The Political Headline chaser and Simplicity over Complexity

February 9th, 2025

Episode Transcript

Speaker 1 (00:00):
Welcome to the hidden world of wealth, where secrets of
the affluent become accessible to you. You are listening to
Your Money Matters, the most provocative financial radio show on
the airwaves. You are about to start your educational journey
here on Your Money Matters with your host, Drew Prescott,

(00:22):
President of Prescott Private Wealth and Chartered Retirement Planning Counselor.
Drew will unlock the complexities of the financial landscape with straightforward,
powerful insights. Whether you're planning for retirement, managing in a state,
or looking to grow your wealth. Consider this your exclusive invitation.
Turn up the volume, lean in closer. Let's navigate the

(00:45):
hidden paths of prosperity together. Your financial enlightenment begins now.

Speaker 2 (00:55):
Securities all produce a terror Financial Specialists LLC Member FEN
the SIPC reservices offered through Certara Investment Advisors LLC so
TERA firms are under separate ownership from any other named entity.
Four five one two sixth Street, Troy, New York one
two one eight zero in.

Speaker 1 (01:27):
Somebody call your name.

Speaker 3 (01:30):
Welcome back, everybody. You're listening to Your Money Matters and
I'm your host, Drew Prescott, Chartered Retirement Planning counselor, accredited
wealth management advisor and President at Prescott Private Wealth, located
here in Troy, New York. The phone number here is
five one eight two zero three one eighty three. The
web address is Prescott PW dot com. Hey, thanks so

(01:53):
much for tuning in today. I'm really glad to have
you back. We've got uh the super Bowl here tonight
and so very exciting time for a lot of people
that are not really even interested in football at all,
but they tune in to the super Bowl. Nice family time,

(02:14):
I know that for our family. We have some family
coming over. Really just great time to kind of just
pig out really right. We love to have different dips.
My wife makes this incredible confetti dip which has like corn,
different colored peppers in there, some onion, I believe, But

(02:39):
what makes it all come together is the oil and
balsamic and a little bit of sugar such a it's
an incredible combination, believe it or not. Even kids that
and it's got some kidney beans in there and stuff.
But even kids will eat it, which is always amazing
because they never want to try it, but then as
soon as you give them a toastedos scoop and tell

(03:02):
them to try a mouthful. They love it. So maybe
it's a way to get some kids seat. Some vegetables
not the healthiest, but we do have some great appetizers
that we're going to be having served up, so looking
forward to that. But I wanted to share some entertaining
things today. Okay, so you know all this is really

(03:23):
designed to be educational, but in a way that is engaging.
So I'm going to share a funny story later on,
and it is not to make fun of anybody at all.
It's just it's just fun to try to keep your attention.
And if we don't inject some type of humor into things,

(03:43):
sometimes it gets pretty boring. And I don't want to
be known for being boring. I want to be known
for educating you. So let's start off with the super
Bowl here. So with the super Bowl, I want to
share with you this has always been a pretty fun
indicator of how the markets will do. Now, when I
tell you this, by no means is this Uh, this

(04:06):
isn't something that you can hang your hat on. Okay,
it's just fun. It's just kind of something to look at.
It's interesting. It's just some some fun statistics. Okay, So
now you've got the two sides that are playing each other, right,
the National Football Conference which is the NFC, and when

(04:28):
they win typically a forecasts a bull market, and while
a victory by the AFC, which is the American Football Conference,
that typically signals a bear market. Now there are exceptions
to this rule, and we're going to cover this, but
the NFC victories Historically, when the NFC team wins a
Super Bowl, the S and P five hundred has averaged

(04:49):
a ten percent game for the year. Now, the markets
have been positive twenty two out of twenty nine such instances,
which translates to about a seventy five point nine percent
sent success rate. Now, AFC victories, in contrast, the AFC
team wins have coincided with an average SMP return of

(05:10):
eight point one and the market was positive twenty out
of twenty nine instances, resulting in a sixty nine percent
success rate. So let me just give you a couple
here and then we're gonna get moving on. But uh,
back in twenty eighteen, when the Eagles won, we saw
the SMP experienced a decline of approximately six point two percent,

(05:35):
making for one of these indicators in accuracies. So Like
I said, this is is something you can hang your
hat on, but just fun numbers. Okay, now, how about
the market performance when the Chiefs have won Super Bowls. Well,
in nineteen sixty nine, when they won their first Super Bowl,
that was, we saw the SMP down just a freckle

(05:57):
point one percent. In two two thousand and nine, when
they won, that was despite the ongoing COVID nineteen pandemic.
Here we saw the SMP ended the year with a
gain of approximately sixteen point three percent. In twenty twenty two,
the Chiefs won again, and we saw the SMP responded

(06:19):
with significant gains of twenty four point two percent that year.
And then in twenty twenty three, when they won, we
saw the SMP posted a gain of approximately twenty three
point three for that year. Okay, now, when I say
those years, I say twenty twenty three, I mean the season,

(06:40):
not the year that they won, because they won in
twenty four blah blah blah. So anyway, so let's just
get that clear. I know what I'm talking about. I
apologize for wording it that way, but nonetheless interesting statistics. Right,
what does that mean? Absolutely nothing? But why not have
some talking points when you've got some people around you
you could share those things fun little uh tidbits when

(07:02):
you're mixing company with some new people that you don't
know and you just want to have a little something
to talk about. Well, there you go. There's my little
contribution to your Super Bowl Sunday. So let's get started
here and let's look at the week that we just saw.
Pretty interesting things here And for those of you who
are just joining us, you're listening to your money matters

(07:23):
and I'm your host, Drew Prescott, chartered retirement planning counselor
and accredited wealth management advisor here Prescott Private Wealth in
tron York. So last weekend, last weekend was really something.
Started fielding some phone calls from some investors that were
a little bit nervous and as a result of these

(07:47):
major news networks, and they're really kind of trying. They
were trying to paint such a grim picture of what
the week ahead was going to look like. So some
of the emails that I received were telling me that
it was going to be an absolute blood bath and

(08:08):
they needed to brace for this bloodbath, and that they
thought that the tariffs were going to send the stocks
tumbling and that there was an economic downturn on the horizon.
And these these weren't subtle predictions. These were very definitive
warnings that the market was on the edge of a disaster.

(08:30):
But I want to remind you headlines don't always tell
the whole story. Okay, So I'll tell you what I
tell my clients, and I want to help neutralize the
narrative that's out there.

Speaker 1 (08:50):
Okay.

Speaker 3 (08:52):
Now, what had happened was I had sent out some
messages and said, don't worry about it, this is going
to play out. Well, we've purchased your holdings for a
long term strategy and we are not emotionally based investors. Okay.

(09:14):
So thankfully my clients hire me for a reason, and
some of that reason is really you know, it's almost
kind of like a therapy, if you would, right, Like
a therapist, I have to hear what they're saying, digest

(09:37):
if they have reached a point that we need to
make a change for them. But prior to that, what
I like to do is walk them through why we
have positioned them the way that we have positioned them. Okay,
So here's what had happened as a result of these headlines.

(10:02):
As expected. We thought that the market was going to
open lower, right, and it did just that. Because when
the media spends an entire weekend predicting doom, it's natural
that we're going to see some type of knee jerk
reactions from traders when the bell rings. So as soon
as the bell rang, we saw that the Dow opened

(10:25):
down about three hundred points. Now I remember keeping an
eye on it here at my desk and seeing out
of the corner of my eye every once in a
while what's going on. And I think that it even
reached nearly uh it was around seven hundred points that
it was down, maybe by like eleven thirty. And then

(10:48):
we also saw the S and P five hundred, and
the Nasdaq had dropped slightly, especially in sectors that were
more sensitive to the trade news. And then we saw
the over markets started to follow suit, which reacting to
this uncertainty. But as this day went on, something happened

(11:11):
and the market started to stabilize an investors started to
step back and look at the bigger picture, and the
immediate panic did not translate into a prolonged selloff, because
by the end of the day we saw that markets
had already started to recover. And that's because while there

(11:33):
were some concerns out there, the fundamentals of the economy
still remained intact. So how did the actual markets perform
this week? Well, let me just go through those with you, okay,
because there is If you're on Facebook, you it felt

(11:59):
like Chicken Little was running around saying that the sky
is falling. So what happened? What actually happened? Well, what
actually happened was that the Dow Jones Industrial Average closed
the week at forty four thousand, three hundred and three,
which was down only a half of a percent, which

(12:20):
is far from a massive drop that the media was pushing. Now,
the SMP closed at six twenty six, ultimately showing resilience
and stability, and then we saw the NASDAC closed at
nineteen thousand and five twenty three, which dipped slightly, but

(12:41):
nowhere's near any type of a crash territory. So did
we see this meltdown that was promised? That's my question
to you. Did we see a massive correction that the
so called experts were warning about. No, not at all.
It wasn't even close. And by midweek we saw a

(13:03):
buyer starting to step back in and by Friday, it
was clear that this wasn't the crisis that was being
pushed by CNN and CNBC. Okay, so that's where that
was coming from. That was the narrative, and we even
saw some Wall Street Journal ads out there or not

(13:26):
ads articles out there that were starting to buy into this.
So what actually moved the markets this week? That's the question.
And now that we know what didn't happen, let's focus
on what did happen. The first thing that I wanted
to talk to you about is the trade and tariffs

(13:48):
policy or panic. One of the biggest stories last week
was the new tariffs on Canada, Mexican and Chinese imports,
which were set to kick off at twenty five percent,
ten percent, and ten percent, respectively. Now, these moves are
meant to reshape trade agreements and bring balance to international markets,

(14:15):
border control, and to try to stop fetanol from coming
into this country. Okay, So let's just focus on the
economic component of this, which is that it is designed
to reshape the trade agreements and to help to restore

(14:38):
some balance to international markets. So we saw companies and
investors took some time to process what this actually means
in the long run. So while there was some initial selling,
markets didn't react as sharply as the media had anticipated.
So clearly there are differing opinions on the long term

(14:59):
impact of these trade policies, but for now markets seemed
to be adapting rather than panicking. Here, also we saw inflation.
Now the numbers weren't as scary as they are expected. Okay,
the Personal Consumption Expenditures Index, which is CPE, that is

(15:20):
what the Fed watches closely. Now, that number came in
at two point six percent year over year, with core
CPE at two point eight percent. So what does that mean.
That means that this was higher than a deal, but
not alarming enough to suggest immediate interest rate hikes, So

(15:43):
the Federal Reserve did not indicate any sudden policy changes
in response. Now, this number was not enough to justify
the market hysteria that had been brewing before the week
even began. Then we saw corporate earnings and they were
holding strong. Now some of the biggest companies in the

(16:04):
world reported their earnings this week and the results were
very solid. We saw Apple reported two dollars and forty
cents per share, with strong growth and services and wearables
offsetting some of the softness in those iPhone sales. Then
we saw a Visa who delivered two point seventy five

(16:26):
per share two dollars and seventy five cents per share,
should say, exceeding the expectations and also showing continued consumer
spending strength. And then we had major tech and financial
firms that reported stable earnings, showing business fundamentals remained sound
at this time. So while certain industries faced their pressures,

(16:48):
the overall corporate earnings picture remained positive, and that's something
that rarely gets the same media attention as negative news. Now,
let's take col peek at the jobs report, because the
American workforce is still growing. Now, another key data point
this week was the Jobs report, which showed steady job

(17:12):
growth in multiple sectors, wage increases continue in key industries,
and a labor market that remained resilient despite these economic uncertainties. So,
rather than being a warning sign, this report suggested that
businesses are still hiring and that the consumer economy is

(17:32):
still holding strong. So what is coming up next week?
What are the key reports in the earnings that we're
looking forward to next week? And we have some important
data releases in corporate earnings reports that we want to watch.
So we want to take keep an eye on the FTV,
which is Ford of Corporation, CBOE Global Markets, and kim

(17:58):
Co Realty Corp. Then we also want to keep an
eye on the reports for the Consumer Price Index, Producers
Price Index, and the retail sales data. And that retail
sales data is really a reflection of consumer confidence because
these reports are going to help shape the market narrative

(18:20):
going into the next trading week. And with that being said,
I want to share with you what can really happen
if you allow these market headlines. Now, I don't care

(18:42):
if you listen to CNN, CNBC, Wall Street Journal, Fox Business, Bloomberg,
it doesn't matter. What you'd need to know is that
do not let your politics drive your own investments. And
I'm going to share why that's important.

Speaker 1 (19:03):
Everybody, sit downcing down, please sit sort time sort.

Speaker 3 (19:13):
So Steve was ready to secure his financial future, and
it was January of two thousand and he had five
hundred thousand dollars that he had saved kept off to
the side for some dry powder as they would call it.
When he felt that timing was right to get into
the market, and the stock market had been soaring for

(19:34):
years now, and everybody just seemed to be making easy money.
So Steve put the entire amount of five hundred thousand
into Spy and index of the S and P five
hundred and when he bought in, it was one hundred
and forty eight dollars per share, so that gave him

(19:57):
about thirty three hundred and seventy eight shares. Now, his
best friend, Mark also decided to do the same thing.
He purchased Spy the same day with five hundred thousand dollars.
But unlike Steve, Mark made a very simple decision and

(20:18):
a commitment to himself that he would never sell no
matter what the headline said. So Steve, Mark told him just.

Speaker 1 (20:30):
Let it ride.

Speaker 3 (20:32):
The market always goes up in the long run, and
Steve scoffed, He said, what does Mark? No, He prided
himself on keeping up with the news, and that was
why he thought he was going to do better than Mark.
And he was a guy who read every article, he
watched every financial show, and he listened to every expert.

(20:54):
So if the market was going to crash, Steve would
see it coming. So when nine to eleven happened and
the dot com bust happened in two thousand and one.
It was September of two thousand and one. The markets
had already taken a hit from the dot com crash,

(21:16):
but Steve held firm until this terrorist attack on the
Twin Towers. Now the markets closed for a week, and
when they reopened, he saw that the Dow had plummeted
fourteen percent in just five days. So he absolutely panicked.
His phone lit up from calls from his friends. They

(21:37):
were saying to just see what happened. This could be
the next great depression. It could take decades to recover,
and so he decided that with all of these horror stories,
he was going to get out. So by the following Monday,
he couldn't take anymore. So he sold his thirty three,

(22:00):
one hundred and seventy eight shares of Spy, and at
that time it was worth a dollar five per share.
That left his five hundred thousand that he had invested
worth three hundred and fifty four thousand, six hundred and
ninety dollars in cash. So fifteen trading days later, the
news started to sound a little bit more optimistic, and

(22:21):
he thought, I don't know, maybe I overreacted so he
bought back in. He bought back in at one hundred
and twelve dollars per share, but now he only had
thirty one hundred and sixty eight shares. So let's check
in with Mark. What did Mark do? Mark went on
a fishing trip in the Adirondecks and he didn't even

(22:42):
check his portfolio because he already had made up his
mind that he was not going to react to market headlines.
So then fast forward to two thousand and eight and
Steve had recovered some of his losses, but then Lehman

(23:03):
Brothers collapsed, and he just felt it in his gut.
He knew this was different. Every expert on TV warned
that the banking system was about to implode, and Steve's
heartburn was just unbearable. He stayed up until two am
at the time, scrolling through financial blogs and arguing with

(23:25):
all kinds of strangers on Facebook, and his posts became
increasingly dire. Said the Fed is out of control, this
is the end of capitalism. He posted, crash is only safe.
Cash is going to be the only safe place in
this crash. And then he even called out his friend

(23:49):
Mark on Facebook and said, Mark, how are you not selling,
what do you have a death wish? And what was
Mark doing? Well? Mark was playing pickleball, and he was
playing his next golf trip. And Steve sold everything at
ninety dollars a share, which left him with two hundred
and eighty five thouy one hundred and twenty in cash.

(24:10):
Two weeks later, the government bails out the banks, the
markets start bouncing back, and Steve begrudgingly re enters the
market at ninety seven dollars per share. Now, at this
time he only had twenty nine hundred and forty shares
of spy. So some time goes by, he's feeling good again.

(24:33):
By twenty twelve, Steve's portfolio had finally rebounded, and just
in time for the fiscal cliff crisis and the looming
impact of Obamacare. Now. At that time, CNBC warned that
the tax increases could absolutely tank this economy. Pundits claimed

(24:53):
that businesses would stop hiring, that the stock market would
collapse under the weight of government regulations, and Steve of
course took to Facebook said I just don't see how
America recovers from this. He said, sell now while you
still have something left. I'm going to all cash until

(25:14):
this administration is out of office, and he sold at
one hundred and thirty six dollars per share, netting himself
three hundred and ninety nine thousand, eight hundred and forty dollars. Well,
fifteen days later, the market was averted, the market started
to or the crisis I should say, was averted, and

(25:34):
the market started to rebound. Well, Steve, licking his wounds,
bought back in at one hundred and forty five dollars
per share. Now he had twenty seven hundred and fifty
eight shares of Spy. Now keep in mind, when I
am talking about this ticker symbol, I'm not encouraging anyone
to buy this, Okay, I'm just using this for illustrative purposes.

(25:56):
This is not a recommendation. Now, what was Mark doing? Well,
Mark spent the winner in Florida, playing golf and voting
with his friends. Meanwhile, fast forward, by twenty twenty eight,
Steve had finally built his account back over seven hundred

(26:18):
and seventy thousand as spy Sword passed two hundred and
eighty dollars per share. Then came Trump's tariffs on China.
Steve went right back into full meltdown mode. His Facebook
page became a battleground with anybody that disagreed with him.

(26:38):
He said, these tariffs will destroy global trade and selling
everything before the crash, he said the market will never
recover from this. Mark called him and said, Steve, relax, buddy,
this is all going to blow over. We've seen this
happen time and time again. And Steve said to Mark,

(27:00):
are you kidding me? This is different. I'm not gonna
let my retirement get wiped out because of bad policy decisions.
So Steve sold at two hundred and seventy dollars per share,
pocketing seven hundred and forty four thousand, six hundred and
sixty dollars. Two weeks later, the market started rallying hard,

(27:22):
so Steve had to buy back in at two hundred
and eighty five dollars per share. Now this time he
had twenty six hundred and twelve shares. So what was
Mark doing? Well? He was on his boat, enjoying a
cold beer, and while his account bounce just kept on climbing.
Mark was carrying on with life, not patting an eye

(27:43):
at everything that had happened. Then, in twenty twenty three,
Steve's account had climbed to nearly one point zero four million.
But then the debt ceiling crisis hit. The US is
going into default, the news warned. Steve's stomach was in
knots all over again. He knew this feeling all too well.

(28:07):
He couldn't sleep, he couldn't focus, and he said to himself,
If this was when I was younger, I would stay invested.
But right now I'm too old for this crap. I
need to sell. So he sold at three hundred and
ninety five dollars a share. He walked away with three million.
I'm sorry, with one million, thirty two thousand, seven hundred

(28:31):
and forty dollars. So two weeks later, the government struck
a deal and SPY rebounded to four hundred and ten
dollars per share. So Steve thought, shoot, I gotta get
back in, so he bought twenty five hundred and nineteen shares. Again.

(28:53):
Where's Mark on the golf course, this time working on
a short game. So where are they today? Well? As
of October of twenty twenty four, Spy was trading at
five hundred and twenty dollars per share. Mark never sold.

(29:14):
He still owns his thirty three hundred and seventy eight shares,
his portfolio value is worth one point seventy five five million. Steve,
who sold at every crisis, now owns twenty five hundred
and nineteen shares and his portfolio value is one point
three to one million. So Steve lost out on four

(29:38):
hundred and forty five thousand dollars. That's nearly a half
of a million dollars just because he let his political
fears control his investments. Meanwhile, Mark is happily retired. He's
enjoying his boat, golf and his worry free life. Steve
sad to say, but he's still on Facebook posting five

(30:03):
times a day about the administration and talking about how
the country is on the brink of falling apart and
that the stock market is going to go down. Well,
what did Mark say? Well, the last time that Mark
posted a picture on Facebook, his post was him at

(30:26):
the Eighteenth Green holding a cigar and a beer, with
the caption that said, some things you just have to
hold on to. So that's a good story about how
two people can act completely different. And if you let
the media get a hold of your emotions and it

(30:50):
just happens to align with your political convictions, you may
cost yourself a lot of money. That's why it's important
to one invest for the long term, two be properly diversified.
Three know what you own and why you own it,

(31:15):
and four do not let politics have any bearing on
your investment philosophy. I hope that you found that story
to be valuable, and I want to share another story
with you here. So it's a little bit of a

(31:36):
story hour if you would. And I think that stories
are very important to help us learn. Even Jesus taught
in parables, and all of us can recall at least
one parable that Jesus taught, if not several. So I

(31:58):
want to share this other story with you, again, designed
to be humorous, not not designed to pick apart any
one person. But again, listen, if we can't take a joke,
what good are we? Right? I always say nothing is
worth doing unless we're having fun doing it. So if

(32:23):
your name is Ben and you're a top orthopedic surgeon
out there, this is not about you. This is about
just a story that I created, Okay, something to have
fun with, something to laugh about, and I created some
fictitious characters. So let me share with you this great

(32:48):
story about one man who has a very complex retirement strategy,
and one man who is a friend of his that
has a simplistic retirement strategy. We'll get in the weeds
a little bit here. I just want to share with

(33:09):
you kind of start to paint a picture. Okay, So
the first individual, we'll call it, let's call this the wealthy,
the wives, and the worried. Doctor Ben had spent forty
years as one of the top orthopedic surgeons in the state.

Speaker 2 (33:30):
Well.

Speaker 3 (33:30):
He was known for his brilliant mind, his sharp tongue,
and an ego that was large enough to require its
own zip code. And Ben was the kind of guy who,
even after he retired, he liked to jog around the
neighborhood in his white coat just so that people didn't
forget that he was indeed Doctor Ben, and he was

(33:51):
living in a very affluent Heritage Hills golf community. Now
Ben had what most would consider the perfect retirement. It
was a million dollar, multimillion dollar portfolio, a luxury car collection,
and seemingly endless ability to complain about taxes, the market,

(34:12):
and how kids these days don't understand what real work is.
Now his next door neighbor, Walt, he was a complete opposite.
Walt was a retired accountant. He was mild mannered, patient
and calm, and he was a man that could sit
through an audit without even breaking a sweat. And he

(34:35):
never talked about money, which bothered Ben immensely. And every
morning at seven am, the two would meet for coffee
at the clubhouse, and every single morning Ben would start
off talking about his investment strategy covered calls Walt. He
would say, that's how the smart money works. I reckon

(34:58):
premium after premium dividends. You bet the market pays me.
And you what are you doing. You're sitting on a
pile of municipal bonds and some stupid annuity. And Walt
would just smile and nod and sip his coffee and
then go back to reading the newspaper. Well, Ben was

(35:19):
absolutely convinced that his strategy was bulletproof and anyone that
didn't do what he did was a fool. He had
one hundred percent of his money invested in stocks that
paid high dividends, and then he would write covered calls
every month to generate even more income. He rarely spent

(35:40):
a dime. He had enough money, but the thought of
withdrawing made him physically ill. Now. Walt, on the other hand,
he took a more balanced approach. Walt had one third
of his portfolio and high quality growth stocks, not for
income today, but for capital appreciation. He had one third
in tax free municipal bonds, giving him a steady tax

(36:03):
free income, and he had one third was in a
variable annuity with a guaranteed lifetime income rider, which meant
no matter what happened, he and his wife would always
have a paycheck for life. Walt, you're doing it all wrong,
Ben would say, where's the excitement in your portfolio? And

(36:25):
Walt every morning would just smile and nod and take
a sip of his coffee. Now, for the first decade
of retirement, both of these men lived very well. Now, Ben,
despite his miserly tendencies, still managed to travel occasionally by
the best stakes at the butcher and remind everybody that

(36:48):
he could afford it. His dividend stocks performed well in
his covered calls, generated extra cash, and meanwhile, Walt never
once worried about the market. When the two thousand and
eight style correction happened during the COVID pandemic, Ben had

(37:08):
a full blown meltdown. He said, well, I need a drink,
he said, I just lost thirty five percent of my portfolio.
Walt barely looked up from his paper and he said,
my municipal bonds are fine. My annuity check came in yesterday.
Oh in my growth stock. Eh, they'll bounce back. Ben

(37:31):
nearly choked on his scotch. He said, you're telling me
that you're not panicking. Nope, Walt said with a smile,
and that drove Ben absolutely crazy, and at year fifteen

(37:54):
of Ben's retirement, something changed. Ben started to forget at
things very small at first, like names dates where he
left his readers, and his wife Margaret started to notice these. Ben.
She said, you asked me the same question three times

(38:16):
this morning. Ben just grumbled. He said, ah, I'm just distracted.
I'm just distracted. But it got worse. By year sixteen,
Ben couldn't manage his own trading account anymore, and his
once carefully placed covered calls and dividend reinvestments were now
a tangled mess, and Margaret had no clue how to

(38:37):
even place a trade. Meanwhile, over at Walt's house, things
were much simpler. Walt's annuity kept paying month after month,
regardless of what was happening in the market. His municipal
bonds still tax free and still generating a steady income,
his growth stocks still appreciate, and they're leaving a nice

(39:02):
nest egg for his wife in the future. Well, Margaret,
Walt said, have you ever placed a trade? Not once
she admitted. That's a problem, he said, and it clearly was.
And by year twenty five of retirement, both men had
lived long, full lives, but when it came to money,

(39:27):
their outcomes were dramatically different. What we saw from Ben's
portfolio was that he stopped managing his covered calls after
his cognitive decline, and without that income, he had to
rely solely on dividends. His wife struggled with managing their assets.

(39:48):
Taxes on dividends and capital gains ate away at their income,
and by year twenty five, their wealth had eroded, leaving
just enough to great buye. Now Walt's portfolio, his annuity
is still paying out his monthly income, covering all of
their living expenses. His municipal bonds remained tax free, giving

(40:13):
his wife an easy to manage, low tax income stream. Additionally,
his growth stocks continued to appreciate, giving his heirs a
sizeable a state. So by year twenty five, Walt's wife
never once worried about money. Well, one crisp morning, Walt

(40:37):
was sitting alone at the clubhouse sipping his coffee when
Margaret walked in. She sat down, she took a deep breath,
and she looked at Walt and she said, Walt, you
were always right about this. Walt just smiled and nodded,
and he said, I take no victory in what I did,

(41:04):
and I wish that I had been able to share
with Ben the value in keeping things simple, but he
just did not want to have this conversation with me. Now,
Walt had helped Ben's wife throughout the remainder of time

(41:27):
that he could. But who had the better strategy? So
look him back. Who really won the retirement strategy game
in this situation? Well, if we look at tax efficiency,
Walt's municipal bonds and annuity provided tax free and tax

(41:47):
deferred income, and Ben had to pay taxes on dividends
and capital gains every year. Then, when it came to
cognitive declient protection, Walt's plan was automatic. His income just
kept coming in and no decisions were required. Well, Ben's
plan needed active management, which became impossible for him later

(42:10):
in life. When we look at the spousal security, what
we see in Walt's picture is that Walt's wife never
had to place the trade. She never had to stress
about stock prices or sell assets. Now Ben's wife, on
the other hand, was completely overwhelmed and eventually she had

(42:30):
to hire someone to manage the account. And as far
as long term growth is concerned, well, Walt's growth stocks
appreciated while his annuities and his bonds provided a steady income.
But Ben's dividends lost purchasing power over time and it
forced more withdrawals, leaving him with having to dip into

(42:57):
the principle of his portfolio. Now, what is the lesson
from this story? The lesson is simple, A well balanced
approach will always win, because retirement isn't just about what
works today, It's about what will work for you in
twenty five plus years, through market cycles, through health challenges,

(43:22):
and life's unexpected turns.

Speaker 2 (43:25):
Now.

Speaker 3 (43:25):
Ben was clearly a brilliant man, and no one is
disputing that. But he built a system that only worked
when he personally was fully capable of managing it. Now, Walt,
he built a system that works in all situations, so
whether the market was up or down, and whether he

(43:46):
could remember his password or not. So the next time
that someone brags about their covered calls and their dividend income,
just think about Walt, smile and nod, because at the
end of the day, simplicity and security will always win
over complexity and risk. So if you're thinking about planning

(44:13):
for retirement, don't just plan for the best case scenario.
You want to plan for real life. My name is
Drew Prescott. I'm a chartered retirement planning counselor and accredited
wealth management advisor at Prescott Private Wealth. We're located in Troy,
New York. Take a look at us Prescott PW dot com.

(44:34):
The phone number here is five P one eight two
zero three one nine eight three. We are in full
swing for our client base here. We are doing our
annual and semiannual reviews and with each one of those
we are refreshing our client's financial plans. Now, why is

(44:58):
having a financial plan the first thing that should be
on your radar? Well, because retirement just is not just
about investing, Okay, it is about your taxation, it is
about your income, it's about your goals, it's about any

(45:23):
risks and concerns that we need to cover, and when
we put together financial plan for you, we address all
of your concerns, your goals, your needs. So if you're
concerned about having a long term care event, needing to
go into a facility, making sure that you're not leaving

(45:48):
your spouse out in the cold, making sure that after
you've had a second marriage or several marriages, that you're
still able to leave money behind to the children that
you want to leave it behind too, that you're not
leaving your wife out in the cold, that all your

(46:10):
beneficiaries are correct. Whatever it is that's important to you,
we are going to address those in your financial plan. Now.
Our other commitment to you is that we will take
all of this information that you share with us, your
desired income, your desired outcome of what you want to happen,

(46:33):
and we will run it through what we call a
Monte Carlo analysis, where it takes one thousand trials. It
takes all of the good parts that could happen with
lower income tax, lower cost of goods, higher rate of returns,
and then it also takes all the terrible things that

(46:55):
could happen the market crashing income taxes increased greatly, a
loaf of bread getting out of control, and it takes
all of these scenarios in between, and it runs every
scenario in that thousand trial marker and it tells you,

(47:16):
out of a thousand trials, how many of those do
you succeed in? And what we want to do is
get you into that safe zone. And sometimes that requires
a little bit of massaging the income, changing some goals,

(47:37):
increasing savings, making things a little bit more tax efficient.
Everyone's different and we have to work with everybody on
a different level. Okay, Now, what we do is when
we manage someone's assets through our platform, you get to
go in review all of your assets and even assets

(47:59):
that are held here, they're at the bank and so on.
Our portal allows you to put all of that information
in there. You can have your budget right on your website,
all of your goals, you can change it, and your
financial plan is right there just to click away at
every time. This gives you complete control and a very

(48:23):
macro look at your picture financially. It'll also allow you
to go into a micro level and look at specific
things that you want to keep an eye on. So
here at Prescott Private Wealth I encourage you to reach out.
If you want to get on our mailing list, just
go to Prescott PW dot com. The pop up at

(48:47):
the home screen is what you would want to sign
up under, and then go into our services. I am
a smartvestor pro through Ramsey Solutions. I also am a
chartered retirement Planning counselor accredited Wealth Management Advisor President of

(49:09):
Prescott Private Wealth. We have a lot of things going
on here, and we really love working with families. If
you have a portfolio that has over two hundred and
fifty thousand dollars of investable assets and you have mutual funds,
I would encourage you to get over here and let

(49:29):
us help you get your portfolio in a better place
and let's get a financial plan together for you. Okay,
you will love the process, You'll feel right at home,
and you'll enjoy having a relationship with us here. So
as we start to come into the close of today,

(49:54):
what are some of the things that you're going to
want to remember well today? Remember this The economy is complex,
but it's not as fragile as these headlines will try
to paint it out to be. Okay, as I said
on Saturday, night and Sunday I started getting emails about

(50:17):
concerned investors and clients. What I said to them was,
number one, we have a financial plan in place, your
Monte Carlo analysis that we ran with those test trials
that I told you about those take these types of
things into consideration. Just breathe. We're gonna be fine. Tariff's work.

(50:45):
We will come out on the winning end of this.
And your investments are for your long term strategy, not
built for this specific moment in time. Okay, So don't
try to time the market. Don't jump in and out

(51:05):
based upon political noise. Right, stay disciplined, Stay like Mark
the Fellaw that invested and was committed to his long
term safety and his long term goal. All right, now, Also,

(51:28):
remember markets fluctuate. But what does history favor. Well, it's
shown over any period of time that you want to
look into any long term track record, history has always

(51:48):
favored those who stay invested. So you want to have
a well thought out strategy, and a strategy like that
is going to beat emotional reactions every single time. So
are you are your financial plans set? Do you have

(52:13):
a financial plan written out that changes day to day
based upon whatever your numbers are well, we can provide
that for you. So if you are investing based on
news cycle right, we can't help you. If you're a

(52:37):
solid individual that's looking for a long term strategy and
having a financial plan, well, then we would be a
wonderful fit for you. So again, I would encourage you
to set a time to come into the office at

(52:57):
Prescott Private Wealth your listenstening to your money matters. I'm
your host, Drew Prescott, chartered retirement planning counselor and accredited
wealth management advisor here at Prescott Private Wealth, and we're
located in Troy, New York on Hoosick Street, just before
the traffic gets completely crazy. So I'm sitting here on

(53:21):
Saturday recording this show, and right now it still hasn't snowed,
and I'm wondering. I'm not going to make any bold predictions,
but it kind of feels like we might we might
not get much here. Anybody else have that feeling. I

(53:43):
just feel like maybe this thing's gotten a little bit
hyped up. But I do know one thing. We're getting
a little bit closer to the end. We're getting closer
to those of blue skies and sunshine and that just
the feel good of having nicer weather and looking forward

(54:04):
to tonight with the super Bowl. Whatever your team is,
I wish you well. I hope that this goes really
well for you, and even greater than that, whoever wins,
I hope that it leads us to a prosperous market

(54:25):
for the remainder of the year. Right, who's with me
on that? So thank you again for tuning in. And
if you do not have a financial plan, if you're
someone that's going at your investments all by yourself and
you have a complex strategy like Ben that I talked about,

(54:46):
or you find yourself being very emotional like Steve that
buys into all the headlines and is just perpetually on
Facebook complain and getting nervous about these headlines. If you
want to change your life, and you need a good coach,

(55:09):
and if you're coachable, that's key. You have to be coachable.
I would love to talk to you. I would love
to share with you the evidence that I have that
can change your mind. Again, only if you want to change,
and only if you're a coachable individual. So thank you

(55:32):
so much for tuning in again. You're listening to your
money matters. I can be heard here every Sunday at
eleven AM Radio eight ten WGY and one oh three
one FM Sunday's at eleven. The phone number to reach
me is five one eight two zero three one nine
eight three. The website is PRESCOTTPW dot com and my

(55:52):
email address is Drew at PRESCOTTPW dot com. Enjoy your day.
Thank you so much for tuning in again, and God
bless you and God bless the USA.