June 27, 2025 • 43 mins
Climbing the Wall of Worry – In the context of the endless news cycle of significant political, economic, and geo-political events, Chris Boyd, Jeff Perry, and Russ Ball discuss what an investor should do with all the external market risks, while at the same time, we are reaching record high levels for several market indices. Topics covered include tariffs, debt-ceiling, Iran, immigration, and the Big Beautiful Bill. While there is some disagreement on the politics, the trio discussed the value of working with a financial advisor, especially in turbulent times. #financialplanning #geo-political #wallofworry #stockmarket
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner practitioner
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome, this is Something More with Chris Boyd.
I'm here with team members, Jeff Perry and
Russ Ball.
We are all of the AMR team at
Wealth Enhancement and glad to have you with
(00:43):
us.
Today, we're talking about the wall of worry.
The market climbs a wall of worry is
an ism that we hear about often and
the market seems to be doing just that.
So we thought we'd talk a little bit
about some of the reasons and some of
the issues and just give some thoughts around
what's going on in the investment world around
(01:06):
us.
We got tariffs.
We've got Middle East conflicts.
We've got all these.
Is Iran considered the Middle East, by the
way?
Yes.
Okay, all of these kinds of issues.
We can maybe go through some of why
don't we start with that a little bit
about what are some of the worries that
people are facing?
(01:26):
I feel like our clientele come in routinely
and mention various concerns and are looking for
reassurances along the way and thinking how are
we handling these and how are we positioning
for them?
Well, I think you're right, Chris.
The breadth of clients, we meet with clients
(01:47):
practically every day, practically all day in some
cases, some days, right?
Right, it feels like it.
And we meet with clients who are young,
just starting out.
We meet with clients who are in their
accumulation years and we meet with clients who
are retired.
So we really get a, not purposely, but
we really get a snapshot of what people
are concerned about and worried about and there
(02:10):
are very consistent patterns.
And they tend to run with the news
cycle, right?
So a few weeks ago, a month ago,
whatever it was, I lose track, it was
the tariffs.
What will be the impact on the economy
and the market on the tariffs?
Early April, right?
What was the name?
Liberation Day.
Liberation Day, that's right.
They coined the phrase.
(02:32):
So, and then I was just going to
run through them if you want.
Yeah, go for it, run through them.
We'll come back and talk about them all.
Yep.
Well, we can even go back before that.
After President Trump took office, he was attempting
to implement many of his campaign promises, etc.
And so, depending on where you are politically
or where you are in your employment, in
(02:54):
some cases, you might have been worried about
effects to the employment market.
Immigration certainly was another, is and was another
big one.
And then we ran into the tariff wall,
so to speak.
And then we got this crisis in the
Middle East where, as we well know, Israel
made a preemptive strike because of the intelligence
(03:16):
related to Iran having a nuclear weapon.
Yeah, I mean, you could categorize it more
broadly with wars because before that, we were
dealing with still, you know, Israel dealing with
Palestine's sort of Hamas, right?
Yeah, and all of Iran's proxies.
(03:37):
Yeah, yeah.
So, broadly defined as Middle East.
Yeah, I think that's accurate.
And Russia, Ukraine continues to, you know, be
an ongoing source of instability, let's say.
That's right.
Plenty of things to worry about there.
And both of those wars, crises, whatever, conflicts
(04:01):
have to do not just with security and
potential terrorism, but have to do with the
energy markets.
And certainly that impacts the global economy.
And in the middle of all this, we
have a big, beautiful bill trying to work
its way through Congress.
And, you know, all the pros and cons
of that, you know, the tax relief, the
(04:23):
giveaways, I'll call them too many giveaways, the
impacts to the national debt and deficit.
And also in that big, beautiful bill deals
with, temporarily, but deals with the debt ceiling,
which is a common thing that the markets
get in and nod in about.
And then Moody's downgrades the national debt.
(04:44):
That's a good point.
So, I'm sure I'm not getting them all.
And there might be more, yeah.
All right, so there's all these variables that
are of concern.
Do you want to weigh in on this
before I chime in?
Things that you're hearing about?
Well, I mean, I know recently, like just
prior to the Iran conflict that's going on,
(05:07):
the protests in California were a big topic
in people's minds and immigration and all that.
Civil unrest, right?
Sent over to California.
So, it seems like there's an endless stream
of headlines that are making waves and making
people worried, I would say.
Good points, yeah.
So, let's kind of pick at some of
(05:30):
these things and dig into them a little.
And then let's come back to some of
the context of all this.
Because again, a lot of this, what's relevant
is how it fits into an individual's financial
plan.
But we still spend a lot of time
thinking about these issues.
And as advisors, we spend a lot of
(05:53):
time thinking about how it should impact one's
portfolio or not.
So, you know, you talked about the immigration
maybe as the starting point or earliest in
the sequence of events.
There definitely has been some adjustment of the
(06:18):
positioning as it relates to the deportation of
certain types of workers that might be here
illegally.
Seems like there's been some rhetoric around maybe
not as much focus on farm workers or
people who are workers.
But right now, there hasn't been much discernment
(06:39):
between people here illegally in one form or
another.
It seems like there's been an effort to
just get anyone out who's not here illegally.
I think that's accurate.
And if we haven't made this realization yet,
I think we really need to.
And maybe the market has.
Maybe the market has before we have.
(07:00):
And that is a policy statement or a
position of the Trump administration when announced is
probably going to change.
Right.
So, you know, all whether it's the immigration
thing or whether it's the big, beautiful bill
or whatever these policies are, they do tend
(07:21):
to change.
They're not as they're not as grand at
the end of the story.
Right.
So traditionally, you would expect what the president
says to be intended to be taken at
its face value.
Literally.
President would say what he means and that
(07:43):
that would be policy.
Or at least efforts to continue to get
to that policy.
Yeah.
Whereas with the Trump administration, the notion of
deal making and the art of the deal
or whatever the book was that maybe that's
not always the case.
(08:04):
Is that where you're going with that?
Exactly.
Exactly on that.
Well, the initial stance we were on immigration,
but we can make the same tariff comment
to terrorists.
Right.
You know, this is what it's going to
be.
This is it.
This is it.
And then change it and sometimes seemingly change
it for no purpose that we know about
(08:25):
anyway, but just a different adjustment in the
strategy.
And initially, we had a lot of market
turmoil based upon some of these statements.
Well, for a week, they were like, there's
not going to be any postponement of this.
This is it.
We're going to need deals right away.
And then bond market reacted.
And, well, we're going to push this off
90 days.
Right.
(08:45):
So maybe that I know maybe a month
later, we're going to push this off for
90 days.
So maybe the market has figured this out
because it does not appear to be responding
as it normally would or previously would based
upon any given crisis.
I would put it a different way.
You can't believe what's being told, you know,
(09:07):
I mean, that's part of the frustration of
this is that, you know, on the one
hand, you take at face value what's being
said and then it turns out, no, that's
not really what's being what's intended.
And you discern what's really meant and what's
not really meant.
That's that's it's such a frustrating way to
(09:28):
deal with things.
And, you know, this notion that in foreign
affairs that, well, people, you know, keeps people
on their toes, but also means people don't
know what to expect.
So sometimes they're going to do there's a
there's a danger that you're going to have
misfire of what one person's thinking and versus
what one person is saying and what it's
(09:49):
what's going to actually be the case, you
know, how it's going to play out.
I think it's scary.
But personally, I think it's a bad, bad
way to do business.
But and as as a leader of of
a nation, I hope that that can change.
But I don't think it is.
I agree.
I think you're right that that's the that's
that's the modus operandi of this administration, that
(10:13):
it's a little bit of keep you guessing,
keep you on your toes and trying to
navigate with like, oh, we'll put something really
outlandish on and see how much we can
get.
And then we'll get something and we'll feel
good about that.
And then it's better than where we started
kind of mindset when it comes to tariffs.
(10:36):
That was kind of the essence of what
you were saying to me yesterday about some
of this.
Yep.
Generally.
And whether or not you are a supporter
of the president or not a supporter, you
know, even if you believe this is the
art of the deal and you like what
he's doing, you still should have the position
where you can't rely on it.
Right.
(10:56):
Or if you're a critic of the president
and you don't like what he's doing, you
would have the same position.
And so under the theme of climbing the
wall of worry, as the market has been,
you know, down from that correction or whatever,
however we want to characterize it, whatever that
reaction to the tariffs, you know, Both in
(11:19):
anticipation and then at the announcement, the market
was starting to decline, but then it declined
more precipitously, close to 20%, not quite from
its peak.
So you wonder like, if the president, Right
back to where we were, right?
Right.
Or in some cases higher.
Maybe higher.
Yeah.
So you wonder what the market, would have
(11:40):
the market responded basically the same way in
April if the president said, we're going to
have a 30% tariff across the board
unless we make another deal.
Yeah.
Would, would the market be saying, Oh, that's
great.
Look at, look at where we are today.
You know that.
Okay.
You know, we're at, at highs or near
highs.
(12:01):
We're recording on June 26th.
Happy anniversary, Kristen.
Happy anniversary.
So, so we're, we're, we're, things can change.
So, but, but as far as this tariff
element is concerned, I think you make a
(12:22):
good point.
If you just came out and said 30
% across the board, there's a 30 plus
10, maybe or whatever it is, you know,
that it might have been received in a
different way.
Where it'd be, you know, where, as opposed
to, Oh, we're not going to have 145
% tariff on China.
Well, maybe that's good.
We don't know that that's the case though.
(12:43):
That's the thing that I keep coming back
to.
We are assuming that the, there will be
deals.
I mean, it seems like we're moving in
that direction.
But right now it's just been, we've delayed,
we've postponed.
Now, what happens in July?
I think it's the 9th when the 30,
the 90 days expires from the time that
(13:06):
this delay was postponed to some time.
Well, the date doesn't even mean anything.
I mean, if you, if you announce this
to the TikTok, will it be, will it
be extended again?
Or, or will it be more rattling the
(13:26):
cage?
Oh, we're going to be, you know, sticking
it to everyone who doesn't meet, you know,
get an agreement or right away or something,
you know, again, is it really what's going
to happen?
Or is it just sort of intended to
move people to some kind of intended objective
you were going to say about TikTok?
Well, TikTok is an analogy because we had
(13:49):
a date.
This is the third extension to the TikTok
deal.
And so that just gets pushed down the
road.
And I'm not trying to be critical of
President Trump.
I think he's had some good successes.
But he does do this in many times.
When, when he gave Iran up to two
(14:10):
weeks to respond, the news media correctly pointed
out that he says two weeks a lot.
Yeah, you know, he puts it out there
two weeks over and over again.
So you can't rely on not just the
policy, but you can't rely on the date
either.
So let's talk about the Iran action, the
(14:33):
decision to drop bunker busters and so forth
on the Iranian nuclear sites.
On the plus side, you know, hopefully this
has material consequence to limit Iran's ability to
(14:56):
actually create a nuclear weapon, which I think
everybody is concerned would not be a good
thing for the world order, whether it's because
of escalation of a nuclear arms race in
the Middle East, or because of the concerns
of what would, you know, what would be
the consequences of that.
Iran actually do, whether through proxies or, or
(15:18):
whatever, right?
Israel security, all that.
My issue with the whole process was procedural
in a sense.
You know, I do think that's essentially an
act of war.
Whether it's been declared as a war or
(15:41):
not, that's essentially an act of war.
I think, I don't recall, I'm sure there
are instances, but I don't recall instances where
we did something similar, where we had
this kind of action without congressional consent, or
(16:05):
what's the right term?
Not consent, giving the four leaders of Congress
a heads up on this kind of thing.
And whether or not, you know, you can
point to some instances where we've struck back
(16:26):
at people who, when there's been some kind
of a retaliatory strike.
I think, you know, that's not uncommon, I
think, but this was, I would argue it's
preemptive.
I think you and I were kind of,
would be willing to argue that point a
little bit, but because of all the proxy
(16:49):
activities and so forth that Iran uses, but
I don't know, this just seemed pretty substantial
to me as a military action.
You know, at this point, it's a celebrated
military action and, you know, no critique of
(17:13):
the military and the way things were exercised
or anything like that.
I just look at it as thinking from
a governance point of view, is this really
the way we want to potentially engage in
a war without some congressional engagement, you know,
that kind of thing?
(17:34):
You and I do disagree on this and,
you know, we could, I could point to
many examples and many presidents, including Thomas Jefferson,
who had a military action against the Barbary
pirates without congressional action all the way through
Syria and Libya and et cetera.
(17:54):
And I think this is a real issue
that Congress needs to deal with.
And I don't mean because of the actions
of President Trump, I mean, because of the
actions of numerous presidents.
Well, that may be the right answer.
It may not be specific to President Trump,
but just that notion of where do you
draw that line as to what is permissible
(18:15):
within presidential power as an office without the
consent of Congress, who actually is empowered to
declare war.
Right.
And Article Two, where the president has the
authority to defend the country and be the
commander in chief.
And it's tough to reconcile those two if
(18:36):
you have a, just for sake of discussion,
without talking specifically about this case, but if
you have a credible threat to the United
States that is imminent, that intelligence shows is
imminent, and we have threats to our country,
our bases, our allies.
Should the president be able to act without
(18:57):
telling members of Congress who may or may
not, you know, keep it to themselves, so
to speak?
Yeah.
Would you consider this one of those occasions?
I do, because I have to, because I
don't have any other evidence, although, you know,
we can be skeptics and say, you know,
(19:18):
question the intelligence.
But I am told through our government that
they had credible evidence that Iran was on
the edge or about to have nuclear weapon
capability.
And in fact, they went over at the
Pentagon briefing this morning.
It was very enlightening.
If people haven't seen it, I would encourage
(19:39):
you to look at it.
They talk about that this, this particular process
of this particular site, the monitoring of it,
and the strategy in the government started 15
years ago when they saw what was being
built, and they actually built these bunker bombs
for this site.
So if I believe my government, which I
(20:00):
tend to do, but open minded, and it's
a credible threat, I want my president to
have the ability to eliminate a threat.
To our bases, our military service members overseas,
and our allies, without having to go to
Congress to tell them, you know, what the
plan is, basically.
(20:20):
And I guess the notion of imminent is
maybe probably relevant in that.
Well, let's say it's not imminent.
Let's say it's within the next month.
I still struggle with telling members of Congress
what we're asking permission to do this and
giving our enemies time to listen to the
public debate in Congress about that.
(20:41):
The War Powers Act doesn't require it.
It requires notification within 48 hours of Congress
and a limit of 60 days to hostilities.
So is that the right balance?
I don't know.
But if this is an issue that Congress
is worried about, I mean, one thing that
you and I agree on is Congress has
delegated, is negligent, whatever it is, on all
(21:04):
these things that they end up complaining about
afterwards.
Congress has the power to change the War
Powers Act if they choose to, and I
doubt they will.
I doubt they'll complain.
And if it was a Democratic president doing
it, as it has been in the past,
the Republicans complain about it.
And then the Republicans get in power, and
they don't do anything about it, and vice
versa.
(21:24):
I don't want the limitation on there.
Yeah, I gotcha.
But, well, in any case, I think this
is a really interesting discussion.
I'm kind of into it.
But I want to bring it back to
what we were originally talking about was the
idea of the wall of worry and markets'
reaction to it.
And I think there are other things besides
(21:46):
this.
Now, this seems to be presently in a
ceasefire.
I think there's a question, like, will it
last?
What is the end of it?
Yeah, right.
Is that the end of hostilities?
Or will there be more of a retaliatory
response?
You know, there was a modest retaliatory response
(22:08):
on one of our bases.
Was it Qatar?
Qatar, how do you say that properly?
Telegraphed and planned.
Yeah, it's pretty widely known.
So, in any case, it seems surprising to
me that that would be the extent of
the retaliation.
(22:30):
But fingers crossed that it is, right?
Absolutely.
But, you know, at the same time, my
worry would be like, oh, what if there's
some kind of cyber attack?
Or, you know, that kind of thing.
Terrorist attack, sure.
Yeah, terrorist attacks.
What kind of response might there be in
(22:51):
a way that's less militarily defendable?
You know what I mean?
But maybe more disruptive to our economy, I
guess.
But you wanted to comment?
Yeah, I think another one of my concerns
with this specifically is, I was reading it.
It sounds like we didn't do that much
(23:13):
damage to the nuclear capabilities.
I was reading something that said we set
them back maybe a few months by hitting
some of the tunnels.
And if that is the case, then if
we didn't really obliterate the nuclear facilities that
are in Iran, then we just drop bombs
on some that might have nuclear capabilities in
the next several months.
(23:33):
So, yeah, I feel like, you know, you're
never going to know for sure if you're
going to do the damage that you expected.
But it is just a looming thought.
Yeah, and that whole issue seems to be
one that's in flux, you know, because they're
still getting the data on how much damage
really was done.
And that was some of the conversation this
(23:56):
morning.
It was, and I agree with the general.
It was, you know, it was disappointing.
In the Secretary of Defense, I think it's
disappointing that that story was released.
It was based upon just the initial internal
data that someone leaked and it had a
(24:17):
low confidence, etc.
No one's going to know until somebody's actually
there.
Yeah, because it's all underground.
I, based upon the presentation made this morning,
I have greater confidence that it was destroyed.
And they didn't say that.
I just, on the presentation that they made
about the weapons and about the plan and
(24:39):
about the execution of it.
It seems, it seems like it would have
to be, but we'll have to, we'll have
to wait.
Some positive things that came out of the
conflict, though, is that North Korea, China, Russia,
the axis of evil, however you want to
describe it.
Yeah, what we used to, yeah.
Right.
(24:59):
None of them, none of their, Iran's allies
did anything to support them.
Yeah.
In fact, they did the opposite, at least
with their public statements.
And they didn't seem to even rattle their
swords, so to speak.
Well, and Russia seemed to say, we'll, we'll,
we'll help Iran get nuclear capabilities, didn't they?
(25:22):
I, if they did, I didn't, I didn't
see that, but they, no one did anything
meaningful.
Which I think is a positive for the
region itself.
And so at the end of the day,
if the ability of Iran and their proxies
to be disruptive in the Middle East or
have a nuclear program, whether it, whether it's
(25:44):
set by six months, six years or forever,
I think is a positive thing.
And then at the same time, the NATO
conference was going on and it seemed like,
based upon the news reports, that it was
a very productive NATO conference with President Trump
reassuring NATO that we are a part of
NATO and we would defend any NATO country.
(26:05):
And all but one, I believe, of the
NATO countries agreeing to that 5% of
GDP, their GDP spending.
And that's, you know, by itself, if we
didn't have all this other stuff in the
news, I think that would be.
The headline news about NATO getting along so
well and making these commitments to being a
strong and vibrant partnership.
(26:26):
So at the end of the day, if
this holds and I, I share your potential
concerns, Chris, but if this holds as it
is today, it's, it's the world is a
better place because the United States acted to
take a, to deter a threat or eliminate
a threat or however we want to characterize
it.
Yeah.
So, um, the, I think we'll know more
(26:49):
within a short time, you know, a couple
of weeks, we'll probably have a better sense
of what's the real damage that was done,
whether or not there'll be more retaliatory response.
So I think this is one of those,
um, let's give it a little time and
see where we're at.
Similarly with the tariffs, uh, we've got, uh,
June 9th looming about a month after that
(27:11):
is the, um, China.
I think we'll get a sense of, uh,
you know, from the extension that was originally
done in April for most countries, uh, where
we stand with, will the, uh, administration kind
of kick the can another 90 days or
something like that, um, to bide time for
(27:32):
finalizing some of these negotiations that may be
in place.
Um, and then that might give us an
indication of, oh, well, that's probably what would
happen with China as well.
Right.
So presumably, um, it was, we'll have maybe
within a few weeks, have a sense of
what's coming there.
Additionally, this tax bill is in the thick
(27:53):
of it, perhaps even by the time our
episode airs, there could be movement on this.
We don't know whether it's going to succeed
or fail.
Uh, essentially the, uh, the house passed a
version of the bill, the one big, beautiful
bill.
We talked about that in a prior episode.
Some of the, uh, features of that, uh,
that the Senate is in the throes of
(28:15):
its negotiations as it relates to this.
Um, there are discrepancies of, uh, how these
will be dealt with.
Um, and that's the nature of how the
process works.
Uh, the Senate will have to pass its
version of the bill that will bring it
back to the house to, uh, vote, I
(28:36):
guess, on.
Reconciling.
Reconciling whether they, you know, can live with
something that comes out of that.
Uh, it's a tenuous process and, um, it,
it, it's on unknown.
And I gather there's features in the bill
that go far beyond just a tax bill,
(28:57):
a budget deal.
Um, but essentially, uh, it seems that, uh,
as if they can keep the Republican, um,
numbers in line.
I mean, I think we've got, was it
one Senator who clearly indicated he's not going
to vote for this?
(29:17):
That leaves them maybe two that, uh, and
then you've got the vice president as a
tie, you know, if there's a tie, but
is that what it is?
There's like 52, maybe then that would be
in favor, uh, if they can keep it
together.
I think the bill passes the Senate.
And as you've said before, um, the house
vote when it went to the Senate passed
by one vote, uh, one, one vote.
(29:42):
I think, I think that the Senators are
working this weekend.
I think they're going to get it out
past, uh, whether or not J.D. Vance
has to be the tying vote.
I don't know.
I think probably not, but I think the
real challenge to the bill is when it
comes back into the house.
There's a lot of, um, renegade Republicans and
maybe that's not a derogatory term for some
(30:04):
people.
It's a good thing.
Um, there's been, and there's like been more
attention to some of the details in the
meantime, right?
That could cause some people to say, I
don't really like this or that.
Uh, you got that group who are focused
on the salt, uh, tax component of it.
That's not coming back.
It seems the way they want.
Right.
Um, there's all different elements that, you know,
(30:26):
you can say, I don't want this.
Not only that, right.
Not enough spending cuts to money, spending cuts,
uh, Medicaid or Medicare rather.
Uh, you know, you've got these different schools
of thought.
So, uh, I think it's going to be
challenging to see how that gets resolved, but
there's a lot of political pressure.
Sure.
Within, you know, a party to, to move
(30:46):
things.
So, uh, but again, we should probably have
a better sense of this uncertainty within a
week or two as to, you know, whether
this is likely to pass or not.
Um, and that's even an unofficial date.
I mean, it's a date, it's a date
set, but this is the bill.
This is the bill for October.
Yeah.
It's a good point.
Uh, that being said, there's a debt ceiling
(31:07):
date.
I want to say August.
I mean, we're in the, we're already past
the, uh, point at which they're doing the
emergency measures and all that.
But we've got a, you know, a drop
dead date, so to speak of somewhere in
August that, uh, if this didn't get passed,
well, now we've got a whole new debt
ceiling, uh, challenge to deal with and strong
(31:30):
views about whether or not to raise the
debt ceiling, which is essentially, uh, the willingness
to pay the debts we owe because our
interest costs keep pushing the debt higher, uh,
in addition to, even if we keep everything
else the same, you know, essentially.
Right.
So, um, we've got a challenge that, uh,
(31:51):
either the debt ceiling needs to be increased
or we might have defaults, um, in some
form or fashion.
And as the treasury secretaries in the past
have said, uh, they don't have the authority
to, uh, prioritize some of these, uh, obligations
that may exist.
(32:12):
So you'd have some real issues of who
gets paid.
I don't think the market could climb that
wall if that actually happened.
That would be, I think that's a good
point.
Yeah.
That would be, uh, devastating to our, uh,
credibility as a nation, our credit as a
nation and the market itself.
(32:34):
Add to that right now, valuations, uh, I,
I would look, I point to PEs.
I know Brian's not a big fan of,
uh, PE, uh, ratios.
When we talked to Brian Regan, our, our,
uh, teams, um, senior portfolio manager.
Um, but it's a commonly utilized, uh, reference
(32:54):
point for talking about, you know, whether the
market is, uh, value how it's valued.
And, uh, in relative terms at, uh, 21,
almost 22 times forward earnings.
Um, uh, the market arguably is a little
bit expensive.
Um, you could, um, make a case for
(33:17):
interest rates and, you know, all these variables
that could justify some of that.
Um, uh, growing, uh, you know, artificial intelligence
and all the rest of there's things to
look to and say, oh, isn't this, you
know, positive.
But there are, uh, you know, a lot
of uncertainties.
It's kind of a, it's, it's priced for
perfection, I guess you might say.
(33:38):
And I think that's a good way to
say it.
We have a lot of these variables that
are in the mix that may, um, go
the way we expect or the way the
market likes is, uh, we had a conversation
internally.
We're talking with Brian about this and we'll
talk about some of this with him next
week as well.
For those who would be interested in listening,
we'll be talking about some market related topics
(34:00):
with Brian Regan next week.
The trend for the, as you were talking
about with tariffs is favorable.
There's a lot of these things you look
at the way they seem to be shaping
up is encouraging.
Uh, but, uh, I think there's still some
will earnings increase to the point to cause
the PE to come down.
Um, well, you know, tariffs could be a
(34:22):
factor in that and so forth.
You know what I mean?
There's some variables that we don't know the
answers to yet.
In any market, the market can be irrationally
exuberant is a quote from Alan Greenspan or
it can be too pessimistic.
So, and I think in this case, it's,
you know, it's exuberant whether it's irrational or
(34:42):
not.
Well, we'll reserve judgment.
Time will tell, but it is a bit
precarious.
I think at times, um, when the market
gets ahead of itself and, you know, we
assume that it's always going to be that
way.
So let's turn our attention to, you know,
the, as we wrap up.
I mean, I know we're going a little
long.
We'll try to wrap this up quickly.
You know, so what's an investor to do?
(35:03):
How do I plan for this?
How do I think about it?
Um, you know, big picture, control the controllables.
What are the controllables?
Well, one of those is your asset allocation.
Uh, if you're concerned about volatility, um, you
know, if you're not a longterm investor in
one sense, you know, that, that is different
from someone who's a longterm investor.
If, uh, I'm Russ here, uh, yeah, I
(35:28):
got a long time to invest, right?
Uh, if I'm, uh, someone in my eighties,
I might be more concerned about how long
it takes for markets to recover.
Um, we had markets decline, uh, by 20
% almost earlier this year.
And we're already talking about their back to
highs.
Things can happen quickly, but they don't always
(35:49):
happen quickly.
And sometimes it takes years for markets to
recover, if you will.
So we get more concerned about that as
we age naturally.
So one of the things we might want
to think about is one, do we have
our liquidity, uh, sufficient reserves, um, in place
too?
So we like to think in terms of
(36:11):
buckets, we've talked about this a lot, but
you know, graduated levels of risk.
And for the portion of our portfolio, that's
longer term in nature.
That's where we want more risk, depending on
your particular temperament for how much you can
tolerate.
But this is a good time to reassess
what's my tolerance for volatility.
(36:31):
And if I say I can, I can
tolerate a bear market, that's a 20%
decline.
Turn it from a percentage number to a
dollar number.
Oh, if my mark, if my account went
down by X dollars, 20%, but do the
math, how do I feel about that?
Can I tolerate, can I stomach that?
If the answer is no, and, and just
(36:53):
because we say a bear market is 20%,
doesn't mean it can't go down 30%
or whatever.
Right.
So, you know, be, be doing a little
bit of the forethought of how much can
I really stomach?
And if that answer to that is that
really makes me uncomfortable, maybe you want to
address your allocation a little bit.
Yeah, yeah.
There can be tax events and all of
(37:14):
that, and that's true, but better to capture
something and have a gain and a tax
event than to have it go down if
you can't stomach it going down.
Right.
So now's when markets are at or near
highs, now's a great time to be revisiting
what's my allocation comfort zone.
(37:34):
And so control the controllables.
We can't control everything.
We can't control what's going to happen with
tax bill.
We can't control what's going to happen with
tariffs and war in the Middle East.
All of these are things that are a
little bit outside our control.
What we can control is how much risk
are we comfortable with?
Do we have the cash flows we need?
(37:55):
Do we have liquidity to meet our needs
for the next couple of years?
If we're retired, maybe six months.
If we're not retired, you know, do we
have things in place to give us the
willingness and ability to stay the course on
our intended objective?
(38:15):
Put it all into a financial plan to
help you navigate this.
You need help with a financial plan.
That's where we come in.
What did you guys want to say?
Because I tried to throw a lot in
there quickly.
Well, this is a financial planning topic.
I feel like I've talked about this before,
the stress testing of the financial plan.
So a lot of people are worried about
the market right now.
(38:36):
So we're talking about what if the market
went down 20% rather than looking at
it on an account to account basis.
You can take it all into one picture
in your financial plan.
See what would happen if the market went
down 20% tomorrow.
Is your plan compromised or does it still
work?
Right.
And big picture, yes, there's a lot of
uncertainty in the near term.
(38:56):
Big picture over your lifetime.
How does this shape out even if the
market does drop 20, 30% in the
next few days?
And we can model that out and see
what that would look like.
Yeah, good point.
So financial plan stress test can really make
a difference in your sense of peace, peace
(39:18):
of mind as you're dealing with your plan.
Because in most cases, a lot of cases
anyway, when we work with our clientele, we
do this stress test.
And we see, yes, it has an effect,
but not so great that it should be
so concerning, you know, or if it is,
well, that's educational.
That's informative.
Maybe we should make some accommodation to plan
(39:40):
for that.
Jeff, speaking about the uncontrollables, I think that's
what drives our emotion sometimes, especially in these
times of high stakes and high interest news
items.
People tend to get more focused in on
the news and sit there and watch it
and worry about it.
And, you know, one of the best things
about having a financial advisor and you talk
(40:02):
about the Vanguard studying a lot, Chris, is
that a financial advisor can assist you when
you're having those urges that you feel you
need to do something.
Sometimes the best thing to do is nothing.
As you said correctly, sometimes the best thing
to do is something.
But it can help you to do anything.
It's a great point.
(40:23):
Sometimes your best bet is just stay the
course, you know, because you have a plan
that works.
But left to our own devices.
Sometimes if you're not working in the field,
then you don't understand the, you know, the
history of it all.
And your own financial plan that's created by
your trusted financial advisor.
Sometimes your behavior is driven by these emotions
(40:45):
and you make decisions that are wholesale decisions.
I have to get out of this.
Yeah, we can overreact, right?
We can overreact, which has devastating impacts to
your plan long term in many cases.
So, you know, that behavioral stuff that maybe
you didn't walk into your financial advisor when
you met with them and hired them and
been working with them.
(41:06):
Maybe that wasn't top of mind.
Like, oh, I need this because I could
have some worries that would be irrational at
some point.
But having that check and that person to
sit down as Russ indicated and go over
your plan and review it and say, does
this matter?
That's where the super amount of value comes
in from having a fiduciary that you're working
with.
(41:26):
Yeah, well, and when it comes to some
of these things, when it comes to the
worries of the moment, you know, that can
be part of the value where your financial
advisor, your portfolio manager.
When the way they navigate that looking for
opportunities can benefit you or risks, but they
(41:47):
can be positioning the portfolio.
Maybe that's where you say, I control the
things I can control, but I'm having professional
management to help me navigate some of these
other things to identify when there's risks or
opportunities that they can position things so that
we benefit from those possibilities.
Yeah, some tactical things that there are different
(42:10):
times that Brian has been very successful at
seeing these opportunities and not making wholesale changes
to the base case, but to take advantage
of some opportunities that may be short-lived
or long-term.
Yeah, particularly when there is disruption in the
market, that's when it's least likely that we're
going to want to, but there could be
some significant opportunities to take advantage of.
(42:34):
Absolutely.
Well, in any case, if we can be
a resource to you along the way, don't
hesitate to reach out to us.
Our team is here to help with a
financial plan and when desired portfolio management.
Until next time, everybody keeps driving for something
more.
Thank you for listening to something more with
Chris Boyd.
(42:55):
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll free at 866
-771-8901 or send us your questions to
(43:16):
amr-info at wealthenhancement.com.
You're listening to something more with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
(43:38):
Wealth Enhancement Group cannot guarantee that using the
information from this show will generate profits or
ensure freedom from loss.
Listeners should consult their own financial advisors or
conduct their own due diligence before making any
financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner practitioner
and senior vice president and financial advisor at
Wealth Enhancement Group, one of the nation's largest
registered investment advisors.
We call it Something More because we'd like
to talk not only about those important dollar
and cents issues, but also the quality of
life issues that make the money matters matter.
(00:22):
Here he is, your fulfillment facilitator, your partner
in prosperity, advising clients on Cape Cod and
across the country.
Here's your host, Jay Christopher Boyd.
Welcome, this is Something More with Chris Boyd.
I'm here with team members, Jeff Perry and
Russ Ball.
We are all of the AMR team at
Wealth Enhancement and glad to have you with
(00:43):
us.
Today, we're talking about the wall of worry.
The market climbs a wall of worry is
an ism that we hear about often and
the market seems to be doing just that.
So we thought we'd talk a little bit
about some of the reasons and some of
the issues and just give some thoughts around
what's going on in the investment world around
(01:06):
us.
We got tariffs.
We've got Middle East conflicts.
We've got all these.
Is Iran considered the Middle East, by the
way?
Yes.
Okay, all of these kinds of issues.
We can maybe go through some of why
don't we start with that a little bit
about what are some of the worries that
people are facing?
(01:26):
I feel like our clientele come in routinely
and mention various concerns and are looking for
reassurances along the way and thinking how are
we handling these and how are we positioning
for them?
Well, I think you're right, Chris.
The breadth of clients, we meet with clients
(01:47):
practically every day, practically all day in some
cases, some days, right?
Right, it feels like it.
And we meet with clients who are young,
just starting out.
We meet with clients who are in their
accumulation years and we meet with clients who
are retired.
So we really get a, not purposely, but
we really get a snapshot of what people
are concerned about and worried about and there
(02:10):
are very consistent patterns.
And they tend to run with the news
cycle, right?
So a few weeks ago, a month ago,
whatever it was, I lose track, it was
the tariffs.
What will be the impact on the economy
and the market on the tariffs?
Early April, right?
What was the name?
Liberation Day.
Liberation Day, that's right.
They coined the phrase.
(02:32):
So, and then I was just going to
run through them if you want.
Yeah, go for it, run through them.
We'll come back and talk about them all.
Yep.
Well, we can even go back before that.
After President Trump took office, he was attempting
to implement many of his campaign promises, etc.
And so, depending on where you are politically
or where you are in your employment, in
(02:54):
some cases, you might have been worried about
effects to the employment market.
Immigration certainly was another, is and was another
big one.
And then we ran into the tariff wall,
so to speak.
And then we got this crisis in the
Middle East where, as we well know, Israel
made a preemptive strike because of the intelligence
(03:16):
related to Iran having a nuclear weapon.
Yeah, I mean, you could categorize it more
broadly with wars because before that, we were
dealing with still, you know, Israel dealing with
Palestine's sort of Hamas, right?
Yeah, and all of Iran's proxies.
(03:37):
Yeah, yeah.
So, broadly defined as Middle East.
Yeah, I think that's accurate.
And Russia, Ukraine continues to, you know, be
an ongoing source of instability, let's say.
That's right.
Plenty of things to worry about there.
And both of those wars, crises, whatever, conflicts
(04:01):
have to do not just with security and
potential terrorism, but have to do with the
energy markets.
And certainly that impacts the global economy.
And in the middle of all this, we
have a big, beautiful bill trying to work
its way through Congress.
And, you know, all the pros and cons
of that, you know, the tax relief, the
(04:23):
giveaways, I'll call them too many giveaways, the
impacts to the national debt and deficit.
And also in that big, beautiful bill deals
with, temporarily, but deals with the debt ceiling,
which is a common thing that the markets
get in and nod in about.
And then Moody's downgrades the national debt.
(04:44):
That's a good point.
So, I'm sure I'm not getting them all.
And there might be more, yeah.
All right, so there's all these variables that
are of concern.
Do you want to weigh in on this
before I chime in?
Things that you're hearing about?
Well, I mean, I know recently, like just
prior to the Iran conflict that's going on,
(05:07):
the protests in California were a big topic
in people's minds and immigration and all that.
Civil unrest, right?
Sent over to California.
So, it seems like there's an endless stream
of headlines that are making waves and making
people worried, I would say.
Good points, yeah.
So, let's kind of pick at some of
(05:30):
these things and dig into them a little.
And then let's come back to some of
the context of all this.
Because again, a lot of this, what's relevant
is how it fits into an individual's financial
plan.
But we still spend a lot of time
thinking about these issues.
And as advisors, we spend a lot of
(05:53):
time thinking about how it should impact one's
portfolio or not.
So, you know, you talked about the immigration
maybe as the starting point or earliest in
the sequence of events.
There definitely has been some adjustment of the
(06:18):
positioning as it relates to the deportation of
certain types of workers that might be here
illegally.
Seems like there's been some rhetoric around maybe
not as much focus on farm workers or
people who are workers.
But right now, there hasn't been much discernment
(06:39):
between people here illegally in one form or
another.
It seems like there's been an effort to
just get anyone out who's not here illegally.
I think that's accurate.
And if we haven't made this realization yet,
I think we really need to.
And maybe the market has.
Maybe the market has before we have.
(07:00):
And that is a policy statement or a
position of the Trump administration when announced is
probably going to change.
Right.
So, you know, all whether it's the immigration
thing or whether it's the big, beautiful bill
or whatever these policies are, they do tend
(07:21):
to change.
They're not as they're not as grand at
the end of the story.
Right.
So traditionally, you would expect what the president
says to be intended to be taken at
its face value.
Literally.
President would say what he means and that
(07:43):
that would be policy.
Or at least efforts to continue to get
to that policy.
Yeah.
Whereas with the Trump administration, the notion of
deal making and the art of the deal
or whatever the book was that maybe that's
not always the case.
(08:04):
Is that where you're going with that?
Exactly.
Exactly on that.
Well, the initial stance we were on immigration,
but we can make the same tariff comment
to terrorists.
Right.
You know, this is what it's going to
be.
This is it.
This is it.
And then change it and sometimes seemingly change
it for no purpose that we know about
(08:25):
anyway, but just a different adjustment in the
strategy.
And initially, we had a lot of market
turmoil based upon some of these statements.
Well, for a week, they were like, there's
not going to be any postponement of this.
This is it.
We're going to need deals right away.
And then bond market reacted.
And, well, we're going to push this off
90 days.
Right.
(08:45):
So maybe that I know maybe a month
later, we're going to push this off for
90 days.
So maybe the market has figured this out
because it does not appear to be responding
as it normally would or previously would based
upon any given crisis.
I would put it a different way.
You can't believe what's being told, you know,
(09:07):
I mean, that's part of the frustration of
this is that, you know, on the one
hand, you take at face value what's being
said and then it turns out, no, that's
not really what's being what's intended.
And you discern what's really meant and what's
not really meant.
That's that's it's such a frustrating way to
(09:28):
deal with things.
And, you know, this notion that in foreign
affairs that, well, people, you know, keeps people
on their toes, but also means people don't
know what to expect.
So sometimes they're going to do there's a
there's a danger that you're going to have
misfire of what one person's thinking and versus
what one person is saying and what it's
(09:49):
what's going to actually be the case, you
know, how it's going to play out.
I think it's scary.
But personally, I think it's a bad, bad
way to do business.
But and as as a leader of of
a nation, I hope that that can change.
But I don't think it is.
I agree.
I think you're right that that's the that's
that's the modus operandi of this administration, that
(10:13):
it's a little bit of keep you guessing,
keep you on your toes and trying to
navigate with like, oh, we'll put something really
outlandish on and see how much we can
get.
And then we'll get something and we'll feel
good about that.
And then it's better than where we started
kind of mindset when it comes to tariffs.
(10:36):
That was kind of the essence of what
you were saying to me yesterday about some
of this.
Yep.
Generally.
And whether or not you are a supporter
of the president or not a supporter, you
know, even if you believe this is the
art of the deal and you like what
he's doing, you still should have the position
where you can't rely on it.
Right.
(10:56):
Or if you're a critic of the president
and you don't like what he's doing, you
would have the same position.
And so under the theme of climbing the
wall of worry, as the market has been,
you know, down from that correction or whatever,
however we want to characterize it, whatever that
reaction to the tariffs, you know, Both in
(11:19):
anticipation and then at the announcement, the market
was starting to decline, but then it declined
more precipitously, close to 20%, not quite from
its peak.
So you wonder like, if the president, Right
back to where we were, right?
Right.
Or in some cases higher.
Maybe higher.
Yeah.
So you wonder what the market, would have
(11:40):
the market responded basically the same way in
April if the president said, we're going to
have a 30% tariff across the board
unless we make another deal.
Yeah.
Would, would the market be saying, Oh, that's
great.
Look at, look at where we are today.
You know that.
Okay.
You know, we're at, at highs or near
highs.
(12:01):
We're recording on June 26th.
Happy anniversary, Kristen.
Happy anniversary.
So, so we're, we're, we're, things can change.
So, but, but as far as this tariff
element is concerned, I think you make a
(12:22):
good point.
If you just came out and said 30
% across the board, there's a 30 plus
10, maybe or whatever it is, you know,
that it might have been received in a
different way.
Where it'd be, you know, where, as opposed
to, Oh, we're not going to have 145
% tariff on China.
Well, maybe that's good.
We don't know that that's the case though.
(12:43):
That's the thing that I keep coming back
to.
We are assuming that the, there will be
deals.
I mean, it seems like we're moving in
that direction.
But right now it's just been, we've delayed,
we've postponed.
Now, what happens in July?
I think it's the 9th when the 30,
the 90 days expires from the time that
(13:06):
this delay was postponed to some time.
Well, the date doesn't even mean anything.
I mean, if you, if you announce this
to the TikTok, will it be, will it
be extended again?
Or, or will it be more rattling the
(13:26):
cage?
Oh, we're going to be, you know, sticking
it to everyone who doesn't meet, you know,
get an agreement or right away or something,
you know, again, is it really what's going
to happen?
Or is it just sort of intended to
move people to some kind of intended objective
you were going to say about TikTok?
Well, TikTok is an analogy because we had
(13:49):
a date.
This is the third extension to the TikTok
deal.
And so that just gets pushed down the
road.
And I'm not trying to be critical of
President Trump.
I think he's had some good successes.
But he does do this in many times.
When, when he gave Iran up to two
(14:10):
weeks to respond, the news media correctly pointed
out that he says two weeks a lot.
Yeah, you know, he puts it out there
two weeks over and over again.
So you can't rely on not just the
policy, but you can't rely on the date
either.
So let's talk about the Iran action, the
(14:33):
decision to drop bunker busters and so forth
on the Iranian nuclear sites.
On the plus side, you know, hopefully this
has material consequence to limit Iran's ability to
(14:56):
actually create a nuclear weapon, which I think
everybody is concerned would not be a good
thing for the world order, whether it's because
of escalation of a nuclear arms race in
the Middle East, or because of the concerns
of what would, you know, what would be
the consequences of that.
Iran actually do, whether through proxies or, or
(15:18):
whatever, right?
Israel security, all that.
My issue with the whole process was procedural
in a sense.
You know, I do think that's essentially an
act of war.
Whether it's been declared as a war or
(15:41):
not, that's essentially an act of war.
I think, I don't recall, I'm sure there
are instances, but I don't recall instances where
we did something similar, where we had
this kind of action without congressional consent, or
(16:05):
what's the right term?
Not consent, giving the four leaders of Congress
a heads up on this kind of thing.
And whether or not, you know, you can
point to some instances where we've struck back
(16:26):
at people who, when there's been some kind
of a retaliatory strike.
I think, you know, that's not uncommon, I
think, but this was, I would argue it's
preemptive.
I think you and I were kind of,
would be willing to argue that point a
little bit, but because of all the proxy
(16:49):
activities and so forth that Iran uses, but
I don't know, this just seemed pretty substantial
to me as a military action.
You know, at this point, it's a celebrated
military action and, you know, no critique of
(17:13):
the military and the way things were exercised
or anything like that.
I just look at it as thinking from
a governance point of view, is this really
the way we want to potentially engage in
a war without some congressional engagement, you know,
that kind of thing?
(17:34):
You and I do disagree on this and,
you know, we could, I could point to
many examples and many presidents, including Thomas Jefferson,
who had a military action against the Barbary
pirates without congressional action all the way through
Syria and Libya and et cetera.
(17:54):
And I think this is a real issue
that Congress needs to deal with.
And I don't mean because of the actions
of President Trump, I mean, because of the
actions of numerous presidents.
Well, that may be the right answer.
It may not be specific to President Trump,
but just that notion of where do you
draw that line as to what is permissible
(18:15):
within presidential power as an office without the
consent of Congress, who actually is empowered to
declare war.
Right.
And Article Two, where the president has the
authority to defend the country and be the
commander in chief.
And it's tough to reconcile those two if
(18:36):
you have a, just for sake of discussion,
without talking specifically about this case, but if
you have a credible threat to the United
States that is imminent, that intelligence shows is
imminent, and we have threats to our country,
our bases, our allies.
Should the president be able to act without
(18:57):
telling members of Congress who may or may
not, you know, keep it to themselves, so
to speak?
Yeah.
Would you consider this one of those occasions?
I do, because I have to, because I
don't have any other evidence, although, you know,
we can be skeptics and say, you know,
(19:18):
question the intelligence.
But I am told through our government that
they had credible evidence that Iran was on
the edge or about to have nuclear weapon
capability.
And in fact, they went over at the
Pentagon briefing this morning.
It was very enlightening.
If people haven't seen it, I would encourage
(19:39):
you to look at it.
They talk about that this, this particular process
of this particular site, the monitoring of it,
and the strategy in the government started 15
years ago when they saw what was being
built, and they actually built these bunker bombs
for this site.
So if I believe my government, which I
(20:00):
tend to do, but open minded, and it's
a credible threat, I want my president to
have the ability to eliminate a threat.
To our bases, our military service members overseas,
and our allies, without having to go to
Congress to tell them, you know, what the
plan is, basically.
(20:20):
And I guess the notion of imminent is
maybe probably relevant in that.
Well, let's say it's not imminent.
Let's say it's within the next month.
I still struggle with telling members of Congress
what we're asking permission to do this and
giving our enemies time to listen to the
public debate in Congress about that.
(20:41):
The War Powers Act doesn't require it.
It requires notification within 48 hours of Congress
and a limit of 60 days to hostilities.
So is that the right balance?
I don't know.
But if this is an issue that Congress
is worried about, I mean, one thing that
you and I agree on is Congress has
delegated, is negligent, whatever it is, on all
(21:04):
these things that they end up complaining about
afterwards.
Congress has the power to change the War
Powers Act if they choose to, and I
doubt they will.
I doubt they'll complain.
And if it was a Democratic president doing
it, as it has been in the past,
the Republicans complain about it.
And then the Republicans get in power, and
they don't do anything about it, and vice
versa.
(21:24):
I don't want the limitation on there.
Yeah, I gotcha.
But, well, in any case, I think this
is a really interesting discussion.
I'm kind of into it.
But I want to bring it back to
what we were originally talking about was the
idea of the wall of worry and markets'
reaction to it.
And I think there are other things besides
(21:46):
this.
Now, this seems to be presently in a
ceasefire.
I think there's a question, like, will it
last?
What is the end of it?
Yeah, right.
Is that the end of hostilities?
Or will there be more of a retaliatory
response?
You know, there was a modest retaliatory response
(22:08):
on one of our bases.
Was it Qatar?
Qatar, how do you say that properly?
Telegraphed and planned.
Yeah, it's pretty widely known.
So, in any case, it seems surprising to
me that that would be the extent of
the retaliation.
(22:30):
But fingers crossed that it is, right?
Absolutely.
But, you know, at the same time, my
worry would be like, oh, what if there's
some kind of cyber attack?
Or, you know, that kind of thing.
Terrorist attack, sure.
Yeah, terrorist attacks.
What kind of response might there be in
(22:51):
a way that's less militarily defendable?
You know what I mean?
But maybe more disruptive to our economy, I
guess.
But you wanted to comment?
Yeah, I think another one of my concerns
with this specifically is, I was reading it.
It sounds like we didn't do that much
(23:13):
damage to the nuclear capabilities.
I was reading something that said we set
them back maybe a few months by hitting
some of the tunnels.
And if that is the case, then if
we didn't really obliterate the nuclear facilities that
are in Iran, then we just drop bombs
on some that might have nuclear capabilities in
the next several months.
(23:33):
So, yeah, I feel like, you know, you're
never going to know for sure if you're
going to do the damage that you expected.
But it is just a looming thought.
Yeah, and that whole issue seems to be
one that's in flux, you know, because they're
still getting the data on how much damage
really was done.
And that was some of the conversation this
(23:56):
morning.
It was, and I agree with the general.
It was, you know, it was disappointing.
In the Secretary of Defense, I think it's
disappointing that that story was released.
It was based upon just the initial internal
data that someone leaked and it had a
(24:17):
low confidence, etc.
No one's going to know until somebody's actually
there.
Yeah, because it's all underground.
I, based upon the presentation made this morning,
I have greater confidence that it was destroyed.
And they didn't say that.
I just, on the presentation that they made
about the weapons and about the plan and
(24:39):
about the execution of it.
It seems, it seems like it would have
to be, but we'll have to, we'll have
to wait.
Some positive things that came out of the
conflict, though, is that North Korea, China, Russia,
the axis of evil, however you want to
describe it.
Yeah, what we used to, yeah.
Right.
(24:59):
None of them, none of their, Iran's allies
did anything to support them.
Yeah.
In fact, they did the opposite, at least
with their public statements.
And they didn't seem to even rattle their
swords, so to speak.
Well, and Russia seemed to say, we'll, we'll,
we'll help Iran get nuclear capabilities, didn't they?
(25:22):
I, if they did, I didn't, I didn't
see that, but they, no one did anything
meaningful.
Which I think is a positive for the
region itself.
And so at the end of the day,
if the ability of Iran and their proxies
to be disruptive in the Middle East or
have a nuclear program, whether it, whether it's
(25:44):
set by six months, six years or forever,
I think is a positive thing.
And then at the same time, the NATO
conference was going on and it seemed like,
based upon the news reports, that it was
a very productive NATO conference with President Trump
reassuring NATO that we are a part of
NATO and we would defend any NATO country.
(26:05):
And all but one, I believe, of the
NATO countries agreeing to that 5% of
GDP, their GDP spending.
And that's, you know, by itself, if we
didn't have all this other stuff in the
news, I think that would be.
The headline news about NATO getting along so
well and making these commitments to being a
strong and vibrant partnership.
(26:26):
So at the end of the day, if
this holds and I, I share your potential
concerns, Chris, but if this holds as it
is today, it's, it's the world is a
better place because the United States acted to
take a, to deter a threat or eliminate
a threat or however we want to characterize
it.
Yeah.
So, um, the, I think we'll know more
(26:49):
within a short time, you know, a couple
of weeks, we'll probably have a better sense
of what's the real damage that was done,
whether or not there'll be more retaliatory response.
So I think this is one of those,
um, let's give it a little time and
see where we're at.
Similarly with the tariffs, uh, we've got, uh,
June 9th looming about a month after that
(27:11):
is the, um, China.
I think we'll get a sense of, uh,
you know, from the extension that was originally
done in April for most countries, uh, where
we stand with, will the, uh, administration kind
of kick the can another 90 days or
something like that, um, to bide time for
(27:32):
finalizing some of these negotiations that may be
in place.
Um, and then that might give us an
indication of, oh, well, that's probably what would
happen with China as well.
Right.
So presumably, um, it was, we'll have maybe
within a few weeks, have a sense of
what's coming there.
Additionally, this tax bill is in the thick
(27:53):
of it, perhaps even by the time our
episode airs, there could be movement on this.
We don't know whether it's going to succeed
or fail.
Uh, essentially the, uh, the house passed a
version of the bill, the one big, beautiful
bill.
We talked about that in a prior episode.
Some of the, uh, features of that, uh,
that the Senate is in the throes of
(28:15):
its negotiations as it relates to this.
Um, there are discrepancies of, uh, how these
will be dealt with.
Um, and that's the nature of how the
process works.
Uh, the Senate will have to pass its
version of the bill that will bring it
back to the house to, uh, vote, I
(28:36):
guess, on.
Reconciling.
Reconciling whether they, you know, can live with
something that comes out of that.
Uh, it's a tenuous process and, um, it,
it, it's on unknown.
And I gather there's features in the bill
that go far beyond just a tax bill,
(28:57):
a budget deal.
Um, but essentially, uh, it seems that, uh,
as if they can keep the Republican, um,
numbers in line.
I mean, I think we've got, was it
one Senator who clearly indicated he's not going
to vote for this?
(29:17):
That leaves them maybe two that, uh, and
then you've got the vice president as a
tie, you know, if there's a tie, but
is that what it is?
There's like 52, maybe then that would be
in favor, uh, if they can keep it
together.
I think the bill passes the Senate.
And as you've said before, um, the house
vote when it went to the Senate passed
by one vote, uh, one, one vote.
(29:42):
I think, I think that the Senators are
working this weekend.
I think they're going to get it out
past, uh, whether or not J.D. Vance
has to be the tying vote.
I don't know.
I think probably not, but I think the
real challenge to the bill is when it
comes back into the house.
There's a lot of, um, renegade Republicans and
maybe that's not a derogatory term for some
(30:04):
people.
It's a good thing.
Um, there's been, and there's like been more
attention to some of the details in the
meantime, right?
That could cause some people to say, I
don't really like this or that.
Uh, you got that group who are focused
on the salt, uh, tax component of it.
That's not coming back.
It seems the way they want.
Right.
Um, there's all different elements that, you know,
(30:26):
you can say, I don't want this.
Not only that, right.
Not enough spending cuts to money, spending cuts,
uh, Medicaid or Medicare rather.
Uh, you know, you've got these different schools
of thought.
So, uh, I think it's going to be
challenging to see how that gets resolved, but
there's a lot of political pressure.
Sure.
Within, you know, a party to, to move
(30:46):
things.
So, uh, but again, we should probably have
a better sense of this uncertainty within a
week or two as to, you know, whether
this is likely to pass or not.
Um, and that's even an unofficial date.
I mean, it's a date, it's a date
set, but this is the bill.
This is the bill for October.
Yeah.
It's a good point.
Uh, that being said, there's a debt ceiling
(31:07):
date.
I want to say August.
I mean, we're in the, we're already past
the, uh, point at which they're doing the
emergency measures and all that.
But we've got a, you know, a drop
dead date, so to speak of somewhere in
August that, uh, if this didn't get passed,
well, now we've got a whole new debt
ceiling, uh, challenge to deal with and strong
(31:30):
views about whether or not to raise the
debt ceiling, which is essentially, uh, the willingness
to pay the debts we owe because our
interest costs keep pushing the debt higher, uh,
in addition to, even if we keep everything
else the same, you know, essentially.
Right.
So, um, we've got a challenge that, uh,
(31:51):
either the debt ceiling needs to be increased
or we might have defaults, um, in some
form or fashion.
And as the treasury secretaries in the past
have said, uh, they don't have the authority
to, uh, prioritize some of these, uh, obligations
that may exist.
(32:12):
So you'd have some real issues of who
gets paid.
I don't think the market could climb that
wall if that actually happened.
That would be, I think that's a good
point.
Yeah.
That would be, uh, devastating to our, uh,
credibility as a nation, our credit as a
nation and the market itself.
(32:34):
Add to that right now, valuations, uh, I,
I would look, I point to PEs.
I know Brian's not a big fan of,
uh, PE, uh, ratios.
When we talked to Brian Regan, our, our,
uh, teams, um, senior portfolio manager.
Um, but it's a commonly utilized, uh, reference
(32:54):
point for talking about, you know, whether the
market is, uh, value how it's valued.
And, uh, in relative terms at, uh, 21,
almost 22 times forward earnings.
Um, uh, the market arguably is a little
bit expensive.
Um, you could, um, make a case for
(33:17):
interest rates and, you know, all these variables
that could justify some of that.
Um, uh, growing, uh, you know, artificial intelligence
and all the rest of there's things to
look to and say, oh, isn't this, you
know, positive.
But there are, uh, you know, a lot
of uncertainties.
It's kind of a, it's, it's priced for
perfection, I guess you might say.
(33:38):
And I think that's a good way to
say it.
We have a lot of these variables that
are in the mix that may, um, go
the way we expect or the way the
market likes is, uh, we had a conversation
internally.
We're talking with Brian about this and we'll
talk about some of this with him next
week as well.
For those who would be interested in listening,
we'll be talking about some market related topics
(34:00):
with Brian Regan next week.
The trend for the, as you were talking
about with tariffs is favorable.
There's a lot of these things you look
at the way they seem to be shaping
up is encouraging.
Uh, but, uh, I think there's still some
will earnings increase to the point to cause
the PE to come down.
Um, well, you know, tariffs could be a
(34:22):
factor in that and so forth.
You know what I mean?
There's some variables that we don't know the
answers to yet.
In any market, the market can be irrationally
exuberant is a quote from Alan Greenspan or
it can be too pessimistic.
So, and I think in this case, it's,
you know, it's exuberant whether it's irrational or
(34:42):
not.
Well, we'll reserve judgment.
Time will tell, but it is a bit
precarious.
I think at times, um, when the market
gets ahead of itself and, you know, we
assume that it's always going to be that
way.
So let's turn our attention to, you know,
the, as we wrap up.
I mean, I know we're going a little
long.
We'll try to wrap this up quickly.
You know, so what's an investor to do?
(35:03):
How do I plan for this?
How do I think about it?
Um, you know, big picture, control the controllables.
What are the controllables?
Well, one of those is your asset allocation.
Uh, if you're concerned about volatility, um, you
know, if you're not a longterm investor in
one sense, you know, that, that is different
from someone who's a longterm investor.
If, uh, I'm Russ here, uh, yeah, I
(35:28):
got a long time to invest, right?
Uh, if I'm, uh, someone in my eighties,
I might be more concerned about how long
it takes for markets to recover.
Um, we had markets decline, uh, by 20
% almost earlier this year.
And we're already talking about their back to
highs.
Things can happen quickly, but they don't always
(35:49):
happen quickly.
And sometimes it takes years for markets to
recover, if you will.
So we get more concerned about that as
we age naturally.
So one of the things we might want
to think about is one, do we have
our liquidity, uh, sufficient reserves, um, in place
too?
So we like to think in terms of
(36:11):
buckets, we've talked about this a lot, but
you know, graduated levels of risk.
And for the portion of our portfolio, that's
longer term in nature.
That's where we want more risk, depending on
your particular temperament for how much you can
tolerate.
But this is a good time to reassess
what's my tolerance for volatility.
(36:31):
And if I say I can, I can
tolerate a bear market, that's a 20%
decline.
Turn it from a percentage number to a
dollar number.
Oh, if my mark, if my account went
down by X dollars, 20%, but do the
math, how do I feel about that?
Can I tolerate, can I stomach that?
If the answer is no, and, and just
(36:53):
because we say a bear market is 20%,
doesn't mean it can't go down 30%
or whatever.
Right.
So, you know, be, be doing a little
bit of the forethought of how much can
I really stomach?
And if that answer to that is that
really makes me uncomfortable, maybe you want to
address your allocation a little bit.
Yeah, yeah.
There can be tax events and all of
(37:14):
that, and that's true, but better to capture
something and have a gain and a tax
event than to have it go down if
you can't stomach it going down.
Right.
So now's when markets are at or near
highs, now's a great time to be revisiting
what's my allocation comfort zone.
(37:34):
And so control the controllables.
We can't control everything.
We can't control what's going to happen with
tax bill.
We can't control what's going to happen with
tariffs and war in the Middle East.
All of these are things that are a
little bit outside our control.
What we can control is how much risk
are we comfortable with?
Do we have the cash flows we need?
(37:55):
Do we have liquidity to meet our needs
for the next couple of years?
If we're retired, maybe six months.
If we're not retired, you know, do we
have things in place to give us the
willingness and ability to stay the course on
our intended objective?
(38:15):
Put it all into a financial plan to
help you navigate this.
You need help with a financial plan.
That's where we come in.
What did you guys want to say?
Because I tried to throw a lot in
there quickly.
Well, this is a financial planning topic.
I feel like I've talked about this before,
the stress testing of the financial plan.
So a lot of people are worried about
the market right now.
(38:36):
So we're talking about what if the market
went down 20% rather than looking at
it on an account to account basis.
You can take it all into one picture
in your financial plan.
See what would happen if the market went
down 20% tomorrow.
Is your plan compromised or does it still
work?
Right.
And big picture, yes, there's a lot of
uncertainty in the near term.
(38:56):
Big picture over your lifetime.
How does this shape out even if the
market does drop 20, 30% in the
next few days?
And we can model that out and see
what that would look like.
Yeah, good point.
So financial plan stress test can really make
a difference in your sense of peace, peace
(39:18):
of mind as you're dealing with your plan.
Because in most cases, a lot of cases
anyway, when we work with our clientele, we
do this stress test.
And we see, yes, it has an effect,
but not so great that it should be
so concerning, you know, or if it is,
well, that's educational.
That's informative.
Maybe we should make some accommodation to plan
(39:40):
for that.
Jeff, speaking about the uncontrollables, I think that's
what drives our emotion sometimes, especially in these
times of high stakes and high interest news
items.
People tend to get more focused in on
the news and sit there and watch it
and worry about it.
And, you know, one of the best things
about having a financial advisor and you talk
(40:02):
about the Vanguard studying a lot, Chris, is
that a financial advisor can assist you when
you're having those urges that you feel you
need to do something.
Sometimes the best thing to do is nothing.
As you said correctly, sometimes the best thing
to do is something.
But it can help you to do anything.
It's a great point.
(40:23):
Sometimes your best bet is just stay the
course, you know, because you have a plan
that works.
But left to our own devices.
Sometimes if you're not working in the field,
then you don't understand the, you know, the
history of it all.
And your own financial plan that's created by
your trusted financial advisor.
Sometimes your behavior is driven by these emotions
(40:45):
and you make decisions that are wholesale decisions.
I have to get out of this.
Yeah, we can overreact, right?
We can overreact, which has devastating impacts to
your plan long term in many cases.
So, you know, that behavioral stuff that maybe
you didn't walk into your financial advisor when
you met with them and hired them and
been working with them.
(41:06):
Maybe that wasn't top of mind.
Like, oh, I need this because I could
have some worries that would be irrational at
some point.
But having that check and that person to
sit down as Russ indicated and go over
your plan and review it and say, does
this matter?
That's where the super amount of value comes
in from having a fiduciary that you're working
with.
(41:26):
Yeah, well, and when it comes to some
of these things, when it comes to the
worries of the moment, you know, that can
be part of the value where your financial
advisor, your portfolio manager.
When the way they navigate that looking for
opportunities can benefit you or risks, but they
(41:47):
can be positioning the portfolio.
Maybe that's where you say, I control the
things I can control, but I'm having professional
management to help me navigate some of these
other things to identify when there's risks or
opportunities that they can position things so that
we benefit from those possibilities.
Yeah, some tactical things that there are different
(42:10):
times that Brian has been very successful at
seeing these opportunities and not making wholesale changes
to the base case, but to take advantage
of some opportunities that may be short-lived
or long-term.
Yeah, particularly when there is disruption in the
market, that's when it's least likely that we're
going to want to, but there could be
some significant opportunities to take advantage of.
(42:34):
Absolutely.
Well, in any case, if we can be
a resource to you along the way, don't
hesitate to reach out to us.
Our team is here to help with a
financial plan and when desired portfolio management.
Until next time, everybody keeps driving for something
more.
Thank you for listening to something more with
Chris Boyd.
(42:55):
Call us for help, whether it's for financial
planning or portfolio management, insurance concerns, or those
quality of life issues that make the money
matters matter.
Whatever's on your mind, visit us at somethingmorewithchrisboyd
.com or call us toll free at 866
-771-8901 or send us your questions to
(43:16):
amr-info at wealthenhancement.com.
You're listening to something more with Chris Boyd
Financial Talk Show.
Wealth Enhancement Advisory Services and Jay Christopher Boyd
provide investment advice on an individual basis to
clients only.
Proper advice depends on a complete analysis of
all facts and circumstances.
The information given on this program is general
financial comments and cannot be relied upon as
pertaining to your specific situation.
(43:38):
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