October 29, 2025 • 44 mins
FOMO and Panic can disrupt your mindset when planning your investment. How can you handle your fears with everything going on? Hosts John and Giuseppe help calm the anxiety. This week we examine the current events affecting your accounts, and show you how growth and income portfolios are beneficial. Then, Gold vs the dollar, fixed rates, and structured investments. The Wise Money Guys.
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Speaker 1 (00:00):
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):
Hello and welcome to the Wise Many Guys Radio Show.
I'm your co host, John Scambray and I'm here with
my partner extraordinaire jos Hope Shempy Josette Visconti, and we
always like to remind people that we are certified portfolio
managers and we absolutely love helping people who are retired
or about to retire manage their money as well as
(00:36):
primarily help them establish good financial plans and good goals
to help them have the confidence to do what they
need to do to keep them on track for the
rest of their lives. And as planning and investment experts,
we feel we are the premiere. We really are probably
(01:00):
the most up and coming, you know, firm in the
area and.
Speaker 3 (01:05):
So by by Gallop Poles or by Scambray polls.
Speaker 2 (01:09):
Yes, by Nielsen No, But reality is, you know, just
based on our growth, based on our results, based on
our client feedback, based on our seminar attendance, based on
just that sort of it's not really tangible, it's more
tangible data.
Speaker 3 (01:31):
I think the feedback is the best feedback we get
from the clients. And we just had a meeting yesterday
with a you know, prominent.
Speaker 2 (01:38):
Client, a client in the Bay, and.
Speaker 3 (01:41):
That's basically what he was saying, and how how much
different the relationship is with us compared to his previous
firm that he's been with, you know, the previous firm
for twenty years. Yeah, and in fact now he's referring
us his adult daughters to have us help them with
their planning and retirement and investment accounts. So that was
(02:04):
that was pretty cool. But if you like what we're
talking about and want more information on it, and as always,
if you want to have a second opinion, or you
haven't had a retirement analysis or haven't reviewed or updated
your actual retirement roadmap your financial plan, give us a
(02:26):
call at nine one six nine six seven thirty five hundred.
Also just a reminder that is it next week already?
Speaker 4 (02:34):
Yeah.
Speaker 2 (02:35):
Our workshop in Conquered for people who are about to
retire or are retired is on October fifteenth at the
old Spaghetti Factory in Conquered from six to seven thirty
pm also called nine one six ninety six seven thirty
five hundred to register for that, or you can register
for it by going to our website whysmoneyguys dot com.
Speaker 4 (02:59):
Why's money guy dot com.
Speaker 3 (03:01):
So two days after Columbus Day, it's it's now called
Columbus Stone.
Speaker 2 (03:06):
Markets are open on Columbus Day though, yeah, banks aren't,
right right, Yeah, so your regular retail banks are closed
on Columbus Day. But but markets are open. So markets
are open, We're open, and so thank god they're not
open on the weekends.
Speaker 4 (03:23):
Actually, remember remember they were talkingzation.
Speaker 3 (03:26):
Yeah, yeah, to have like twenty four to seven almost
like cryptocurrency where it's.
Speaker 2 (03:29):
Just always on, which would just seems seem ridiculous. But anyway,
good show to talk coming at you this morning. So
lots on here, I mean, especially from a current events,
you know, current economic information, some of the things that
have happened. You know, A pretty big deal this this
week was the Peace deal. So that's certainly progress and
(03:53):
hopefully getting some of this killing and and peace in
the Middle East. Yeah, peace in the Middle East. That's
how does that sound? That sounds really good? So who knows,
you know, do they go all the way through with it.
But it's a massive first step and that happening, and
it's one hundred percent because of President Trump, end of story,
(04:15):
you know, without him and the pressure, and.
Speaker 4 (04:18):
Because how long how long has it been going on now? Oh?
Speaker 2 (04:22):
On and off for probably one hundred years.
Speaker 4 (04:26):
I mean well, I mean just this most recent event,
what was it last year? Oh?
Speaker 2 (04:30):
Yeah, oh, you mean when they when they attack was
almost exactly a year ago where they just surprised, did
a surprise attack on Israel? Yeah, that was that was
exactly a year ago. So thank god that's coming potentially
to an end. And you know that any sort of
positive news on the geopolitical front. And the reason why
(04:50):
we talk uh politics and mentioned these things and analyze
these things is because they affect investments. In fact, they
I did, I got it correctly. They infect the stock
market and people's investment results. And so we're always mindful
of all the current events and news and things that
(05:11):
are going on to make sure that it doesn't require
some sort of change to our investment philosophy or specific
investments that we might have in your account. You really
have to have you know, your your your ear is
it your ear to the grindstone.
Speaker 4 (05:29):
That's the Yeah, that would be uncomfortable.
Speaker 2 (05:32):
Yeah, that would be the very But you have to
pay attention, is the point.
Speaker 4 (05:38):
And these and these things matter.
Speaker 3 (05:40):
But the other the other kind of political current events
that is we don't I just heard recently, and we'll
kind of see how it filters out as Trump working
with some Jijing ping and soybean purchase or for the
farmers black thereof, black thereof, and then some new new
(06:02):
parameters that's not the right word, but I forget. What
China did is kind of put some guidelines or restrictions,
restrictions on.
Speaker 4 (06:10):
Rare earth minerals.
Speaker 3 (06:12):
So we'll see how that pans out, because that can
impact farmers number one, commodities, but then also the rare
earth minerals with a lot of stuff that we use
for technology, which.
Speaker 2 (06:23):
Really affects the prices of a lot of the inputs
that the companies that need the raw materials, you know,
especially on the chip front or the tech front. And
then obviously commodities and real tangible goods and services are
in so many and affect so many mutual funds and
(06:44):
exchange traded funds. So you know, a deal and maybe
removing some of the barriers, hopefully with China, would be
a big positive for the commodities market for rare earth materials,
especially for the mining companies and the companies that then
need those to manufacture that they're good or service. All
(07:09):
super positive.
Speaker 3 (07:10):
Because we're in the we're we're like in the boom
phase of AI, data centers, creation ships, and software.
Speaker 2 (07:18):
I see in your notes here data center build out
up three hundred and twenty two percent four years. Yeah,
that is insane. And when we look at some of
those deals that that Trump has negotiated, you know, it's
in the trillions. Now, oh what Apple is going to
spand what Nvidia is going to spand what car manufacturers
are going to spend?
Speaker 4 (07:38):
Well, then it's on and on.
Speaker 3 (07:39):
Well, then it's deals amongst each other, amongst the tech
tech tech companies, you know, much as like open Aye
has been big recently striking deals with Nvidia, Oracle. The
spend back and forth, and just the companies themselves and
what they're dedicating towards the A I boom. Meta has
(08:02):
sixty five billion. You know, in regards to that x AI,
which is Elon Musk's he built the Colossus which is
one of the largest data centers. He's now have plans
to do Colossus too, which is going to be even
bigger than that, and he has in Vidia chips running
running those data centers. Amazon has thirty centers for their
(08:27):
anthropic Microsoft Google launching multi billion dollar facilities. So what's
going to be interesting is now they are, you know,
instead of having software and chips, they're now having to
like carve out funds for real estate.
Speaker 2 (08:45):
Really, you're absolutely right, because I mean, data centers need
massive amounts of property too, I mean massive buildings, right,
And so it's not like it's just something that's been
what we've been used to as far as technology, which
was really you know, space and cyberspace. I know it's
hard to fathom, but it was all about cloud computing
(09:06):
and storage and and you know transmission which take took
no physical real estate. So now you look at when
we look at investments in real estate, we specifically look to, okay,
what type of real estate are in these particular funds
that we like, and so here you have, you know,
(09:28):
a boom in a specific sector inside of the category
of real estate. And that's again important to have someone
who has the wherewithal or if you're managing things yourself,
to pay attention to what you're actually investing in and
and if you don't, it could bite you. So, for example,
if you love real estate, we were showing a new
(09:51):
perspective almost trust for that perspective client up in the
in the Reno market, the type of real estate into
this U Hire fund that we've been talking about a lot,
and how the three hundred and forty five holdings and
what they're primarily made up of, and more importantly where
they're primarily at. So it's crucial when you're working with
(10:16):
an advisory team like Giuseppe and I, or if you're
you know, buying things yourself, which I don't understand why
people do that. You know, when they can get the
type of people like ourselves in their corner, you know,
you really need to have your ear to the grindstone
(10:37):
on the news and the things that could affect the
sector or the category of investment you're in. But more
importantly then if you have you know, a sizeable amount
of money like these people were roughly talking about, you know,
seven figures sitting in cash and they want to buy
real estate, then you need to know Okay, if I
buy a fund or or.
Speaker 3 (10:58):
They're looking at opportunities but they're scared to buy stocks
now because it's ritually valued.
Speaker 2 (11:04):
Yeah, so it's important that you're explained what it is
you're buying and while you're why you are buying it
now or why we are buying it now, and so
we'll spend more time, you know, talking about just what's
going on in our country and around the world and
how it affects your investment. You're listening to the wise
(11:24):
money guys, John Scamberan. I'm here with my partner Giuseppe
Veascani and quick, quick, quick correction. We were mentioning a
real estate investment trust that we like, and it has
three hundred and forty five tenants, not three hundred and
forty five properties. The properties were fifty four properties that
are are rented ninety four percent by three hundred and
(11:47):
forty five tenants, but a one point one billion dollar
portfolio ninety four percent occupied and a six percent cash
flow rate. That's that's this particular property isn't you know,
open to ten thirty ones portfolio. However, if you want
(12:08):
to invest in real estate or like we like to do,
have a little bit of real estate in everybody's potentially
everybody's portfolios if it makes sense for their goals and objectives.
This has a six percent cash flow that is well
in the in the deck it says one hundred percent
tax free, but recent data says is six percent at
(12:32):
ninety four percent tax free with roughly a ten percent
equivalent taxable yield. So if you were getting ten percent
taxable and you're in a combined high tax bracket, then
that would be the six percent is the equivalent of
ten percent.
Speaker 3 (12:50):
Finding something that pays you ten percent and your high
tax bracket so after taxes, that's that's the equivalency.
Speaker 2 (12:57):
Which this came up as we're talking about the amount
of real estate that is required for these data centers,
and really, you know, when you look into your real estate,
the positions that you have in your portfolio, you know
what type of real estate to they actually own. That's
(13:18):
how maybe the sire.
Speaker 4 (13:20):
Maybe there isn't.
Speaker 3 (13:20):
I mean a lot of times we look at you know,
clients uh portfolios or people that we meet that are
just meeting us for the first first time and having
us review their their outside portfolios. A lot of times
it's just stocks and bonds and cash that's within their portfolio.
So these are some of the other things within other
areas of acid classes, you know, real estate or other
(13:43):
alternative investments as well that we like to put into
client portfolios just to further diversify them outside of just
the traditional stocks, bonds, and cash, because twenty twenty two
is really a testament of you know, the traditional allocation
just doesn't protect you.
Speaker 4 (13:59):
You know, yeah, like a sixty forty split stocks and bonds.
Speaker 3 (14:02):
Right, yeah, And that's worked for a long time, and
there's been some controversy of that.
Speaker 4 (14:07):
That portfolio is dad maybe.
Speaker 3 (14:10):
Now it's back now, but twenty twenty two you got
you got blown up.
Speaker 4 (14:14):
During that area.
Speaker 2 (14:15):
And what's amazing is a people think that the growth
and income portfolio, you know, when that's your mix and
the core you know, goal of all of the investments
that you have, that it's lower pain. But when we
look at our growth and income portfolios and what returns
they're at year to date, it's double digits. I mean
(14:37):
it's I mean, I get it. The stocks are obviously
a huge piece, but we're picking you know, stocks for
the most part that pay dividends.
Speaker 4 (14:45):
Yeah, we're picked well.
Speaker 3 (14:46):
And also since the rates have come down the ten
your treasuries come down, that's helped lifted the bond values
market value as well, and that's also helped to some
of the cap appreciation.
Speaker 2 (14:55):
It just to clarify that a little bit more, when
interest rates start coming down, the value of an individual
bond or maybe even a bond fund that you're holding
per share or per bond tends to go up. Every
once in a while that that, you know, relationship doesn't
exactly pan out, but for the most part, when interest
(15:18):
rates go down, if you're sitting on a coupon for
an individual bond that you hold and it's paying higher
than what you could get a similar bond for in
the secondary market, you're going to be able to sell
that bond for more, well hopefully more than you paid.
And certainly if you're working with guys like like us,
(15:41):
you know, we like to buy and put individual bonds
for the control and just the security of knowing what
it is and what it pays and what you're going
to get back and really reducing risk as much as
possible as long as rates are high, you know, as
long as we're still getting in the fives we're putting bonds,
(16:03):
individual bonds and people's accounts, and then you couple that
with mixing it with like this real estate holding we
were talking about that has such a great taxable equivalent
return on investment or cash flow, as well as the
dividends that stocks have been playing paying high single digits,
and then the alternatives which have been paying high single digits,
(16:26):
and then if you get price appreciation on top of that,
it's just been amazing since going back to twenty nineteen,
really even with the twenty two, even with the twenty twenty,
when you average out the last six years, I mean,
it's that's incredible for our.
Speaker 3 (16:43):
Percent average on a return or something like that. It's
not and that's not normal for sure. And you know,
in some of my notes as well, it's, you know,
markets are richly valued. You're hearing, you know, oh, we're
in a bubble? Are we in kind of a dot
com era again? And when you look at fundamental some
(17:05):
fundamental metrics, it's saying either yeah, yeah we are or
were getting close not quite there, but we are richly valued,
and do we need to get to I mean, everybody's
comparing it to dot com, But do we need to
get to dot com valuations. I mean, we weren't there
in two thousand and eight, we weren't there in twenty
twenty two, you know, so I'm not sure why there's this.
(17:29):
I mean, because of the AI and the technology.
Speaker 2 (17:32):
Historically we have to compare things to previous events.
Speaker 3 (17:35):
But outside of but outside of the dot com, you know,
there's other periods of time that has not reached dot
com valuations.
Speaker 4 (17:45):
Yet we hit a recession for and.
Speaker 3 (17:46):
Every recession is different, right, It's not going to be
a repeat, exact repeat, but nevertheless, there you know stocks
are expensive, not all stocks.
Speaker 4 (17:56):
But.
Speaker 3 (17:58):
You know, you couple the overall valuation of the stock
indices and then what are the contributing factors of bringing
those valuations up? And you know thirty percent of it
is driven by these technology companies, a handful of technology companies.
Speaker 4 (18:14):
How much more does it go?
Speaker 3 (18:15):
I just recently read an analyst report that raised Nvidia.
Speaker 4 (18:20):
I don't know if you heard this or not target price?
Let me lay it on me. Yeah, I guess what
the target price is now?
Speaker 2 (18:27):
Well, I mean more than two hundred three hundred, three.
Speaker 3 (18:31):
Hundred three hundred, and that they're gonna hit this can
be seven trillion as far as that's that's.
Speaker 2 (18:38):
Not even real. You can't nobody can comprehend a billion
as far as physical dollars, let alone a trillion. I mean,
these this word trillion now just thrown around around like
like ten years ago, a millillion or a billion billion.
I mean, it's it's unfathomable. But that's the reality we're in.
(19:02):
I mean, who knows. Well you mentioned Tesla earlier. Come on,
are we really valuing Tesla based.
Speaker 4 (19:11):
On cars what it's doing.
Speaker 2 (19:14):
I mean, if you throw in a true valuation, you
can't even do a true valuation, because what do you
value eight thousand satellites in space owned by SpaceX, owned
by Elon Muskat starlink, right, yeah, well the starlink. But
I'm just saying the just the network. Yeah, the network,
that's the eighth time. But the comes us, the space
(19:35):
X imagine could get the satellites there and to go
to stations. And now now we're on this Moon race again.
I don't know if you've been reading about that, you
know we're gonna you know, NASA and and Space Force,
but they're going to try to get to the Moon
and potentially start colonizing the moon. Now here's what's funny.
That sounds like science fiction.
Speaker 4 (19:56):
It's not.
Speaker 3 (19:57):
Well, I can tell you one of my favorite books
I was a kid. It was a Good Night Moon.
Speaker 2 (20:02):
Oh do you remember that book?
Speaker 4 (20:07):
But these things are real, and so, you.
Speaker 2 (20:11):
Know, knowing what to put into your portfolio is still crucial.
It's still in our opinions strategically.
Speaker 3 (20:20):
Even more so now because things are at lofty levels.
You have to you have to be choosy on what
you're going to put into your portfolio. Not all stocks
are equal, So what stocks are you going to be
putting in there? And then what other acid classes can
you take advantage of?
Speaker 2 (20:36):
And just like the information uh industrial revolution, and now
we're in this artificial intelligence industrial revolution, quality still matters.
And just because a company comes out and says, oh,
we're going into space travel or whatever it is, does
it mean that that company is going to make it.
In fact, thousands of companies that were priced at ridiculous
(21:01):
multiples initially looked like the next greatest thing since you
name it slice bread all went out of business from
the late nineties and early two thousands that were just
an internet company of some fashion and now they're gone.
So at these valuations, even if it's AI, you know,
(21:22):
quality still matters the type of company and what it
is making or doing, and what sort of you know,
underlying fundamentals they have as far as revenue, growth, profitability,
cash flow, access to capital, the type of management you know,
(21:46):
in their experience, do they have the right leader leadership
to get them to be the next Nvidia or whatever
it is, And so many don't. And so don't get
suckered into just putting something in your portfolio because you
got something on the internet, for example, or in your
email that says, oh news, we picked you know, we
(22:08):
picked Google twelve years ago and and it's up five
thousand now all of a sudden, we know which the
next which which is the next.
Speaker 4 (22:17):
Company to pick the next Google?
Speaker 2 (22:19):
Right, since our clients are mostly retired or write about
retiring and then needing to you know, know, what to
do with those dollars that they may be rolling over
from from their employer, or they may be you know,
cautious on on what to put it in because you know,
(22:40):
fear of of running out of money, so on and
so forth. It it couldn't be more important than it
is right now, to not just guess at it, don't
go at it or something. Internet man, if you if
if something sounds too good to be true, it probably
is too good to be true. So anyway, we'll talk
(23:01):
more about specific investments and things. You're listening to John
Scambray and I'm here with my partner Geosette Visconti, and
I had mentioned gold so many times, you know, in
the past, you know, six, eight, nine months, or even
the hills and quite frankly, you know, when it was
(23:22):
in the the low twos even had broken down and
went down below two thousand and ounce, I said it
was going to three. And then recently I've been telling
people over the last six nine months it's going to five.
And here it touched almost well it did when it
went four grand. And so you know, the reason being
(23:47):
is because I recognize and I didn't make this happen,
but I saw what was happening when the whole thing
with the other you know, big big countries, say call
them G seven countries and others, when we literally seized,
if you will, uh, the Russian dollars.
Speaker 4 (24:10):
There's been a lot of buying too. There's the countries scooping.
Speaker 2 (24:13):
Up well that that's one of the big reasons because
a lot of these companies have made a pact to
not put dollars, to not buy dollars countries for their reserves,
so they're buying gold instead. And because now there's a
massive gold tonnage race, you know, to back your your
(24:34):
country's currency with gold again versus with dollars. That's really
what's running up the price of gold because now and
the US is doing it too. The US is trying
to stay on top of the race to have the
most gold, you know. Uh. And and in fact Trump
talked about wanting to go see the gold to see
(24:55):
if I don't know if he did, but because we
have something like.
Speaker 4 (25:00):
Like Doesney have gold in his own personal play? Oh?
Speaker 2 (25:05):
Well, he gold plated gold in lays everything. You know,
his whole mansions are all gold. He loves gold.
Speaker 3 (25:11):
He wants to see his Fort Knox have more gold
in my house and play.
Speaker 4 (25:15):
A truck I bought.
Speaker 2 (25:16):
The pin striping is literally gold, the twenty four carrot gold.
But where was it the gold tonage? So you know,
last that I read, the US was at about nine
hundred thousand tons tons of gold, which is still not
a good ratio to the debt you know when we
(25:39):
were on the gold standard.
Speaker 3 (25:41):
Yes, never, it can never go back to the gold standard.
Speaker 4 (25:44):
Well can you imagine it?
Speaker 2 (25:46):
Actually, that would make your that would make our currencies
and everything be far more valuable than they are today
if we did valuable compared to what compared compared to
just the paper made up value that the central bank
works so hard to manipulate.
Speaker 3 (26:05):
Yeah, but I mean what I mean the other large countries,
like you said at G seven, are they they would
do it too. That's what I'm saying, is nobody's back,
so like why would one country start?
Speaker 2 (26:15):
Well, they all are, they all are started. That's what
this that's why gold is going up. It's because it's
the race to back more of the with gold.
Speaker 3 (26:24):
Would they have to change the verbiage on the dollar
and God, we trust. We're just saying gold we trust.
Speaker 2 (26:30):
Well, it was always in gold we trust up until
you know, literally modern times. I mean, this didn't happen
you know, a thousand years ago. No, this just happened
in the last you know, fifty years or so where
we and I don't know how they got it done,
but in order to borrow more money, they got off
(26:50):
of the gold you know standard, and listen, that's if
we go back to what the price of things were,
we can tie it all too. When we got off
of the gold standard, and it's not been good since
it just keeps getting worse and worse and worse because
you can print and borrow money freely without having the
(27:12):
asset to collateralize. Done a good job, and and so again.
The movement of countries not putting their faith in dollars
is the reason why goal and they don't trust other
they don't trust their own dollar or other countries dollars.
The US is still the main numero that is still
(27:34):
numero uno around the world, but it's just not as
much as it used to be because of things like okay, hey,
if you do something to cross us, well, if we're
going to see seese your dollar reserves.
Speaker 3 (27:46):
I think I think the I think. The other thing
to look at too is how are you running? Like
if we look at the US as a business, how
are you running your business?
Speaker 4 (27:56):
Right?
Speaker 3 (27:56):
Do you take dollars from a company, let's say a
company US to invest with us, right and they say, hey,
we're going to give you x amount, or like open AI,
we talked about this before, right, one of the things
that came up is open AI. I think was going
to give was it, three hundred billion to Oracle over
the course of five years, But they're but they're like
most recent forecasted revenue is going to be like thirteen billion. Yeah,
(28:17):
so how do you how do you write unless you
do some stock exchange or something like that.
Speaker 4 (28:22):
But but we'll just the revenue.
Speaker 3 (28:24):
So I think the the strength of our currency right now,
since it isn't backed by gold anymore or the gold standard,
is how are you running your what's your debt look
like versus your assets? Your revenue? Our revenue is GDP, right,
so what is your revenue? And then what does what
does what does the debt servicing look like? And right
now it's what one hundred billion dollars a month for
(28:45):
debt servicing based off of the thirty seven trillion dollars
in the debt that we have, where the interest rates
of where we're at.
Speaker 2 (28:51):
Then the then what the military cost us, then what
soul success?
Speaker 3 (28:55):
So I think that's that's a bigger threat right to
the sustainability or the strength of our currency, the strength
of our treasury, our us treasures because you know, all
other countries when they go flight flight to safety when
things are uncertain a lot of times, a lot of
other countries, they don't even invest in their own they'll
invest in US treasuries. So, but if we're continue running
(29:19):
these massive deficits, right and we have this massive debt
to service.
Speaker 4 (29:23):
With these higher interest rates, it didn't it didn't look
too good. Well, and then this is why we have
the credit down ratings right for the downratted a couple
of times from Moody's.
Speaker 3 (29:33):
Right and Fitch, because you're saying, well, you're you're a
little out of whack. Now you know, we're still you know,
highly rated when you're looking at the credit I mean,
but no longer, which.
Speaker 2 (29:44):
Debt is still a healthy because of our GDP our output.
If you look at our output, compare it to the
amount of debt we have, and then you go back
fifty years, we're actually better off than we were fifty
years ago as far as the amount of debt to GDP.
So it's it's it's not controllable, but it's it's not
(30:09):
unsustainable right now. But but again, you hit a recession
and all of a sudden, now the money coming into
the coffers gets even less and then you actually fire
up those printing presses even more, then you're real.
Speaker 3 (30:25):
And then interest rates will come down to So that
would be the relief to the you know.
Speaker 4 (30:30):
Debt servicing. But fun fat we were talking a little
bit of fact, not a fun.
Speaker 3 (30:36):
Fact with statistics, because we got on the subject of gold, right,
and that's a hot topic.
Speaker 4 (30:41):
And you know one of those in the radio. Uh
you know, you hear these commercials like by gold and
I can't trust it. You can't trust a dollar and
you have to have it in your investments and so on.
Speaker 2 (30:50):
And before you go to that real quick strategically, you know,
this conversation we're having, we're not recommending you go out
and put everything in gold. You know, as always use
a rule of thumb. I mean, should five percent of
your portfolio be tied to something gold mining, which I
would say is a better way to invest in gold
(31:14):
because gold is not really liquid. Once you own physical gold,
it's pretty hard and very costly to buy or sell it,
and it doesn't pay cash flow. So is it good
to have a defensive position of gold in your portfolio?
We think so, But to put and go, oh my god,
I'm putting everything in gold. You know, no, we don't.
(31:37):
We don't recommend that, but go ahead. You were talking.
Speaker 3 (31:39):
About so just in comparison to and I pulled up
and used some AI since we talked about AI earlier
s and P five hundred versus gold. Right, So compounded
annual growth rate of return, which basically just means, you know,
to get the annual annual rate of return, and you
compounded over time, so you just continue to reinvest, reinvestmorinvest.
(32:03):
And then then the standard deviation, which the standard deviation
is just a measurement of risk. The higher the standard
deviation number just means more wild roller coaster ride, right,
which in the past thirty years there's been some roller
coaster rides, some P five hundred stocking time, right, but
there also has been with gold. Yeah, right, but you
only hear about gold is really a hedge against uncertainty,
(32:24):
really apps, right, like, oh, when things are getting shaky,
you need to buy gold. So I think it has
kind of a the way it's advertises almost like it's
a safety it's a safe asset class to put your
money in. Right, So compounding you on annual growth rate, right,
for S and P five hundred over the past thirty.
Speaker 4 (32:44):
Years, what would you say we talked, you know, on
average per year.
Speaker 2 (32:48):
Yeah, okay, so if we just go thirty years, Well,
if you look at thirty years and say we went
from a thousand to six thousand, I mean that's uh,
that's more than two doublings and over thirty years. So
I'm guessing it's still right around you know, nine ten
percent per year, nine.
Speaker 4 (33:07):
Point six percent.
Speaker 2 (33:09):
And that gold was probably in the in the five
ago yeah, five hundred dollars and it's gone to four thousand,
So it's got Now, this is just what I believe,
So it's got to be less than the S and
P five hundred would be my guess.
Speaker 4 (33:25):
Yeah, that's a good guess. Six point eight nine percent. Genius,
A genius. What about volatility, oh, stock market.
Speaker 2 (33:33):
I've seen them both go all over the place. I
would think the standard deviation of gold might this I'm
just going you know, against what I would think was
probably higher than the standard deviation of the S and
P five editor.
Speaker 3 (33:47):
Yeah, seventeen point four to six standard deviation for S
and P five hundred for gold eighteen point five six.
Speaker 2 (33:54):
Holy moly, now I don't know if you understand what
we're talking about, but standard deviation is just a measure
of how wild the price can change, you know, over time.
And so basically what that's saying is the swings in
price of gold per ounce has been greater over the
(34:15):
last thirty years than the swings in price of the
stock market. Yet people are fearful of the stock market.
And again often it's because they make mistakes managing their
own money. Right when things are great, like they are now,
they buy in at high valuations, high prices because they
want to get on the on the train. And yet
(34:37):
then if if things do sell off for whatever reason,
some news comes out economically or something happens geopolitically and
stuff starts to go treasure, then they get out at
a lower price than they paid, and then they lose money.
And then they go, oh, stock market's too risky, and
(34:57):
so we do the thing with gold. You could do
that very same thing with gold. Be prudent, Like I
said earlier, don't go run out and buy gold because
gold does run up and countries are gobbling up as
much gold as they can. Or do you feel like
you're missing out or you feel like you're missing out.
You know, that's just an emotional, unnecessary, incorrect way to
(35:21):
manage your money. But it could be a piece to
your education.
Speaker 3 (35:25):
I think how much should it be a piece just
really depends on your overall plan, your risk tolerance, you
know what you need it for. And if you don't
know and you want to ask us, you know, give
us a call nine one six nine six seven thirty
five hundred and we can help you out with that.
Speaker 2 (35:41):
Okay, And just to recap on, yes, we like gold.
We think it should be a piece of people's portfolios.
Remember there is really five overarching categories to all investments
that stocks, bonds, real estate, alternative structures and strategies and
investments that are a big capture of anything that's not stocks,
(36:04):
bonds or real estate, and then cash and cash equivalents.
And so when we build portfolios, you know, at any
time there's always a good time to either invest in something,
add to something, or get out of something and not
worry that, oh I'm going to miss out on you know,
(36:25):
opportunity because I didn't get into Nvidia you know a
year ago, five years ago, so on and so forth.
So just don't don't get overly worried that you see
something like we were talking about UH go so high
that there's not going to be an opportunity for similar
UH returns and and and long term, you know, growth
(36:49):
of your money and your income. There always is, and
so it's and it's hard to it's it's hard to
time it to you.
Speaker 3 (36:56):
I mean, nobody can exactly time I go, I'm gonna
get in this investment or get out of that investment
or so on and so forth, even you know, and
I just say that because we've talked you know, this
episode and then previous episodes of how.
Speaker 4 (37:11):
Things are richly valued right when you look at fundamentals
and you'll hear it on financial news networks or YouTube
and you'll have you'll hear the.
Speaker 3 (37:19):
Other side too, like oh, we're we're not as high
as what we were in dot com.
Speaker 4 (37:23):
And people are going to be.
Speaker 3 (37:25):
Comparing dot com only because we're dealing with technology, this
new technology boom, So you know, is it going to
end up resulting like the dot com? Who knows? We
don't know yet. Everybody's raising prices, not only to individual
stocks and companies, but you're seeing reassessments of S and
P five hundred year end targets and.
Speaker 4 (37:46):
What the S and P five hundred will be next year.
Speaker 3 (37:49):
You know, I've seen seven thousand for this year and
then you know seventy seven hundred. Some say by like
twenty twenty eight or twenty twenty nine, the SMP can
be like ten thousand. Who knows, right, I mean, things
can change on a dime. Things move so fast. You
want to be choosy with the investments, right, You want
to be selfish, you know, just want to put something
(38:12):
in in a fund or an ETF, especially because it
can put you in things that are already like overvalued.
But it's hard to time, you know, are we in
the bubble? Is a bubble forming? And if so, it
doesn't mean you get everything you get out of everything,
because it can continue to run up for weeks, months,
another another year. I mean Alan Greenspan was saying, was
(38:35):
talking in terms of how things were exuberant and things
were lofty, and that was in nineteen ninety six. Well,
it continued to run up for another few years before
it actually hit the top, and then two thousand and
it came crashing down. Is it going to be the
same this time? Is there going to be another three
years of this, who knows. But you want to be
smart with your investments, so you don't want to get
(38:56):
overly greedy with oh you know, I want to miss
I don't want to miss out on a chase performance
because it could be that, you know, all of a sudden,
we're going to have a downturn and it could be
next year.
Speaker 4 (39:06):
Who knows.
Speaker 2 (39:06):
Yeah, reshow to client in their review a seven percent
cash flow that had no stocks, no individual stocks. And
that's part of the gift of high interest rates. I
like to say high interest rates when you're retired, have
no debt, and you're relying on some of your assets
(39:31):
to you know, either create your legacy or supplement your
income or or buy you know, your your your next
big purchase like a vacation home or something. High interest
rates are a gift because you can get returns, you know,
five six, seven percent on your money without having to
(39:53):
risk and play the growth game, where Okay, I buy
a stock, I hope it goes up by at least
the average of the stock market over the last thirty years,
like we were talking to ten and then I have
to sell it and time it to realize that growth
rate on my money. Well, right now you can get
high interest rates that they're coming in no matter what.
(40:17):
You know, you lock in some of these bonds and
some of these other structures that we have, and you're
getting six seven eight nine percent. In fact, this structured
investment that we just did this week and we're doing
next week is what was it nine point seven? So
these things change all.
Speaker 3 (40:37):
The time, which is a little higher than the thirty
year average of the.
Speaker 2 (40:42):
Yeah, without having to just know when from a timing perspective,
is the right time to buy a stock in order
to make a ten percent turn. If you're getting again
five six seven eight percent in distribution, in yield, in
cash flow, then getting to growth like numbers of what
(41:05):
the stock market's averaged or what gold is averaged, you
have a much greater probability of cheap achieving an eight
nine ten percent you know, long term average annual return
if you've got five to eight percent of it coming
in yield.
Speaker 4 (41:21):
Yeah, because then you're doing it with lower standard deviation. Right, Well,
thank you very much. Yeah, lower voltail.
Speaker 3 (41:31):
It's just basically taking it's it's banged for you buck, right,
risk versus reward? Why would you want to take more
risk if you're not going to have as much reward
or you don't know if you're going to have you don't.
Speaker 2 (41:45):
Need it, take more risk. We see this all the time.
And we've had how many clients come in this year
that are doing great by the way they're hitting there's
no time.
Speaker 3 (41:52):
But there's been a handful of where they see the like, oh, hey,
I don't I want to And the seven.
Speaker 2 (41:56):
Sisters brothers mother's cousin told me about.
Speaker 3 (41:59):
Your seven even as the client that is getting seven
percent in cash flow, he even went down the route like, hey,
what if we find some things in stocks to get
a bigger returns?
Speaker 4 (42:08):
Well, what is it that you need? Right?
Speaker 3 (42:10):
And he's like, well, ideally I want eight percent a year. Okay,
So seven of it is coming from cash flow. So
all you're asking is your assets to appreciate one more
percent a year. That's not allowed to ask, right, And
that's not much burden on the portfolio. Very reasonable. Why
would you want to put other assets in there that
are more risky? Are you're going to up the overall
risk of your portfolio? And you know we've been spoiled
(42:33):
really yeah the market this year, I mean other than
April when we had the whole Yeah, the Liberation Day.
Liberation Day correction is really what it was after that.
Speaker 2 (42:45):
It's just really the tariff correction is so yeah, but
go on.
Speaker 3 (42:51):
So we haven't had a three percent pullback for things
like one hundred and one hundred and fifteen or one
hundred and twenty days, which is not normal whatsoever at all,
not normal whatsoever. So we've been very, very spoiled, and
I think people lose track of that. They start having
short memories, very short memories, and they forget things.
Speaker 4 (43:11):
I'm like, oh, they forget.
Speaker 2 (43:12):
They forgot twenty twenty two, like it's so so long
ago where And they even forgot, like you said, April
May this year when in Vidia, for example, was down
fifty percent off of it's high at that time, fifty
percent and yet you know, oh my god, how do
I get in Vidia or this, that or the other.
I mean so, but that's why it's so important to
(43:35):
give us a call for your no obligation financial planning conversation.
You'll be glad you did, and I promise it'll be
a great use of your time. Called nine one six
ninety six, seven thirty five hundred. Also, if you're retired
and you've been, you know, looking at your portfolio, you've
been looking at your plan if you have one, and
(43:57):
you know, because the cost of everything is gone up,
maybe you just you know, you did your taxes, were
about to start thinking about taxes for next year, and
you're worried your net after tax income isn't where it
used to be. We can help you solve for those things,
you know, don't you know, let this this opportunity of
(44:19):
high interest rates pass you by again. Called nine one
six ninety six seven thirty five hundred and register for
our workshop on October fifteenth from six to seven thirty
pm in Conquered. All right, well that's all we have
this fine Saturday morning. Hope you enjoyed the show. Come
back and give us a listen next weekend.
Speaker 4 (44:38):
By all, have a good holiday weekend.
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):
Hello and welcome to the Wise Many Guys Radio Show.
I'm your co host, John Scambray and I'm here with
my partner extraordinaire jos Hope Shempy Josette Visconti, and we
always like to remind people that we are certified portfolio
managers and we absolutely love helping people who are retired
or about to retire manage their money as well as
(00:36):
primarily help them establish good financial plans and good goals
to help them have the confidence to do what they
need to do to keep them on track for the
rest of their lives. And as planning and investment experts,
we feel we are the premiere. We really are probably
(01:00):
the most up and coming, you know, firm in the
area and.
Speaker 3 (01:05):
So by by Gallop Poles or by Scambray polls.
Speaker 2 (01:09):
Yes, by Nielsen No, But reality is, you know, just
based on our growth, based on our results, based on
our client feedback, based on our seminar attendance, based on
just that sort of it's not really tangible, it's more
tangible data.
Speaker 3 (01:31):
I think the feedback is the best feedback we get
from the clients. And we just had a meeting yesterday
with a you know, prominent.
Speaker 2 (01:38):
Client, a client in the Bay, and.
Speaker 3 (01:41):
That's basically what he was saying, and how how much
different the relationship is with us compared to his previous
firm that he's been with, you know, the previous firm
for twenty years. Yeah, and in fact now he's referring
us his adult daughters to have us help them with
their planning and retirement and investment accounts. So that was
(02:04):
that was pretty cool. But if you like what we're
talking about and want more information on it, and as always,
if you want to have a second opinion, or you
haven't had a retirement analysis or haven't reviewed or updated
your actual retirement roadmap your financial plan, give us a
(02:26):
call at nine one six nine six seven thirty five hundred.
Also just a reminder that is it next week already?
Speaker 4 (02:34):
Yeah.
Speaker 2 (02:35):
Our workshop in Conquered for people who are about to
retire or are retired is on October fifteenth at the
old Spaghetti Factory in Conquered from six to seven thirty
pm also called nine one six ninety six seven thirty
five hundred to register for that, or you can register
for it by going to our website whysmoneyguys dot com.
Speaker 4 (02:59):
Why's money guy dot com.
Speaker 3 (03:01):
So two days after Columbus Day, it's it's now called
Columbus Stone.
Speaker 2 (03:06):
Markets are open on Columbus Day though, yeah, banks aren't,
right right, Yeah, so your regular retail banks are closed
on Columbus Day. But but markets are open. So markets
are open, We're open, and so thank god they're not
open on the weekends.
Speaker 4 (03:23):
Actually, remember remember they were talkingzation.
Speaker 3 (03:26):
Yeah, yeah, to have like twenty four to seven almost
like cryptocurrency where it's.
Speaker 2 (03:29):
Just always on, which would just seems seem ridiculous. But anyway,
good show to talk coming at you this morning. So
lots on here, I mean, especially from a current events,
you know, current economic information, some of the things that
have happened. You know, A pretty big deal this this
week was the Peace deal. So that's certainly progress and
(03:53):
hopefully getting some of this killing and and peace in
the Middle East. Yeah, peace in the Middle East. That's
how does that sound? That sounds really good? So who knows,
you know, do they go all the way through with it.
But it's a massive first step and that happening, and
it's one hundred percent because of President Trump, end of story,
(04:15):
you know, without him and the pressure, and.
Speaker 4 (04:18):
Because how long how long has it been going on now? Oh?
Speaker 2 (04:22):
On and off for probably one hundred years.
Speaker 4 (04:26):
I mean well, I mean just this most recent event,
what was it last year? Oh?
Speaker 2 (04:30):
Yeah, oh, you mean when they when they attack was
almost exactly a year ago where they just surprised, did
a surprise attack on Israel? Yeah, that was that was
exactly a year ago. So thank god that's coming potentially
to an end. And you know that any sort of
positive news on the geopolitical front. And the reason why
(04:50):
we talk uh politics and mentioned these things and analyze
these things is because they affect investments. In fact, they
I did, I got it correctly. They infect the stock
market and people's investment results. And so we're always mindful
of all the current events and news and things that
(05:11):
are going on to make sure that it doesn't require
some sort of change to our investment philosophy or specific
investments that we might have in your account. You really
have to have you know, your your your ear is
it your ear to the grindstone.
Speaker 4 (05:29):
That's the Yeah, that would be uncomfortable.
Speaker 2 (05:32):
Yeah, that would be the very But you have to
pay attention, is the point.
Speaker 4 (05:38):
And these and these things matter.
Speaker 3 (05:40):
But the other the other kind of political current events
that is we don't I just heard recently, and we'll
kind of see how it filters out as Trump working
with some Jijing ping and soybean purchase or for the
farmers black thereof, black thereof, and then some new new
(06:02):
parameters that's not the right word, but I forget. What
China did is kind of put some guidelines or restrictions,
restrictions on.
Speaker 4 (06:10):
Rare earth minerals.
Speaker 3 (06:12):
So we'll see how that pans out, because that can
impact farmers number one, commodities, but then also the rare
earth minerals with a lot of stuff that we use
for technology, which.
Speaker 2 (06:23):
Really affects the prices of a lot of the inputs
that the companies that need the raw materials, you know,
especially on the chip front or the tech front. And
then obviously commodities and real tangible goods and services are
in so many and affect so many mutual funds and
(06:44):
exchange traded funds. So you know, a deal and maybe
removing some of the barriers, hopefully with China, would be
a big positive for the commodities market for rare earth materials,
especially for the mining companies and the companies that then
need those to manufacture that they're good or service. All
(07:09):
super positive.
Speaker 3 (07:10):
Because we're in the we're we're like in the boom
phase of AI, data centers, creation ships, and software.
Speaker 2 (07:18):
I see in your notes here data center build out
up three hundred and twenty two percent four years. Yeah,
that is insane. And when we look at some of
those deals that that Trump has negotiated, you know, it's
in the trillions. Now, oh what Apple is going to
spand what Nvidia is going to spand what car manufacturers
are going to spend?
Speaker 4 (07:38):
Well, then it's on and on.
Speaker 3 (07:39):
Well, then it's deals amongst each other, amongst the tech
tech tech companies, you know, much as like open Aye
has been big recently striking deals with Nvidia, Oracle. The
spend back and forth, and just the companies themselves and
what they're dedicating towards the A I boom. Meta has
(08:02):
sixty five billion. You know, in regards to that x AI,
which is Elon Musk's he built the Colossus which is
one of the largest data centers. He's now have plans
to do Colossus too, which is going to be even
bigger than that, and he has in Vidia chips running
running those data centers. Amazon has thirty centers for their
(08:27):
anthropic Microsoft Google launching multi billion dollar facilities. So what's
going to be interesting is now they are, you know,
instead of having software and chips, they're now having to
like carve out funds for real estate.
Speaker 2 (08:45):
Really, you're absolutely right, because I mean, data centers need
massive amounts of property too, I mean massive buildings, right,
And so it's not like it's just something that's been
what we've been used to as far as technology, which
was really you know, space and cyberspace. I know it's
hard to fathom, but it was all about cloud computing
(09:06):
and storage and and you know transmission which take took
no physical real estate. So now you look at when
we look at investments in real estate, we specifically look to, okay,
what type of real estate are in these particular funds
that we like, and so here you have, you know,
(09:28):
a boom in a specific sector inside of the category
of real estate. And that's again important to have someone
who has the wherewithal or if you're managing things yourself,
to pay attention to what you're actually investing in and
and if you don't, it could bite you. So, for example,
if you love real estate, we were showing a new
(09:51):
perspective almost trust for that perspective client up in the
in the Reno market, the type of real estate into
this U Hire fund that we've been talking about a lot,
and how the three hundred and forty five holdings and
what they're primarily made up of, and more importantly where
they're primarily at. So it's crucial when you're working with
(10:16):
an advisory team like Giuseppe and I, or if you're
you know, buying things yourself, which I don't understand why
people do that. You know, when they can get the
type of people like ourselves in their corner, you know,
you really need to have your ear to the grindstone
(10:37):
on the news and the things that could affect the
sector or the category of investment you're in. But more
importantly then if you have you know, a sizeable amount
of money like these people were roughly talking about, you know,
seven figures sitting in cash and they want to buy
real estate, then you need to know Okay, if I
buy a fund or or.
Speaker 3 (10:58):
They're looking at opportunities but they're scared to buy stocks
now because it's ritually valued.
Speaker 2 (11:04):
Yeah, so it's important that you're explained what it is
you're buying and while you're why you are buying it
now or why we are buying it now, and so
we'll spend more time, you know, talking about just what's
going on in our country and around the world and
how it affects your investment. You're listening to the wise
(11:24):
money guys, John Scamberan. I'm here with my partner Giuseppe
Veascani and quick, quick, quick correction. We were mentioning a
real estate investment trust that we like, and it has
three hundred and forty five tenants, not three hundred and
forty five properties. The properties were fifty four properties that
are are rented ninety four percent by three hundred and
(11:47):
forty five tenants, but a one point one billion dollar
portfolio ninety four percent occupied and a six percent cash
flow rate. That's that's this particular property isn't you know,
open to ten thirty ones portfolio. However, if you want
(12:08):
to invest in real estate or like we like to do,
have a little bit of real estate in everybody's potentially
everybody's portfolios if it makes sense for their goals and objectives.
This has a six percent cash flow that is well
in the in the deck it says one hundred percent
tax free, but recent data says is six percent at
(12:32):
ninety four percent tax free with roughly a ten percent
equivalent taxable yield. So if you were getting ten percent
taxable and you're in a combined high tax bracket, then
that would be the six percent is the equivalent of
ten percent.
Speaker 3 (12:50):
Finding something that pays you ten percent and your high
tax bracket so after taxes, that's that's the equivalency.
Speaker 2 (12:57):
Which this came up as we're talking about the amount
of real estate that is required for these data centers,
and really, you know, when you look into your real estate,
the positions that you have in your portfolio, you know
what type of real estate to they actually own. That's
(13:18):
how maybe the sire.
Speaker 4 (13:20):
Maybe there isn't.
Speaker 3 (13:20):
I mean a lot of times we look at you know,
clients uh portfolios or people that we meet that are
just meeting us for the first first time and having
us review their their outside portfolios. A lot of times
it's just stocks and bonds and cash that's within their portfolio.
So these are some of the other things within other
areas of acid classes, you know, real estate or other
(13:43):
alternative investments as well that we like to put into
client portfolios just to further diversify them outside of just
the traditional stocks, bonds, and cash, because twenty twenty two
is really a testament of you know, the traditional allocation
just doesn't protect you.
Speaker 4 (13:59):
You know, yeah, like a sixty forty split stocks and bonds.
Speaker 3 (14:02):
Right, yeah, And that's worked for a long time, and
there's been some controversy of that.
Speaker 4 (14:07):
That portfolio is dad maybe.
Speaker 3 (14:10):
Now it's back now, but twenty twenty two you got
you got blown up.
Speaker 4 (14:14):
During that area.
Speaker 2 (14:15):
And what's amazing is a people think that the growth
and income portfolio, you know, when that's your mix and
the core you know, goal of all of the investments
that you have, that it's lower pain. But when we
look at our growth and income portfolios and what returns
they're at year to date, it's double digits. I mean
(14:37):
it's I mean, I get it. The stocks are obviously
a huge piece, but we're picking you know, stocks for
the most part that pay dividends.
Speaker 4 (14:45):
Yeah, we're picked well.
Speaker 3 (14:46):
And also since the rates have come down the ten
your treasuries come down, that's helped lifted the bond values
market value as well, and that's also helped to some
of the cap appreciation.
Speaker 2 (14:55):
It just to clarify that a little bit more, when
interest rates start coming down, the value of an individual
bond or maybe even a bond fund that you're holding
per share or per bond tends to go up. Every
once in a while that that, you know, relationship doesn't
exactly pan out, but for the most part, when interest
(15:18):
rates go down, if you're sitting on a coupon for
an individual bond that you hold and it's paying higher
than what you could get a similar bond for in
the secondary market, you're going to be able to sell
that bond for more, well hopefully more than you paid.
And certainly if you're working with guys like like us,
(15:41):
you know, we like to buy and put individual bonds
for the control and just the security of knowing what
it is and what it pays and what you're going
to get back and really reducing risk as much as
possible as long as rates are high, you know, as
long as we're still getting in the fives we're putting bonds,
(16:03):
individual bonds and people's accounts, and then you couple that
with mixing it with like this real estate holding we
were talking about that has such a great taxable equivalent
return on investment or cash flow, as well as the
dividends that stocks have been playing paying high single digits,
and then the alternatives which have been paying high single digits,
(16:26):
and then if you get price appreciation on top of that,
it's just been amazing since going back to twenty nineteen,
really even with the twenty two, even with the twenty twenty,
when you average out the last six years, I mean,
it's that's incredible for our.
Speaker 3 (16:43):
Percent average on a return or something like that. It's
not and that's not normal for sure. And you know,
in some of my notes as well, it's, you know,
markets are richly valued. You're hearing, you know, oh, we're
in a bubble? Are we in kind of a dot
com era again? And when you look at fundamental some
(17:05):
fundamental metrics, it's saying either yeah, yeah we are or
were getting close not quite there, but we are richly valued,
and do we need to get to I mean, everybody's
comparing it to dot com, But do we need to
get to dot com valuations. I mean, we weren't there
in two thousand and eight, we weren't there in twenty
twenty two, you know, so I'm not sure why there's this.
(17:29):
I mean, because of the AI and the technology.
Speaker 2 (17:32):
Historically we have to compare things to previous events.
Speaker 3 (17:35):
But outside of but outside of the dot com, you know,
there's other periods of time that has not reached dot
com valuations.
Speaker 4 (17:45):
Yet we hit a recession for and.
Speaker 3 (17:46):
Every recession is different, right, It's not going to be
a repeat, exact repeat, but nevertheless, there you know stocks
are expensive, not all stocks.
Speaker 4 (17:56):
But.
Speaker 3 (17:58):
You know, you couple the overall valuation of the stock
indices and then what are the contributing factors of bringing
those valuations up? And you know thirty percent of it
is driven by these technology companies, a handful of technology companies.
Speaker 4 (18:14):
How much more does it go?
Speaker 3 (18:15):
I just recently read an analyst report that raised Nvidia.
Speaker 4 (18:20):
I don't know if you heard this or not target price?
Let me lay it on me. Yeah, I guess what
the target price is now?
Speaker 2 (18:27):
Well, I mean more than two hundred three hundred, three.
Speaker 3 (18:31):
Hundred three hundred, and that they're gonna hit this can
be seven trillion as far as that's that's.
Speaker 2 (18:38):
Not even real. You can't nobody can comprehend a billion
as far as physical dollars, let alone a trillion. I mean,
these this word trillion now just thrown around around like
like ten years ago, a millillion or a billion billion.
I mean, it's it's unfathomable. But that's the reality we're in.
(19:02):
I mean, who knows. Well you mentioned Tesla earlier. Come on,
are we really valuing Tesla based.
Speaker 4 (19:11):
On cars what it's doing.
Speaker 2 (19:14):
I mean, if you throw in a true valuation, you
can't even do a true valuation, because what do you
value eight thousand satellites in space owned by SpaceX, owned
by Elon Muskat starlink, right, yeah, well the starlink. But
I'm just saying the just the network. Yeah, the network,
that's the eighth time. But the comes us, the space
(19:35):
X imagine could get the satellites there and to go
to stations. And now now we're on this Moon race again.
I don't know if you've been reading about that, you
know we're gonna you know, NASA and and Space Force,
but they're going to try to get to the Moon
and potentially start colonizing the moon. Now here's what's funny.
That sounds like science fiction.
Speaker 4 (19:56):
It's not.
Speaker 3 (19:57):
Well, I can tell you one of my favorite books
I was a kid. It was a Good Night Moon.
Speaker 2 (20:02):
Oh do you remember that book?
Speaker 4 (20:07):
But these things are real, and so, you.
Speaker 2 (20:11):
Know, knowing what to put into your portfolio is still crucial.
It's still in our opinions strategically.
Speaker 3 (20:20):
Even more so now because things are at lofty levels.
You have to you have to be choosy on what
you're going to put into your portfolio. Not all stocks
are equal, So what stocks are you going to be
putting in there? And then what other acid classes can
you take advantage of?
Speaker 2 (20:36):
And just like the information uh industrial revolution, and now
we're in this artificial intelligence industrial revolution, quality still matters.
And just because a company comes out and says, oh,
we're going into space travel or whatever it is, does
it mean that that company is going to make it.
In fact, thousands of companies that were priced at ridiculous
(21:01):
multiples initially looked like the next greatest thing since you
name it slice bread all went out of business from
the late nineties and early two thousands that were just
an internet company of some fashion and now they're gone.
So at these valuations, even if it's AI, you know,
(21:22):
quality still matters the type of company and what it
is making or doing, and what sort of you know,
underlying fundamentals they have as far as revenue, growth, profitability,
cash flow, access to capital, the type of management you know,
(21:46):
in their experience, do they have the right leader leadership
to get them to be the next Nvidia or whatever
it is, And so many don't. And so don't get
suckered into just putting something in your portfolio because you
got something on the internet, for example, or in your
email that says, oh news, we picked you know, we
(22:08):
picked Google twelve years ago and and it's up five
thousand now all of a sudden, we know which the
next which which is the next.
Speaker 4 (22:17):
Company to pick the next Google?
Speaker 2 (22:19):
Right, since our clients are mostly retired or write about
retiring and then needing to you know, know, what to
do with those dollars that they may be rolling over
from from their employer, or they may be you know,
cautious on on what to put it in because you know,
(22:40):
fear of of running out of money, so on and
so forth. It it couldn't be more important than it
is right now, to not just guess at it, don't
go at it or something. Internet man, if you if
if something sounds too good to be true, it probably
is too good to be true. So anyway, we'll talk
(23:01):
more about specific investments and things. You're listening to John
Scambray and I'm here with my partner Geosette Visconti, and
I had mentioned gold so many times, you know, in
the past, you know, six, eight, nine months, or even
the hills and quite frankly, you know, when it was
(23:22):
in the the low twos even had broken down and
went down below two thousand and ounce, I said it
was going to three. And then recently I've been telling
people over the last six nine months it's going to five.
And here it touched almost well it did when it
went four grand. And so you know, the reason being
(23:47):
is because I recognize and I didn't make this happen,
but I saw what was happening when the whole thing
with the other you know, big big countries, say call
them G seven countries and others, when we literally seized,
if you will, uh, the Russian dollars.
Speaker 4 (24:10):
There's been a lot of buying too. There's the countries scooping.
Speaker 2 (24:13):
Up well that that's one of the big reasons because
a lot of these companies have made a pact to
not put dollars, to not buy dollars countries for their reserves,
so they're buying gold instead. And because now there's a
massive gold tonnage race, you know, to back your your
(24:34):
country's currency with gold again versus with dollars. That's really
what's running up the price of gold because now and
the US is doing it too. The US is trying
to stay on top of the race to have the
most gold, you know. Uh. And and in fact Trump
talked about wanting to go see the gold to see
(24:55):
if I don't know if he did, but because we
have something like.
Speaker 4 (25:00):
Like Doesney have gold in his own personal play? Oh?
Speaker 2 (25:05):
Well, he gold plated gold in lays everything. You know,
his whole mansions are all gold. He loves gold.
Speaker 3 (25:11):
He wants to see his Fort Knox have more gold
in my house and play.
Speaker 4 (25:15):
A truck I bought.
Speaker 2 (25:16):
The pin striping is literally gold, the twenty four carrot gold.
But where was it the gold tonage? So you know,
last that I read, the US was at about nine
hundred thousand tons tons of gold, which is still not
a good ratio to the debt you know when we
(25:39):
were on the gold standard.
Speaker 3 (25:41):
Yes, never, it can never go back to the gold standard.
Speaker 4 (25:44):
Well can you imagine it?
Speaker 2 (25:46):
Actually, that would make your that would make our currencies
and everything be far more valuable than they are today
if we did valuable compared to what compared compared to
just the paper made up value that the central bank
works so hard to manipulate.
Speaker 3 (26:05):
Yeah, but I mean what I mean the other large countries,
like you said at G seven, are they they would
do it too. That's what I'm saying, is nobody's back,
so like why would one country start?
Speaker 2 (26:15):
Well, they all are, they all are started. That's what
this that's why gold is going up. It's because it's
the race to back more of the with gold.
Speaker 3 (26:24):
Would they have to change the verbiage on the dollar
and God, we trust. We're just saying gold we trust.
Speaker 2 (26:30):
Well, it was always in gold we trust up until
you know, literally modern times. I mean, this didn't happen
you know, a thousand years ago. No, this just happened
in the last you know, fifty years or so where
we and I don't know how they got it done,
but in order to borrow more money, they got off
(26:50):
of the gold you know standard, and listen, that's if
we go back to what the price of things were,
we can tie it all too. When we got off
of the gold standard, and it's not been good since
it just keeps getting worse and worse and worse because
you can print and borrow money freely without having the
(27:12):
asset to collateralize. Done a good job, and and so again.
The movement of countries not putting their faith in dollars
is the reason why goal and they don't trust other
they don't trust their own dollar or other countries dollars.
The US is still the main numero that is still
(27:34):
numero uno around the world, but it's just not as
much as it used to be because of things like okay, hey,
if you do something to cross us, well, if we're
going to see seese your dollar reserves.
Speaker 3 (27:46):
I think I think the I think. The other thing
to look at too is how are you running? Like
if we look at the US as a business, how
are you running your business?
Speaker 4 (27:56):
Right?
Speaker 3 (27:56):
Do you take dollars from a company, let's say a
company US to invest with us, right and they say, hey,
we're going to give you x amount, or like open AI,
we talked about this before, right, one of the things
that came up is open AI. I think was going
to give was it, three hundred billion to Oracle over
the course of five years, But they're but they're like
most recent forecasted revenue is going to be like thirteen billion. Yeah,
(28:17):
so how do you how do you write unless you
do some stock exchange or something like that.
Speaker 4 (28:22):
But but we'll just the revenue.
Speaker 3 (28:24):
So I think the the strength of our currency right now,
since it isn't backed by gold anymore or the gold standard,
is how are you running your what's your debt look
like versus your assets? Your revenue? Our revenue is GDP, right,
so what is your revenue? And then what does what
does what does the debt servicing look like? And right
now it's what one hundred billion dollars a month for
(28:45):
debt servicing based off of the thirty seven trillion dollars
in the debt that we have, where the interest rates
of where we're at.
Speaker 2 (28:51):
Then the then what the military cost us, then what
soul success?
Speaker 3 (28:55):
So I think that's that's a bigger threat right to
the sustainability or the strength of our currency, the strength
of our treasury, our us treasures because you know, all
other countries when they go flight flight to safety when
things are uncertain a lot of times, a lot of
other countries, they don't even invest in their own they'll
invest in US treasuries. So, but if we're continue running
(29:19):
these massive deficits, right and we have this massive debt
to service.
Speaker 4 (29:23):
With these higher interest rates, it didn't it didn't look
too good. Well, and then this is why we have
the credit down ratings right for the downratted a couple
of times from Moody's.
Speaker 3 (29:33):
Right and Fitch, because you're saying, well, you're you're a
little out of whack. Now you know, we're still you know,
highly rated when you're looking at the credit I mean,
but no longer, which.
Speaker 2 (29:44):
Debt is still a healthy because of our GDP our output.
If you look at our output, compare it to the
amount of debt we have, and then you go back
fifty years, we're actually better off than we were fifty
years ago as far as the amount of debt to GDP.
So it's it's it's not controllable, but it's it's not
(30:09):
unsustainable right now. But but again, you hit a recession
and all of a sudden, now the money coming into
the coffers gets even less and then you actually fire
up those printing presses even more, then you're real.
Speaker 3 (30:25):
And then interest rates will come down to So that
would be the relief to the you know.
Speaker 4 (30:30):
Debt servicing. But fun fat we were talking a little
bit of fact, not a fun.
Speaker 3 (30:36):
Fact with statistics, because we got on the subject of gold, right,
and that's a hot topic.
Speaker 4 (30:41):
And you know one of those in the radio. Uh
you know, you hear these commercials like by gold and
I can't trust it. You can't trust a dollar and
you have to have it in your investments and so on.
Speaker 2 (30:50):
And before you go to that real quick strategically, you know,
this conversation we're having, we're not recommending you go out
and put everything in gold. You know, as always use
a rule of thumb. I mean, should five percent of
your portfolio be tied to something gold mining, which I
would say is a better way to invest in gold
(31:14):
because gold is not really liquid. Once you own physical gold,
it's pretty hard and very costly to buy or sell it,
and it doesn't pay cash flow. So is it good
to have a defensive position of gold in your portfolio?
We think so, But to put and go, oh my god,
I'm putting everything in gold. You know, no, we don't.
(31:37):
We don't recommend that, but go ahead. You were talking.
Speaker 3 (31:39):
About so just in comparison to and I pulled up
and used some AI since we talked about AI earlier
s and P five hundred versus gold. Right, So compounded
annual growth rate of return, which basically just means, you know,
to get the annual annual rate of return, and you
compounded over time, so you just continue to reinvest, reinvestmorinvest.
(32:03):
And then then the standard deviation, which the standard deviation
is just a measurement of risk. The higher the standard
deviation number just means more wild roller coaster ride, right,
which in the past thirty years there's been some roller
coaster rides, some P five hundred stocking time, right, but
there also has been with gold. Yeah, right, but you
only hear about gold is really a hedge against uncertainty,
(32:24):
really apps, right, like, oh, when things are getting shaky,
you need to buy gold. So I think it has
kind of a the way it's advertises almost like it's
a safety it's a safe asset class to put your
money in. Right, So compounding you on annual growth rate, right,
for S and P five hundred over the past thirty.
Speaker 4 (32:44):
Years, what would you say we talked, you know, on
average per year.
Speaker 2 (32:48):
Yeah, okay, so if we just go thirty years, Well,
if you look at thirty years and say we went
from a thousand to six thousand, I mean that's uh,
that's more than two doublings and over thirty years. So
I'm guessing it's still right around you know, nine ten
percent per year, nine.
Speaker 4 (33:07):
Point six percent.
Speaker 2 (33:09):
And that gold was probably in the in the five
ago yeah, five hundred dollars and it's gone to four thousand,
So it's got Now, this is just what I believe,
So it's got to be less than the S and
P five hundred would be my guess.
Speaker 4 (33:25):
Yeah, that's a good guess. Six point eight nine percent. Genius,
A genius. What about volatility, oh, stock market.
Speaker 2 (33:33):
I've seen them both go all over the place. I
would think the standard deviation of gold might this I'm
just going you know, against what I would think was
probably higher than the standard deviation of the S and
P five editor.
Speaker 3 (33:47):
Yeah, seventeen point four to six standard deviation for S
and P five hundred for gold eighteen point five six.
Speaker 2 (33:54):
Holy moly, now I don't know if you understand what
we're talking about, but standard deviation is just a measure
of how wild the price can change, you know, over time.
And so basically what that's saying is the swings in
price of gold per ounce has been greater over the
(34:15):
last thirty years than the swings in price of the
stock market. Yet people are fearful of the stock market.
And again often it's because they make mistakes managing their
own money. Right when things are great, like they are now,
they buy in at high valuations, high prices because they
want to get on the on the train. And yet
(34:37):
then if if things do sell off for whatever reason,
some news comes out economically or something happens geopolitically and
stuff starts to go treasure, then they get out at
a lower price than they paid, and then they lose money.
And then they go, oh, stock market's too risky, and
(34:57):
so we do the thing with gold. You could do
that very same thing with gold. Be prudent, Like I
said earlier, don't go run out and buy gold because
gold does run up and countries are gobbling up as
much gold as they can. Or do you feel like
you're missing out or you feel like you're missing out.
You know, that's just an emotional, unnecessary, incorrect way to
(35:21):
manage your money. But it could be a piece to
your education.
Speaker 3 (35:25):
I think how much should it be a piece just
really depends on your overall plan, your risk tolerance, you
know what you need it for. And if you don't
know and you want to ask us, you know, give
us a call nine one six nine six seven thirty
five hundred and we can help you out with that.
Speaker 2 (35:41):
Okay, And just to recap on, yes, we like gold.
We think it should be a piece of people's portfolios.
Remember there is really five overarching categories to all investments
that stocks, bonds, real estate, alternative structures and strategies and
investments that are a big capture of anything that's not stocks,
(36:04):
bonds or real estate, and then cash and cash equivalents.
And so when we build portfolios, you know, at any
time there's always a good time to either invest in something,
add to something, or get out of something and not
worry that, oh I'm going to miss out on you know,
(36:25):
opportunity because I didn't get into Nvidia you know a
year ago, five years ago, so on and so forth.
So just don't don't get overly worried that you see
something like we were talking about UH go so high
that there's not going to be an opportunity for similar
UH returns and and and long term, you know, growth
(36:49):
of your money and your income. There always is, and
so it's and it's hard to it's it's hard to
time it to you.
Speaker 3 (36:56):
I mean, nobody can exactly time I go, I'm gonna
get in this investment or get out of that investment
or so on and so forth, even you know, and
I just say that because we've talked you know, this
episode and then previous episodes of how.
Speaker 4 (37:11):
Things are richly valued right when you look at fundamentals
and you'll hear it on financial news networks or YouTube
and you'll have you'll hear the.
Speaker 3 (37:19):
Other side too, like oh, we're we're not as high
as what we were in dot com.
Speaker 4 (37:23):
And people are going to be.
Speaker 3 (37:25):
Comparing dot com only because we're dealing with technology, this
new technology boom, So you know, is it going to
end up resulting like the dot com? Who knows? We
don't know yet. Everybody's raising prices, not only to individual
stocks and companies, but you're seeing reassessments of S and
P five hundred year end targets and.
Speaker 4 (37:46):
What the S and P five hundred will be next year.
Speaker 3 (37:49):
You know, I've seen seven thousand for this year and
then you know seventy seven hundred. Some say by like
twenty twenty eight or twenty twenty nine, the SMP can
be like ten thousand. Who knows, right, I mean, things
can change on a dime. Things move so fast. You
want to be choosy with the investments, right, You want
to be selfish, you know, just want to put something
(38:12):
in in a fund or an ETF, especially because it
can put you in things that are already like overvalued.
But it's hard to time, you know, are we in
the bubble? Is a bubble forming? And if so, it
doesn't mean you get everything you get out of everything,
because it can continue to run up for weeks, months,
another another year. I mean Alan Greenspan was saying, was
(38:35):
talking in terms of how things were exuberant and things
were lofty, and that was in nineteen ninety six. Well,
it continued to run up for another few years before
it actually hit the top, and then two thousand and
it came crashing down. Is it going to be the
same this time? Is there going to be another three
years of this, who knows. But you want to be
smart with your investments, so you don't want to get
(38:56):
overly greedy with oh you know, I want to miss
I don't want to miss out on a chase performance
because it could be that, you know, all of a sudden,
we're going to have a downturn and it could be
next year.
Speaker 4 (39:06):
Who knows.
Speaker 2 (39:06):
Yeah, reshow to client in their review a seven percent
cash flow that had no stocks, no individual stocks. And
that's part of the gift of high interest rates. I
like to say high interest rates when you're retired, have
no debt, and you're relying on some of your assets
(39:31):
to you know, either create your legacy or supplement your
income or or buy you know, your your your next
big purchase like a vacation home or something. High interest
rates are a gift because you can get returns, you know,
five six, seven percent on your money without having to
(39:53):
risk and play the growth game, where Okay, I buy
a stock, I hope it goes up by at least
the average of the stock market over the last thirty years,
like we were talking to ten and then I have
to sell it and time it to realize that growth
rate on my money. Well, right now you can get
high interest rates that they're coming in no matter what.
(40:17):
You know, you lock in some of these bonds and
some of these other structures that we have, and you're
getting six seven eight nine percent. In fact, this structured
investment that we just did this week and we're doing
next week is what was it nine point seven? So
these things change all.
Speaker 3 (40:37):
The time, which is a little higher than the thirty
year average of the.
Speaker 2 (40:42):
Yeah, without having to just know when from a timing perspective,
is the right time to buy a stock in order
to make a ten percent turn. If you're getting again
five six seven eight percent in distribution, in yield, in
cash flow, then getting to growth like numbers of what
(41:05):
the stock market's averaged or what gold is averaged, you
have a much greater probability of cheap achieving an eight
nine ten percent you know, long term average annual return
if you've got five to eight percent of it coming
in yield.
Speaker 4 (41:21):
Yeah, because then you're doing it with lower standard deviation. Right, Well,
thank you very much. Yeah, lower voltail.
Speaker 3 (41:31):
It's just basically taking it's it's banged for you buck, right,
risk versus reward? Why would you want to take more
risk if you're not going to have as much reward
or you don't know if you're going to have you don't.
Speaker 2 (41:45):
Need it, take more risk. We see this all the time.
And we've had how many clients come in this year
that are doing great by the way they're hitting there's
no time.
Speaker 3 (41:52):
But there's been a handful of where they see the like, oh, hey,
I don't I want to And the seven.
Speaker 2 (41:56):
Sisters brothers mother's cousin told me about.
Speaker 3 (41:59):
Your seven even as the client that is getting seven
percent in cash flow, he even went down the route like, hey,
what if we find some things in stocks to get
a bigger returns?
Speaker 4 (42:08):
Well, what is it that you need? Right?
Speaker 3 (42:10):
And he's like, well, ideally I want eight percent a year. Okay,
So seven of it is coming from cash flow. So
all you're asking is your assets to appreciate one more
percent a year. That's not allowed to ask, right, And
that's not much burden on the portfolio. Very reasonable. Why
would you want to put other assets in there that
are more risky? Are you're going to up the overall
risk of your portfolio? And you know we've been spoiled
(42:33):
really yeah the market this year, I mean other than
April when we had the whole Yeah, the Liberation Day.
Liberation Day correction is really what it was after that.
Speaker 2 (42:45):
It's just really the tariff correction is so yeah, but
go on.
Speaker 3 (42:51):
So we haven't had a three percent pullback for things
like one hundred and one hundred and fifteen or one
hundred and twenty days, which is not normal whatsoever at all,
not normal whatsoever. So we've been very, very spoiled, and
I think people lose track of that. They start having
short memories, very short memories, and they forget things.
Speaker 4 (43:11):
I'm like, oh, they forget.
Speaker 2 (43:12):
They forgot twenty twenty two, like it's so so long
ago where And they even forgot, like you said, April
May this year when in Vidia, for example, was down
fifty percent off of it's high at that time, fifty
percent and yet you know, oh my god, how do
I get in Vidia or this, that or the other.
I mean so, but that's why it's so important to
(43:35):
give us a call for your no obligation financial planning conversation.
You'll be glad you did, and I promise it'll be
a great use of your time. Called nine one six
ninety six, seven thirty five hundred. Also, if you're retired
and you've been, you know, looking at your portfolio, you've
been looking at your plan if you have one, and
(43:57):
you know, because the cost of everything is gone up,
maybe you just you know, you did your taxes, were
about to start thinking about taxes for next year, and
you're worried your net after tax income isn't where it
used to be. We can help you solve for those things,
you know, don't you know, let this this opportunity of
(44:19):
high interest rates pass you by again. Called nine one
six ninety six seven thirty five hundred and register for
our workshop on October fifteenth from six to seven thirty
pm in Conquered. All right, well that's all we have
this fine Saturday morning. Hope you enjoyed the show. Come
back and give us a listen next weekend.
Speaker 4 (44:38):
By all, have a good holiday weekend.
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