profit sharing or whatever itis, put it into an IRA.
Now they've andtire a number of yearsand they are having to take required minimum
distributions. It's nice to have thatmonthly income, you know, offsetting the

(24:08):
draw down that that you're doing,because it starts off at about three point
sixty five percent for sure, youbill it and then it just increases year
over year over year. So timethink about it from that perspective. If
you're at the age where you're doingr M d S and you're just you
know, in your early seventies,I mean you're basically minus you know,

(24:33):
almost four percent on just what youhave to take out, right, and
so you know, now if you'regetting seven percent, even though you're taking
out your three point sixty five orfour percent whatever, that required minimum distribution
amount is you're still growing your IRA. Now you wouldn't have all your money
in that. But as an example, if we then built your weighted rate

(24:56):
of return in all different investments andyou're you're diversified amongst stocks, bonds,
alternatives, alternative strategies, you know, so on and so forth, and
we've got your weighted diving in andinterests up to six seven eight percent,
Well, you're already you know,exceeding your draw down requirement and you're ahead

(25:21):
of the game. And also you'rehedging you know, your performance by having
that divid in and interest come inso that you know, the market would
have to do much less than that, meaning be more negative than that before
you actually you know, dip intoprinciple. Yeah, if it drops seven

(25:41):
percent but your portfolio spinning out sevenpercent and dividends and interest, then you're
basically a wash, exactly right.And so many people don't, you know,
don't realize that there's two ways tomake money, and it's equally important.
They they're very comfortable in their knowledgeof like having a rental property,

(26:03):
right that the best part about arental property is having it rented and getting
the cash flow from the rental income, but you also want to have paid
a good price for the property andhave you know value, you know,
equity and growth potentially in the thethe ultimate you know price of that property

(26:27):
above what you paid plus that cashflow. Well, investing in stocks,
bonds, alternatives, you know isthe same thing. You know, Yes,
you could buy an investment that you'rethe only way you're going to make
money is for it to go upin value, or you can you know,

(26:48):
work with people like us that willfind investments that we believe and our
research shows that potentially could go upin value. But you also get a
day it in or interest while you'reinvested in that particular investment investment, and
so that's getting the rental income.That is a crucial part. So if

(27:12):
it turns out that your goal,so let's say you have half a million
bucks and you want, want,or have to draw down forty grand a
year off of that for whatever reason. Maybe that's your income needs to sustain
yourself in retirement. And it couldbe a combination of what you have to
take out and what you need becauseit's an ERA and your over required minimum

(27:36):
distribution age. But nevertheless, fortythousand on five hundred thousand is an eight
percent you know draw down rate,and so if you're getting five six seven,
you know percent and dividend an interest. I don't want to say it's
it's super easy, but it's easiertake a load off the portfolio. Takes
a load off the portfolio, youknow, to just find things that grow

(28:02):
in value another one or two percent. Now we're not using you know,
perfect mathematical formulas here, but we'rejust keeping it simple. And so that's
part of you know, when we'relooking at portfolios and we're looking at the
risk you know, retired our retiredclients are are are taking. You know,
the benefit of right now is youdon't have to take as much risk

(28:27):
to get and stay ahead of inflationthat you if whether you believe the numbers
are not unless you're buying a poolor putting wood in your outside, if
inflation needs a lot more, youknow now going to run at a rate
of three or four percent year overyear, because obviously we know that most

(28:48):
things went up one hundred percent ormore in price. But if we're run
rate is at three or four percentand you're having to you know, again
you have to if you have totake out that amount because you're you know,
it's it's from an IRA, youknow, to get five six percent
fixed we haven't seen that since sincereally what I think two thousand and six,

(29:15):
what was the last time. Soreally everything had to come from taking
a risk where dividends aren't guaranteed,the value of the stock that you're buying
isn't guaranteed, and how much moneyyou ultimately would make make to offset inflation,
to offset your income needs to offsetyour draw down, you know,

(29:36):
was much more difficult than it isright now. You can take less risk
than to get to a five orsix percent or seven or eight percent return
because so much of it will comefrom fixed income. Then it did,
you know just a few years ago. Well, and that's again and we've
talked about it multiple times. Butthe better way is only as you have

(30:00):
the means to do so, isby you know, investing in individual bonds.
People with money don't buy mutual funds, and nor should they. Sometimes
we do. We see it.Sometimes we see some sizeable accounts figures and
they've got vanilla mutual fund. Itblows my mind. I mean, we're
just looking at the mutual funds FidelityGrowth Fund, very popular fund has done

(30:23):
very well, has had good performancenumbers. I think it's up over eighteen
percent year to day, which isgreat. Yeah, because but when you
look inside, when you look underthe hood, and it says five hundred
and something holdings inside of it,right, so you think, wow,
that's a lot. That's that's diversified. Oh yeah, I'm diversified. There's
five the top five Nvidia, Microsoft, both class shares of the Google and

(30:47):
Apple make up forty six percent ofthe waiting of that fund. By the
way, in twenty twenty two,what were the worst stocks as far as
from the price they were at tothe price that they went down to in
twenty twenty two, tech they werejust the same names that are now.
The Nasdack itself was down, youknow, almost mid thirties. Yeah,

(31:12):
year, But if you dove intoyou know, the NVIDIAs, the Microsoft's,
the Apples, the Amazons and theyou know, the Netflix and you
know, on and on and on, many of those were down even way
worse than what the endicy was down. In fact, some of them were

(31:33):
down fifty sixty seventy percent. Andyet people forget, they have short memories
of what can happen to their portfolio. So you've seen your fund, you
have the Fidelity Growth Fund or whateverit is, and you've seen it go
up twenty percent, and you forgetthat it could also go down twenty or
thirty percent more very easily. Someof those darling names during you know,

(31:57):
twenty twenty in Covid, Zoom,Peloton, all these stay at home stocks,
I mean Amazon was one of them. Yeah, and some of those
went down seventy percent yep. Andso don't let that happen to you.
Called nine one six nine six seventhirty five hundred. There are still great

(32:19):
investments to rebalance into that can loweryour risk and still help you accomplish your
goals called nine one six nine sixseven thirty five hundred. Again, that
number is nine one six nine sixseven thirty five hundred. You know.
On top of alternative investments, Istill like the energy sector, even with

(32:43):
the NVIDIAs of the world or theAI you know push that we're seeing all
of those things take energy and thefact that these data centers gobble up power
the likes that we've never seen andI didn't understand. I've read some of
these articles that the these First ofall, there'll be multi story buildings and

(33:07):
all they'll be filled with is thesecomputer servers that are storing and uh the
information and processing the information that artificialintelligence is putting out to the tune of
you know, billions and trillions ofof of of data bits literally in seconds.

(33:29):
Now you couple this and it's usagearound the globe, right, the
need for these data centers, ontop of on top of the push for
everybody having an electric vehicle is goingto be the need for for everything oil,
natural gas, nuclear, you nameit, and dare I say it?
Because this is this is the effectof all this, you know phony

(33:52):
uh, and climate change policy iscoal. Coal is being fired up,
burning plants around the world. Arethe quickest cheapest source of getting power to
grids, and so when you makeother forms of energy unaffordable, you know,

(34:15):
then you see the need for cheapersources of energy you know, being
utilized, which does the exact oppositeof what you know, some of all
these climate policies are supposed to be. But anyway, where I was going
with that, without getting on asoapboxy, it just drives me crazy that,
you know, these politicians want peopleto believe that the world could be

(34:37):
powered on wind meals and butterflies.That is absolutely not the case. Energy.
Energy, energy, Jusseppi. Theworld needs energy, period. You
can't do anything without energy. Idon't care what it is. Think about
it. Even if you go tosleep at night with all of the obesity

(34:58):
and the seapath machines, right,you're plugged in. You need energy.
It doesn't matter what it is.If you don't have one, I don't
have one energy, no. Butbut what I'm getting at is everything needs
to be plugged in, and itdoesn't matter what your your consumption is that

(35:20):
you have or do. It's thebe all for our time, and AI
is only going to exacerbate it tobe, you know, more, the
world to be more dependent on fossilfuels and natural gas and nuclear than it
is already. Right, So wecan pretend that that, you know,

(35:43):
oh uh, we're gonna get it. Like I said, We're gonna get
our energy from wind meals and butterflies. But the reality is it's still going
to come from the traditional companies andsources that are out there. And it's
a great time because we've seen alittle bit of a pullback on some of
the oil companies, on some ofthe pipeline companies, on some of the

(36:07):
transportation companies to get back in oradd to your position. And one of
the ones that I just absolutely love. It's gone up one hundred percent and
more than one hundred percent since Istarted talking about it, you know,
a couple of years ago, backin nineteen forty eight and nineteen fifty teen.

(36:28):
But Frontline PLC it's now pulled backoff of its highs of twenty nine.
It was almost thirty dollars a share. You know, it was down
to twenty five and change last week. But why I like that price is
because it's projected dividend got back upto above ten percent. So buying it
here, it's dividend is projected tobe annually. You know, again,

(36:52):
dividends aren't guaranteed, but think ofthe source. It's a transportation company of
energy. On how long they've beenpaying dividends for years and years and years.
This has a long term track recordof paying out a very high percentage
of its projected dividends year and yearout. This is a great investment f

(37:15):
R. Again, dividends aren't guaranteed. Stocks aren't guaranteed. But when you're
looking at what sector I want tobe in to help myself achieve my income
or growth goals, I might aswell do it on something that could potentially
go if it went back to it'shigh, it would go up at least

(37:36):
ten percent from this price here ormore or more. And you know,
if you got into it in thetwenty fives, you're projected to make a
ten percent you know, dividend.Again, well you're to date it's up
still twenty three percent. I don'tgive the amen. I don't give these
examples to say bet the farm,but I think you're foolish on whatever portion

(37:58):
of stocks that you have that youtie one hundred percent of it to you
know, one sector i e.Being the semiconductor or the artificial intelligence sector
when there's still great less volatile,you know, more more needed investments.
Right, we don't even know ultimatelyhow companies and humanity is going to benefit

(38:23):
or get hurt by artificial intelligence.Right, artificial intelligence is definitely going to
hurt labor, you know, it'sdefinitely going to hurt employment. So so
again, even if that's why Ilike the energy sector so much, so
let's say robots replace manual labor.Those robots again will take more energy than

(38:46):
what humans consumed to operate the factory, to operate, you know, in
a restaurant, you know, oror to do construction or whatever the case
may be, to operate equipment,so on and so forth. So don't
discount the energy sector in your investmentportfolio. And if you don't have some

(39:10):
sort of exposure to you know,whether it's utility companies, oil companies,
natural gas companies, pipelines, shippingcompanies, whatever the case may be,
you're missing out. You know,one of the greatest sectors for investing and
that will continue to be one ofthe greatest sectors for investing your money going

(39:32):
forward. Called nine one six ninetysix seven thirty five hundred. To learn
more again that numbers nine one six, nine six seven thirty five hundred.
Let us show you how our customactively managed portfolios for you can help you
tackle whatever is going to be thrownat us here in the coming months and

(39:54):
the coming years. Called nine onesix, nine six seven thirty five hundred.
I'm talking about AI. I reada report and they were doing an
analysis of the potential you know,what what industries are going to be at
potential risk where they could be replacedby AI. And so they had this

(40:15):
like quadrant, the one that wasmost at risk, where the industries or
or positions that were most at riskare budget analysts, loan officers, accountants,
insurance sales agents, I mean insurancesales agents. They're just going away
here in California. So well becausejust from getting insurance companies aren't writing insurance

(40:37):
in California. I mean we talkedabout I think, well, so that's
not even due to AI, that'sjust due to you know, California and
its policies. And then paralegals aswell. But you know what'd be interesting
is loan officers, hair of leegalsgo away because a lot of what they
do is just research, right,Yeah, so if the AI can replace

(40:57):
that, just go research on thisand this, an article whatever and blah
blah blah, and law from whateverand yeah and then type of find me
precedent on such and such and bomit'll be there in seconds. Yeah,
oh my god, lawyers. Thenwhat do we'd even need lawyers for?
Right? You just have some computerin there talking about precedent. Yeah,

(41:21):
I don't know, I don't know, well, I think it's I think
they needed they need The idea isthat it does the research, but then
they put the different components and piecestogether to formulate like, Okay, here's
here's here's how we're going to solvethis case. Where these pieces or the
research that I found, it's justbecoming more efficient. I don't know if
it ends up being you know,coming to fruish or not. But one

(41:43):
thing that I was looking at isthe NBA mortgages and refinances. We're at
such a low point right now.Yeah, I mean even it even lower
than where we're at where we werewhen thousand, even more than that,
right and so, and there's beena lot of layoffs at these big banks.

(42:05):
So I wonder if the banks,these big banks will start to involve
AI. Well, some of theloan officers get paid quite a bit of
money. Well, if you thinkabout it, I mean, you know,
productivity is all about getting the sameperson to do the job of two
people or two people doing the jobof four people. And in order to
crease productivity, all you do isturn around and just go, hey,

(42:30):
by the way, you know,we need to cut expenses because the cost
of everything has gone up, andwe now want you to take over responsibility
for this, that and the other, and so terminator says, okay,
right, I'll do that. Soyou're going to get rid of a lot
of the processors and as you said, insurance agents and all these other professionals

(42:51):
because you know, quite frankly,companies, we just can't afford to keep
them around well, especially when,especially when interest rates are as high as
they are right they're squeezing margins,you know, in this current environment.
If there's a way to save oncosts, they're going to do it.
All of this boils down to onething and one thing only, and that

(43:12):
is I can't remember a time wherefolks like you and I are more needed
than right now, at least forthe next however many years, in order
to just figure out how to survivethe changes that are coming. It's catastrophic
if you make a bad decision onyou know, your investments, and what

(43:38):
that could do for you in retirement. It could be the difference of having
a great retirement where you have plentyof money, or running out of money
and then drastically needing to change yourlifestyle. Don't let that happen to you,
called nine one six nine six seventhirty five hundred for a no obligation
consultation. That's nine one six ninesix seven thirty five hundred. You were

(44:00):
listening to the wise money guys,John Scambray and to Seppie Visconti. Hope
you enjoyed the show. Have agreat weekend. By all, By all,