November 7, 2025 • 44 mins
The Government shutdown has started. How will this affect my investment accounts? Hosts John and Guiseppe take us through the fundamentals of investing to secure your assets. Plus, parallels from inflation between the 80s and now, fixed rates to fight that inflation, and is a sell-off coming? The Wise Money Guys.
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Episode Transcript
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Speaker 1 (00:00):
The Wise Money Guys Radio Show is brought to you
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visit our website One Source WM dot com.
Speaker 2 (00:14):
Hello and welcome to the Wise Money Guys Radio Show.
I'm your co host John Scambray and I'm here with
my partner Jusepa Wisconti, and we are certified portfolio managers
that specialize in helping people who are retired are about
to retire and manage their money. If you like our
show and have questions or want to come in for
a no obligation consultation, give us a call at nine
(00:34):
one six nine six seven thirty five hundred again nine
six seven thirty five hundred. Also for more information, you
can always go to our website Wysemoney Guys dot com
and you can email us anytime too at question at
Wysemoneyguys dot com. Keep in mind that things that we
(00:55):
talk about could potentially lose you principle. And if anybody
tells you all investments are guaranteed and you're gonna make
a ton of money, and you know there's some sort
of secret sauce that they know about that nobody else
knows about. Please run from that conversation or person, because
(01:19):
that is not the case. In fact, it makes me
think of a client who brought us some information on
something they heard on the radio, and we looked into
the person and the firm and it was not good.
The the issues, complaints, discreasurements, disclosures were pretty bad, more
(01:44):
than what I've seen at most firms or individuals. So anyway,
we try to keep things simple and more importantly, the
things we talk about are really what we honestly believe
and have a high experience level with things that we
(02:07):
talk about. In fact, what it's been almost twenty years
for you in the industry and over thirty years for me,
So we've been doing this a long time, and there's
a lot going on right now. There's some things that
we're going to talk about that are concerns and then
things that are opportunities. As always, we try to give
(02:31):
information that's helpful to people. So let's kick it off.
Speaker 3 (02:36):
Yeah, we got some info on government shutdown. We'll talk
a little bit about that, kind of where things are
at and where it could go from here, how's the
economy holding up so far? And also we have a
hold up of some of the.
Speaker 2 (02:52):
The economy holding up so far.
Speaker 3 (02:56):
We also have some economic data that's been held up
because of the government shut down. But with the data
that we have, how is the economy? How's inflation doing?
And then we have the upcoming FMC meeting at the
end of this month, it'll be October twenty ninth, and
then we are in earning season again officially. This week
it started with the financials and banks reporting, so we'll
(03:19):
talk a little bit about that and how that's kicked
off so far.
Speaker 2 (03:24):
As always, our favorite thing to talk about is specific
strategies that we employ that you can employ. Also investments
that we like. We'll talk about those as well. So
you'll want to stay tuned through the whole show because
generally we get to what I call the nitty gritty
or the meat and potatoes towards the end of the show.
(03:46):
So first let's talk about I mean, you know, has
anything really changed. I mean, here we are, we're in
the government shut down. You know, tens of thousands, maybe
it's even hundreds of thousands of veteral and playloyees have
been furloughed. And has that affected your life at all?
Or affected your investments. Hasn't our client's investments at all.
Speaker 3 (04:09):
Yeah, No, it hasn't. Zern hasn't really made a blip
in the market or the economy. It has lagged. You know,
we are held up on some of the economic indicators
and data that's supposed to come out.
Speaker 2 (04:22):
That you mean, the data that's never accurate, that they
revise over and over again because they manipulate it to
whatever political wins are blowing, whatever election is happening. And
then after that's over, you know, however the tides turn,
then the truth about data typically comes out.
Speaker 3 (04:43):
You can't you can't handle the truth.
Speaker 2 (04:45):
You can't handle the truth.
Speaker 3 (04:47):
Yeah, But nevertheless, it's the data that we have, so there,
I mean, unless you have some other source of data,
that's that's the So it's being held up. But they're
at a standstill, the Democrats and the Republicans. They're putting
much that a standstill. Polling shows both sides are kind
of equal, so it doesn't show that there's really urgency
(05:08):
to absolve and get this government shut down over with.
But as far as where it's costing, you know, the
the only data you know, used by the Federal Reserve.
It says it can cost the economy fifteen billion dollars
per week, and then it's just that they layoff. So
we'll see how this unfolds.
Speaker 2 (05:29):
You mean fifteen billion dollars of phony money that they
they print or borrow. I mean, that's a good thing.
Speaker 3 (05:37):
Did you have your coffee this morning?
Speaker 2 (05:38):
I did. I'm on my second copy.
Speaker 3 (05:43):
No under it.
Speaker 2 (05:45):
Then, what it really gets down to now, without the
manipulation of the government, without the self importance of these
politicians right who always say, oh god, a government shut down,
the world will cease doing exists, Economies will collapse, collapse,
jobs will disappear, the military will will be taken Oh.
(06:07):
I mean, that's what they portray. The reality is it's
their self importance. Bs. That is what's really going on.
Because the government shut down, shuts down, you know, dozens
and dozens of agencies that should never have been created
or put in business or budgeted for or or you know,
(06:30):
be burdened, uh be a burden of the taxpayers. And
that's what we're really seeing that most of what the
federal government is can go away and will benefit taxpayers,
It'll benefit investors, it'll benefit Americans.
Speaker 3 (06:48):
Let's get rid less government, less.
Speaker 2 (06:50):
Government, less bureaucracy, less red tape, you know, on and
on and on and less blowhards of self importance, on
how how important it is to not shut down the government.
And that's just a simple lie. Well no, it's just
a not simple it's a big lie that's been going
on for years. Every government shut down or potential governments
(07:14):
shut down, they scare, you know people, The media sensationalizes
it to pass some ridiculous deficit spending measure called a
continuing resolution. And that's all they're trying to do now
is pass another continuing resolution without balancing the budget, without
actually passing a budget, to just tack on more debts,
(07:40):
operate as a deficit. And that's why the government shut down.
True fiscal conservatives want it shut down because they don't
want to pay for any of this nonsense, especially people
and programs you know that aren't deserving of a nickel.
And then you've got the the the other fleet, opposite side,
(08:01):
the communist socialist side that wants to give away all
wealth and transfer it to people and country and institutions
that don't deserve a single nickel. So, in my opinion,
this is fantastic and the longer it goes on, the
better because we're not blowing money and we're not employing
(08:22):
people that their only AGENTDA is to enrich themselves, empower
themselves and take money out of my pocket, our clients pockets,
our children's pockets, our grandchildren's pockets. So now what I
love is now it's about the fundamentals of investments and
whether or not it's a good time to buy stocks,
(08:44):
Is it a good time to buy bonds, Is it
a good buy time to buy real estate? So on
and so forth. And that's really what our expertise is
is taking all the noise and then filtering it down
into where there's opportunity for our clients to make a
good living in retirement.
Speaker 3 (09:03):
Filtering through the narrative, looking at the natural data and
seeing seeing what what lies underneath the hood to figure
out how to appropriate based off of client schools and needs.
But I have I have a question the way you
said I have a question. Though I do see your
Starbucks here, I thought you were on decaf. Did you
switch to caffeine today?
Speaker 2 (09:23):
I actually went to a caffeinated first thing this morning. No,
one time.
Speaker 3 (09:28):
No, because you're on fire this morning.
Speaker 2 (09:33):
And what and this is decaf. But my first cup
was my first cup of caffeinated coffee in ten months. Wow. Wow.
So I didn't know I was feeling it till.
Speaker 3 (09:46):
Proof proof caffeine works.
Speaker 2 (09:49):
But reality is, as I was saying, is that I
think this is a good thing. Let me let me
put it that way.
Speaker 3 (09:56):
I mean, government is essential, but when it gets bloated, yes, yes,
and you get too much spend. When we've had we've
had bloated government. We've had too much spending. We had
too many programs and organizations out there, and then it
filters down to us where we're paying the cost. And
we saw that with inflation. Right. And we just had
(10:18):
our workshop earlier this week on Wednesday night and conquered
and we showed one of the slides was what things
cost in twenty nineteen and what do they cost today
and how much they rose And that's part of because
of all the stimulus measures and spending that was overblown,
that was overbloated, right, that cause.
Speaker 2 (10:39):
That you know, and a key point of that is
I'm glad you brought that up. First of all, it
was as always a great group of people, great crowd.
We love doing this We love sharing our knowledge and
what we know. We hope that people sit down with
us as a result of it and potentially become a client,
(11:01):
but if not, we would do it anyway. And so
we'll talk more about what you brought up the slides
and what that really was telling people what we think
is coming. Jiseppi had mentioned our seminar that we do
for people who are about to retire or who are retired,
(11:21):
and a lot of the information and data, not narrative
that we share is where we think things are going
to go, where things currently are, and more importantly, how
do you react and what should you be doing, your
advisor should be doing, or what we would be doing
if we were your financial advisors and investment managers. And
(11:44):
the fact is is that looking at the inflation data,
looking at its cause and effect to people's you know,
ability to live the same station in life that they're
living now, Well it used to be and especially from
what two thousand and eight till twenty and twenty two,
(12:05):
I mean, inflation on average was let's just say one percent.
So if you were making three four five percent on
your money, you had a nice comfortable margin spread above inflation.
And so your purchasing power would actually be growing and
you would be okay for the rest of your life
(12:26):
in retirement. Well that's not the case now. From twenty
nineteen till twenty twenty five, most things doubled in price,
whether it was grocery items, energy prices, insurance prices, medical
care prices, you name it, utilities, interest rates on automobiles
(12:52):
and credit cards, travel, doesn't matter what it is, it
went up. It took the last last fifty years of
what things had grown at since the seventies.
Speaker 3 (13:05):
Well seventies, late seventies and eighties. It was a big
spike inflation, but for forty years after that we hadn't
really seen anything. There was normal inflation in the nineties
and then early two thousands, but after the financial crisis
in two thousand and eight, it just wiped everything out.
And even with QE and the spending it didn't cause
inflation to go up. But we were just you know,
(13:28):
anemic in inflation for a period of time. But now
twenty twenty two, twenty three, twenty four, twenty five, we've
had higher inflation. So it's raised that average up and
completely different from what everybody's used to. And only that
but because of the supply shortage and a lot of
different either items or real estate or what have you,
(13:50):
all that's gone up, right, I mean real estate by itself.
Not only have interest rates gone up, but how much
has real estate gone up cumulative from twenty twenty or
from what prices were in twenty nineteen to what prices
are now. I mean, real estate softened a little bit
lately because of interest rates being high and relatively staying
high for for a while. The real estate market has
(14:10):
kind of slowed down, but overall on a cumulative basis,
I mean, I know my house just from twenty you know,
from when I bought it in twenty sixteen until kind
of the height of the market in twenty twenty one,
twenty twenty two, it basically almost doubled.
Speaker 2 (14:26):
Yeah, which is crazy. Yeah. I got a thing in
the mail on my house that said, borrow one point
six million dollars in equity out of your house now
based on what they projected the value of my house was.
And the reality is that would be insane because you know,
that's that's more than double what I owe and I'm
(14:48):
paying three percent And if I borrowed that out it
was seven point seventy five percent to eleven point seven
five percent, as as what the potential interest costs would
be caught that money and people can afford You can't
afford it. People can suckered into that. But what we
(15:08):
were getting back to, what we were showing is that
with these prices, okay, you can't make three four five
percent because it's projected now that prices will continue to increase.
There's no projection of prices drastically coming down to where
they were pre twenty twenty two.
Speaker 3 (15:27):
Less deflation happens, right, we were in a deflationary environment,
then things would then things would start to write. But
that you wouldn't want that to happen. I mean initially
people say, well that would be good. Yeah, things that
you look at the economy, the economy would not be
in a good state exactly.
Speaker 2 (15:45):
You might be unemployed, your your income you know, could
be have could go down because what you're getting and
making on your investments is going down. So you don't
want deflation. But the reality is is we were showing
people how they could as conservatively as possible, and in
some cases with with guarantees from issuers. Guarantee you said,
(16:11):
there's no guarantees, I said, guarantees from issuers beat a
three percent, you know, with a nice comfortable spread above inflation.
We were showing investments that paid interest in the fives,
like bank bonds, and then you know, dividends in the
(16:31):
sevens eights up to ten percent on investments that pay
these dividends pretty darn consistently and are with gigantic companies
that are far less volatile, especially the alternative and alternatives
and the and the structured investments that we were showing
(16:54):
people that yes, in order to you know, live the
next ten twenty thirty years, you're not going to be
able to do it on a three percent you know,
ready to return from a bank. And if you think
that it's not real that okay, well you know my pension,
(17:14):
my sole security that's basically staying the same. And you
might say, well, oh, don't forget the cost of living adjustment.
SOL Security gives it every once in a while. Oh,
but don't forget. Every time SOLI Security does that, they
offset it with an increase in price in medicare. So
it's a total you'd hope illusion that you're getting a
raise in SOL Security because the cost of your Medicare
(17:37):
goes up to offset the rays that they gave you,
so the net to the government is no more additional
out of pocket money. So the reality is those things
are fixed. So if those are fixed, then all you
have is your investment dollars that have to grow at
six seven eight percent is what we project from most
(18:00):
of our retirees to be able to live comfortable twenty
years from now, thirty years for now. So if you're
looking at your plan or you don't have a plan
and going, well, huh, I don't know what assumed interest
rate you know, and I don't know what will happen
to my money after ten years or twenty years.
Speaker 3 (18:20):
Of you factoring inflation that's what taxes.
Speaker 2 (18:24):
Or then I highly recommend you come in. We'll do
a we'll do a free investment consultation and we'll even
do a free financial plan analysis for you. Absolutely no
obligation by calling nine six ninety six seven thirty five hundred.
(18:46):
Again that number is nine one six nine six seven
thirty five hundred. So let's switch gears over to earnings.
Speaker 3 (18:53):
Well, before we switch gears.
Speaker 2 (18:55):
The finish off government shut down or.
Speaker 3 (18:57):
Yeah, just how resilient the the market and the economy
has has has been with everything that it's been faced with.
We have the government shutdown that's continuing on right. We've
had the tariffs, which.
Speaker 2 (19:11):
Taking care of all of that, and I mean that facetiously,
you'll probably.
Speaker 3 (19:16):
Expend Trump Trump says I'm imposing tariffs with AI and
then boom, the market just.
Speaker 2 (19:22):
Takes off, exactly.
Speaker 3 (19:24):
But but even with the tariffs, and we saw the
turmoil that happened within the markets when that initially was
put out there in April, and then it's been quiet,
but now it's it's surfaced again between us in China.
Still market is still resilient, had a little bit of
a blip, you know, earlier in the week and Friday
(19:45):
the last week, and then with labor labor market softness
on top of it. So even with all of that,
we still have pretty solid consumer spending, which is a
big part of the GDP. We have record high s
and P five hundred forward earnings right and we have
earning season which we'll get into that just kicked off
and so far it's going it's going pretty good.
Speaker 2 (20:06):
Yeah. So especially in the big banks, the big investment
banks all beat andor or comfortably met analysts expectations, which
was very healthy. But the interesting thing is is this
last tariff thing you mentioned was on rare earth minerals, right,
And the reality is, if we go back to the
(20:26):
sixties and seventies, I watched and read a whole analysis
on this. In the sixties and seventies, we didn't get
our rare earth minerals anywhere else but in the United States.
Everything we needed, gold, copper, silver, you know, nickel, whatever,
(20:47):
all came from the United States and very little was
coming from you know, South America, Central America, China, so
on and so forth.
Speaker 3 (20:55):
And what there was plutonium right from Lebanon atonium future.
Speaker 2 (21:02):
Remember I was going, Okay, where's he going with this? Well, uranium.
Uranium comes from basically Utah, the Utah area, and we
have insane amounts of uranium and yet we sell it all.
Here's what's interesting, wait for it. You know where our
(21:23):
uranium goes, primarily Russia. Hillary Clinton did a deal where,
without voter approval, sold off our largest company that minds
uranium to Russia. And isn't it interesting that Hillary Clinton
is also you know, tied to the Soroses, uh, you
(21:48):
know through marriage. Now of her daughter, and again I
don't know if this is fact or fiction about the
daughter and and and their connections to George Soros. How well,
it's not fiction about uranium one being sold to a
Russian company.
Speaker 3 (22:06):
Are we still selling it or is it?
Speaker 2 (22:08):
Yes, unless that was overturned, I don't I don't think
it was by by Trump. But but the reality is,
and where I was going with that is we don't
need any other country.
Speaker 3 (22:23):
So I wonder what where Earth were you know, is
in demand today versus back different from the sixties and seventies.
It's still with technology, you know, advanced, you know, quite
a bit from them.
Speaker 2 (22:35):
Yeah, it's things like lithium now it's nickel, definitely, it's cadium,
it's it's copper still, it's still gold. It's things like that,
and and some new ones. I mean, yes, palladium and
magnesium and other things like that. But we have all
(22:56):
of that here in the United States. And it was
really the E p A and the Green you know
agenda that said, oh no, we're not going to get
that from here. We're gonna only get that to have it,
you know, imported to us. And the reality is is
I hope that these things you know, literally stop that
(23:18):
that great cut off buying uh rare earth minerals from China,
so that we actually go back to you know, relying
on our own country for our energy, for our minerals.
Speaker 3 (23:30):
I guess you just have to plan that out, depending
on how how much time to you know build that
back up again, right, yeah, but to map mind and manufacture.
Speaker 2 (23:39):
But the mining companies are here, The manufacturing companies are here.
They've just been you know, put to sleep a little bit.
And getting back to the inflation, the earnings, you know,
the economic output, which is all all been fairly uh
(24:00):
good and above what's been expected. You know, the real
noise is again that this shut down again no effect
on investments, however, you know, I guess the sixty four
million dollar question is is do we see the market
pulling back from here? What's the risk of that, or
(24:22):
do we see it just continuing to you know, run
up throughout the rest of the year, And how do
we think twenty twenty six will be. That's the most
important stuff when it comes to managing money. It's it's
having a reasonable plan for things going either direction, wouldn't
(24:44):
you say? I mean sure, I think if we get
through October, there's a good chance that you know, maybe
we even hit some all time highs. There's again, but
there's still you know, concern that at whether it's employed.
Speaker 3 (25:02):
Yeah, well let's let's let's unpack it. So what are
the things that what are the things that have to
continue to go right to continue to have growth. I mean,
we we've typically the end of July, August, September, and
then part of October you have a slower but more
volatile season in the stock market, and we haven't seen that.
(25:24):
We've actually had a positive September, which September historically and
when you average it out, is negative as far as
stock market performance. But we actually had a positive UH
in September. And now here we are, you know, halfway
through October, and it's been plugging along. We've had a
couple blips, you know, when this whole rare earth and
(25:46):
tariff imposing between US and China, but outside of that,
it's been pretty a smooth ride, which is crazy. So
that one I think raises a little bit of flag
of caution because you can only go so long with
a smooth ride before that's some sort something something happening, right,
(26:06):
So one I think is how does this whole US
and China with the current environment, How does that unfold?
And do they find I don't think it's going to
be where they're going to tear iff and we're going
to tariff, because it won't be good for either country,
right it could cause it could take it if it
got real bad, It could technically cause be a catalyst
(26:27):
to cause a recession, right And nobody's gonna want that
between US and China. So I think at some point
they will resolve it. But will it cost some volatility?
It potentially could? I think. The other The other part is,
you know, we're coming up in the f MC meeting.
The market is betting we already had one rate cut.
The market is betting for two more twenty five basis
(26:47):
points or quarter point rate cuts this year. I don't
think the Fed's going to cut, So how is the
market going to respond to that? Are they going to
shrug that off too like they've shrugged off other events,
or has the rate cut scenario been baked in so
much that it could cause volatility? And I don't think
it's gonna I don't think the Feds are gonna cut anymore.
(27:09):
I think it was just a one and done this
year because so far the data that we have, we
are going to have another inflation print with CPI, so
we'll see how that comes in. But so far, the
inflation and the measurements that the FED looks at, it's
still around three percent. It's sticky, so it's not going anywhere.
And Jerome Palell just recently earlier this week, came out
(27:31):
and said that they're going to be slowing down the
quantitative tightening, right, So that's another tool than the toolbox
outside of just raising or lowering interest rates to battle
inflation or you know, stimulating the economy. So because I
think they did that and we're inflation and we're the
economic data and the resiliency of the market and economy
(27:52):
so far with everything going on, I don't think they
have any reason to cut rates, you know, when they
meet at the end of this month.
Speaker 2 (27:59):
Yeah, I completely agree. And again the reality is based
on where we're at. If you're looking at your investments
and you're not sure if you have investments that will
do well whether interest rates go higher, whether interest rates
go lower, whether stocks go higher, stocks go lower, you're
(28:22):
probably not properly diversified, and you probably have never had
somebody you know, truly look at you know, the risk
from a volatility measure, from a correlation measure, from a
beta measure, and some of the other statistical information we
(28:45):
look at to say, Okay, yeah, you have a portfolio
that will do very well in good years like twenty
five and twenty four, but you also have a portfolio
that potentially could go down twenty thirty percent or more
if we don't have a good year in twenty twenty six.
And when you're retired, it's more about focusing on a
(29:07):
rate of return that you need overall on your investments,
and then balancing out the types of investments you have,
and spreading out and diversifying properly amongst the different investment
categories stocks, bonds, real estate, alternatives, cash, so on and
(29:27):
so forth, to make sure that I have the best
possible chance of achieving my seven percent, my eight percent,
my nine percent, whatever the number is, versus not knowing
that number and then just hoping that my portfolio will
do okay if things aren't going as perfect from a
(29:48):
stock market perspective as they've gone in twenty five and
twenty four. Don't forget twenty five wasn't exactly a smooth
ride till the second half, because the first half we
I mean we had a twenty to thirty percent you know, crash,
not a correction. We actually had a crash because stocks,
(30:09):
the stock in Yep, we're all down more than twenty percent,
which is the basic definition of a stock market crash
is when all your investments in the stock market have
corrected downward twenty percent or more. And we had that. Now,
thank god, you know, some of the things that caused
(30:30):
that ended up not coming to fruition, and and there
was a lot of potential rebalancing and opportunities that came
out of that, which we certainly did because if you
look at our client's portfolios and the things that we
boughtom in in the downturn in March, April and May
of this year, I mean, they're are massive double digits
(30:54):
from from the rebalancing that we did in April and May.
And what I'm getting at is that strategically, don't go
buying and throwing your money at well. For example, we
had at a person that was asking about gold and
should I just put everything in gold if you think
(31:14):
gold's going to five thousand and I do think it's
going to five thousand, but no, because what if it doesn't?
And also gold doesn't pay you anything why you own it?
And on top of that, it's commission base. You got
to pay a big commission, usually around ten percent to
buy you own the physical goal, right if you own
the physical gold, and then you got to pay a
ten percent you know, commission to get out of it.
(31:36):
And the reality is is that when you're retired or
about retired, about to retire, it's about can I replace
my income that I was used to earning, you know
as a W two employee or if I was self employed?
What cash flow did I have? And can I maintain
that cash flow and grow that cash flow consistently or
(32:00):
for a long period of time. So it comes down
to recognizing, you know, where I can get those investments
that usually don't all come from just stocks. In fact,
our portfolio is a big mix of stocks, about thirty
thirty five percent for most of our clients average, some more,
(32:20):
some less, depending on your tolerance for risk and need.
And then a big percentage thirty forty percent in bonds,
individual bonds and other fixed income investments. And then a
big chunk now in alternative investments that we just are
(32:41):
so happy and excited for what they're doing for our clients,
which is way less volatility and in some cases even
less volatility, which means smaller ups and downs in value
than even bonds, than even bond prices. So think about that,
if I could get into an investment and one category
(33:04):
that I have some money in, isn't the roller coaster
ride of investment value that I might be seeing in
my portfolio go wildly swinging like stocks and mildly swinging
like bonds, and is less than those. But here's the
kicker pays more than bonds.
Speaker 3 (33:24):
I mean, we feel distribution.
Speaker 2 (33:27):
Retired person should have that in Yeah, as far as
distribution slash slashes the pie, YEP should have that slice
of their pie in their portfolio. But again, if you're well.
Speaker 3 (33:37):
And then also in twenty twenty two, like you mentioned,
I mean, bonds were down to ten percent, stocks were down,
and we've talked about it before, you know, twentyth over
thirty percent. Some of these alternate investments were either flatter
slightly up. So I hoped to create a buffer within
the overall traditional portfolio. And I think a lot of
people are missing that. And you know, I had one
(33:59):
of the attendees in our work General workshop this week
that we had come up and said, you know, I
enjoyed it very much. I had a lot of great information.
I learned a lot. And she says, you know, I
knew about kind of stocks and bonds, but I didn't
know about some of these other things that you talked about.
I didn't even know they existed. So it got me
(34:20):
thinking and it was very you know, it's you know,
having me spin the wheels in my head and put
in some thought, and I was like, hey, you don't
know what you don't know. This is a complex world.
And we learn of investments that come out. I mean,
investments today were not the same ten years ago or
twenty years ago or thirty years ago, right, I mean
stocks have been around for a long time, bonds have
been around for a long time. But outside of that,
(34:42):
there's all these other areas within even stocks and bonds.
But then alternative investments that emerge, and you have to
be abreast of what's out there to see if hey,
maybe it makes sense or it can call, you know,
create further diversification of a portfolio.
Speaker 2 (34:56):
It never ceases to amaze me that people with considerable
amounts of money mostly have mutual funds or exchange traded funds,
and then on top of that, they have no idea
what's inside of those funds and whether or not they're overlapping,
and what their risk profile actually is by owning so
(35:19):
much of these various mutual funds. And then again they
have hundreds of thousands to millions of dollars and they
don't have you know, hedging, they don't have alternatives, they
don't have private credit products, they don't have structured notes
and structured investments and all these things that people with
money should have, in our opinion, in their portfolio. And
(35:43):
we'd love to tell you more about those things by
giving us a call at nine six nine six seven
thirty five hundred. Hope you've enjoyed the show so far,
and we were just diving in a little bit into strategy.
How important diversification is, how important all is. How much
do you have in each category of investments, not how
(36:05):
much do you specifically just have in stocks. That's important
especially on you know, are you all tied to just
one sector of stocks? But more importantly, why don't you
have alternatives in your portfolio. Why don't you have real
estate investments in your portfolio? There's great real estate products
that we put in people's portfolio that have awesome cash flow,
(36:31):
awesome tax advantages. And you're an owner of real estate,
and when you have wealth, why don't you have again
real estate alternatives hedging strategies in your portfolio so that
you have things that just don't all go down in
lockstep together, and more importantly, may stay flat or even
(36:52):
go up if the stock market is down and it
blows me away over and over and over again. We
take on clients that have you know, five hundred thousand,
a million, two million, three million, and they come in
with a basket of funds or a basket of investments,
and they have no idea what they do for them,
(37:14):
how they help them achieve their goals, what their risks are,
what correlation they are to each other. All they know
is that, hey, well I work with this person. They
put me in this and it was really bad. I
watched it go really up in twenty four and then
I watched it go you know, down in twenty five,
(37:35):
and now we're back up again. But they don't know why.
And then I go what do you need? We go
what do you need this to make? And what sort
of income are you drawing off of this or what's
the overarching goal for this money? And so we start
helping them drill down and understand that, Okay, well, gosh,
(37:57):
maybe I don't need some of these things that are
in there, or maybe I need more of some things
and less of others, or maybe they're.
Speaker 3 (38:06):
Just going to add some things because they don't even
have an exposure to it.
Speaker 2 (38:08):
So the best way I can put it is, let's
just say you have a half a million dollars and
you have a pension, you have sol security, you've been
retired for you know, five years, you've watched prices go
through the roof. You're still taking out the same amount
of money. So overall, you're buying power and your your
potential longevity of your income is at risk because if
(38:34):
prices continue to inflate from here at three percent and
nothing was adjusted for the last five years where we
had this massive inflation spike not seen since the seventies,
well then you know, somebody needs to take a deep
dive on that for you and go, okay, well, if
you have five hundred and you've been taking out forty
(38:57):
you've been taking out eight percent per year? Are you
earning eight percent per year? Do you have cash flow
that is eight percent per year? Meaning do the investments
inside my portfolio kick off eight percent per year without
having to sell them? And if the answer is I
don't know or know, you definitely need to come in
(39:19):
and see us by calling nine one six ninety six
seven thirty five hundred. We're gonna do a quick surface analysis,
give you our second opinion. We can do a deeper
dive if you'd like, by doing a retirement financial plan
for you, and I highly suggest you do that because again,
(39:42):
things are potentially looking like they could be good in
twenty twenty six, but there's still a lot of reasons why,
just like in the beginning of this year, we could
see a twenty thirty percent sell off. And I'd hate
you to have the regret that says man. I wish
I would have came in and saw those guys and
and potentially rebalance my portfolio and have their active management
(40:07):
style in my corner. Versus I just let it ride
and and and well, we'll see what happens.
Speaker 3 (40:15):
So stay the course.
Speaker 2 (40:17):
You know what it's so funny you said that, because
well it's not funny.
Speaker 3 (40:22):
Funny you're to amuse you. Yes you do like a clown.
Speaker 2 (40:27):
Yes you are. No, But the reality is is that's
what most people typically hear, no matter what is happening,
no matter how their situation has changed, no matter how
their investment portfolio has gone up or drastically down, it's
don't worry about it stayed the same, and and sometimes
you do need to worry about it, and a lot
(40:47):
of times it does need to change. And that's really
the difference between active.
Speaker 3 (40:51):
Managed sometimes sometimes now no, but sometimes yes. And I
think I think we're we're at the market today because
as resilient as it has been, we're reaching you know,
the valuations that we've talked about in previous shows that
things are lofty right now. So you know, prices are highs,
We hit all time highs in the stock market, and
so do you take money and put it in stocks
(41:13):
or in a fund, you know, a growth fund, what
have you, And probably most of them are going to
be weighted towards the Mac seven, right, and Video and
Microsoft and Google, which are already high. You have to
this time it makes sense to be really choosy on
the investments that you put into your portfolio and pick
and choose them out. Cis Cisco was like the cream
(41:33):
of the crop back in the dot com right as
far as a quality stock for a decade and yeah,
and after after the dot com crash, I mean, yeah,
it took forever just to get back to I don't
know if it has gotten back to.
Speaker 2 (41:45):
Yeah, that was in the thirties for a decade.
Speaker 3 (41:49):
Yeah.
Speaker 2 (41:49):
And then so if you if.
Speaker 3 (41:51):
You just said, if you just said, oh, I'm just
going to stay at the course, I mean you just
saw nothing of it for a year after year after
year after.
Speaker 2 (41:57):
Year, and it pays no dividends, right, So you literally
got no return on your investment for a decade.
Speaker 3 (42:02):
Yeah.
Speaker 2 (42:03):
Right.
Speaker 3 (42:04):
But the good news so far that's continuing to spur
and have growth in the economy and more so, the
stock market is earning season financials and banks kicked off.
So far it's been great, you know, basically from the
deal making asset management side of the investment banks and
(42:27):
banks that we know of have been great. Target prices
for those banks. I just saw Bank of America recently
just got their target price has increased. So we need
more of that. More things need to continue to go
right for the rest of this year and for more
of what we've been witnessing of the stock market and
(42:47):
this resiliency, because it's been shrugging off. So I think
the headwinds, I think the tailwinds is a continued strong
earning season. I think the headwinds is we'll see what
happens at the end of the month of FMC them
not cutting right, staying the course with where they're at
right now on the rates, and see if that causes
(43:09):
volatility in the market. In terroriffs yep, the terriff situation
between US and China, and see where that sins. I
think those are the two on the surface as far
as head ones.
Speaker 2 (43:18):
To sum up the whole show is asset allocation. Knowing
your minimum return to objective, your goals, your tolerance for risk,
potentially rebalancing your portfolio, and having it all wrapped up
nicely in a plan, in a roadmap is crucial to
(43:39):
you know the remainder of the year, staying a good year,
and more importantly, how you start twenty twenty six will
be crucial to how you end twenty twenty six. So
give us a call you've been listening to The Wise
Money Guys are numbers nine to one, six ninety six,
seven thirty five hundred. I hope you enjoyed the show.
Speaker 3 (44:00):
Have a great weekend.
Speaker 1 (44:07):
Mm hmm
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, and
visit our website One Source WM dot com.
Speaker 2 (00:14):
Hello and welcome to the Wise Money Guys Radio Show.
I'm your co host John Scambray and I'm here with
my partner Jusepa Wisconti, and we are certified portfolio managers
that specialize in helping people who are retired are about
to retire and manage their money. If you like our
show and have questions or want to come in for
a no obligation consultation, give us a call at nine
(00:34):
one six nine six seven thirty five hundred again nine
six seven thirty five hundred. Also for more information, you
can always go to our website Wysemoney Guys dot com
and you can email us anytime too at question at
Wysemoneyguys dot com. Keep in mind that things that we
(00:55):
talk about could potentially lose you principle. And if anybody
tells you all investments are guaranteed and you're gonna make
a ton of money, and you know there's some sort
of secret sauce that they know about that nobody else
knows about. Please run from that conversation or person, because
(01:19):
that is not the case. In fact, it makes me
think of a client who brought us some information on
something they heard on the radio, and we looked into
the person and the firm and it was not good.
The the issues, complaints, discreasurements, disclosures were pretty bad, more
(01:44):
than what I've seen at most firms or individuals. So anyway,
we try to keep things simple and more importantly, the
things we talk about are really what we honestly believe
and have a high experience level with things that we
(02:07):
talk about. In fact, what it's been almost twenty years
for you in the industry and over thirty years for me,
So we've been doing this a long time, and there's
a lot going on right now. There's some things that
we're going to talk about that are concerns and then
things that are opportunities. As always, we try to give
(02:31):
information that's helpful to people. So let's kick it off.
Speaker 3 (02:36):
Yeah, we got some info on government shutdown. We'll talk
a little bit about that, kind of where things are
at and where it could go from here, how's the
economy holding up so far? And also we have a
hold up of some of the.
Speaker 2 (02:52):
The economy holding up so far.
Speaker 3 (02:56):
We also have some economic data that's been held up
because of the government shut down. But with the data
that we have, how is the economy? How's inflation doing?
And then we have the upcoming FMC meeting at the
end of this month, it'll be October twenty ninth, and
then we are in earning season again officially. This week
it started with the financials and banks reporting, so we'll
(03:19):
talk a little bit about that and how that's kicked
off so far.
Speaker 2 (03:24):
As always, our favorite thing to talk about is specific
strategies that we employ that you can employ. Also investments
that we like. We'll talk about those as well. So
you'll want to stay tuned through the whole show because
generally we get to what I call the nitty gritty
or the meat and potatoes towards the end of the show.
(03:46):
So first let's talk about I mean, you know, has
anything really changed. I mean, here we are, we're in
the government shut down. You know, tens of thousands, maybe
it's even hundreds of thousands of veteral and playloyees have
been furloughed. And has that affected your life at all?
Or affected your investments. Hasn't our client's investments at all.
Speaker 3 (04:09):
Yeah, No, it hasn't. Zern hasn't really made a blip
in the market or the economy. It has lagged. You know,
we are held up on some of the economic indicators
and data that's supposed to come out.
Speaker 2 (04:22):
That you mean, the data that's never accurate, that they
revise over and over again because they manipulate it to
whatever political wins are blowing, whatever election is happening. And
then after that's over, you know, however the tides turn,
then the truth about data typically comes out.
Speaker 3 (04:43):
You can't you can't handle the truth.
Speaker 2 (04:45):
You can't handle the truth.
Speaker 3 (04:47):
Yeah, But nevertheless, it's the data that we have, so there,
I mean, unless you have some other source of data,
that's that's the So it's being held up. But they're
at a standstill, the Democrats and the Republicans. They're putting
much that a standstill. Polling shows both sides are kind
of equal, so it doesn't show that there's really urgency
(05:08):
to absolve and get this government shut down over with.
But as far as where it's costing, you know, the
the only data you know, used by the Federal Reserve.
It says it can cost the economy fifteen billion dollars
per week, and then it's just that they layoff. So
we'll see how this unfolds.
Speaker 2 (05:29):
You mean fifteen billion dollars of phony money that they
they print or borrow. I mean, that's a good thing.
Speaker 3 (05:37):
Did you have your coffee this morning?
Speaker 2 (05:38):
I did. I'm on my second copy.
Speaker 3 (05:43):
No under it.
Speaker 2 (05:45):
Then, what it really gets down to now, without the
manipulation of the government, without the self importance of these
politicians right who always say, oh god, a government shut down,
the world will cease doing exists, Economies will collapse, collapse,
jobs will disappear, the military will will be taken Oh.
(06:07):
I mean, that's what they portray. The reality is it's
their self importance. Bs. That is what's really going on.
Because the government shut down, shuts down, you know, dozens
and dozens of agencies that should never have been created
or put in business or budgeted for or or you know,
(06:30):
be burdened, uh be a burden of the taxpayers. And
that's what we're really seeing that most of what the
federal government is can go away and will benefit taxpayers,
It'll benefit investors, it'll benefit Americans.
Speaker 3 (06:48):
Let's get rid less government, less.
Speaker 2 (06:50):
Government, less bureaucracy, less red tape, you know, on and
on and on and less blowhards of self importance, on
how how important it is to not shut down the government.
And that's just a simple lie. Well no, it's just
a not simple it's a big lie that's been going
on for years. Every government shut down or potential governments
(07:14):
shut down, they scare, you know people, The media sensationalizes
it to pass some ridiculous deficit spending measure called a
continuing resolution. And that's all they're trying to do now
is pass another continuing resolution without balancing the budget, without
actually passing a budget, to just tack on more debts,
(07:40):
operate as a deficit. And that's why the government shut down.
True fiscal conservatives want it shut down because they don't
want to pay for any of this nonsense, especially people
and programs you know that aren't deserving of a nickel.
And then you've got the the the other fleet, opposite side,
(08:01):
the communist socialist side that wants to give away all
wealth and transfer it to people and country and institutions
that don't deserve a single nickel. So, in my opinion,
this is fantastic and the longer it goes on, the
better because we're not blowing money and we're not employing
(08:22):
people that their only AGENTDA is to enrich themselves, empower
themselves and take money out of my pocket, our clients pockets,
our children's pockets, our grandchildren's pockets. So now what I
love is now it's about the fundamentals of investments and
whether or not it's a good time to buy stocks,
(08:44):
Is it a good time to buy bonds, Is it
a good buy time to buy real estate? So on
and so forth. And that's really what our expertise is
is taking all the noise and then filtering it down
into where there's opportunity for our clients to make a
good living in retirement.
Speaker 3 (09:03):
Filtering through the narrative, looking at the natural data and
seeing seeing what what lies underneath the hood to figure
out how to appropriate based off of client schools and needs.
But I have I have a question the way you
said I have a question. Though I do see your
Starbucks here, I thought you were on decaf. Did you
switch to caffeine today?
Speaker 2 (09:23):
I actually went to a caffeinated first thing this morning. No,
one time.
Speaker 3 (09:28):
No, because you're on fire this morning.
Speaker 2 (09:33):
And what and this is decaf. But my first cup
was my first cup of caffeinated coffee in ten months. Wow. Wow.
So I didn't know I was feeling it till.
Speaker 3 (09:46):
Proof proof caffeine works.
Speaker 2 (09:49):
But reality is, as I was saying, is that I
think this is a good thing. Let me let me
put it that way.
Speaker 3 (09:56):
I mean, government is essential, but when it gets bloated, yes, yes,
and you get too much spend. When we've had we've
had bloated government. We've had too much spending. We had
too many programs and organizations out there, and then it
filters down to us where we're paying the cost. And
we saw that with inflation. Right. And we just had
(10:18):
our workshop earlier this week on Wednesday night and conquered
and we showed one of the slides was what things
cost in twenty nineteen and what do they cost today
and how much they rose And that's part of because
of all the stimulus measures and spending that was overblown,
that was overbloated, right, that cause.
Speaker 2 (10:39):
That you know, and a key point of that is
I'm glad you brought that up. First of all, it
was as always a great group of people, great crowd.
We love doing this We love sharing our knowledge and
what we know. We hope that people sit down with
us as a result of it and potentially become a client,
(11:01):
but if not, we would do it anyway. And so
we'll talk more about what you brought up the slides
and what that really was telling people what we think
is coming. Jiseppi had mentioned our seminar that we do
for people who are about to retire or who are retired,
(11:21):
and a lot of the information and data, not narrative
that we share is where we think things are going
to go, where things currently are, and more importantly, how
do you react and what should you be doing, your
advisor should be doing, or what we would be doing
if we were your financial advisors and investment managers. And
(11:44):
the fact is is that looking at the inflation data,
looking at its cause and effect to people's you know,
ability to live the same station in life that they're
living now, Well it used to be and especially from
what two thousand and eight till twenty and twenty two,
(12:05):
I mean, inflation on average was let's just say one percent.
So if you were making three four five percent on
your money, you had a nice comfortable margin spread above inflation.
And so your purchasing power would actually be growing and
you would be okay for the rest of your life
(12:26):
in retirement. Well that's not the case now. From twenty
nineteen till twenty twenty five, most things doubled in price,
whether it was grocery items, energy prices, insurance prices, medical
care prices, you name it, utilities, interest rates on automobiles
(12:52):
and credit cards, travel, doesn't matter what it is, it
went up. It took the last last fifty years of
what things had grown at since the seventies.
Speaker 3 (13:05):
Well seventies, late seventies and eighties. It was a big
spike inflation, but for forty years after that we hadn't
really seen anything. There was normal inflation in the nineties
and then early two thousands, but after the financial crisis
in two thousand and eight, it just wiped everything out.
And even with QE and the spending it didn't cause
inflation to go up. But we were just you know,
(13:28):
anemic in inflation for a period of time. But now
twenty twenty two, twenty three, twenty four, twenty five, we've
had higher inflation. So it's raised that average up and
completely different from what everybody's used to. And only that
but because of the supply shortage and a lot of
different either items or real estate or what have you,
(13:50):
all that's gone up, right, I mean real estate by itself.
Not only have interest rates gone up, but how much
has real estate gone up cumulative from twenty twenty or
from what prices were in twenty nineteen to what prices
are now. I mean, real estate softened a little bit
lately because of interest rates being high and relatively staying
high for for a while. The real estate market has
(14:10):
kind of slowed down, but overall on a cumulative basis,
I mean, I know my house just from twenty you know,
from when I bought it in twenty sixteen until kind
of the height of the market in twenty twenty one,
twenty twenty two, it basically almost doubled.
Speaker 2 (14:26):
Yeah, which is crazy. Yeah. I got a thing in
the mail on my house that said, borrow one point
six million dollars in equity out of your house now
based on what they projected the value of my house was.
And the reality is that would be insane because you know,
that's that's more than double what I owe and I'm
(14:48):
paying three percent And if I borrowed that out it
was seven point seventy five percent to eleven point seven
five percent, as as what the potential interest costs would
be caught that money and people can afford You can't
afford it. People can suckered into that. But what we
(15:08):
were getting back to, what we were showing is that
with these prices, okay, you can't make three four five
percent because it's projected now that prices will continue to increase.
There's no projection of prices drastically coming down to where
they were pre twenty twenty two.
Speaker 3 (15:27):
Less deflation happens, right, we were in a deflationary environment,
then things would then things would start to write. But
that you wouldn't want that to happen. I mean initially
people say, well that would be good. Yeah, things that
you look at the economy, the economy would not be
in a good state exactly.
Speaker 2 (15:45):
You might be unemployed, your your income you know, could
be have could go down because what you're getting and
making on your investments is going down. So you don't
want deflation. But the reality is is we were showing
people how they could as conservatively as possible, and in
some cases with with guarantees from issuers. Guarantee you said,
(16:11):
there's no guarantees, I said, guarantees from issuers beat a
three percent, you know, with a nice comfortable spread above inflation.
We were showing investments that paid interest in the fives,
like bank bonds, and then you know, dividends in the
(16:31):
sevens eights up to ten percent on investments that pay
these dividends pretty darn consistently and are with gigantic companies
that are far less volatile, especially the alternative and alternatives
and the and the structured investments that we were showing
(16:54):
people that yes, in order to you know, live the
next ten twenty thirty years, you're not going to be
able to do it on a three percent you know,
ready to return from a bank. And if you think
that it's not real that okay, well you know my pension,
(17:14):
my sole security that's basically staying the same. And you
might say, well, oh, don't forget the cost of living adjustment.
SOL Security gives it every once in a while. Oh,
but don't forget. Every time SOLI Security does that, they
offset it with an increase in price in medicare. So
it's a total you'd hope illusion that you're getting a
raise in SOL Security because the cost of your Medicare
(17:37):
goes up to offset the rays that they gave you,
so the net to the government is no more additional
out of pocket money. So the reality is those things
are fixed. So if those are fixed, then all you
have is your investment dollars that have to grow at
six seven eight percent is what we project from most
(18:00):
of our retirees to be able to live comfortable twenty
years from now, thirty years for now. So if you're
looking at your plan or you don't have a plan
and going, well, huh, I don't know what assumed interest
rate you know, and I don't know what will happen
to my money after ten years or twenty years.
Speaker 3 (18:20):
Of you factoring inflation that's what taxes.
Speaker 2 (18:24):
Or then I highly recommend you come in. We'll do
a we'll do a free investment consultation and we'll even
do a free financial plan analysis for you. Absolutely no
obligation by calling nine six ninety six seven thirty five hundred.
(18:46):
Again that number is nine one six nine six seven
thirty five hundred. So let's switch gears over to earnings.
Speaker 3 (18:53):
Well, before we switch gears.
Speaker 2 (18:55):
The finish off government shut down or.
Speaker 3 (18:57):
Yeah, just how resilient the the market and the economy
has has has been with everything that it's been faced with.
We have the government shutdown that's continuing on right. We've
had the tariffs, which.
Speaker 2 (19:11):
Taking care of all of that, and I mean that facetiously,
you'll probably.
Speaker 3 (19:16):
Expend Trump Trump says I'm imposing tariffs with AI and
then boom, the market just.
Speaker 2 (19:22):
Takes off, exactly.
Speaker 3 (19:24):
But but even with the tariffs, and we saw the
turmoil that happened within the markets when that initially was
put out there in April, and then it's been quiet,
but now it's it's surfaced again between us in China.
Still market is still resilient, had a little bit of
a blip, you know, earlier in the week and Friday
(19:45):
the last week, and then with labor labor market softness
on top of it. So even with all of that,
we still have pretty solid consumer spending, which is a
big part of the GDP. We have record high s
and P five hundred forward earnings right and we have
earning season which we'll get into that just kicked off
and so far it's going it's going pretty good.
Speaker 2 (20:06):
Yeah. So especially in the big banks, the big investment
banks all beat andor or comfortably met analysts expectations, which
was very healthy. But the interesting thing is is this
last tariff thing you mentioned was on rare earth minerals, right,
And the reality is, if we go back to the
(20:26):
sixties and seventies, I watched and read a whole analysis
on this. In the sixties and seventies, we didn't get
our rare earth minerals anywhere else but in the United States.
Everything we needed, gold, copper, silver, you know, nickel, whatever,
(20:47):
all came from the United States and very little was
coming from you know, South America, Central America, China, so
on and so forth.
Speaker 3 (20:55):
And what there was plutonium right from Lebanon atonium future.
Speaker 2 (21:02):
Remember I was going, Okay, where's he going with this? Well, uranium.
Uranium comes from basically Utah, the Utah area, and we
have insane amounts of uranium and yet we sell it all.
Here's what's interesting, wait for it. You know where our
(21:23):
uranium goes, primarily Russia. Hillary Clinton did a deal where,
without voter approval, sold off our largest company that minds
uranium to Russia. And isn't it interesting that Hillary Clinton
is also you know, tied to the Soroses, uh, you
(21:48):
know through marriage. Now of her daughter, and again I
don't know if this is fact or fiction about the
daughter and and and their connections to George Soros. How well,
it's not fiction about uranium one being sold to a
Russian company.
Speaker 3 (22:06):
Are we still selling it or is it?
Speaker 2 (22:08):
Yes, unless that was overturned, I don't I don't think
it was by by Trump. But but the reality is,
and where I was going with that is we don't
need any other country.
Speaker 3 (22:23):
So I wonder what where Earth were you know, is
in demand today versus back different from the sixties and seventies.
It's still with technology, you know, advanced, you know, quite
a bit from them.
Speaker 2 (22:35):
Yeah, it's things like lithium now it's nickel, definitely, it's cadium,
it's it's copper still, it's still gold. It's things like that,
and and some new ones. I mean, yes, palladium and
magnesium and other things like that. But we have all
(22:56):
of that here in the United States. And it was
really the E p A and the Green you know
agenda that said, oh no, we're not going to get
that from here. We're gonna only get that to have it,
you know, imported to us. And the reality is is
I hope that these things you know, literally stop that
(23:18):
that great cut off buying uh rare earth minerals from China,
so that we actually go back to you know, relying
on our own country for our energy, for our minerals.
Speaker 3 (23:30):
I guess you just have to plan that out, depending
on how how much time to you know build that
back up again, right, yeah, but to map mind and manufacture.
Speaker 2 (23:39):
But the mining companies are here, The manufacturing companies are here.
They've just been you know, put to sleep a little bit.
And getting back to the inflation, the earnings, you know,
the economic output, which is all all been fairly uh
(24:00):
good and above what's been expected. You know, the real
noise is again that this shut down again no effect
on investments, however, you know, I guess the sixty four
million dollar question is is do we see the market
pulling back from here? What's the risk of that, or
(24:22):
do we see it just continuing to you know, run
up throughout the rest of the year, And how do
we think twenty twenty six will be. That's the most
important stuff when it comes to managing money. It's it's
having a reasonable plan for things going either direction, wouldn't
(24:44):
you say? I mean sure, I think if we get
through October, there's a good chance that you know, maybe
we even hit some all time highs. There's again, but
there's still you know, concern that at whether it's employed.
Speaker 3 (25:02):
Yeah, well let's let's let's unpack it. So what are
the things that what are the things that have to
continue to go right to continue to have growth. I mean,
we we've typically the end of July, August, September, and
then part of October you have a slower but more
volatile season in the stock market, and we haven't seen that.
(25:24):
We've actually had a positive September, which September historically and
when you average it out, is negative as far as
stock market performance. But we actually had a positive UH
in September. And now here we are, you know, halfway
through October, and it's been plugging along. We've had a
couple blips, you know, when this whole rare earth and
(25:46):
tariff imposing between US and China, but outside of that,
it's been pretty a smooth ride, which is crazy. So
that one I think raises a little bit of flag
of caution because you can only go so long with
a smooth ride before that's some sort something something happening, right,
(26:06):
So one I think is how does this whole US
and China with the current environment, How does that unfold?
And do they find I don't think it's going to
be where they're going to tear iff and we're going
to tariff, because it won't be good for either country,
right it could cause it could take it if it
got real bad, It could technically cause be a catalyst
(26:27):
to cause a recession, right And nobody's gonna want that
between US and China. So I think at some point
they will resolve it. But will it cost some volatility?
It potentially could? I think. The other The other part is,
you know, we're coming up in the f MC meeting.
The market is betting we already had one rate cut.
The market is betting for two more twenty five basis
(26:47):
points or quarter point rate cuts this year. I don't
think the Fed's going to cut, So how is the
market going to respond to that? Are they going to
shrug that off too like they've shrugged off other events,
or has the rate cut scenario been baked in so
much that it could cause volatility? And I don't think
it's gonna I don't think the Feds are gonna cut anymore.
(27:09):
I think it was just a one and done this
year because so far the data that we have, we
are going to have another inflation print with CPI, so
we'll see how that comes in. But so far, the
inflation and the measurements that the FED looks at, it's
still around three percent. It's sticky, so it's not going anywhere.
And Jerome Palell just recently earlier this week, came out
(27:31):
and said that they're going to be slowing down the
quantitative tightening, right, So that's another tool than the toolbox
outside of just raising or lowering interest rates to battle
inflation or you know, stimulating the economy. So because I
think they did that and we're inflation and we're the
economic data and the resiliency of the market and economy
(27:52):
so far with everything going on, I don't think they
have any reason to cut rates, you know, when they
meet at the end of this month.
Speaker 2 (27:59):
Yeah, I completely agree. And again the reality is based
on where we're at. If you're looking at your investments
and you're not sure if you have investments that will
do well whether interest rates go higher, whether interest rates
go lower, whether stocks go higher, stocks go lower, you're
(28:22):
probably not properly diversified, and you probably have never had
somebody you know, truly look at you know, the risk
from a volatility measure, from a correlation measure, from a
beta measure, and some of the other statistical information we
(28:45):
look at to say, Okay, yeah, you have a portfolio
that will do very well in good years like twenty
five and twenty four, but you also have a portfolio
that potentially could go down twenty thirty percent or more
if we don't have a good year in twenty twenty six.
And when you're retired, it's more about focusing on a
(29:07):
rate of return that you need overall on your investments,
and then balancing out the types of investments you have,
and spreading out and diversifying properly amongst the different investment
categories stocks, bonds, real estate, alternatives, cash, so on and
(29:27):
so forth, to make sure that I have the best
possible chance of achieving my seven percent, my eight percent,
my nine percent, whatever the number is, versus not knowing
that number and then just hoping that my portfolio will
do okay if things aren't going as perfect from a
(29:48):
stock market perspective as they've gone in twenty five and
twenty four. Don't forget twenty five wasn't exactly a smooth
ride till the second half, because the first half we
I mean we had a twenty to thirty percent you know, crash,
not a correction. We actually had a crash because stocks,
(30:09):
the stock in Yep, we're all down more than twenty percent,
which is the basic definition of a stock market crash
is when all your investments in the stock market have
corrected downward twenty percent or more. And we had that. Now,
thank god, you know, some of the things that caused
(30:30):
that ended up not coming to fruition, and and there
was a lot of potential rebalancing and opportunities that came
out of that, which we certainly did because if you
look at our client's portfolios and the things that we
boughtom in in the downturn in March, April and May
of this year, I mean, they're are massive double digits
(30:54):
from from the rebalancing that we did in April and May.
And what I'm getting at is that strategically, don't go
buying and throwing your money at well. For example, we
had at a person that was asking about gold and
should I just put everything in gold if you think
(31:14):
gold's going to five thousand and I do think it's
going to five thousand, but no, because what if it doesn't?
And also gold doesn't pay you anything why you own it?
And on top of that, it's commission base. You got
to pay a big commission, usually around ten percent to
buy you own the physical goal, right if you own
the physical gold, and then you got to pay a
ten percent you know, commission to get out of it.
(31:36):
And the reality is is that when you're retired or
about retired, about to retire, it's about can I replace
my income that I was used to earning, you know
as a W two employee or if I was self employed?
What cash flow did I have? And can I maintain
that cash flow and grow that cash flow consistently or
(32:00):
for a long period of time. So it comes down
to recognizing, you know, where I can get those investments
that usually don't all come from just stocks. In fact,
our portfolio is a big mix of stocks, about thirty
thirty five percent for most of our clients average, some more,
(32:20):
some less, depending on your tolerance for risk and need.
And then a big percentage thirty forty percent in bonds,
individual bonds and other fixed income investments. And then a
big chunk now in alternative investments that we just are
(32:41):
so happy and excited for what they're doing for our clients,
which is way less volatility and in some cases even
less volatility, which means smaller ups and downs in value
than even bonds, than even bond prices. So think about that,
if I could get into an investment and one category
(33:04):
that I have some money in, isn't the roller coaster
ride of investment value that I might be seeing in
my portfolio go wildly swinging like stocks and mildly swinging
like bonds, and is less than those. But here's the
kicker pays more than bonds.
Speaker 3 (33:24):
I mean, we feel distribution.
Speaker 2 (33:27):
Retired person should have that in Yeah, as far as
distribution slash slashes the pie, YEP should have that slice
of their pie in their portfolio. But again, if you're well.
Speaker 3 (33:37):
And then also in twenty twenty two, like you mentioned,
I mean, bonds were down to ten percent, stocks were down,
and we've talked about it before, you know, twentyth over
thirty percent. Some of these alternate investments were either flatter
slightly up. So I hoped to create a buffer within
the overall traditional portfolio. And I think a lot of
people are missing that. And you know, I had one
(33:59):
of the attendees in our work General workshop this week
that we had come up and said, you know, I
enjoyed it very much. I had a lot of great information.
I learned a lot. And she says, you know, I
knew about kind of stocks and bonds, but I didn't
know about some of these other things that you talked about.
I didn't even know they existed. So it got me
(34:20):
thinking and it was very you know, it's you know,
having me spin the wheels in my head and put
in some thought, and I was like, hey, you don't
know what you don't know. This is a complex world.
And we learn of investments that come out. I mean,
investments today were not the same ten years ago or
twenty years ago or thirty years ago, right, I mean
stocks have been around for a long time, bonds have
been around for a long time. But outside of that,
(34:42):
there's all these other areas within even stocks and bonds.
But then alternative investments that emerge, and you have to
be abreast of what's out there to see if hey,
maybe it makes sense or it can call, you know,
create further diversification of a portfolio.
Speaker 2 (34:56):
It never ceases to amaze me that people with considerable
amounts of money mostly have mutual funds or exchange traded funds,
and then on top of that, they have no idea
what's inside of those funds and whether or not they're overlapping,
and what their risk profile actually is by owning so
(35:19):
much of these various mutual funds. And then again they
have hundreds of thousands to millions of dollars and they
don't have you know, hedging, they don't have alternatives, they
don't have private credit products, they don't have structured notes
and structured investments and all these things that people with
money should have, in our opinion, in their portfolio. And
(35:43):
we'd love to tell you more about those things by
giving us a call at nine six nine six seven
thirty five hundred. Hope you've enjoyed the show so far,
and we were just diving in a little bit into strategy.
How important diversification is, how important all is. How much
do you have in each category of investments, not how
(36:05):
much do you specifically just have in stocks. That's important
especially on you know, are you all tied to just
one sector of stocks? But more importantly, why don't you
have alternatives in your portfolio. Why don't you have real
estate investments in your portfolio? There's great real estate products
that we put in people's portfolio that have awesome cash flow,
(36:31):
awesome tax advantages. And you're an owner of real estate,
and when you have wealth, why don't you have again
real estate alternatives hedging strategies in your portfolio so that
you have things that just don't all go down in
lockstep together, and more importantly, may stay flat or even
(36:52):
go up if the stock market is down and it
blows me away over and over and over again. We
take on clients that have you know, five hundred thousand,
a million, two million, three million, and they come in
with a basket of funds or a basket of investments,
and they have no idea what they do for them,
(37:14):
how they help them achieve their goals, what their risks are,
what correlation they are to each other. All they know
is that, hey, well I work with this person. They
put me in this and it was really bad. I
watched it go really up in twenty four and then
I watched it go you know, down in twenty five,
(37:35):
and now we're back up again. But they don't know why.
And then I go what do you need? We go
what do you need this to make? And what sort
of income are you drawing off of this or what's
the overarching goal for this money? And so we start
helping them drill down and understand that, Okay, well, gosh,
(37:57):
maybe I don't need some of these things that are
in there, or maybe I need more of some things
and less of others, or maybe they're.
Speaker 3 (38:06):
Just going to add some things because they don't even
have an exposure to it.
Speaker 2 (38:08):
So the best way I can put it is, let's
just say you have a half a million dollars and
you have a pension, you have sol security, you've been
retired for you know, five years, you've watched prices go
through the roof. You're still taking out the same amount
of money. So overall, you're buying power and your your
potential longevity of your income is at risk because if
(38:34):
prices continue to inflate from here at three percent and
nothing was adjusted for the last five years where we
had this massive inflation spike not seen since the seventies,
well then you know, somebody needs to take a deep
dive on that for you and go, okay, well, if
you have five hundred and you've been taking out forty
(38:57):
you've been taking out eight percent per year? Are you
earning eight percent per year? Do you have cash flow
that is eight percent per year? Meaning do the investments
inside my portfolio kick off eight percent per year without
having to sell them? And if the answer is I
don't know or know, you definitely need to come in
(39:19):
and see us by calling nine one six ninety six
seven thirty five hundred. We're gonna do a quick surface analysis,
give you our second opinion. We can do a deeper
dive if you'd like, by doing a retirement financial plan
for you, and I highly suggest you do that because again,
(39:42):
things are potentially looking like they could be good in
twenty twenty six, but there's still a lot of reasons why,
just like in the beginning of this year, we could
see a twenty thirty percent sell off. And I'd hate
you to have the regret that says man. I wish
I would have came in and saw those guys and
and potentially rebalance my portfolio and have their active management
(40:07):
style in my corner. Versus I just let it ride
and and and well, we'll see what happens.
Speaker 3 (40:15):
So stay the course.
Speaker 2 (40:17):
You know what it's so funny you said that, because
well it's not funny.
Speaker 3 (40:22):
Funny you're to amuse you. Yes you do like a clown.
Speaker 2 (40:27):
Yes you are. No, But the reality is is that's
what most people typically hear, no matter what is happening,
no matter how their situation has changed, no matter how
their investment portfolio has gone up or drastically down, it's
don't worry about it stayed the same, and and sometimes
you do need to worry about it, and a lot
(40:47):
of times it does need to change. And that's really
the difference between active.
Speaker 3 (40:51):
Managed sometimes sometimes now no, but sometimes yes. And I
think I think we're we're at the market today because
as resilient as it has been, we're reaching you know,
the valuations that we've talked about in previous shows that
things are lofty right now. So you know, prices are highs,
We hit all time highs in the stock market, and
so do you take money and put it in stocks
(41:13):
or in a fund, you know, a growth fund, what
have you, And probably most of them are going to
be weighted towards the Mac seven, right, and Video and
Microsoft and Google, which are already high. You have to
this time it makes sense to be really choosy on
the investments that you put into your portfolio and pick
and choose them out. Cis Cisco was like the cream
(41:33):
of the crop back in the dot com right as
far as a quality stock for a decade and yeah,
and after after the dot com crash, I mean, yeah,
it took forever just to get back to I don't
know if it has gotten back to.
Speaker 2 (41:45):
Yeah, that was in the thirties for a decade.
Speaker 3 (41:49):
Yeah.
Speaker 2 (41:49):
And then so if you if.
Speaker 3 (41:51):
You just said, if you just said, oh, I'm just
going to stay at the course, I mean you just
saw nothing of it for a year after year after
year after.
Speaker 2 (41:57):
Year, and it pays no dividends, right, So you literally
got no return on your investment for a decade.
Speaker 3 (42:02):
Yeah.
Speaker 2 (42:03):
Right.
Speaker 3 (42:04):
But the good news so far that's continuing to spur
and have growth in the economy and more so, the
stock market is earning season financials and banks kicked off.
So far it's been great, you know, basically from the
deal making asset management side of the investment banks and
(42:27):
banks that we know of have been great. Target prices
for those banks. I just saw Bank of America recently
just got their target price has increased. So we need
more of that. More things need to continue to go
right for the rest of this year and for more
of what we've been witnessing of the stock market and
(42:47):
this resiliency, because it's been shrugging off. So I think
the headwinds, I think the tailwinds is a continued strong
earning season. I think the headwinds is we'll see what
happens at the end of the month of FMC them
not cutting right, staying the course with where they're at
right now on the rates, and see if that causes
(43:09):
volatility in the market. In terroriffs yep, the terriff situation
between US and China, and see where that sins. I
think those are the two on the surface as far
as head ones.
Speaker 2 (43:18):
To sum up the whole show is asset allocation. Knowing
your minimum return to objective, your goals, your tolerance for risk,
potentially rebalancing your portfolio, and having it all wrapped up
nicely in a plan, in a roadmap is crucial to
(43:39):
you know the remainder of the year, staying a good year,
and more importantly, how you start twenty twenty six will
be crucial to how you end twenty twenty six. So
give us a call you've been listening to The Wise
Money Guys are numbers nine to one, six ninety six,
seven thirty five hundred. I hope you enjoyed the show.
Speaker 3 (44:00):
Have a great weekend.
Speaker 1 (44:07):
Mm hmm
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