April 21, 2025 • 28 mins
What's the Buzz? Recent Lessons – Chris Boyd, Jeff Perry, and Russ Ball discuss the
economic and market news of the week, including the continued stock market volatility,
tariffs, the Federal Reserve, unemployment data, consumer sentiment, and inflation. The
trio outlines why having a financial plan is so critical in uncertain times. The
conversation goes on to a discussion about how people make investments decisions
within an employer-sponsored retirement plan, including the pros and cons that come
with using target date funds.
For more information or to reach TEAM AMR, click the following link:
https://www.wealthenhancement.com/s/advisor-teams/amr
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Transcript
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, 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 to the program, Something More with Chris
Boyd.
I'm Chris Boyd here with Jeff Perry and
Russ Ball, both of us, all of us
from the AMR team here at Wealth Enhancement.
(00:44):
Thanks for being with us.
And today, we're going to talk about a
variety of things that we'd start off with
a little bit of news and maybe some
little lessons of some of the things we
glean from the kind of meetings we have
from one day to the next, and maybe
some helpful hints that you can apply to
your own thinking.
So with that, guys, I don't know, maybe
(01:06):
we can start with a little bit of
news.
I guess we saw the ECB, the European
Central Bank, did cut rates, trying to stimulate
over there.
We've had a little bit of back and
forth with the president and- Who wants
to cut rates.
Who wants to cut rates.
But Chairman Powell recently indicated that that's sort
(01:29):
of a wait and see view of things
right now.
Anything more to add to either of those
topics before I jump on to others?
I'm torn about this rate thing.
And so, I mean, the Fed's job is
to watch inflation and employment, right?
There's two broad categories that they are delegated
(01:52):
with being responsible.
Inflation numbers are coming down.
They're pretty stable.
If you believe that the tariff situation could
slow the economy, which is a rational belief,
that means inflation should trend down.
But if you believe tariffs will cause higher
(02:13):
prices, that's inflation.
So I get why the Fed is hesitating
because we're in kind of uncharted waters with
these level of tariff issues.
Yeah, I think it's a real dilemma, right?
And a lot of it is, I think,
(02:35):
wait and see is reasonable because you don't
know exactly what's really going to be implemented
when it all shakes out.
Right.
If you'd expect massive tariffs, the kind of
thing we're talking about in China, well, it's
inevitable you'd have high inflation, at least temporarily,
(02:57):
transitory.
Where there's no credibility, you mean?
But if that was the case, I'm the
one here.
And then, like you say, I mean, the
other thing people worry about is a slowing
economy and that could be the reason to
(03:18):
stimulate.
So you've got kind of this back and
forth going on that's a little bit ambiguous.
I guess the question that I ask myself
when this issue comes up, like, should they
decrease rates, is what is the rate that
they're seeking, right?
And if they're waiting to see what happens,
(03:40):
what is the rate that they want it
to be at?
And if they are artificially high, just because
of where they are in the cycle, right?
Artificially meaning what?
I'm not following you there.
So the PCE they want is 2%
and it's over that.
I think it was 2.8 or something
like that, right?
(04:00):
Right.
But what's the rate if they reach their
goal that they would be at, right?
And how does that correlate with where they're
at now compared to the inflation trends?
So if they're artificially high, meaning pausing at
a higher rate because they don't know, I
guess there's an argument that maybe they should
(04:21):
be leaning towards lowering.
Yeah, I would say if they're not, if
rates are inflation rates are higher than they
want to keep interest rates higher is an
effort to reduce the rate of inflation.
Unemployment, the other mandate clearly right now is
(04:42):
still pretty good.
So now if you do have a big
economic disruption, then you'd be a little bit
more challenged to expect unemployment to be disrupted
and to have rising unemployment.
Yeah, we're not seeing that in the data
yet, but the number that's below expectations.
(05:05):
No, no.
So to your point, there's no worry on
the unemployment side, but there is still a
concern for inflation being elevated.
And if we're worried that the tariffs could
exacerbate that, it probably makes sense not to
(05:26):
be reducing rates in that setting because you're
still trying to get inflation lower.
That assumes the question, that assumes, you answered
the question that I posed, but that assumes
that the Fed's inflation rate is actually 2
.0. I know that's what they say, but
(05:48):
some of their target that their target is.
Yeah.
So there's been a lot of posturing about
that.
Is that really the rate that they expect
or is that really their target?
Is that really reasonable?
Well, and to another point that I think
you made to me outside of the content
(06:09):
of the program here, interest rates have declined,
not on the short end, but on the
long end of the curve.
You are the further out on the curve,
right?
Have we seen some change there?
Yeah.
Actually, sorry.
They've been rising.
I take it back, right?
Interest rates have been rising on the longer
(06:31):
end, right?
As you've had perhaps more sellers in the
bond market with treasuries causing some disruption of
the yield, prices have gone down and yields
have gone up.
I guess it depends when we're comparing it
to, right?
So if you compare it to January, rates
(06:51):
are lower.
Rates of the 10-year is lower, it's
like 40 or 50 basis points lower than
it was.
So the bond market sometimes is telling us
things on their own regardless of what the
Fed is doing, right?
Well, I think prior to this question of
why are rates rising the way they have
(07:15):
in very recent weeks, the longer term outlook
from the bond market was conveying the thought
of a slowing economy due to concern that
would tariffs have a slowing effect, right?
(07:36):
And this was before any announcement of what
the actual plan was, I think some expectation
of that over time would have some consequence.
I think the other end of this is
probably the way that things have moved is
maybe some gamesmanship or pressure to try to
say, hey, look, we can dump some of
(08:00):
these bonds that are being held by foreign
powers.
Seems like whatever topic we're discussing, it all
comes back to tariffs.
Yeah, it does, I think that's a good
point.
So along those lines, there was an item
in the Wall Street Journal that asked two
(08:20):
economists what their expectation is for recession or
not.
And the biggest caveat was, hey, the economists
aren't always right.
So nothing to overestimate there.
Well, we've pointed that out many times.
I think we've done a couple of segments
called Where's the Recession that they've been predicting
for years.
(08:43):
Back with the soft landing topic, would they
be able to do a soft landing?
So in this case, you're just seeing a
sharp rise is really the bottom line.
We went from at the start of the
year, maybe around 20% of economists on
this survey.
(09:03):
There were some 70-odd economists that get
surveyed.
Not all participate in every survey, but in
any case, 64% in the most recent.
We went from somewhere around early low 20s
at the start of the year, expecting a
probability of recession to somewhere around 45%
(09:24):
in April, though the survey was taken right
around the time of the start of all
the tariff news.
So again, how this actually evolves and so
forth.
That's the problem with the data that we're
still getting, whatever data point we're getting recently,
(09:48):
retail sales or unemployment or surveys or...
It's kind of backward looking as opposed to...
Inflation data, it's all backward looking.
So when the April data comes out in
a few weeks, it may be very different.
And if it's not different, that'll be extremely
(10:08):
interesting to dig into.
Watching the different projections of recession from the
banks has been about as volatile as the
market just from one day going from 70
% chance of recession, actually 40%.
I think it's kind of in tune with
what happens with markets, what happens with inflation.
(10:31):
Banks are adjusting in real time, just like
everyone else.
So yeah.
Well, I think one of these big picture
issues is consumer sentiment and planning from businesses
becomes challenging in this face of uncertainty.
There's a lot of lack of clarity as
(10:55):
to what is really going to be the
plan when it comes to tariffs in particular.
And so that creates an uncertainty of businesses
to know what to do when it comes
to their own spending and purchasing and so
(11:17):
forth.
To the concern of consumers, should I, shouldn't
I?
You could, on the one hand, see consumers
saying, hey, those tariffs are going up.
Let's go get that car.
Let's go get that TV or whatever stuff
they might think.
Well, before it gets worse, you could see
(11:38):
that surge some economic impact.
Or you could see people saying, you know,
I'm a little worried.
I'm not sure what's going to happen.
Maybe we'll keep some powder dry.
Maybe I'm not sure my job is as
secure as I'd like it to be or
whatever.
And you could see that working its way
into the consumer sentiment and spending.
(12:00):
And of course, we know that our economy
is largely driven by the purchasing of consumption
largely by individuals.
So in any case, I wouldn't be surprised
if this uncertainty has some consequence.
(12:20):
But it may be a surge before.
It's a slow.
It's a fair point.
That's a fair point.
Well, in the midst of all this, I
think, you know, one of the things that
we want to talk about is what are
some of the lessons that we can maybe
derive from some of the experiences we've had
(12:42):
with the way we're talking with clients?
And Jeff, you had talked about retirement plans
a little bit as maybe one of the
things we want to start off talking about.
Well, you know, we've heard from clients over
the past since Liberation Day, I guess.
I actually thought, you know, just as kind
of a tangent here, I actually thought we'd
(13:03):
hear more from clients since the tariff mess
and the market volatility.
I was kind of gearing up for like,
OK, my schedule is going to be super
full.
And I'm going to hear from half of
my clients each day, you know.
(13:24):
But that hasn't been the case.
And I think the primary reason is because
our clients are, first of all, they're well
informed because we talk to them a lot
in different methods, including this podcast, I guess.
But, you know, direct communication with our clients
and we're telling them our thoughts and our
views.
So communication certainly helps people feel like they
(13:47):
understand what we're doing and why we're doing
it.
But they also have a financial plan.
And the financial plan, we review with them
frequently, at least annually.
And, you know, they have an understanding of
how volatility fits in.
And we do a risk assessment at the
beginning of all this to make sure that
hopefully make sure that they're invested in the
(14:10):
proper allocation based on the risk tolerance.
So when you put all those things together,
I guess it makes sense that our clients
as a whole, all of them, but maybe
a little bit less concerned about market volatility.
But certainly the ones that we're hearing from,
that is the topic that they're discussing.
They're concerned about the tariffs and what it
(14:32):
means for their individual investments.
And I think that goes back to having
the right risk assessment and having them invested
in the right asset allocation.
In this case, primarily talking about exposure to
the stock market.
Yeah, I'll just jump in and then Russ,
I'm sure you want to chime in too.
(14:52):
But we definitely do hear more from clients
in times of market volatility and anxiety, so
to speak.
Right?
Right.
And that's understandable and totally reasonable.
That's when you want advice from your advisor.
(15:12):
And that's fine.
That's where we're coming from.
To have that opportunity, right?
Absolutely.
So rather people talk to us and get
input rather than maybe go rogue and make
some decisions without some counsel.
Yeah, an emotional decision.
In our case, I think our clients do
(15:35):
know that we're actively managing their investments and
that may offer them some additional comfort.
I think there's a lot of people right
now who, after a couple of years, really
good years, kind of have the mindset, well,
this is the way markets work and we
understand.
And to some extent, maybe just trying to
(15:55):
turn a blind eye for a time, thinking
that there's ups and downs.
I know it's a long term thing, that
kind of mindset.
Those clients who are at a stage of
life where they're drawing from their investments may
feel a little more anxiety.
And maybe, Russ, you can talk a little
(16:17):
bit about some of the things that we've
been talking about that help people when they're
thinking that way as well.
Yeah.
So I think what you just mentioned, Chris,
is that sometimes taking a step back and
not looking at the market every single day
can be helpful.
I think most of the clients who are
particularly nervous or concerned about the portfolios are
(16:40):
the ones that are looking at the stock
market every day.
They're seeing the ups and downs.
When they come and meet with us, we
show them their plan, we stress test their
plan, and I think that gives a certain
level of comfort that big picture, things are
probably going to be OK.
And in the meantime, it's a bumpy ride,
but there's a lot.
By having a financial plan like Jeff was
(17:02):
talking about, you can see, all right, what's
going to happen if the market goes down
by X percent tomorrow?
We can model that out and show what
that looks like.
The other thing that we're doing is we
aspire to create this bucket approach where we
have liquidity reserves in one piece.
So whether that's cash in a bank account,
(17:24):
in a high yield savings account, a money
market fund, you have that reserve to get
over the hump.
So rather if the market's down one year,
two years, we try to prepare for that,
have that excess spending money set aside.
And then the second bucket would be a
little bit more of a bond focused, more
conservative portfolio.
(17:44):
And the longer term could be a little
bit more equity focused and growth oriented.
So having the buckets is a good piece
of it.
Reviewing the risk assessment, to your point, Jeff,
is a good piece of it.
And, you know, what do you do today
if you find that, yeah, my risk appetite
(18:06):
has changed?
I'm not as tolerant of volatility as I
was the last time I did my risk
assessment questionnaire a couple of years ago.
Life has evolved.
I'm closer to spending, whatever it might be,
right?
And I think that's the challenge.
(18:27):
But that's usually why we do try to
have gradations of risk in your portfolio so
that you have a place for the near
term, a place for some longer term, you
know, that kind of thing in the way
you're structured.
But when there are multiple accounts, I think
that gives you the opportunity to say, well,
(18:48):
maybe we can make an incremental adjustment.
Let's not do an all or nothing.
Let's not do anything extreme.
But maybe there's a place for modifying your
risk tolerance, your implementation of your plan a
little bit.
(19:08):
Markets are not at their highs.
That's clear.
But we've had a bit of, you know,
it's been back and forth.
So there is a little bit of periodically
there's an opportunity to say, well, maybe now's
a good time, you know, for an incremental,
modest adjustment, if it helps you to sleep
(19:29):
better.
Big picture, though, you really want to think
long term.
You want to not look at it day
to day, as Russ was saying.
And we tend to have that mindset that
over time things will perform well.
It's just equities do tend to outperform.
(19:51):
But there is volatility that we have to
endure.
So that's why we want this mix of
investments.
Something we've been talking about is people who
have maybe some investments but don't have a
lot of cash reserve or they're trying to
tidy up their debt picture and clean up
(20:12):
some of those kind of things.
And that's a good practice as well to
try to ease up their cash flow without
trying to pay off some debts, maybe to
have fewer kinds of costs can help them
save up and add to their cash again,
(20:33):
you know, rebuild that cash.
But we want to kind of have a
combination of liquidity for the unexpected, because that
can help us to get through the volatility
that we know in periods is going to
happen.
What else, Jeff?
(20:54):
You look like you were ready to comment
on one of those things.
It's not exactly on point, but it is
related.
And some of the clients I've spoken to
in the past few weeks and they have
assets that we manage for them, but a
lot of them also have 401ks, they're still
working.
(21:15):
And I find the level of concern about
investments and their level of understanding of what
they have, it's like kind of night and
day that I think so many people, whether
they're clients of ours, this is irrelevant, this
is just a general statement.
It's amazing the lack of knowledge, information and
consideration that's given to people when they have
(21:39):
a 401k.
So many people, you know, they have a
401k and they just don't know how it's
invested.
It could have started when they got the
job out of college or if they got
a new job and they go to HR,
they fill out the forms.
They got so much paperwork to do when
you start off and it's just one of
many things, right?
Here's the form, we sign up, we max
(22:00):
3%, it's a good deal, do it.
And then if they're lucky, they get another
form that says, here are your choices.
And they're making these decisions either, you know,
sitting in a small chair with a clipboard
at the HR office, or maybe they go
home and do it, but they're making these
decisions without all the things that we're talking
about.
They haven't likely, I'm sure there's exceptions, but
(22:22):
they haven't done a risk assessment.
They probably don't have a financial plan and
they're just at the end of the day,
seeing either a rate of return on one
of the investments that looks really good, so
they'll pick that one or they say, oh,
capital preservation.
I don't want to lose my money.
And they check capital preservation or whatever they
do.
(22:43):
Or these days, often it's just done by
a target date.
This is my retirement objective.
I'll plug it in there, which is, I
mean, not bad, but it doesn't necessarily help
you to understand what you own.
You know what I mean?
How it's going to react.
Well, I actually talked to someone who, it's
not a client of ours, but I talked
to someone, I had lunch with someone who
(23:04):
may be a client of ours one of
these days, and he was talking about the
target fund that he has.
And he asked me, he's in this target
fund and he asked me what the date
meant.
Like target fund 2030.
And so he said, what's that?
What's the date?
I said, it's the year 2030.
It's designed to be a prediction of when
you might be using those funds.
(23:26):
And he said, oh, okay.
So it just, I guess I'm hearing a
lot about it in the last few weeks
about either people being really nervous because they
don't understand what they have or however you
want to frame it.
They just don't have a good understanding of
what they have, which leads to being more
nervous and more concerned and having more angst
(23:47):
about having the 401k.
You don't know what it's invested in.
You see it go down, but you don't
know really if it's temporary or permanent.
So it just adds to the whole feeling
that I have working with an advisor where
you can ask these questions, have this information.
If you have an investment that they're managing,
hopefully they've done this risk assessment.
It's part of a financial plan.
(24:09):
So it's all one picture.
And when you feel this way, you have
these questions rather than wake up at three
in the morning and go down a rabbit
hole.
You can just call your advisor and say,
my account's down a few percent.
But I had this call yesterday.
My account's on 3%.
I'm nervous.
It's never gone down.
This person started investing a couple of years
(24:30):
ago and they had two years of 20
% returns and they're just new to investing.
So it's like, this is what happens.
I like this thing.
And it's down 3%.
So she was nervous.
So what's going on?
Yeah, it's supposed to go up.
Right.
So she understands now, but this was just
somebody who hadn't had that experience.
(24:52):
So you mentioned target dates and those kinds
of funds.
And Russ, I know you're a fan of
Christine Venn's Morningstar.
I think you follow her too.
I am too.
Yeah.
I met her as a guest, in fact.
We have.
I know she's done a number of reports
on how there's these big differences in how
(25:14):
some of these target date funds work.
Is it a target date for retirement where
then you have a 20 year time horizon?
Or is it, this is the date I
want it to be without risk.
You know, essentially, you can have these widely
varying.
Definitionally, right?
Yeah.
Structures for these target date type of portfolios.
(25:37):
So understanding how that works.
You know, as we kind of wrap up,
I was thinking for those people who are
particularly anxious right now.
It's this, our episode is going to air
on Good Friday.
So and for all those who celebrated Passover
(25:58):
last week, happy Passover.
And for those who celebrate Easter, wishing you
a happy Easter.
But I thought I'd make a little analogy
here that, you know, you may be in
the depths of despair when you're feeling about
your portfolio.
The Good Friday experience of, you know, all
(26:20):
the despair that comes with that.
But ultimately, after that comes new life, right?
And eventually, that's the way investing works as
well.
It can take time, might not be three
days, sorry.
But, you know, there's the ultimate eventuality that
we have better outcomes given time and new
(26:44):
beginnings.
And as much as we may go through
some disruption with tariffs and the economic consequence
that may shake out from now, there may
be some disruption.
Eventually, it will lead to greater profitability of,
you know, companies tend to find a way
to be profitable.
And that will eventually lead to higher values
(27:08):
in your portfolio.
So maybe that's a little bit of a
seasonal takeaway as we head towards spring and
all that comes with it.
Thanks, everyone, for being here.
And guys, good input.
Take a little bit of help from us.
We'd be happy to give you an analysis
of your portfolio, evaluate how it's positioned relative
to your risk tolerance.
(27:30):
We'll give you a risk questionnaire to help
navigate that and maybe identify some things you
might want to consider if there's need for
change.
We do run into occasions where people are
doing great and there's not a need for
change.
But if you'd like to take us up,
reach out to us and we're happy to
be a resource to you.
(27:50):
866-771-8901.
And until next time, keep striving for something
more.
For those quality of life issues that make
the money matters, matter.
(28:11):
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 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
(28:33):
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.
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
(28:54):
financial decisions.
Welcome to Something More with Chris Boyd.
Chris Boyd is a certified financial planner, practitioner,
and senior vice president, 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 to the program, Something More with Chris
Boyd.
I'm Chris Boyd here with Jeff Perry and
Russ Ball, both of us, all of us
from the AMR team here at Wealth Enhancement.
(00:44):
Thanks for being with us.
And today, we're going to talk about a
variety of things that we'd start off with
a little bit of news and maybe some
little lessons of some of the things we
glean from the kind of meetings we have
from one day to the next, and maybe
some helpful hints that you can apply to
your own thinking.
So with that, guys, I don't know, maybe
(01:06):
we can start with a little bit of
news.
I guess we saw the ECB, the European
Central Bank, did cut rates, trying to stimulate
over there.
We've had a little bit of back and
forth with the president and- Who wants
to cut rates.
Who wants to cut rates.
But Chairman Powell recently indicated that that's sort
(01:29):
of a wait and see view of things
right now.
Anything more to add to either of those
topics before I jump on to others?
I'm torn about this rate thing.
And so, I mean, the Fed's job is
to watch inflation and employment, right?
There's two broad categories that they are delegated
(01:52):
with being responsible.
Inflation numbers are coming down.
They're pretty stable.
If you believe that the tariff situation could
slow the economy, which is a rational belief,
that means inflation should trend down.
But if you believe tariffs will cause higher
(02:13):
prices, that's inflation.
So I get why the Fed is hesitating
because we're in kind of uncharted waters with
these level of tariff issues.
Yeah, I think it's a real dilemma, right?
And a lot of it is, I think,
(02:35):
wait and see is reasonable because you don't
know exactly what's really going to be implemented
when it all shakes out.
Right.
If you'd expect massive tariffs, the kind of
thing we're talking about in China, well, it's
inevitable you'd have high inflation, at least temporarily,
(02:57):
transitory.
Where there's no credibility, you mean?
But if that was the case, I'm the
one here.
And then, like you say, I mean, the
other thing people worry about is a slowing
economy and that could be the reason to
(03:18):
stimulate.
So you've got kind of this back and
forth going on that's a little bit ambiguous.
I guess the question that I ask myself
when this issue comes up, like, should they
decrease rates, is what is the rate that
they're seeking, right?
And if they're waiting to see what happens,
(03:40):
what is the rate that they want it
to be at?
And if they are artificially high, just because
of where they are in the cycle, right?
Artificially meaning what?
I'm not following you there.
So the PCE they want is 2%
and it's over that.
I think it was 2.8 or something
like that, right?
(04:00):
Right.
But what's the rate if they reach their
goal that they would be at, right?
And how does that correlate with where they're
at now compared to the inflation trends?
So if they're artificially high, meaning pausing at
a higher rate because they don't know, I
guess there's an argument that maybe they should
(04:21):
be leaning towards lowering.
Yeah, I would say if they're not, if
rates are inflation rates are higher than they
want to keep interest rates higher is an
effort to reduce the rate of inflation.
Unemployment, the other mandate clearly right now is
(04:42):
still pretty good.
So now if you do have a big
economic disruption, then you'd be a little bit
more challenged to expect unemployment to be disrupted
and to have rising unemployment.
Yeah, we're not seeing that in the data
yet, but the number that's below expectations.
(05:05):
No, no.
So to your point, there's no worry on
the unemployment side, but there is still a
concern for inflation being elevated.
And if we're worried that the tariffs could
exacerbate that, it probably makes sense not to
(05:26):
be reducing rates in that setting because you're
still trying to get inflation lower.
That assumes the question, that assumes, you answered
the question that I posed, but that assumes
that the Fed's inflation rate is actually 2
.0. I know that's what they say, but
(05:48):
some of their target that their target is.
Yeah.
So there's been a lot of posturing about
that.
Is that really the rate that they expect
or is that really their target?
Is that really reasonable?
Well, and to another point that I think
you made to me outside of the content
(06:09):
of the program here, interest rates have declined,
not on the short end, but on the
long end of the curve.
You are the further out on the curve,
right?
Have we seen some change there?
Yeah.
Actually, sorry.
They've been rising.
I take it back, right?
Interest rates have been rising on the longer
(06:31):
end, right?
As you've had perhaps more sellers in the
bond market with treasuries causing some disruption of
the yield, prices have gone down and yields
have gone up.
I guess it depends when we're comparing it
to, right?
So if you compare it to January, rates
(06:51):
are lower.
Rates of the 10-year is lower, it's
like 40 or 50 basis points lower than
it was.
So the bond market sometimes is telling us
things on their own regardless of what the
Fed is doing, right?
Well, I think prior to this question of
why are rates rising the way they have
(07:15):
in very recent weeks, the longer term outlook
from the bond market was conveying the thought
of a slowing economy due to concern that
would tariffs have a slowing effect, right?
(07:36):
And this was before any announcement of what
the actual plan was, I think some expectation
of that over time would have some consequence.
I think the other end of this is
probably the way that things have moved is
maybe some gamesmanship or pressure to try to
say, hey, look, we can dump some of
(08:00):
these bonds that are being held by foreign
powers.
Seems like whatever topic we're discussing, it all
comes back to tariffs.
Yeah, it does, I think that's a good
point.
So along those lines, there was an item
in the Wall Street Journal that asked two
(08:20):
economists what their expectation is for recession or
not.
And the biggest caveat was, hey, the economists
aren't always right.
So nothing to overestimate there.
Well, we've pointed that out many times.
I think we've done a couple of segments
called Where's the Recession that they've been predicting
for years.
(08:43):
Back with the soft landing topic, would they
be able to do a soft landing?
So in this case, you're just seeing a
sharp rise is really the bottom line.
We went from at the start of the
year, maybe around 20% of economists on
this survey.
(09:03):
There were some 70-odd economists that get
surveyed.
Not all participate in every survey, but in
any case, 64% in the most recent.
We went from somewhere around early low 20s
at the start of the year, expecting a
probability of recession to somewhere around 45%
(09:24):
in April, though the survey was taken right
around the time of the start of all
the tariff news.
So again, how this actually evolves and so
forth.
That's the problem with the data that we're
still getting, whatever data point we're getting recently,
(09:48):
retail sales or unemployment or surveys or...
It's kind of backward looking as opposed to...
Inflation data, it's all backward looking.
So when the April data comes out in
a few weeks, it may be very different.
And if it's not different, that'll be extremely
(10:08):
interesting to dig into.
Watching the different projections of recession from the
banks has been about as volatile as the
market just from one day going from 70
% chance of recession, actually 40%.
I think it's kind of in tune with
what happens with markets, what happens with inflation.
(10:31):
Banks are adjusting in real time, just like
everyone else.
So yeah.
Well, I think one of these big picture
issues is consumer sentiment and planning from businesses
becomes challenging in this face of uncertainty.
There's a lot of lack of clarity as
(10:55):
to what is really going to be the
plan when it comes to tariffs in particular.
And so that creates an uncertainty of businesses
to know what to do when it comes
to their own spending and purchasing and so
(11:17):
forth.
To the concern of consumers, should I, shouldn't
I?
You could, on the one hand, see consumers
saying, hey, those tariffs are going up.
Let's go get that car.
Let's go get that TV or whatever stuff
they might think.
Well, before it gets worse, you could see
(11:38):
that surge some economic impact.
Or you could see people saying, you know,
I'm a little worried.
I'm not sure what's going to happen.
Maybe we'll keep some powder dry.
Maybe I'm not sure my job is as
secure as I'd like it to be or
whatever.
And you could see that working its way
into the consumer sentiment and spending.
(12:00):
And of course, we know that our economy
is largely driven by the purchasing of consumption
largely by individuals.
So in any case, I wouldn't be surprised
if this uncertainty has some consequence.
(12:20):
But it may be a surge before.
It's a slow.
It's a fair point.
That's a fair point.
Well, in the midst of all this, I
think, you know, one of the things that
we want to talk about is what are
some of the lessons that we can maybe
derive from some of the experiences we've had
(12:42):
with the way we're talking with clients?
And Jeff, you had talked about retirement plans
a little bit as maybe one of the
things we want to start off talking about.
Well, you know, we've heard from clients over
the past since Liberation Day, I guess.
I actually thought, you know, just as kind
of a tangent here, I actually thought we'd
(13:03):
hear more from clients since the tariff mess
and the market volatility.
I was kind of gearing up for like,
OK, my schedule is going to be super
full.
And I'm going to hear from half of
my clients each day, you know.
(13:24):
But that hasn't been the case.
And I think the primary reason is because
our clients are, first of all, they're well
informed because we talk to them a lot
in different methods, including this podcast, I guess.
But, you know, direct communication with our clients
and we're telling them our thoughts and our
views.
So communication certainly helps people feel like they
(13:47):
understand what we're doing and why we're doing
it.
But they also have a financial plan.
And the financial plan, we review with them
frequently, at least annually.
And, you know, they have an understanding of
how volatility fits in.
And we do a risk assessment at the
beginning of all this to make sure that
hopefully make sure that they're invested in the
(14:10):
proper allocation based on the risk tolerance.
So when you put all those things together,
I guess it makes sense that our clients
as a whole, all of them, but maybe
a little bit less concerned about market volatility.
But certainly the ones that we're hearing from,
that is the topic that they're discussing.
They're concerned about the tariffs and what it
(14:32):
means for their individual investments.
And I think that goes back to having
the right risk assessment and having them invested
in the right asset allocation.
In this case, primarily talking about exposure to
the stock market.
Yeah, I'll just jump in and then Russ,
I'm sure you want to chime in too.
(14:52):
But we definitely do hear more from clients
in times of market volatility and anxiety, so
to speak.
Right?
Right.
And that's understandable and totally reasonable.
That's when you want advice from your advisor.
(15:12):
And that's fine.
That's where we're coming from.
To have that opportunity, right?
Absolutely.
So rather people talk to us and get
input rather than maybe go rogue and make
some decisions without some counsel.
Yeah, an emotional decision.
In our case, I think our clients do
(15:35):
know that we're actively managing their investments and
that may offer them some additional comfort.
I think there's a lot of people right
now who, after a couple of years, really
good years, kind of have the mindset, well,
this is the way markets work and we
understand.
And to some extent, maybe just trying to
(15:55):
turn a blind eye for a time, thinking
that there's ups and downs.
I know it's a long term thing, that
kind of mindset.
Those clients who are at a stage of
life where they're drawing from their investments may
feel a little more anxiety.
And maybe, Russ, you can talk a little
(16:17):
bit about some of the things that we've
been talking about that help people when they're
thinking that way as well.
Yeah.
So I think what you just mentioned, Chris,
is that sometimes taking a step back and
not looking at the market every single day
can be helpful.
I think most of the clients who are
particularly nervous or concerned about the portfolios are
(16:40):
the ones that are looking at the stock
market every day.
They're seeing the ups and downs.
When they come and meet with us, we
show them their plan, we stress test their
plan, and I think that gives a certain
level of comfort that big picture, things are
probably going to be OK.
And in the meantime, it's a bumpy ride,
but there's a lot.
By having a financial plan like Jeff was
(17:02):
talking about, you can see, all right, what's
going to happen if the market goes down
by X percent tomorrow?
We can model that out and show what
that looks like.
The other thing that we're doing is we
aspire to create this bucket approach where we
have liquidity reserves in one piece.
So whether that's cash in a bank account,
(17:24):
in a high yield savings account, a money
market fund, you have that reserve to get
over the hump.
So rather if the market's down one year,
two years, we try to prepare for that,
have that excess spending money set aside.
And then the second bucket would be a
little bit more of a bond focused, more
conservative portfolio.
(17:44):
And the longer term could be a little
bit more equity focused and growth oriented.
So having the buckets is a good piece
of it.
Reviewing the risk assessment, to your point, Jeff,
is a good piece of it.
And, you know, what do you do today
if you find that, yeah, my risk appetite
(18:06):
has changed?
I'm not as tolerant of volatility as I
was the last time I did my risk
assessment questionnaire a couple of years ago.
Life has evolved.
I'm closer to spending, whatever it might be,
right?
And I think that's the challenge.
(18:27):
But that's usually why we do try to
have gradations of risk in your portfolio so
that you have a place for the near
term, a place for some longer term, you
know, that kind of thing in the way
you're structured.
But when there are multiple accounts, I think
that gives you the opportunity to say, well,
(18:48):
maybe we can make an incremental adjustment.
Let's not do an all or nothing.
Let's not do anything extreme.
But maybe there's a place for modifying your
risk tolerance, your implementation of your plan a
little bit.
(19:08):
Markets are not at their highs.
That's clear.
But we've had a bit of, you know,
it's been back and forth.
So there is a little bit of periodically
there's an opportunity to say, well, maybe now's
a good time, you know, for an incremental,
modest adjustment, if it helps you to sleep
(19:29):
better.
Big picture, though, you really want to think
long term.
You want to not look at it day
to day, as Russ was saying.
And we tend to have that mindset that
over time things will perform well.
It's just equities do tend to outperform.
(19:51):
But there is volatility that we have to
endure.
So that's why we want this mix of
investments.
Something we've been talking about is people who
have maybe some investments but don't have a
lot of cash reserve or they're trying to
tidy up their debt picture and clean up
(20:12):
some of those kind of things.
And that's a good practice as well to
try to ease up their cash flow without
trying to pay off some debts, maybe to
have fewer kinds of costs can help them
save up and add to their cash again,
(20:33):
you know, rebuild that cash.
But we want to kind of have a
combination of liquidity for the unexpected, because that
can help us to get through the volatility
that we know in periods is going to
happen.
What else, Jeff?
(20:54):
You look like you were ready to comment
on one of those things.
It's not exactly on point, but it is
related.
And some of the clients I've spoken to
in the past few weeks and they have
assets that we manage for them, but a
lot of them also have 401ks, they're still
working.
(21:15):
And I find the level of concern about
investments and their level of understanding of what
they have, it's like kind of night and
day that I think so many people, whether
they're clients of ours, this is irrelevant, this
is just a general statement.
It's amazing the lack of knowledge, information and
consideration that's given to people when they have
(21:39):
a 401k.
So many people, you know, they have a
401k and they just don't know how it's
invested.
It could have started when they got the
job out of college or if they got
a new job and they go to HR,
they fill out the forms.
They got so much paperwork to do when
you start off and it's just one of
many things, right?
Here's the form, we sign up, we max
(22:00):
3%, it's a good deal, do it.
And then if they're lucky, they get another
form that says, here are your choices.
And they're making these decisions either, you know,
sitting in a small chair with a clipboard
at the HR office, or maybe they go
home and do it, but they're making these
decisions without all the things that we're talking
about.
They haven't likely, I'm sure there's exceptions, but
(22:22):
they haven't done a risk assessment.
They probably don't have a financial plan and
they're just at the end of the day,
seeing either a rate of return on one
of the investments that looks really good, so
they'll pick that one or they say, oh,
capital preservation.
I don't want to lose my money.
And they check capital preservation or whatever they
do.
(22:43):
Or these days, often it's just done by
a target date.
This is my retirement objective.
I'll plug it in there, which is, I
mean, not bad, but it doesn't necessarily help
you to understand what you own.
You know what I mean?
How it's going to react.
Well, I actually talked to someone who, it's
not a client of ours, but I talked
to someone, I had lunch with someone who
(23:04):
may be a client of ours one of
these days, and he was talking about the
target fund that he has.
And he asked me, he's in this target
fund and he asked me what the date
meant.
Like target fund 2030.
And so he said, what's that?
What's the date?
I said, it's the year 2030.
It's designed to be a prediction of when
you might be using those funds.
(23:26):
And he said, oh, okay.
So it just, I guess I'm hearing a
lot about it in the last few weeks
about either people being really nervous because they
don't understand what they have or however you
want to frame it.
They just don't have a good understanding of
what they have, which leads to being more
nervous and more concerned and having more angst
(23:47):
about having the 401k.
You don't know what it's invested in.
You see it go down, but you don't
know really if it's temporary or permanent.
So it just adds to the whole feeling
that I have working with an advisor where
you can ask these questions, have this information.
If you have an investment that they're managing,
hopefully they've done this risk assessment.
It's part of a financial plan.
(24:09):
So it's all one picture.
And when you feel this way, you have
these questions rather than wake up at three
in the morning and go down a rabbit
hole.
You can just call your advisor and say,
my account's down a few percent.
But I had this call yesterday.
My account's on 3%.
I'm nervous.
It's never gone down.
This person started investing a couple of years
(24:30):
ago and they had two years of 20
% returns and they're just new to investing.
So it's like, this is what happens.
I like this thing.
And it's down 3%.
So she was nervous.
So what's going on?
Yeah, it's supposed to go up.
Right.
So she understands now, but this was just
somebody who hadn't had that experience.
(24:52):
So you mentioned target dates and those kinds
of funds.
And Russ, I know you're a fan of
Christine Venn's Morningstar.
I think you follow her too.
I am too.
Yeah.
I met her as a guest, in fact.
We have.
I know she's done a number of reports
on how there's these big differences in how
(25:14):
some of these target date funds work.
Is it a target date for retirement where
then you have a 20 year time horizon?
Or is it, this is the date I
want it to be without risk.
You know, essentially, you can have these widely
varying.
Definitionally, right?
Yeah.
Structures for these target date type of portfolios.
(25:37):
So understanding how that works.
You know, as we kind of wrap up,
I was thinking for those people who are
particularly anxious right now.
It's this, our episode is going to air
on Good Friday.
So and for all those who celebrated Passover
(25:58):
last week, happy Passover.
And for those who celebrate Easter, wishing you
a happy Easter.
But I thought I'd make a little analogy
here that, you know, you may be in
the depths of despair when you're feeling about
your portfolio.
The Good Friday experience of, you know, all
(26:20):
the despair that comes with that.
But ultimately, after that comes new life, right?
And eventually, that's the way investing works as
well.
It can take time, might not be three
days, sorry.
But, you know, there's the ultimate eventuality that
we have better outcomes given time and new
(26:44):
beginnings.
And as much as we may go through
some disruption with tariffs and the economic consequence
that may shake out from now, there may
be some disruption.
Eventually, it will lead to greater profitability of,
you know, companies tend to find a way
to be profitable.
And that will eventually lead to higher values
(27:08):
in your portfolio.
So maybe that's a little bit of a
seasonal takeaway as we head towards spring and
all that comes with it.
Thanks, everyone, for being here.
And guys, good input.
Take a little bit of help from us.
We'd be happy to give you an analysis
of your portfolio, evaluate how it's positioned relative
to your risk tolerance.
(27:30):
We'll give you a risk questionnaire to help
navigate that and maybe identify some things you
might want to consider if there's need for
change.
We do run into occasions where people are
doing great and there's not a need for
change.
But if you'd like to take us up,
reach out to us and we're happy to
be a resource to you.
(27:50):
866-771-8901.
And until next time, keep striving for something
more.
For those quality of life issues that make
the money matters, matter.
(28:11):
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 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
(28:33):
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.
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
(28:54):
financial decisions.
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