February 27, 2025 • 46 mins
Wow, these unemployment numbers. They were higher than anticipated. Hosts John and Giuseppe take a hard look a the numbers, and their history, to tell us what to expect for the rest of the year 2025. Then, possible Interest Rates cuts ?, Bonds, Staggflation, and our March 12th Workship! 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
by One Source of Wealth Management SEC licensed three one
nine zero seven eight. For disclosures and more information, visit
our website One Source STEMP Wise Money Guys.
Speaker 2 (00:12):
My name is Giuseppe Visconti, co host along with John Scambray,
who is out for this week. We are One Source
Wealth Management and we are certified portfolio managers who like
to help our clients, who are mostly pre retirees and retirees,
get to their goals by way of planning, putting a
(00:33):
blueprint together and helping them along their path from getting
from point A to point B. We have been doing
this since twenty fifteen. Both John and I have a
combined experience of about fifty years helping clients. John since
nineteen ninety two and I got started in the business
(00:54):
since two thousand and eight, which was a little bit
of a boot camp and a shock to me, especially
entering in in the Great Financial Crisis, but it was
a great learning lesson starting into the business. We have
a upcoming workshop and this is where we get to
explain more of what we do, who we are, our process,
(01:16):
how we help our clients from point A to point
B make sure that they're on track for retirement and
hitting all the retirement goals and their financial goals that
are important to them and their family. And that workshop
is coming up next month pretty soon. Time is flying.
It is on March twelfth in Conquered and it's going
to be the first workshop for this year and also
(01:39):
the first time we are doing it in the East Bay.
We've been getting more and more calls and interest from
clients within that region, so we figured why not do
workshop in that area. You want to call in nine
one six, nine sixty seven thirty five hundred seats do
fill up. It is you know, a certain amount of
(02:01):
limited seating, So the earlier the better you want to
place your spot and RSVP you can call in most
likely to be speaking with our office manager Kathy, and
she can put you down for a spot on the
workshop again. And what we do is tell you more
of who we are, you know, pull back the curtains,
give you a glimpse of you know, what's out there.
(02:23):
How we help clients not only in the planning process
and building a blueprint, you know, and structuring and some
of the things that we look at and help clients
some of the questions that we get how to get
them from point A to point B. But then also
going down into you know, what does a typical portfolio
look like? What are some of the investments that we
use that are typical of retirement. You know, how do
(02:43):
you get your assets and your money that you've accumulated
and worked hard for for a number of years and
turn that into an asset that's going to produce a
paycheck for you At this point right no longer is
it in the growth mode, but now it's in the
distribution mode and is going to stand the test of time,
right through the ups and downs of the market, through
(03:06):
some of the black Swan events, meaning you know, geopolitical
tensions that are going around, whether it's a war in
the Middle East, the war in Eastern Europe and Russian
and Ukraine inflation, all those sorts of things can stand
the test of time and how we measure and you know,
nobody's got a crystal ball, but we like to put
(03:28):
things in place as far as a plan and a
portfolio where we can kind of create some bumper lanes
and have the track go in a pathway so it's
not guesswork, and you know, five years from now, your portfolio,
you know your goals, you're you're way up here, and
then maybe two years later your your way down and saying,
oh no, you can't retire, or you're going to have
to reduce your retirement spending, so on and so forth.
(03:50):
So again, you want to give us a call nine
six seven thirty five hundred to get on that list
for the upcoming workshop and conquered at the old space
Edy Factory on March twelfth, which is from six to
seven thirty. You can also give us a call if
you you know, can't make it or that day doesn't
work for you, but you want to have a conversation
(04:11):
with us. Maybe there's some questions that you have in mind,
maybe you haven't got around and maybe you're kind of
looking at yourself as far as your financials because it
is tax season and you're wondering, Hey, am I on
track to retire or is my retirement doing what it
should be doing? And can at last, you know, for
the duration of my retirement. You can also give us
(04:32):
a call for no obligation consultation. You can also an
email us at question at wisemoney guys dot com if
there's a topic or a question that you have, and
we look at those emails from time to time, and
sometimes we even bring up those questions on air a
lot to uncover. I wanted to go over some of
the hot topics and trending, you know, events out there
(04:57):
within the economy and the stock market. You know, most
of the time people have questions because inflation data is
coming out, or the Fed's med or you know, the
tariff talk, and so what are some of the things
that are happening out there, What are the potential implications
and key takeaways. And I'll do my best to break
it down in layman's terms. But we have job reports
(05:22):
which is still showing resilience, you know. I'll explain what
that report revealed, some of the potential benefits or consequences
of that report, you know, and if that trend continues. Inflation,
that report came out. We talked a little bit about
that in our previous show. But that is you know,
(05:43):
inflation is kind of hot topic because that's heating back
up based off of the most recent data. Trump's tariff push,
so you know, he's pushing on these tariffs and he's
and he's focusing more on a reciprocal tariff structure. I'll
go over some thoughts and key takeaways on that. Retail sales.
That's economic data that that came by and they have dropped,
(06:08):
So what does that mean. What's the indication of retail
sales plummeting stock market? We hit all time high in
S and P five hundred, but not in the other industries,
so we're having some mixed signals. And what are you know,
some of the key takeaways or benefits and consequences of that.
Stagflation This kind of relates to the inflate inflation measurement.
(06:31):
What is stagflation? What does that mean? We talked about
that in previous episodes, and what is the worry of stagflation?
And then the other that came up midweek is the
FED minutes, and the Fed minutes essentially is all the
notes and the minutes of the most recent FMC meeting
with Jerown Pale and all the FED presidents, some of
(06:53):
their thoughts, their forecasts as far as inflation, what needs
to be done really to get inflation down to their
target of two percent? So jobs report, I'll start there
and we'll work through the other items. Obviously, I won't
have time all in one segment, so we'll break it
(07:14):
down in different segments. But the job reports shows resilience
and the last one it added one hundred and forty
two thousand jobs, is a bit shy of what was expected.
But the unemployment rate dipped down to four percent, so wages,
on the other hand, also jumped, so that was up
(07:36):
half a percent for the month, beating forecasts. So really
what that says, I mean, that's good. That is a
positive economic outcome that unemployment is down to four percent
because we're still in low unemployment, which is great for
the economy, and it's putting the labor market in a
(07:57):
bright spot even though growth is somewhat But the potential
consequence of that, when we're looking at the inflation environment
and kind of the Federal Reserve and the position that
they're in, is that with the higher wages, that just
means that that could boost spending and that could be
(08:19):
great for retailers. But if inflation spikes because there's more
spending happening, then it could force the Fed to rethink
rate cuts, and we've already witnessed that, right they were
cutting rates and they cut it three times last year.
Then this most recent FMC meeting, they said we're going
to put it on pause. And now we're at a
(08:41):
point in time where if inflation ticks up like it
has in the most recent inflation data, then they could
be in a spot where they can't cut rates anymore,
and if anything, they may have to raise rates if
that trend continues in inflation to curb the inflation continuing
to end up. Overall, the economy continues to show resilience,
(09:05):
which is great for our US economy because the opposite is,
you know, and the two mandates that the FED really
look at is full employment, which four percent unemployment is
you know, within full employment, and it's very very good reading.
But then the other is getting inflation in check, and
(09:27):
that's exactly what they've been trying to battle since twenty
twenty two, and we've made a lot of headway towards that.
But now we're at the sticky point. So we'll see
with further economic data that comes in in regards to jobs, wages,
as well as inflation and inflation. You know. Speaking of that,
(09:50):
the data shows really the prices for groceries, gas used
cars are all climbing faster than expected and those are
all the variables. Usually at the Federal Reserve try to
strip out because they say, you know, gas and groceries
and those things are always more volatile, and we want
to strip that out to get a better reading to
(10:11):
see if we're getting closer to our two percent target
as far as the trajectory of the rate of inflation
coming down. But that's what really hurts all of us
on a day by day and week by week basis,
because we need groceries to live, we need gas to
live and go from point A to point b. Not
only that, but then you know ups and I mean
(10:32):
there's more electric vehicles like Amazon's using a lot more electric.
But you have all of the transportation that utilizes gas
and energy or fuel some sort of fuel, whether it's
diesel gasoline to get from point A to point b, right,
whether it's transportation from planes, cargo transportation from chips or trains,
or freight long haul trucks. And when those prices are higher, right,
(10:57):
then it's going to impact the prices of the goods
that are being trans transported from point A to point b.
John was talking about in the last segment that you know,
if crude oil the barrel of crude oil comes down
to the sixties or fifties, then we'll see a bigger
(11:19):
relief and kind of a translation into lower energy costs
therefore lower prices on some of the consumer goods that
would consume that are being trans transported from planes, trains
and automobiles. We'll come right back. I'll talk a little
bit more about inflation, jumping into the terrace and retail
(11:41):
sales economic data. Give us a call nine one six
ninety six seven thirty five hundred to register for our
upcoming workshop and conquered on March twelfth at the Old
Spaghetti Factory. This is Juseppe Visconti, co host and John
Scambray who's out for this week. We are one Source
Wealth Managed and we are certified portfolio managers who help
(12:03):
pre retirees and retirees help them get to their goals
from point A to point B and live a long
retirement and make sure that their financial plan and portfolios
stand the test of time to last them throughout retirement,
whether it's twenty years or thirty years. We are having
an upcoming workshop to discuss and reveal more of what
(12:26):
is entailed in taking somebody from point A to point
B and making sure they have a lasting retirement and
that's going to be in conquered. March twelfth, six to
seven point thirty at the old Spaghetti Factory. You want
to give us a call at nine to one six
ninety sixty seven thirty five hundred. You will be speaking
with our office manager Kathy, who could put you down
(12:48):
an RSVP for a seat which is limited by the way,
So you want to give us a call. The earlier
the better because we hate to have it get to
capacity and start having to turn people away or maybe
take down their name and number from maybe the next
upcoming workshop. Again, though, you can reach us at nine
one six nine six seven thirty five hundred, or you
(13:11):
could just give us a call if you want a
no obligation consultation. If that day, time or location does
not work for you, I'd be more than happy to
have a discussion of what are some of your concerns
financial goals. You can get a chance to learn more
about you know ourselves, our firm, how we do things,
(13:32):
how we help our clients and take them from point
A to point B and see if we are a
good fit to help you and your path and journey
along retirement. So last segment I touched on job support,
the resilience of the US economy and the data that's
coming in. You know, they're spending, inflation's ticking up, jobs
(13:55):
tick down, the unemployment rate tick down to four percent.
There's the worry of the tariffs. You know, there was
a lot of uncertainty of how that was going to
unfold before Trump got into office. You know, how much
is the tariff's going to be? Is it going to
be retaliatory? Retaliatory where one nation is going to up
(14:19):
the ante and then Trump and his team are going
to have to up the ante, and then we're going
to have these high high terrior It's going to impact,
you know, some of the goods that we consume, and
the prices which are already really high. I mean, eggs
are crazy right now to get a dozen eggs like
eight nine bucks. It used to be that well, I
think it was like twenty twenty two. We were faced
(14:41):
with that. So prices are already high. You know. The
surprising thing and what has been taking place in what's
unfolded so far right there are some still uncertainties out there,
but so far the market is digesting it fairly well.
I mean, the S and P five hundred just hit
record high midweek, so that is a good sign as
(15:04):
far as how it is digesting some of what you
know has been already spoken for along the lines of
tariffs or what could be expected in the near future,
because that's exactly what the stock market is. It's trying
to price in the perceived future. It's not that the
pricing of this stock market or individual stocks for that
(15:26):
matter that make up the stock market is not reflective
of the valuation of today. If you look at their
balance sheets and their financials and say, okay, what's the
market value of that stock or the stock market today,
the price and where the stock market is is what
the perceived values. And that's that's why it fluctuates up
(15:47):
and down. And that's when you have some good news,
when you have some bad news, When jerown power comes
on and says, you know, we're cutting rates or we're
you know, keeping rates on hold, all the those create
the gyrations in the stock market or individual stocks. And
(16:08):
so far it's been digesting it fairly well. And I
think the key point with everything that's going on with
the tariffs is Trump has signaled that it's going to
be reciprocal, which is you know, I think the endgame
and what we're hoping for is, well, this reciprocal terriffs
is if this nation is tearing us at this level,
(16:29):
then we're going to tear them at that same level.
And if they want a lower tariff, then go ahead
and lower yours and we'll lower ours. And in the end,
hopefully what would come come to fruition is that different
nations right that are terrifying each other, decide that we're
going to start lowering and lowering and lowering and come closer.
(16:50):
And I don't think it's going to come to absolute
free trade, but if it could come closer to a
freer trade environment, that is going to be boasting very well,
not only for our economy but economies across the world.
And a utopian environment, you know, as far as world trade,
you know, and this is something that you learn and
I learned, you know, going through undergrad for my business
(17:13):
economics and even through grad school, especially when I earned
my master's in economics and finance, was you know, the
utopian and the best outcome for a trade situation in
the world economy is to have free trade right not
to everybody have these high tears against each other. And
(17:34):
so I think that is going to be a good path,
if that is a path, and I think, you know,
and that's what John and I have talked about, and
we think that's kind of the path that Trump is
taking or trying to, you know, move towards. And if
it comes to fruition, then that's going to boast well
for not only ours, but like I said, the world.
So hopefully that along with I guess, you know, and
(17:58):
what we've seen so far as using tears as a
measure to try, well not using to try, but to
use as a negotiation factor. And we saw that with
Columbia with some of the illegal immigrants, and it's gonna
and it's probably going to continue to be used for
a negotiation measure, you know, with other other nations, and
(18:19):
hopefully at some point that we'll have some resolve with
some of the geopolitical tensions in these wars in the
Middle East, and as long along with Russia Ukraine, that
works out for everybody and both you know, and and
works out well for Ukraine and works out well for
for the Middle East. But if that comes to fruition
(18:40):
where we can, and Trump is successful in garnering peace,
you know, much like he did in his last term,
and not any new creation of new wars the stock market.
That's going to be tell went for the stock market
and economy as well. So we'll see how it continues
to unfold. We have high hopes, you know, I think
(19:00):
that these are some tall winds, but there because there
are some uncertainties around that and the short term it
is going to cost some volatility and the short term,
you know, the tariff situation could we could expect higher
prices from anything from electronics to maybe some groceries, and
that can rattle some markets. Right as we go through
(19:22):
this journey to hopefully lower tariffs across the board and
have a more equal playing field, but then also freer trade. Right,
So jumping into retail cells, this is very important because
consumers make up a big portion of the GDP, the
(19:44):
gross domestic product, which is the you know, the measurement
of what our nation is generating as far as revenue,
and the consumers are a huge part of that. I
believe it's almost seventy percent of the GDP. And and
why they're important is because if consumers are spending money
and creating economic activity out there. That's going to lift
(20:08):
and boost the economy moving forward. But if it starts
slowing down, then we see that translating, and if it
continues to be a trend, you know, eventually that could
cause I mean the eventual is to cause a recession.
So retail sales plummeted and that was a recent economic
(20:28):
indicator that that took place here in the last week,
and that tanked and that went down you know further,
you know, in the last then it has been really
in the past two years, some of the you know,
climate as far as I'm saying climate that climate change,
but I'm saying like wildfire, wildfire's frigid weather. You know,
(20:52):
cold weather has impacted some of that. I don't know
if that's going to be the main culprit of the
lackluster retail cells indicator. We'll find out, obviously when the
future indicate, you know, the more recent or the new
next retail cells comes out, and if it was just
(21:17):
a blip on the radar, or if there's something more underlying,
meaning that consumers are starting to pull back right and
pull back spending because things are very, very expensive tightening
their tightening their belts, and so temporary dip could ease
inflation pressure, which would be a good thing. But if
(21:38):
it's prolonged and this becomes more of a trend, like
I said, then that can be more of a signal
of a recession risk, which is going to obviously spook
investors and that can cause some volatility within the market.
So hopefully within this temporary hopefully it's a temporary blip.
(22:00):
Hopefully the journey through the tariff you know what Trump
is going through as far as raising the tariffs and
trying to make it an equal playing field, and hopefully
some of these short term expected higher prices on some
of the goods that it might impact. Is that short
and temporary, and then going through and the Department of
Government Efficiency and dog does an effective job where they
(22:23):
can find ways to trim spending and then not create
any new spending out there right and find ways which
Trump has been doing, finding ways for foreign entities, corporations
or countries come in and say hey, it's a benefit
and here's the benefit of investing in the US, and
we get more foreign direct investment which helps boost our
(22:44):
local economy. So we'll see how that unfolds the stock market.
Like I said, the S and P five hundred hit
an all time high just this week, but not the
other indices, right the NASDAK, the Dow Jones they were
and so we're having some mixed signals. And part of
that too is that we're in a high valuation point. Again.
(23:07):
We talked about this last year that we're at a
high valuation point. The pe levels at a high point
historically looking and that could be a time where you
want to look to rebalance your portfolios. And I'll get
more into what that looks like as far as you know,
rebalancing your portfolios. Some massive classes that you want to
(23:28):
look at. Again. You're listening to Giuseppe Visconti co hosts
along with John Scambray with the Wise Money Guys. Give
us a call for an obligation, consultation or to get
a seat at our upcoming workshop and conquered March twelfth
at nine one six nine six seven thirty five hundred.
We are One Source Wealth Management, a management firm that
(23:49):
we consider ourselves portfolio managers first, but also do financial
planning as it is a key component to the overall
process to helping individuals from point A to point B.
Most of who we help are clients that are nearing
retirement or in retirement already who have worked hard their
whole lives and accumulated assets, earning income and then planning
(24:15):
for How do we take these hard earned assets that
they've saved for all their life and turn it into
a lasting paycheck for the retirement to last for you know,
whether it's twenty or thirty years or more for their
retirement years. And it's becoming harder and harder to do that,
especially as inflation and prices of goods and services that
(24:39):
we use and pay for every day, every week, every
month throughout the year, especially in the past few years,
has exponentially grown, some more than others, but a lot
of it, and even the services, and that's where it's
hitting hard is you know, insurance even down to you know,
(24:59):
a lot arm services where you have the monitoring services
like a d T other membership services that are on
a monthly, quarterly, or annual basis. Everything has gone up
and those are not coming back down. Unfortunately. The things
that are going to fluctuate that we see obviously are
going to be more of gas and groceries. But you know,
(25:23):
are they going to get back to where they were
five ten years ago? No? You know, for us here
in California, and that's where we're based out of. You know,
gas has been ticking up and up and up, even
though the price of per barrel of oil has been
going down a little bit. Someone has to do with
other measurements that California likes to put into the gas,
which is the gas taxes. But we see fluctuations of
(25:46):
that going up and down. But it's becoming harder and
harder for a retiree where it used to be back then,
you know, you can save a million dollars, have a
four percent you know return or cash flow from that
million bucks, and you would be okay. Right now if
(26:06):
you had that same million bucks, it's going to be
even harder to you know, sustain the normal expenses that
you had pre COVID really when all this started, and
you need more of like a five percent or six
percent as far as a yield for cash flow. So
how do you do that? You know, And a lot
(26:28):
of times when you're thinking, well, if I need a
higher return, then that means that I'm going to need
to take more risk sometimes yes, but there is a
range and there are other things out there, and we
try to do our best to look for instruments out
there in the investment world to get you kind of
the best bang for your buck where you're not having
(26:48):
to go out there on the risk goal and take
a bunch of risk, right, And some of those things
which we've talked about in previous episodes are fixed income
with your bonds because they're paying attractive rates. They're paying
really attractive rates, like in twenty twenty two, twenty twenty three,
and even some twenty twenty four, but then it started
coming down with a whole rate cut talk and then
(27:09):
actual rate cuts. But then it starts to spike back up,
and so we see some opportunities back out there, maybe
not as high as they used to be, but still attractive.
We're in their five percent range and you can lock
those in and you're not taking a bunch of risk
doing that, and it takes a big burden from your
portfolio if you're trying to, you know, just achieve a five,
(27:30):
six or seven percent return because you're not having to
go out there and say, well, I'm just going to
put it in a whole bunch of stocks and hopefully
those stocks that a pick are going to grow in
value over time and it's going to help me retire.
Others are alternative investments out there, and those are paying
you know, some distribution rates of you know there from
like six seven percent all the way up to ten
percent distribution rate. But it's not going out there on
(27:53):
the risk go where you're taking a bunch of risk
in order to getting that payout. So the nice thing
is that they're is ways to produce a paycheck from
the assets that you've worked hard for and produce enough
right as long as you as long as you have
a meaningful account that you can go out there and
earn you know, six percent cash flow on your on
(28:15):
your assets without having to go out there and take
a bunch of risk and being aggressive, because the last
thing you want to do in retirement is take risk
and chase performance. We've had conversations with clients that you know,
they say, well, yeah, I tried to go on my
own and I've bought these different stocks, and especially during
like twenty twenty twenty twenty one, before twenty twenty two
(28:38):
happened and you had all these stocks like Zoom to
stay at home stocks like Zoom and Peloton and they
were just doing nothing but going up to the moon,
and people were chasing performance. But what happened in twenty
twenty two is, you know, the stock market went down
by twenty percent, s and P five hundred, NASDAK was
down by like in the thirty over thirty percent, rustled
two thousand as well, bonds were down by over ten percent.
(29:01):
But some of these individual stocks like Zoom and Pelotons,
some of these stay at home stocks, I mean they
were down healthy double digits, forty fifty somewhere down seventy percent.
You don't want to put yourself in that situation. We
think that there's more tell winds than headwinds moving into
this economy in this year that are going to support
(29:24):
a continued resilient and healthy economy and growth in the
stock market. But doesn't mean that there's no uncertainties out there.
And we're at a point right now, and I was
talking a little bit before on the previous episode of
you know the mixed signals of stock market and the
pe valuations and kind of the valuation of the stock
market where it is right now, and it is at
a higher point. So this is a good time where
(29:45):
if you have some winners in your portfolio that hey,
I picked, Palenteer I picked. You know, SMCI has been
moving up quite a bit recently, trim some of that position,
take some of the profits off the table, and you
want to reposition some other assets that are uncorrelated with stocks, right,
(30:07):
and take some risk off, and you're putting into some
assets that are not as risky as some of those
stocks that you had in your portfolio, but pay maybe
a healthy dividend or a healthy yield, because if it's
paying a six or seven percent yield or dividend, you know,
if that position goes down by five or six percent,
then you're your flat you're even right, not until it
(30:29):
goes below that dividend yield. So you have you use,
you're providing some cushion within your overall portfolio. And those
are the things that we look at, and those are
the things that we do for our clients. Is what
are the opportunities out there, where are we on this
business cycle, What are some of the major policy shifts
that are going on out there, and how could that
impact certain sectors of the market. And if we think
that it can impact it in a positive or negative way,
(30:51):
then we want to take we want to take note
of that and you know, allocate appropriately within our client portfolio.
Is that makes sense, you know, whether you're more conservative
or more moderate, and generally speaking the average across the
board for our clientele and what we see and you know,
the history that I've been, you know, an advisor for
almost twenty years in Samuel John for over thirty years,
(31:13):
is that most people are kind of in the moderate
range as far as risk right and then in in
the general market you can expect a four to six
percent return. That was the line of thinking back then.
But now you're having to find ways to be moderate
but push it closer to the six percent. And it
is possible with some investments out there that are available,
(31:34):
and they're not available everywhere you go. You know, with
our type of firm being an raa registered Investment advisory
firm and independent, you know, we have access to some
certain investments, especially in alternative space, that other typical you know,
big box brand name firms you wouldn't have access to,
(31:55):
or you especially wouldn't have access to. You know, if
you're doing your own investments with regular online retail brokerage firm.
If you have some questions or you know you want
to explore what are some of these other investments out
there that are not the plane, Vanilla's dock and bond
options or mutual fund or ETF options. Give us a
call nine one six nine six seven thirty five hundred.
(32:19):
You can also email us at question at wisemoneyguys dot
com or again, like I've said before, you can register
for upcoming workshop which is in March twelfth. If you're
in the conquered or close to the conquered area or
passing through again March twelfth, six to seven point thirty
pm at the Old Spaghetti Factory and conquered again. You
(32:42):
want to give us a call earlier the better because
seating is filling up and we have a limited capacity.
You can speak to Kathy, She'll put you down. If not,
leave us a message, we'll get right back to you.
We also have you know, Facebook, where you can go
and register online as well. You can check us out
at wismoneyguys dot com or we have a website and
(33:05):
also subscribe. You know, if you're a radio listener and
you're like, you know, I've listened to these guys. Maybe
it's your first time, or maybe you've been a listener
for a while and haven't had the opportunity to meet us,
and you want to put a face to the voice,
go on our YouTube channel. We have been doing that
for the past couple of months and you can find us.
Just search within YouTube the Wise Money guys and we'll
(33:27):
pop right up and we have been loading some videos
which is basically the live radio show for the past
couple months now. So going back to stock market, one
of the things that is a risk and kind of
whispers out there is stagflation. That was something that came up,
(33:47):
you know, within inflation era during the seventies, and that
is something that's a potential Oh no, what if we
go back into stackflation. I'll get more into that, what
stagflation is, what that can intel and what can you
know be the ramifications of that, as well as a
little bit of the breakdown from the Fed minutes from
the most recent FOMC meeting. Again, this is just APPI
(34:11):
Visconte with Wise Money guys. I was talking earlier about
stagflation whispers and you know how that can impact potentially
impact the economy or what's the risk's what's the importance
of stackflation? What does it even mean? Essentially, it's slower
growth plus rising prices and Feds are on pause for
(34:34):
cutting rates because inflation is proving to be sticky and
it's starting to be on the rise. We'll see if
that continues to be a trend, but if so, then
there'll be at a sticking point where they can't cut
rates and prices continue to rise and with slower growth,
that puts us in a stagflationary environment. We had this,
(34:57):
you know in the seventies. Is it going to to
be your rerun? And that's kind of what's out there
right that's the scare and that's what you see like
on x formerly Twitter or social media, and it's kind
of haunting the headlines. Again, it could very well be
a possibility. But I think what can help to combat
(35:18):
that is, you know they talked earlier before, if you
know the new administrate, Trump's new administration and team are
successful and slashing some of the wasteful spending. Continuing on
with that, find ways for other foreign entities or countries
to bring in assets to invest in the US economy,
(35:43):
Extend the tax cuts and the taxes that were we
have been used to since twenty seventeen and have that
continue on. If he's successful and even furthering lowering the
corporate tax rate to fifteen percent, Drill, baby drill. And
(36:05):
if he's successful in lowering the price of oil and
also becoming a net exporter right lowering energy costs, all
of these will have a culmination effect to help lower
and ease inflation and also spur economic activity, which will
(36:27):
help help to further and strengthen the economy and also
the stock market. So I think that is important, and
I think we're optimistic in those things to come to
fruition again. You know, you kind of want to be
cautiously optimistic because things are priced to kind of a
(36:49):
perfection meaning that you know, S and P five hundred
I mentioned earlier hit an all time high, and you know,
some people can look at that and say, wow, the
market's doing great. You know, it hit an all time
high again, and we so a lot of that last year.
I mean there have been I think it was almost
like forty or maybe even over forty all time highs
at SMP hit throughout the year. But that means that
(37:11):
things are priced to perfection, you know, what drives that.
Some of the things that are taking place within Trump's
administration helping to drive that. We had earnings. It's not
completely over, but a good portion of it has gone through.
And a lot of corporation, which we like to call
kind of the mother's milk. The profits that corporations, they
(37:33):
continue to beat in a big portion of them are
beating meeting or beating expectations, and that helps to further
drive the stock market and the economy. But we're coming
to a point, and we're at a point again actually
where the valuation is hitting that high point and so
things are priced to perfection. So this is where you
don't want to be overly zealous and say I'm just
going to go aggressive and chase performance. This is where,
(37:55):
like I said before, you want to start rebalancing, taking
some winners and you don't need to, you know, sell
all of it and do your due diligence. You know,
we sometimes give some parameters and things that we think
are of interest or notable, whether it's sectors or portfolio management.
You know, it may well work for you, it may
(38:17):
not because we don't The truth is, we don't know
exactly your time frame, your risk tolerance, your your goals.
That's what we do when we meet with new clients
and existing clients and we go through their blueprint or
revisit their financial plan if they already have one, we've
already created one for them, and look at their timeline,
(38:39):
look at the risk tolerance, look at their goals and
seeing what's necessary and how hard does your money need
to work for you in order to get you to
where you need to be and withstand some of these
big dips, right or these unknowns. If some of these
unknowns come to fruition or if stagflation happens, right, you
kind of have a big spag You have some big
(38:59):
firms out there saying, hey, we're going to have slow
growth for the next ten years. Maybe it's going to
be another lost decade like we saw, you know, after
the dot com crash. Between that and the financial crisis,
it was like a lost decade in the stock market.
I don't think that that's going to happen. I think
innovation and a lot of the AI will help. If
we're in these kind of new you know ed yardany
(39:21):
and economists. One of the contents that I follow, he
calls it the new roaring twenty twenties kind of the
roaring nineteen twenties, and that very well could be, and
that could be an important component that drives the market
and economy further, especially for the US. I wanted to
touch base on the FED minutes because as boring as
(39:43):
it is, it is important aspect overall overall economy. The
Federal Reserve is a big component that most investors and
investment firms look at, not only in the US but
across the globe. Most firms and we think the Fed
could be done cutting rates this year, especially if inflation
data kind of stays where it's at, there's no reason
(40:05):
for them to cut rates anymore. So it could it
could very well be that twenty twenty five one and
see rate cut. There's some firms and analysts out there
saying that, you know, we can see maybe one more
one more cut this year that takes place, or actually
only one cut because they haven't cut they stay they
stayed put. But there might be one cut this year.
You know, if there's multiple cuts, that's a worrisome, uh
(40:28):
you know, notion, because if that happens, then there's something
going wrong within the economy that they need to step
in and stimulate most likely. I don't think it's going
to be a rapid uh, disinflationary environment that we're all
of a sudden going to be, you know, rapidly on
our way to two percent, and therefore the Feds are
going to be cutting rates quarter by quarter by quarter
(40:50):
every meeting. That would be more of a worrysome environment.
So I think some of these tew winds that we've
talked about will create a great environment for sustained growth
and within our economy, in our stock market. The Feds
have taken a you know, if you break down the
Fed Minutes, which is more into the details of their
(41:11):
decision making they take, they took basically a dovish pause,
meaning that they've they've hinted that they'll do more rate
cuts if inflation nears they're two percent, which is supporting
stocks and bonds. The alternative is, you know, if it doesn't,
(41:31):
then they have to hold their line, and if it
continues to trend up, like I said before, then they're
going to have to race. And hopefully that doesn't happen
because that will start to stir, you know, the market.
The bad thing about the Federal Reserve and why it's
so you know, important to look at is because a
lot of what's predicated upon these FED minutes or these
(41:54):
details is what they digested from past, you know, in
economic indicators. But the more importantly what they're forecasting. You know,
what what do they think in the future, How are
they going to react? Where do they think inflation is heading.
Are they comfortable where things are at and where some
of the economic indicators are coming in at, or are
they concerned? You know a lot of times you don't
(42:16):
hear a lot of concern other than yeah, we're we're
at a resilient market's resilient. Then economy is doing well,
so we're going to go ahead and hold our place
right here. You know, the growth vibes are strong. But
you know, if we look across the globe, you know,
UK they got a three percent CPI print in January,
(42:36):
so they're still at a higher point. So it's not
only just the US. But then if if other you know,
inflation data of some of the major developed countries across
the globe also stay relatively stubborn and sticky where they're
at or trending up, then that can cause some pressure
you know from them easy, right, because a lot of
(42:56):
central banks across the world, not just STARS. They have
been an easing phase, not a quantitative tightening phase, and
been lowering or cutting rates. But if this kind of
stands not only with US, but with UK or other
developed nations, and they can put things on past two,
which means that you know, higher rates for longers can
(43:18):
put more pressure on small businesses, people who are borrowing funds.
We've seen you know, housing permits slow down. I mean
mortgages they got to maybe the high five percent range
and now they peaked above seven percent when things spiked
up here recently. Now they're back maybe in the high
you know, high mid sixes to high sixes, and that
(43:41):
puts pressure. You know, that changes a lot in comparison
to rates were just two three years ago of what
you can purchase. The other big thing is commercial real estate.
You know, commercial real estate you know comes due typically
it's there's a lot of different terms, but you know,
in five years ors some real estate loans that are
coming to commercial side this year, some next year, and
(44:02):
if rates stay higher where they're at now and they're
at a three percent or four percent rate, but then
they got a refinance to a seven percent rate that
can put a big impact on their overall balance sheet.
So those are some of the things to look at.
FEDS have made more mistakes than they have been times correct,
so that's probably the bigger concern that we track and
(44:23):
look at as far as what could be a factor
to derail the economy. A lot out there. I've discussed,
you know, some of the economic indicators, the stock market evaluation.
It's a lot to digest. But this is what we
do on a day by day basis. John and I
(44:44):
look at different metrics, have conversations between each other, look
at different investments, asset allocations to portfolios, you know, putting
it together within a plan of kind of the macro
view of how to get clients from point A to
point B specific to their financial goals and needs as
well as their timelines and risk tolerance. But then how
(45:05):
do you put that into play, How do you construct
the portfolio, how how do you, you know, make the
shifts and adjustments and when do you do that and
when is it necessary to do that? Along the way,
when there are these all these things happening out there
in the world, whether it's our economy or or the world,
whether it's things dealing specifically with the you know, economic
(45:27):
indicators and data that comes out, or it's you know,
geopolitical things that are that are taking place across the world,
and how's that going to impact you over our portfolio
and how do you have it where you can sustain
and have your assets last the test of time for
a prolongs period that's going to last you throughout your retirement.
(45:49):
These are things that we work on. I would advise
you can give us a call if you have more
questions specifically to your needs, your goals, your timeline to
see if you're on track. You can reach out to
us at nine one six nine six seven thirty five
hundred for no obligation consultation. You can also sign up
(46:09):
if you're in the concert or near the conquered area
in March twelfth at the Old Spaghetti Factory from from
six to seven thirty again nine one six nine six
seven thirty five hundred. Give us a visit on YouTube.
You can search us on YouTube the Wise Money Guys
and you can put a face to the voice or
(46:30):
leave us a question at question at wysemoneyguys dot com.
It has been a pleasure. I hope you found some
value out of this show and look forward to speaking
with you guys next week. Have a great 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 STEMP Wise Money Guys.
Speaker 2 (00:12):
My name is Giuseppe Visconti, co host along with John Scambray,
who is out for this week. We are One Source
Wealth Management and we are certified portfolio managers who like
to help our clients, who are mostly pre retirees and retirees,
get to their goals by way of planning, putting a
(00:33):
blueprint together and helping them along their path from getting
from point A to point B. We have been doing
this since twenty fifteen. Both John and I have a
combined experience of about fifty years helping clients. John since
nineteen ninety two and I got started in the business
(00:54):
since two thousand and eight, which was a little bit
of a boot camp and a shock to me, especially
entering in in the Great Financial Crisis, but it was
a great learning lesson starting into the business. We have
a upcoming workshop and this is where we get to
explain more of what we do, who we are, our process,
(01:16):
how we help our clients from point A to point
B make sure that they're on track for retirement and
hitting all the retirement goals and their financial goals that
are important to them and their family. And that workshop
is coming up next month pretty soon. Time is flying.
It is on March twelfth in Conquered and it's going
to be the first workshop for this year and also
(01:39):
the first time we are doing it in the East Bay.
We've been getting more and more calls and interest from
clients within that region, so we figured why not do
workshop in that area. You want to call in nine
one six, nine sixty seven thirty five hundred seats do
fill up. It is you know, a certain amount of
(02:01):
limited seating, So the earlier the better you want to
place your spot and RSVP you can call in most
likely to be speaking with our office manager Kathy, and
she can put you down for a spot on the
workshop again. And what we do is tell you more
of who we are, you know, pull back the curtains,
give you a glimpse of you know, what's out there.
(02:23):
How we help clients not only in the planning process
and building a blueprint, you know, and structuring and some
of the things that we look at and help clients
some of the questions that we get how to get
them from point A to point B. But then also
going down into you know, what does a typical portfolio
look like? What are some of the investments that we
use that are typical of retirement. You know, how do
(02:43):
you get your assets and your money that you've accumulated
and worked hard for for a number of years and
turn that into an asset that's going to produce a
paycheck for you At this point right no longer is
it in the growth mode, but now it's in the
distribution mode and is going to stand the test of time,
right through the ups and downs of the market, through
(03:06):
some of the black Swan events, meaning you know, geopolitical
tensions that are going around, whether it's a war in
the Middle East, the war in Eastern Europe and Russian
and Ukraine inflation, all those sorts of things can stand
the test of time and how we measure and you know,
nobody's got a crystal ball, but we like to put
(03:28):
things in place as far as a plan and a
portfolio where we can kind of create some bumper lanes
and have the track go in a pathway so it's
not guesswork, and you know, five years from now, your portfolio,
you know your goals, you're you're way up here, and
then maybe two years later your your way down and saying,
oh no, you can't retire, or you're going to have
to reduce your retirement spending, so on and so forth.
(03:50):
So again, you want to give us a call nine
six seven thirty five hundred to get on that list
for the upcoming workshop and conquered at the old space
Edy Factory on March twelfth, which is from six to
seven thirty. You can also give us a call if
you you know, can't make it or that day doesn't
work for you, but you want to have a conversation
(04:11):
with us. Maybe there's some questions that you have in mind,
maybe you haven't got around and maybe you're kind of
looking at yourself as far as your financials because it
is tax season and you're wondering, Hey, am I on
track to retire or is my retirement doing what it
should be doing? And can at last, you know, for
the duration of my retirement. You can also give us
(04:32):
a call for no obligation consultation. You can also an
email us at question at wisemoney guys dot com if
there's a topic or a question that you have, and
we look at those emails from time to time, and
sometimes we even bring up those questions on air a
lot to uncover. I wanted to go over some of
the hot topics and trending, you know, events out there
(04:57):
within the economy and the stock market. You know, most
of the time people have questions because inflation data is
coming out, or the Fed's med or you know, the
tariff talk, and so what are some of the things
that are happening out there, What are the potential implications
and key takeaways. And I'll do my best to break
it down in layman's terms. But we have job reports
(05:22):
which is still showing resilience, you know. I'll explain what
that report revealed, some of the potential benefits or consequences
of that report, you know, and if that trend continues. Inflation,
that report came out. We talked a little bit about
that in our previous show. But that is you know,
(05:43):
inflation is kind of hot topic because that's heating back
up based off of the most recent data. Trump's tariff push,
so you know, he's pushing on these tariffs and he's
and he's focusing more on a reciprocal tariff structure. I'll
go over some thoughts and key takeaways on that. Retail sales.
That's economic data that that came by and they have dropped,
(06:08):
So what does that mean. What's the indication of retail
sales plummeting stock market? We hit all time high in
S and P five hundred, but not in the other industries,
so we're having some mixed signals. And what are you know,
some of the key takeaways or benefits and consequences of that.
Stagflation This kind of relates to the inflate inflation measurement.
(06:31):
What is stagflation? What does that mean? We talked about
that in previous episodes, and what is the worry of stagflation?
And then the other that came up midweek is the
FED minutes, and the Fed minutes essentially is all the
notes and the minutes of the most recent FMC meeting
with Jerown Pale and all the FED presidents, some of
(06:53):
their thoughts, their forecasts as far as inflation, what needs
to be done really to get inflation down to their
target of two percent? So jobs report, I'll start there
and we'll work through the other items. Obviously, I won't
have time all in one segment, so we'll break it
(07:14):
down in different segments. But the job reports shows resilience
and the last one it added one hundred and forty
two thousand jobs, is a bit shy of what was expected.
But the unemployment rate dipped down to four percent, so wages,
on the other hand, also jumped, so that was up
(07:36):
half a percent for the month, beating forecasts. So really
what that says, I mean, that's good. That is a
positive economic outcome that unemployment is down to four percent
because we're still in low unemployment, which is great for
the economy, and it's putting the labor market in a
(07:57):
bright spot even though growth is somewhat But the potential
consequence of that, when we're looking at the inflation environment
and kind of the Federal Reserve and the position that
they're in, is that with the higher wages, that just
means that that could boost spending and that could be
(08:19):
great for retailers. But if inflation spikes because there's more
spending happening, then it could force the Fed to rethink
rate cuts, and we've already witnessed that, right they were
cutting rates and they cut it three times last year.
Then this most recent FMC meeting, they said we're going
to put it on pause. And now we're at a
(08:41):
point in time where if inflation ticks up like it
has in the most recent inflation data, then they could
be in a spot where they can't cut rates anymore,
and if anything, they may have to raise rates if
that trend continues in inflation to curb the inflation continuing
to end up. Overall, the economy continues to show resilience,
(09:05):
which is great for our US economy because the opposite is,
you know, and the two mandates that the FED really
look at is full employment, which four percent unemployment is
you know, within full employment, and it's very very good reading.
But then the other is getting inflation in check, and
(09:27):
that's exactly what they've been trying to battle since twenty
twenty two, and we've made a lot of headway towards that.
But now we're at the sticky point. So we'll see
with further economic data that comes in in regards to jobs, wages,
as well as inflation and inflation. You know. Speaking of that,
(09:50):
the data shows really the prices for groceries, gas used
cars are all climbing faster than expected and those are
all the variables. Usually at the Federal Reserve try to
strip out because they say, you know, gas and groceries
and those things are always more volatile, and we want
to strip that out to get a better reading to
(10:11):
see if we're getting closer to our two percent target
as far as the trajectory of the rate of inflation
coming down. But that's what really hurts all of us
on a day by day and week by week basis,
because we need groceries to live, we need gas to
live and go from point A to point b. Not
only that, but then you know ups and I mean
(10:32):
there's more electric vehicles like Amazon's using a lot more electric.
But you have all of the transportation that utilizes gas
and energy or fuel some sort of fuel, whether it's
diesel gasoline to get from point A to point b, right,
whether it's transportation from planes, cargo transportation from chips or trains,
or freight long haul trucks. And when those prices are higher, right,
(10:57):
then it's going to impact the prices of the goods
that are being trans transported from point A to point b.
John was talking about in the last segment that you know,
if crude oil the barrel of crude oil comes down
to the sixties or fifties, then we'll see a bigger
(11:19):
relief and kind of a translation into lower energy costs
therefore lower prices on some of the consumer goods that
would consume that are being trans transported from planes, trains
and automobiles. We'll come right back. I'll talk a little
bit more about inflation, jumping into the terrace and retail
(11:41):
sales economic data. Give us a call nine one six
ninety six seven thirty five hundred to register for our
upcoming workshop and conquered on March twelfth at the Old
Spaghetti Factory. This is Juseppe Visconti, co host and John
Scambray who's out for this week. We are one Source
Wealth Managed and we are certified portfolio managers who help
(12:03):
pre retirees and retirees help them get to their goals
from point A to point B and live a long
retirement and make sure that their financial plan and portfolios
stand the test of time to last them throughout retirement,
whether it's twenty years or thirty years. We are having
an upcoming workshop to discuss and reveal more of what
(12:26):
is entailed in taking somebody from point A to point
B and making sure they have a lasting retirement and
that's going to be in conquered. March twelfth, six to
seven point thirty at the old Spaghetti Factory. You want
to give us a call at nine to one six
ninety sixty seven thirty five hundred. You will be speaking
with our office manager Kathy, who could put you down
(12:48):
an RSVP for a seat which is limited by the way,
So you want to give us a call. The earlier
the better because we hate to have it get to
capacity and start having to turn people away or maybe
take down their name and number from maybe the next
upcoming workshop. Again, though, you can reach us at nine
one six nine six seven thirty five hundred, or you
(13:11):
could just give us a call if you want a
no obligation consultation. If that day, time or location does
not work for you, I'd be more than happy to
have a discussion of what are some of your concerns
financial goals. You can get a chance to learn more
about you know ourselves, our firm, how we do things,
(13:32):
how we help our clients and take them from point
A to point B and see if we are a
good fit to help you and your path and journey
along retirement. So last segment I touched on job support,
the resilience of the US economy and the data that's
coming in. You know, they're spending, inflation's ticking up, jobs
(13:55):
tick down, the unemployment rate tick down to four percent.
There's the worry of the tariffs. You know, there was
a lot of uncertainty of how that was going to
unfold before Trump got into office. You know, how much
is the tariff's going to be? Is it going to
be retaliatory? Retaliatory where one nation is going to up
(14:19):
the ante and then Trump and his team are going
to have to up the ante, and then we're going
to have these high high terrior It's going to impact,
you know, some of the goods that we consume, and
the prices which are already really high. I mean, eggs
are crazy right now to get a dozen eggs like
eight nine bucks. It used to be that well, I
think it was like twenty twenty two. We were faced
(14:41):
with that. So prices are already high. You know. The
surprising thing and what has been taking place in what's
unfolded so far right there are some still uncertainties out there,
but so far the market is digesting it fairly well.
I mean, the S and P five hundred just hit
record high midweek, so that is a good sign as
(15:04):
far as how it is digesting some of what you
know has been already spoken for along the lines of
tariffs or what could be expected in the near future,
because that's exactly what the stock market is. It's trying
to price in the perceived future. It's not that the
pricing of this stock market or individual stocks for that
(15:26):
matter that make up the stock market is not reflective
of the valuation of today. If you look at their
balance sheets and their financials and say, okay, what's the
market value of that stock or the stock market today,
the price and where the stock market is is what
the perceived values. And that's that's why it fluctuates up
(15:47):
and down. And that's when you have some good news,
when you have some bad news, When jerown power comes
on and says, you know, we're cutting rates or we're
you know, keeping rates on hold, all the those create
the gyrations in the stock market or individual stocks. And
(16:08):
so far it's been digesting it fairly well. And I
think the key point with everything that's going on with
the tariffs is Trump has signaled that it's going to
be reciprocal, which is you know, I think the endgame
and what we're hoping for is, well, this reciprocal terriffs
is if this nation is tearing us at this level,
(16:29):
then we're going to tear them at that same level.
And if they want a lower tariff, then go ahead
and lower yours and we'll lower ours. And in the end,
hopefully what would come come to fruition is that different
nations right that are terrifying each other, decide that we're
going to start lowering and lowering and lowering and come closer.
(16:50):
And I don't think it's going to come to absolute
free trade, but if it could come closer to a
freer trade environment, that is going to be boasting very well,
not only for our economy but economies across the world.
And a utopian environment, you know, as far as world trade,
you know, and this is something that you learn and
I learned, you know, going through undergrad for my business
(17:13):
economics and even through grad school, especially when I earned
my master's in economics and finance, was you know, the
utopian and the best outcome for a trade situation in
the world economy is to have free trade right not
to everybody have these high tears against each other. And
(17:34):
so I think that is going to be a good path,
if that is a path, and I think, you know,
and that's what John and I have talked about, and
we think that's kind of the path that Trump is
taking or trying to, you know, move towards. And if
it comes to fruition, then that's going to boast well
for not only ours, but like I said, the world.
So hopefully that along with I guess, you know, and
(17:58):
what we've seen so far as using tears as a
measure to try, well not using to try, but to
use as a negotiation factor. And we saw that with
Columbia with some of the illegal immigrants, and it's gonna
and it's probably going to continue to be used for
a negotiation measure, you know, with other other nations, and
(18:19):
hopefully at some point that we'll have some resolve with
some of the geopolitical tensions in these wars in the
Middle East, and as long along with Russia Ukraine, that
works out for everybody and both you know, and and
works out well for Ukraine and works out well for
for the Middle East. But if that comes to fruition
(18:40):
where we can, and Trump is successful in garnering peace,
you know, much like he did in his last term,
and not any new creation of new wars the stock market.
That's going to be tell went for the stock market
and economy as well. So we'll see how it continues
to unfold. We have high hopes, you know, I think
(19:00):
that these are some tall winds, but there because there
are some uncertainties around that and the short term it
is going to cost some volatility and the short term,
you know, the tariff situation could we could expect higher
prices from anything from electronics to maybe some groceries, and
that can rattle some markets. Right as we go through
(19:22):
this journey to hopefully lower tariffs across the board and
have a more equal playing field, but then also freer trade. Right,
So jumping into retail cells, this is very important because
consumers make up a big portion of the GDP, the
(19:44):
gross domestic product, which is the you know, the measurement
of what our nation is generating as far as revenue,
and the consumers are a huge part of that. I
believe it's almost seventy percent of the GDP. And and
why they're important is because if consumers are spending money
and creating economic activity out there. That's going to lift
(20:08):
and boost the economy moving forward. But if it starts
slowing down, then we see that translating, and if it
continues to be a trend, you know, eventually that could
cause I mean the eventual is to cause a recession.
So retail sales plummeted and that was a recent economic
(20:28):
indicator that that took place here in the last week,
and that tanked and that went down you know further,
you know, in the last then it has been really
in the past two years, some of the you know,
climate as far as I'm saying climate that climate change,
but I'm saying like wildfire, wildfire's frigid weather. You know,
(20:52):
cold weather has impacted some of that. I don't know
if that's going to be the main culprit of the
lackluster retail cells indicator. We'll find out, obviously when the
future indicate, you know, the more recent or the new
next retail cells comes out, and if it was just
(21:17):
a blip on the radar, or if there's something more underlying,
meaning that consumers are starting to pull back right and
pull back spending because things are very, very expensive tightening
their tightening their belts, and so temporary dip could ease
inflation pressure, which would be a good thing. But if
(21:38):
it's prolonged and this becomes more of a trend, like
I said, then that can be more of a signal
of a recession risk, which is going to obviously spook
investors and that can cause some volatility within the market.
So hopefully within this temporary hopefully it's a temporary blip.
(22:00):
Hopefully the journey through the tariff you know what Trump
is going through as far as raising the tariffs and
trying to make it an equal playing field, and hopefully
some of these short term expected higher prices on some
of the goods that it might impact. Is that short
and temporary, and then going through and the Department of
Government Efficiency and dog does an effective job where they
(22:23):
can find ways to trim spending and then not create
any new spending out there right and find ways which
Trump has been doing, finding ways for foreign entities, corporations
or countries come in and say hey, it's a benefit
and here's the benefit of investing in the US, and
we get more foreign direct investment which helps boost our
(22:44):
local economy. So we'll see how that unfolds the stock market.
Like I said, the S and P five hundred hit
an all time high just this week, but not the
other indices, right the NASDAK, the Dow Jones they were
and so we're having some mixed signals. And part of
that too is that we're in a high valuation point. Again.
(23:07):
We talked about this last year that we're at a
high valuation point. The pe levels at a high point
historically looking and that could be a time where you
want to look to rebalance your portfolios. And I'll get
more into what that looks like as far as you know,
rebalancing your portfolios. Some massive classes that you want to
(23:28):
look at. Again. You're listening to Giuseppe Visconti co hosts
along with John Scambray with the Wise Money Guys. Give
us a call for an obligation, consultation or to get
a seat at our upcoming workshop and conquered March twelfth
at nine one six nine six seven thirty five hundred.
We are One Source Wealth Management, a management firm that
(23:49):
we consider ourselves portfolio managers first, but also do financial
planning as it is a key component to the overall
process to helping individuals from point A to point B.
Most of who we help are clients that are nearing
retirement or in retirement already who have worked hard their
whole lives and accumulated assets, earning income and then planning
(24:15):
for How do we take these hard earned assets that
they've saved for all their life and turn it into
a lasting paycheck for the retirement to last for you know,
whether it's twenty or thirty years or more for their
retirement years. And it's becoming harder and harder to do that,
especially as inflation and prices of goods and services that
(24:39):
we use and pay for every day, every week, every
month throughout the year, especially in the past few years,
has exponentially grown, some more than others, but a lot
of it, and even the services, and that's where it's
hitting hard is you know, insurance even down to you know,
(24:59):
a lot arm services where you have the monitoring services
like a d T other membership services that are on
a monthly, quarterly, or annual basis. Everything has gone up
and those are not coming back down. Unfortunately. The things
that are going to fluctuate that we see obviously are
going to be more of gas and groceries. But you know,
(25:23):
are they going to get back to where they were
five ten years ago? No? You know, for us here
in California, and that's where we're based out of. You know,
gas has been ticking up and up and up, even
though the price of per barrel of oil has been
going down a little bit. Someone has to do with
other measurements that California likes to put into the gas,
which is the gas taxes. But we see fluctuations of
(25:46):
that going up and down. But it's becoming harder and
harder for a retiree where it used to be back then,
you know, you can save a million dollars, have a
four percent you know return or cash flow from that
million bucks, and you would be okay. Right now if
(26:06):
you had that same million bucks, it's going to be
even harder to you know, sustain the normal expenses that
you had pre COVID really when all this started, and
you need more of like a five percent or six
percent as far as a yield for cash flow. So
how do you do that? You know, And a lot
(26:28):
of times when you're thinking, well, if I need a
higher return, then that means that I'm going to need
to take more risk sometimes yes, but there is a
range and there are other things out there, and we
try to do our best to look for instruments out
there in the investment world to get you kind of
the best bang for your buck where you're not having
(26:48):
to go out there on the risk goal and take
a bunch of risk, right, And some of those things
which we've talked about in previous episodes are fixed income
with your bonds because they're paying attractive rates. They're paying
really attractive rates, like in twenty twenty two, twenty twenty three,
and even some twenty twenty four, but then it started
coming down with a whole rate cut talk and then
(27:09):
actual rate cuts. But then it starts to spike back up,
and so we see some opportunities back out there, maybe
not as high as they used to be, but still attractive.
We're in their five percent range and you can lock
those in and you're not taking a bunch of risk
doing that, and it takes a big burden from your
portfolio if you're trying to, you know, just achieve a five,
(27:30):
six or seven percent return because you're not having to
go out there and say, well, I'm just going to
put it in a whole bunch of stocks and hopefully
those stocks that a pick are going to grow in
value over time and it's going to help me retire.
Others are alternative investments out there, and those are paying
you know, some distribution rates of you know there from
like six seven percent all the way up to ten
percent distribution rate. But it's not going out there on
(27:53):
the risk go where you're taking a bunch of risk
in order to getting that payout. So the nice thing
is that they're is ways to produce a paycheck from
the assets that you've worked hard for and produce enough
right as long as you as long as you have
a meaningful account that you can go out there and
earn you know, six percent cash flow on your on
(28:15):
your assets without having to go out there and take
a bunch of risk and being aggressive, because the last
thing you want to do in retirement is take risk
and chase performance. We've had conversations with clients that you know,
they say, well, yeah, I tried to go on my
own and I've bought these different stocks, and especially during
like twenty twenty twenty twenty one, before twenty twenty two
(28:38):
happened and you had all these stocks like Zoom to
stay at home stocks like Zoom and Peloton and they
were just doing nothing but going up to the moon,
and people were chasing performance. But what happened in twenty
twenty two is, you know, the stock market went down
by twenty percent, s and P five hundred, NASDAK was
down by like in the thirty over thirty percent, rustled
two thousand as well, bonds were down by over ten percent.
(29:01):
But some of these individual stocks like Zoom and Pelotons,
some of these stay at home stocks, I mean they
were down healthy double digits, forty fifty somewhere down seventy percent.
You don't want to put yourself in that situation. We
think that there's more tell winds than headwinds moving into
this economy in this year that are going to support
(29:24):
a continued resilient and healthy economy and growth in the
stock market. But doesn't mean that there's no uncertainties out there.
And we're at a point right now, and I was
talking a little bit before on the previous episode of
you know the mixed signals of stock market and the
pe valuations and kind of the valuation of the stock
market where it is right now, and it is at
a higher point. So this is a good time where
(29:45):
if you have some winners in your portfolio that hey,
I picked, Palenteer I picked. You know, SMCI has been
moving up quite a bit recently, trim some of that position,
take some of the profits off the table, and you
want to reposition some other assets that are uncorrelated with stocks, right,
(30:07):
and take some risk off, and you're putting into some
assets that are not as risky as some of those
stocks that you had in your portfolio, but pay maybe
a healthy dividend or a healthy yield, because if it's
paying a six or seven percent yield or dividend, you know,
if that position goes down by five or six percent,
then you're your flat you're even right, not until it
(30:29):
goes below that dividend yield. So you have you use,
you're providing some cushion within your overall portfolio. And those
are the things that we look at, and those are
the things that we do for our clients. Is what
are the opportunities out there, where are we on this
business cycle, What are some of the major policy shifts
that are going on out there, and how could that
impact certain sectors of the market. And if we think
that it can impact it in a positive or negative way,
(30:51):
then we want to take we want to take note
of that and you know, allocate appropriately within our client portfolio.
Is that makes sense, you know, whether you're more conservative
or more moderate, and generally speaking the average across the
board for our clientele and what we see and you know,
the history that I've been, you know, an advisor for
almost twenty years in Samuel John for over thirty years,
(31:13):
is that most people are kind of in the moderate
range as far as risk right and then in in
the general market you can expect a four to six
percent return. That was the line of thinking back then.
But now you're having to find ways to be moderate
but push it closer to the six percent. And it
is possible with some investments out there that are available,
(31:34):
and they're not available everywhere you go. You know, with
our type of firm being an raa registered Investment advisory
firm and independent, you know, we have access to some
certain investments, especially in alternative space, that other typical you know,
big box brand name firms you wouldn't have access to,
(31:55):
or you especially wouldn't have access to. You know, if
you're doing your own investments with regular online retail brokerage firm.
If you have some questions or you know you want
to explore what are some of these other investments out
there that are not the plane, Vanilla's dock and bond
options or mutual fund or ETF options. Give us a
call nine one six nine six seven thirty five hundred.
(32:19):
You can also email us at question at wisemoneyguys dot
com or again, like I've said before, you can register
for upcoming workshop which is in March twelfth. If you're
in the conquered or close to the conquered area or
passing through again March twelfth, six to seven point thirty
pm at the Old Spaghetti Factory and conquered again. You
(32:42):
want to give us a call earlier the better because
seating is filling up and we have a limited capacity.
You can speak to Kathy, She'll put you down. If not,
leave us a message, we'll get right back to you.
We also have you know, Facebook, where you can go
and register online as well. You can check us out
at wismoneyguys dot com or we have a website and
(33:05):
also subscribe. You know, if you're a radio listener and
you're like, you know, I've listened to these guys. Maybe
it's your first time, or maybe you've been a listener
for a while and haven't had the opportunity to meet us,
and you want to put a face to the voice,
go on our YouTube channel. We have been doing that
for the past couple of months and you can find us.
Just search within YouTube the Wise Money guys and we'll
(33:27):
pop right up and we have been loading some videos
which is basically the live radio show for the past
couple months now. So going back to stock market, one
of the things that is a risk and kind of
whispers out there is stagflation. That was something that came up,
(33:47):
you know, within inflation era during the seventies, and that
is something that's a potential Oh no, what if we
go back into stackflation. I'll get more into that, what
stagflation is, what that can intel and what can you
know be the ramifications of that, as well as a
little bit of the breakdown from the Fed minutes from
the most recent FOMC meeting. Again, this is just APPI
(34:11):
Visconte with Wise Money guys. I was talking earlier about
stagflation whispers and you know how that can impact potentially
impact the economy or what's the risk's what's the importance
of stackflation? What does it even mean? Essentially, it's slower
growth plus rising prices and Feds are on pause for
(34:34):
cutting rates because inflation is proving to be sticky and
it's starting to be on the rise. We'll see if
that continues to be a trend, but if so, then
there'll be at a sticking point where they can't cut
rates and prices continue to rise and with slower growth,
that puts us in a stagflationary environment. We had this,
(34:57):
you know in the seventies. Is it going to to
be your rerun? And that's kind of what's out there
right that's the scare and that's what you see like
on x formerly Twitter or social media, and it's kind
of haunting the headlines. Again, it could very well be
a possibility. But I think what can help to combat
(35:18):
that is, you know they talked earlier before, if you
know the new administrate, Trump's new administration and team are
successful and slashing some of the wasteful spending. Continuing on
with that, find ways for other foreign entities or countries
to bring in assets to invest in the US economy,
(35:43):
Extend the tax cuts and the taxes that were we
have been used to since twenty seventeen and have that
continue on. If he's successful and even furthering lowering the
corporate tax rate to fifteen percent, Drill, baby drill. And
(36:05):
if he's successful in lowering the price of oil and
also becoming a net exporter right lowering energy costs, all
of these will have a culmination effect to help lower
and ease inflation and also spur economic activity, which will
(36:27):
help help to further and strengthen the economy and also
the stock market. So I think that is important, and
I think we're optimistic in those things to come to
fruition again. You know, you kind of want to be
cautiously optimistic because things are priced to kind of a
(36:49):
perfection meaning that you know, S and P five hundred
I mentioned earlier hit an all time high, and you know,
some people can look at that and say, wow, the
market's doing great. You know, it hit an all time
high again, and we so a lot of that last year.
I mean there have been I think it was almost
like forty or maybe even over forty all time highs
at SMP hit throughout the year. But that means that
(37:11):
things are priced to perfection, you know, what drives that.
Some of the things that are taking place within Trump's
administration helping to drive that. We had earnings. It's not
completely over, but a good portion of it has gone through.
And a lot of corporation, which we like to call
kind of the mother's milk. The profits that corporations, they
(37:33):
continue to beat in a big portion of them are
beating meeting or beating expectations, and that helps to further
drive the stock market and the economy. But we're coming
to a point, and we're at a point again actually
where the valuation is hitting that high point and so
things are priced to perfection. So this is where you
don't want to be overly zealous and say I'm just
going to go aggressive and chase performance. This is where,
(37:55):
like I said before, you want to start rebalancing, taking
some winners and you don't need to, you know, sell
all of it and do your due diligence. You know,
we sometimes give some parameters and things that we think
are of interest or notable, whether it's sectors or portfolio management.
You know, it may well work for you, it may
(38:17):
not because we don't The truth is, we don't know
exactly your time frame, your risk tolerance, your your goals.
That's what we do when we meet with new clients
and existing clients and we go through their blueprint or
revisit their financial plan if they already have one, we've
already created one for them, and look at their timeline,
(38:39):
look at the risk tolerance, look at their goals and
seeing what's necessary and how hard does your money need
to work for you in order to get you to
where you need to be and withstand some of these
big dips, right or these unknowns. If some of these
unknowns come to fruition or if stagflation happens, right, you
kind of have a big spag You have some big
(38:59):
firms out there saying, hey, we're going to have slow
growth for the next ten years. Maybe it's going to
be another lost decade like we saw, you know, after
the dot com crash. Between that and the financial crisis,
it was like a lost decade in the stock market.
I don't think that that's going to happen. I think
innovation and a lot of the AI will help. If
we're in these kind of new you know ed yardany
(39:21):
and economists. One of the contents that I follow, he
calls it the new roaring twenty twenties kind of the
roaring nineteen twenties, and that very well could be, and
that could be an important component that drives the market
and economy further, especially for the US. I wanted to
touch base on the FED minutes because as boring as
(39:43):
it is, it is important aspect overall overall economy. The
Federal Reserve is a big component that most investors and
investment firms look at, not only in the US but
across the globe. Most firms and we think the Fed
could be done cutting rates this year, especially if inflation
data kind of stays where it's at, there's no reason
(40:05):
for them to cut rates anymore. So it could it
could very well be that twenty twenty five one and
see rate cut. There's some firms and analysts out there
saying that, you know, we can see maybe one more
one more cut this year that takes place, or actually
only one cut because they haven't cut they stay they
stayed put. But there might be one cut this year.
You know, if there's multiple cuts, that's a worrisome, uh
(40:28):
you know, notion, because if that happens, then there's something
going wrong within the economy that they need to step
in and stimulate most likely. I don't think it's going
to be a rapid uh, disinflationary environment that we're all
of a sudden going to be, you know, rapidly on
our way to two percent, and therefore the Feds are
going to be cutting rates quarter by quarter by quarter
(40:50):
every meeting. That would be more of a worrysome environment.
So I think some of these tew winds that we've
talked about will create a great environment for sustained growth
and within our economy, in our stock market. The Feds
have taken a you know, if you break down the
Fed Minutes, which is more into the details of their
(41:11):
decision making they take, they took basically a dovish pause,
meaning that they've they've hinted that they'll do more rate
cuts if inflation nears they're two percent, which is supporting
stocks and bonds. The alternative is, you know, if it doesn't,
(41:31):
then they have to hold their line, and if it
continues to trend up, like I said before, then they're
going to have to race. And hopefully that doesn't happen
because that will start to stir, you know, the market.
The bad thing about the Federal Reserve and why it's
so you know, important to look at is because a
lot of what's predicated upon these FED minutes or these
(41:54):
details is what they digested from past, you know, in
economic indicators. But the more importantly what they're forecasting. You know,
what what do they think in the future, How are
they going to react? Where do they think inflation is heading.
Are they comfortable where things are at and where some
of the economic indicators are coming in at, or are
they concerned? You know a lot of times you don't
(42:16):
hear a lot of concern other than yeah, we're we're
at a resilient market's resilient. Then economy is doing well,
so we're going to go ahead and hold our place
right here. You know, the growth vibes are strong. But
you know, if we look across the globe, you know,
UK they got a three percent CPI print in January,
(42:36):
so they're still at a higher point. So it's not
only just the US. But then if if other you know,
inflation data of some of the major developed countries across
the globe also stay relatively stubborn and sticky where they're
at or trending up, then that can cause some pressure
you know from them easy, right, because a lot of
(42:56):
central banks across the world, not just STARS. They have
been an easing phase, not a quantitative tightening phase, and
been lowering or cutting rates. But if this kind of
stands not only with US, but with UK or other
developed nations, and they can put things on past two,
which means that you know, higher rates for longers can
(43:18):
put more pressure on small businesses, people who are borrowing funds.
We've seen you know, housing permits slow down. I mean
mortgages they got to maybe the high five percent range
and now they peaked above seven percent when things spiked
up here recently. Now they're back maybe in the high
you know, high mid sixes to high sixes, and that
(43:41):
puts pressure. You know, that changes a lot in comparison
to rates were just two three years ago of what
you can purchase. The other big thing is commercial real estate.
You know, commercial real estate you know comes due typically
it's there's a lot of different terms, but you know,
in five years ors some real estate loans that are
coming to commercial side this year, some next year, and
(44:02):
if rates stay higher where they're at now and they're
at a three percent or four percent rate, but then
they got a refinance to a seven percent rate that
can put a big impact on their overall balance sheet.
So those are some of the things to look at.
FEDS have made more mistakes than they have been times correct,
so that's probably the bigger concern that we track and
(44:23):
look at as far as what could be a factor
to derail the economy. A lot out there. I've discussed,
you know, some of the economic indicators, the stock market evaluation.
It's a lot to digest. But this is what we
do on a day by day basis. John and I
(44:44):
look at different metrics, have conversations between each other, look
at different investments, asset allocations to portfolios, you know, putting
it together within a plan of kind of the macro
view of how to get clients from point A to
point B specific to their financial goals and needs as
well as their timelines and risk tolerance. But then how
(45:05):
do you put that into play, How do you construct
the portfolio, how how do you, you know, make the
shifts and adjustments and when do you do that and
when is it necessary to do that? Along the way,
when there are these all these things happening out there
in the world, whether it's our economy or or the world,
whether it's things dealing specifically with the you know, economic
(45:27):
indicators and data that comes out, or it's you know,
geopolitical things that are that are taking place across the world,
and how's that going to impact you over our portfolio
and how do you have it where you can sustain
and have your assets last the test of time for
a prolongs period that's going to last you throughout your retirement.
(45:49):
These are things that we work on. I would advise
you can give us a call if you have more
questions specifically to your needs, your goals, your timeline to
see if you're on track. You can reach out to
us at nine one six nine six seven thirty five
hundred for no obligation consultation. You can also sign up
(46:09):
if you're in the concert or near the conquered area
in March twelfth at the Old Spaghetti Factory from from
six to seven thirty again nine one six nine six
seven thirty five hundred. Give us a visit on YouTube.
You can search us on YouTube the Wise Money Guys
and you can put a face to the voice or
(46:30):
leave us a question at question at wysemoneyguys dot com.
It has been a pleasure. I hope you found some
value out of this show and look forward to speaking
with you guys next week. Have a great weekend.
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