Simply Money

Episode Transcript

(00:05):
Tonight, Is this the jobs reportthat Wall Street has been waiting for and
costly mistakes to avoid making with yourfor one k and of course we've got
much more we're getting into. You'relistening to Simply Money, presented by all
Worth Financial I Meani Wagner along withSteve Ruby. Gosh, it seems like
it was decades ago with the FederalReserve, our nation central bank started down

(00:26):
this path of trying to pull downinflation by raising interest rates, and one
of the things that we were expectingas kind of a side effect of that
was that the job market would pullback, right there would be less people
hiring, maybe more people laying employeesoff. And we've actually sort of seen
the opposite of that. In fact, the job market has been insanely resilient

(00:48):
despite all of that until maybe lastweek. Joining us tonight, chief Investment
Officer and the stout Andy, let'stalk about this latest news and your take
on it. Yeah, when youlook at the jobs report from the last
week, it was really everything thatthe Federal Reserve wanted to see in the
markets certainly embrace that by putting togethera pretty strong rally on Friday, because

(01:11):
that's when it came out, butreally, over the past couple weeks things
have been good. What the bottomline is from this jobs report is that
all of the rate hikes over thepast two years might finally be starting to
impact the economy, which in turnsuggests that we could see rate cuts in
the not too distant future. Sothis is one of those bad news is

(01:34):
actually good news type scenarios that we'vebeen talking about for a couple of years
now. Yeah. Absolutely, AndI wouldn't even call it that bad of
news. I mean, bad newswould be if there were, you know,
no new jobs being added. Economiststhought that employers were going to add
two hundred and forty thousand jobs lastmonth. They still added one hundred and
seventy five thousand, So I meanthat's not terrible news. It's just not

(01:57):
as many as expected. It's alsothe fewest in six months. And when
you look under the hood in termsof where the jobs were being added,
you were seeing healthcare lead the waywith eighty eight thousand jobs, and healthcare
tends to be i'll call it relativelyimmune to economic cycles. So if we

(02:19):
pair that out, because you're alwaysgoing to need healthcare jobs, right,
But if you pair that out andyou look at your lower skilled jobs out
there, you know those are youknow, they're shrinking a little bit in
terms of the number of jobs thatemployers are filling. So when you put
that all together, you know,it's not a terrible report, but it
shows that employers are making some adjustmentsthere. And I mean, we could

(02:42):
look take this in another way.Which was really positive for the Federal Reserve
was the earnings that people were beingpaid. The average hourly earnings only increased
er point two percent last month.The prior month in March it was a
point three percent, and that's whateconomists expected. Again, but it pulled
back, so we saw a littlebit of wage pressure relief. And on
top of that, the number ofhours work per week declined a bit as

(03:06):
well, helping to add some moreeasing of inflationary pressures on the wage front.
Andy, we've been talking about thepossibility of something called a soft landing,
right, and this is could theFederal Reserve bring down inflation without major
sort of fallout in the economy.And it looked for a while like maybe

(03:27):
that could be a possibility, atleast a stronger possibility than anyone would have
thought. A year ago. Butnow we've got this job support, Now
we've got GDP not necessarily growing atthe rate that maybe economists were predicting.
I'm wondering, what's your take.Does this pull that soft landing off the
table? No, I don't thinkit does pull the soft landing off the
table. If you look at thisjob's report, I mean, we still

(03:51):
one hundred and seventy five thousand jobsbeing added. The estimate is that if
we see at least one hundred thousandjobs added, that would actually pretty much
match what our population growth is,so it would kind of be a neutral
level of job editions. And whenyou look at the GDP report that you

(04:13):
just mentioned, yeah, it wasn'tgreat. It was one point six percent,
but a lot of that was justbecause of imports. H and so
we're buying more from abroad, andalso business inventories declined if you you know,
factor out inventories as well as importsand just trade in general. Right,

(04:36):
the economy grew two point nine percent, and you could easily argue that
trade as well as business inventories aren'treally representative of the true underlying strength of
the US economy. So to answeryour question, No, soft landing is
still on the table. I mean, if you look at leading economic indicators,

(04:56):
it does show that the risk hasdropped in terms of the chance of
recession in the next you know,two quarters. I would say, really,
you know, where there's still someuncertainty is looking out to the fourth
quarter. So but as more datacomes in, we'll get some more clarity
on that. But right now itdoes show low recession risk and that's a
really good thing for investors because youknow, when you do have a recession,

(05:19):
you know, that's when you seea lot more volatility perk up.
Now, of course, there couldbe a left field event, something could
happen, so nothing is off thetable. So you know, there's been
a lot of speculation when the Fedis actually going to cut interest rates.
And as new information comes out,such as a labor market report, does
that paint a clearer picture of whenwe're going to see interest rates fall this

(05:41):
year? When you look at theinterest rate probabilities And you can see this
by looking where certain like securities raythey're called FED fund futures, and you
can get a probability for the chanceof a rate cut at an upcoming meeting.
You know, the next meeting isJune twelfth. There's a ten percent
chance of a right cut, sothat's pretty much off the table. You

(06:01):
go out to July, you're lookingabout thirty six percent, so it seems
pretty unlikely. We would need tosee some big changes, like maybe the
unemployment rate moving up even more.I mean, we saw from the jobs
report last week that it went upfrom three point eight to three point nine
percent. But if it ticks upthe four four to one, you know,
that does bring July into the ballparkfour rate cuts, but we'll see

(06:25):
how that plays out. It's notreally until the September meeting where we have
more than a fifty percent chance ofa cut, and that currently sits at
eighty six percent, and the Novembermeeting shows you know, that's the first
time a full cuts priced in.It's just amazing though, when you think
about it. At the beginning ofthe year, markets were pricing in about
seven quarter point rate cuts, andwe would have we should have already had

(06:47):
some based on that beginning of theyear estimates. Now we're maybe not even
going to get two rate cuts thisyear, at least based on how the
market is trading well. Moving sofar away from those initials, I mean,
looking at some of the reports recently, again job growth slowing. But
can we put to bed any talkof interest rate hikes at this point at

(07:08):
least? Yeah, So we hadthe Federal Reserve they they met last week,
and there was some real concern ofa potential hike by some market participants
because of the elevated inflation readings youknow that we have been seeing over the
past you know, a couple ofmonths. I mean, for instance,
the Fed's Preferred inflation Measures core PCEand if you look at the last three

(07:30):
months of data, it analyzes outto a four point four percent that's well
above what the FED wants to see, which is two percent. So the
the chance of a rate hike thatyou know, people were starting to really
talk about that as a possibility.However, you know, what we've seen,
or what we saw last week atthe FED meeting is that cha chair

(07:53):
Pal pretty much put that to bed, saying that the next move it's unlikely
to be a hike, and hesaid the Fed can remain patient rate with
rates where they are. So thatsuggests that the federalill keep rates where there
are and then cut and once theyget more confidence that inflation is heading lower.

(08:13):
Andy, One of the many thingsthat I appreciate about you is that
you call it how you see it, and you have with the Federal Reserve
going back for as long as Ican remember you being on the show.
Right, if they're making a mistakeor you don't like what you're hearing,
like, you tell us. Soif you were to give the Federal Reserve
a grade at this point of howthey're handling inflation as they try to pull

(08:35):
it down, what they're doing withinterest rate hikes, what is Professor Stout's
grade for the Federal Reserve? Well, I would have to go back to
the December time frame in order togive a really accurate measurement, and I
wouldn't grade them too well. Imean, I'll say a D. Because

(08:58):
what happened was Chair Pal and alot of the other FED members they started
talking a lot about whether or notor they started talking about the extent and
timing of rate cuts, and thathad a traumatic impact on just how easy
money flowed into the economy. Eventhough they didn't do anything, it did

(09:20):
result in financial conditions easing tremendously,interest rate longer term interest rates dropping,
and things like that, and thatprobably was one of the major reasons that
you saw inflation become stubbornly high whenit seemed to be moving in the right
direction and then it stalled out aswe've seen so far this year. And
I think the blame lays squarely witha FED on this one, for just

(09:43):
getting a little too far ahead ofitself. And that's why a lot of
people thought the FED would have beenI guess more talking, talking tough to
the markets last week, and theydid it, and you saw markets rally
on that. The markets like thatgood news, but they need to see
and come down before we get anyreal progress there. Appreciate the honesty and

(10:05):
Pandor. That's a pretty harsh grade, isn't it. My kids come in
with a D and I'm not happy, And I think that's great perspective for
investors, right. I mean,you like to think that people who are
making these decisions are doing them withoutair, you know, and obviously they
don't have a crystal ball they knowwhat's going to happen. But that's my
appreciate Andy, your kind of toughtalk on these things, because I think
it's important for us to understand thiscould have been handled differently, and the

(10:28):
result might have been different for allof our four to one case for interest
rates and everything else that's affected bythat. Here's the all Worth advice.
Don't be compelled to make a financialmove based on what the Federal Reserve may
or may not do. Obviously,it's often a guessing game for them.
The target is constantly moving. Comingup next, the latest example of my

(10:48):
owning too much of onestock is likeplaying Russian roulette. You're listening to Simply
Money presented by all Worth Financial herein fifty five krs the talk station.
You're listening to simply Money presented byall Words Financial. I mean you Wagner
along with Steve Ruby. If youcan't listen to our show every night,
you don't have to miss a thing. We've got a daily podcast for you.

(11:09):
Just search Simply Money. It's rightthere on the iHeart app or wherever
you get your podcasts. Coming upat six forty three, a recent stock
market prediction could compel you to messwith your four oh one k What it
is and what you need to know? All right, Steeve, have you
ever been audited by the irs?No? I haven't, and I actually
did claim the home office. Ohyou did. Yeah, when I once

(11:33):
upon a time I lived in JerseyCity, New Jersey, worked in New
York City, and a roommate movedout and I used his old room as
an office and I claimed it.And I did not get audited O,
because they say that's like a definitive, like we're coming for you. If
you claim that one, I couldhave and would have defended myself. Sure
I would have and it would haveworked. But I and it was more

(11:54):
than seven years ago, So we'regood. If you get any ideas.
If anyone from the IRS is listening, I give Steve a Cole. It's
a stressful experience. Luckily I haven'tbeen audited, neither of you. But
the IRS is getting a message outthere that they are taking these audits very
seriously. In fact, they aregoing to increase the audit rate. Now
for those of you who are startingto feel maybe your blood pressure go up

(12:18):
a little bit. Here's who they'retargeting. The wealthy, I would say,
the uber ultra wealthy. Yeah,you and I were not in this
this demographic here. Yeah, we'retalking about total positive income of more than
ten million dollars by the taxi oftwenty twenty six, the audit rate for
these individuals, it would be sixteenpoint five percent in twenty twenty six,

(12:41):
compared to about eleven percent of thatdemographic in twenty nineteen. Okay, and
I think most of us are saying, oh, okay, yeah, audit
those people, right, I mean, these are the kinds of people who
have not just ACPA working for them. They probably have a whole team of
people working looking at loopholes and taxcodes. Right, how do we pay

(13:03):
the least amount as possible? Notonly with just individuals who are making you
know, just a measly ten millionor more a year, but they're actually
going to triple the audit rate onlarge corporations that you know, make two
hundred and fifty million dollars a year, and they say they're going to boost
audit rates by tenfold for large complexpartnerships with assets over ten million dollars.

(13:24):
So, you know, I thinkthis is like the frustrating thing of like
kind of the average Joe is.Like when you hear about someone being audited
or the irs giving you or someoneyou know a hard time, It's like,
are you serious? Like I don'tmake that much money? Like what
am I going to do? Andthen you hear about, you know,
these individuals who make a gazillion dollarsand they're paying less in taxes than we

(13:46):
are, right, and that's frustratingfor the average American. I think the
IRS is saying, we hear youloud and clear. We are going to
spend more money and more resources targetingpeople, and it's going to be the
people who are in those high,high, high tax Yeah, the IRS
is actually emphasizing that they're not goingto increase audit rates for any small businesses

(14:07):
or taxpayers making less than four hundredthousand dollars per year, and that is
at historically the audit rate for thatdemographic is at historically low figures. So
for those of you who were stressedout, if you are in sort of
the more normal income range, you'regoing to be fine. But if you've
ever been frustrated by hearing these storiesabout people getting out of paying taxes,

(14:31):
maybe they're maybe there are times up. So Amy says, you should claim
that home office. Go ahead andclaim that home office, as long as
you're not making ten million dollars ayear. You know, we talk a
lot on the show about the importanceof being diversified in your investments in your
portfolio. And I think sometimes youcan come across a stock or company and

(14:52):
you think, oh my gosh,they're onto something here. I'm thinking back
to the pandemic, when it wasno longer we didn't know I guess if
it was safe for people to goto gyms, you know, just normal
exercise patterns were kind of thrown outthe window and everyone went all in on
the Peloton. Yeah. Peloton commercialswere everywhere. There were every NonStop.

(15:13):
The marketing was through the roof,and it made sense because people were locked
down, they had nothing to do, they couldn't go to their gyms.
Taking advantage of what this company offeredand the services that you could subscribe to
was a way to stay I guessin shape and busy and whatnot. But
this company now they are not onlyhiring a different CEO, but they're cutting
fifteen percent of their staff, fourhundred jobs being eliminated from Peloton. Well,

(15:37):
when you looked at that company duringthe pandemic, it was like,
yes, like not only do Imaybe need a subscription because I can't go
anywhere, but maybe I need stockin this company. Yeah, right,
because of course things were going banggangbusters. You know, I think that
back to that time, Zoom,and there were just certain companies that just
looked like winners because everyone's normal wayof living absolutely stopped, and there were

(15:58):
certain companies that were able to takeadvantage of that situation and really grow and
grow and grow. The problem isnow that the world has gone back to
normal, a lot of people areback to the normal way of working out.
They're back to gyms, they're backto taking classes with a sweaty room
full of people. Nobody cares anymore, right, And the situation at Peloton

(16:22):
has changed. You mentioned they're cuttingfifteen of their staff. That's four hundred
people. But there was a timewhen their stock was through the roof,
like a share was more than onehundred and seventy bucks, and you know,
last check it was like south offive bucks a share, Yeah,
three dollars and fourteen cents to beprecise. So that this is a scary
story because yes, the pandemic changedthe face of investing for many of these

(16:48):
companies that just surged, some ofyour streaming services, Peloton, for example,
Zoom. These companies went through theroof, so a lot of people
saw this as opportunities that they couldcapture to change their own financial future.
That one hot stock to hop onboard with. Maybe you bought high because
you just knew it was going tokeep going. You just knew it was

(17:10):
going to keep surging because people aregoing to use this service in perpetuity.
Who knows when we were going togo back to the gym, So it
just made sense, I'm going tobuy Peloton, and that's going to be
my retirement plan. Not so much. There are clearly reasons why we say
no more than five, ten,maybe fifteen percent tops of an individual stock

(17:33):
making up your entire portfolio, andI'd say Peloton is a pretty good example
of that right now. And I'mgoing to go out on a limb here
and imagine that social media actually probablypaid a large role in this, right
because during that time, not onlyare you maybe thinking about using Peloton,
but every time you jump on socialmedia, everyone's bragging about this Peloton class
that they just took, and youknow, eight weeks in a rule of
that they haven't missed a class.And so you are kind of seeing these

(17:56):
images and seeing these posts and it'slike, oh, I need to go
all in on this. And Imean this is just exhibit A, Exhibit
Z, Exhibit two than three hundredand fifty nine. Why on one day
one company can be the best thinggoing. In the next day you have
no idea where it's going to go. And I've been around a few people
recently who've been talking about, oh, this pharmast startup and I should go

(18:19):
all in on this, or youknow, someone told me about this hot
stock at church and I you know, invested a ton And it just makes
me so nervous because diversification, rightis what truly pays off as a long
term investor, because if you're notmoving in that direction, you know,
one day a company's great, inthe next day it's not, And all
of a sudden, what looked likewas going to be a fantastic retirement is

(18:41):
all of a sudden falling apart aroundyou put plenty of folks that I work
with have you know, managed asset'sthe majority of their portfolio, and they're
at a point where they know thatthey have financial freedom and that their money's
going to last longer than they doif they would have a play money account
on the side that can throw moneyat individual stocks like Peloton, for example,
Oh go Gangbusters, but not leveragingyour entire portfolio in an attempt to

(19:04):
play catchup or to get rich quick. If it sounds too good to be
true, it probably is. AndPeloton selling for one hundred and seventy dollars
per share back in early twenty twentyone and selling at three dollars now is
a testament to that. Well,and I think, yes, you're right,
Like, if you have money that'searmarked for retirement, it should not
be an individual stock like this.You know, we talk about the fact

(19:26):
that you know, for some people, right, investing can feel like gambling.
While that is gambling, right,going all in on one stock is
absolutely gambling. If you've got playmoney, that's one thing. If it's
a retirement and you're thinking get richquick, that's something else. Entirely.
Here's the all Worth advice. It'spretty simple. Don't have more than ten
percent of your entire portfolio invested inone particular stock or just individual stocks altogether.

(19:51):
Coming up next, the important pointsto get across to those college age
kids. So you're not sacrificing yourown financial freedom. You're listening simply money
presented by all Worth Financial. Herein fifty five KRC the talk station listening
to Simply Money, presented by allWorth Financial. I Meani Wagner along with
Steve Ruby. Remember how much collegecosts for you back in the day,

(20:15):
Well, I have one in collegewhen heading to college next year, and
gosh, that seems like a bargain. And you know, see if I
remember also when I don't know,my daughter was maybe two, doing one
of those calculators that would kind oftell you how much, and I was
like, this is wrong, rightnow, this cannot be right. College

(20:37):
is not going to cost that muchby the time she's eighteen. Now I
realize those estimates were very conservative andit's actually more expensive than it was even
projecting to be, you know,sixteen years ago. And I think the
issue for so many parents is youwant to give your kids their hopes,
their dreams. You want them tobe able to do the things that they've

(20:57):
always talked about. In some ofthese covers around college can be incredibly difficult
if your child decides if they wantto go out of state to some big
college. And I'm just going tospeak about my daughter right now. I
think maybe when she was like fourteenyears old, she was on Instagram and
someone posted someone that she follows postedsomething about South Carolina and there were palm

(21:18):
trees. Oh, and at thatpoint that's all she decided. That's where
she was going to school, right, And she would talk about it and
I would say, Okay, well, what's the major that I don't know?
I just need to go to SouthCarolina Exactly, I'm majoring in the
South where it's warm and there's palmtrees, and it looks like a lot
of fun and in sec you knowall the things. Palm trees are there
in South Carolina, apparently a lotmore than there are in Kentucky. She

(21:42):
knows the further south you go,the more palm trees there are. I'm
so glad you weren't around for thisconversation, or maybe she would have been
looking at Florida. Point being,we had to have a difficult conversation about
the fact that we're going to payfor in state college tuition because we can't
afford more than that, and theoption and for her then to be to
take out student loans for the difference, and that would really put her in

(22:04):
the hole starting out, and itwas not something that I was comfortable seeing
her do. And it's not aneasy conversation. It's not a fun one.
But it's interesting because now that she'seighteen and we're two three months away
from her going away to college,she gets it. Now. That's good
that she gets it. I mean, obviously, you're in a position where
we preach constantly the importance of opencommunication when it comes to financial planning topics.

(22:29):
This can be usually it's between twoplanning partners spouses, but having this
conversation with your children it's just asimportant, especially if you're the one helping
them navigate paying for college or payingfor college with them or for them.
These conversations are incredibly important, andI'm glad that we have you in our
corner to kind of talk through someof your own personal experiences right now.

(22:52):
I did pay for my own college. I remember doing the fast foe kind
of figuring all that out of myown and it was it was certainly a
nightmare, but I got it done. I did finish with about forty thousand
dollars in student loans that are finallypaid off. But that having had I
known what I know now, mypath may have looked a little different.
Yeah. Well, and also justto you mentioned the FASVA. It is

(23:17):
an absolute mess. And this is, you know, the Federal student Aid
application that you pass out or thatyou fill out and went through some changes
this year. So for any parentsstruggling with this, you already know what
I'm talking about, but it iseven more of a mass this year than
normal years. Please stick with it, right, this is how you're going
to get any sort of student aid. It's going to just take longer than

(23:38):
normal. But I think it's difficultfor parents because you want to treat your
child as an adult. But here'sthe deal. There's still a teenager,
and so they think that they're agrown up and they're making this decision,
and you have decades more of experience. And I meet I met was someone
just last week who was talking aboutthe fact they're in their mid thirties forty

(24:00):
plus thousand dollars in student loan debt. And she says, I've been paying
on these loans for the past decadeyep, and they don't move. Yeah.
Probably touched four thousand dollars in principleafter that time. Yeah, And
she was like, I just feellike I'm never going to get them paid
off. And you know, andshe said, I would have done things
differently. I wouldn't have I wouldn'thave gone to the school that I went

(24:21):
to, you know, and youknow, I mean making fifty sixty thousand
dollars a year now, right,it's really difficult to climb out of those
positions. In parents, I thinkit's on you to have these conversations with
your kid. And I'm not sayingyou want to crush their dreams. It's
just a bit of a reality checkof and maybe it's even in you know,
ed think one of our our founderstalks about the fact that he would

(24:41):
have loved he went to a Xavier. He would have loved to have lived
on campus and had the whole sortof party and you know, the experience
of living away from parents. Couldn'tafford it. You know, he got
a great college education, you know, went on to have a very successful
career, but he had to cometo terms with the fact that he wasn't

(25:02):
gonna, you know, he wasn'tgonna put all the money out of his
pocket to live on campus. Reallyglad all these years later that he didn't.
That's a good example of something thatI might have done a little bit
different. I did four years atBowling Green State University. You know,
I got a degree out of it, I got a wife out of it,
I got some lifelong friendships out ofit. Obviously it was a good
time and worked out well for mein the end, but financially speaking,

(25:23):
it was very difficult and set meback many, many years coming out of
school with that debt. I didget the pell grants, I got the
Ohio Instructional Grant. This is forfamilies that are below the poverty line,
which great. You know, thatwas very helpful, but I still came
out with forty thousand dollars in debt. So being in a position where had
I a better understanding of what thatmight have looked like for my early financial

(25:45):
future after graduation, I might havedone the two years at a community college
before transitioning to a four year university, because you're going to get the same
education, the same piece of paperat the end of the day. Maybe
I would have found the same wife, who knows, but I would have
finished with a lot less debt.And I think that you painting the picture

(26:07):
of when your daughter was two yearsold and you were running some calculations and
your mind was blown about what thoseexpenses would look like. I think having
that open line of communication with yourchildren and showing them some of those numbers
and asking them if it's okay thatthey put off buying a home, starting
a family, things like that,because college education has gotten so expensive that

(26:29):
even if you work full time,you're not even going to make a debt
on what college tuition is going tolook like. And that's a big difference
from a lot of people that wentto the college in the sixties, seventies
or eighties. Parents, grandparents,I know you don't like having these conversations,
right It's an exciting time for yourkids and they have these huge hopes
and dreams. But I actually thinkyou're doing them a major disservice if you're

(26:51):
not talking to them about the realityof the debt that they will be facing
on the other side. And Ican tell you personally, I started having
these conversations with my kids in middleschool. I mean in middle school,
they're starting to figure out what theylike and what they don't like. And
you know, my son is fourteen, he's going to be a freshman next
year. He's you know, he'svery big into college sports and things like

(27:15):
that, and we just have conversationsabout, you know, what kinds of
things he's interested in, what he'snot. But we're not talking about you
know, oh, you can goanywhere, and you know, you can
chase whatever. No, because Iactually think I live in the state of
Kentucky. I think we have fantasticschools in the state of Kentucky. I
think there's fantastic schools in the stateof Ohio, in the state of Indiana
where you can get an amazing education. And quite honestly, no one has

(27:38):
asked where I went to college ina job interview since I got my first
job. That's a great point.It is absolutely irrelevant. I could have
gone to Harvard, I could havegone to the Community College of the Ozarks.
I don't even know if that exists. I just made it up.
But point being, nobody cares.Nobody cares anymore. You've got your experience

(27:59):
that you get and you go outthere and you get the first job and
you build from there. And theseare conversations parents that I hope you're having
with your kids so that they're notlooking back like you're saying all these years
later, Well, I wish Iwould have known that, because maybe I
would have done things differently. Thankgoodness for you. You've paid off those
student loans you've made at work.You're the rarity. Most people your age
are still drowning in student loaned atleast a large percentage of them are.

(28:22):
I also finish school in four years, keeping in mind that that is the
rarity. Now five years is moreoften than not the reality. And so
I just think these conversations have tohappen in order for you. And I
think it's a gift actually that you'regiving your kids. And many times you
want to look at the gift asI'm just going to support them the entire
way, And I think sometimes supportingthem is having those difficult conversations. Here's

(28:47):
the all Worth advice. Laying downthe lall about college costs is not easy.
But if you can make your chitkids understand all of the factors involved,
I think it can be a hugewin win for everyone. Come next,
the connection between a new stock marketprediction and you're four to one k.
You're listening to simply Money presented byall Worth Financial. Here in fifty
five K see the talk station you'relistening to Simply Money presented by all Worth

(29:12):
Financial. I mean you Wagner alongwith Steve Ruvi. If you've got a
financial question you are struggling with,maybe it's keeping you up at night.
There's a red button you can clickon while you're listening to the show right
there on the iHeart app record yourquestion and it's coming straight to us and
straight ahead. You ever heard ofa virtual credit card? We'll tell you
when these might make a lot ofsense to use and maybe how they can

(29:36):
save you some money. If youspend any time in financial headlines, you
know, one of the things thatyou're going to see almost every day,
if not every day, is somemajor prediction, right what the stock market's
going to do, what an individualstock is going to do? When you
should run for the hills. I'dlike to look at these predictions. I
like to laugh at these predictions becauseso often they are wrong. And the

(29:56):
latest one that we've come across involves, you know, what you could expect
the stock market to do for therest of the year, because apparently whoever
wrote it does have a crystal ball. That's a good way to look at
it. So this is according toBaron's Big Money Poll, which it's a
lot of money managers in market peopleacross the country. They're optimistic that US
equities will continue to climb in twentytwenty four. They see April's poolback recently

(30:21):
as more of a healthy pause afterseveral strong quarters in a row, and
that is the precursor to further stockmarket gains. This poll it closed on
April eighteenth, and it did generateresponses of about one hundred and twenty investment
professionals across the United States. Halfof the respondents said that they were bullish
about the outlook for stocks over thenext twelve months. Another three in ten

(30:45):
described themselves as more or less neutral. Only fifteen percent said that they were
bearish for the next one year,and the half who said, Hey,
I'm feeling really good about where Ithink things are going to go as this
year progresses came in saying the Dow, the S and P, five hundred,
NASDAC, they predicted all of themto be up about ten percent for

(31:07):
the rest of the year. Soundsgreat, Sign me up for that,
you know, we'll see. Imean so many times we read these predictions.
Sometimes they come true, sometimes theydon't. I mean, last week
we were talking about people who believethat historically the markets are down for the
next six months of the year,As you know, things sort of wind

(31:27):
down. And this is kind ofbased on decades and decades ago when everyone
on Wall Street will go to theHamptons for the summer. I mean,
so one. I mean it's funnytoo. You can look at the same
place, you can look at thesame financial website, financial news source,
and one day it's going to makea prediction that absolutely is the exact opposite
of what it did the day beforethat, and no one's ever saying,

(31:49):
hey, this might sound crazy becausewe said something else yesterday, but here's
what we're saying today. Makes mewant to pull my hair out if it
bleeds. It reads, and theloudest articles are going to get the most
clicks, the ones that are sayingthat the world is ending and you should
sell everything and move to gold,or the markets are are actually going to
go up nine percent. That's that'swhat we like to see. Makes us

(32:09):
feel all good inside. The importantthing is to remember not to act on
this based on emotions. It's actuallyone of the reasons why I do this
radio show. Once upon a timeI worked in a four one to hang
out with me. Oh god,now there was real enthusiasm behind that two
G. Once upon a time Iworked in a four to one K customer

(32:32):
service role. And customer service it'sall about just helping the customer on the
end with what they need. AndI would get phone calls where people would
say, hey, I want totake out a four to one K loan
or I want to stop contributing tomy four to one K and move everything
to cash. You know, Isaw something online and I'm really spooked about
what might be happening. And Iwould say, well, great, you

(32:54):
reached the right place. I'm reallyhappy to help. You. Were never
able to say are you sure?Have you thought this through? Let's look
at your other options, Not untilit became a licensed individual. So eventually,
yes, I was able to hitthe pause button and ask, you
know, the big loaded question ofwhy or have you thought about how this

(33:15):
might derail your financial future? Soyou know, obviously not everybody that we
talked to are going to become clients. But if you hear what we're saying,
and you hear that the noise issomething that we don't need to pay
attention to and it makes you pauseand not make a bad decision with your
four om K. Then that's ahuge win because this example is one that
sparks greed. Perhaps, Hey,if the markets are going to be up

(33:37):
nine percent by the end of theyear, is it time for me to
move everything to one hundred percent stockso I could capitalize on that? Yeah,
what can I do with this information? Let me go all in on
the stock market. I mean,you mentioned greed, and I love this
story. But several years ago themarket had been on a tear and we
had a ninety three year old clientwho called it and said, put me

(33:57):
one hundred percent stocks. Yeah,well, you know, no one that
age has that business taking on thatmuch risk. Yet you're reading these headlines.
It's all of these It's not justone person saying this. This is
a poll of all these money managersacross the country. They can't all be
wrong. Well, of course theycan. We've seen this happen many,
many times. You can read theseheadlines. You can digest these headlines.

(34:19):
The problem is if you do somethingabout it right, change your individual financial
plan, your individual risk tolerance basedon some prediction someone's making you as no
idea, Actually, what's going tohappen for the rest of the year,
whether you're pulling money out of themarket or putting money in. This makes
me extremely nervous. Yes, ifyou put it back in based on this

(34:40):
news, or you take more riskbased on this news, then you have
to realize that that new risk profileis one that's also going to lead to
bigger dips when the markets do havea correction, and if you're not prepared
for that mentally, then that couldput you in a position where you sell
to cash at the wrong time,which is after the markets go down.
So listening to feedback like this tomake emotional decisions is not what any fiduciary
financial planner would recommend. Here's theall Worth advice. If most predictions came

(35:05):
true, well, we would allbe billionaires, right we would be doing
this show from our own island rightnow, or maybe we wouldn't even be
doing it at all because we wouldn'thave to work. Stick to the plan
you created and you will still achieveyour financial goals. Coming up next,
we're delving into the world of virtualcredit cards. Why you might want to
look into these you're listening to SimplyMoney and presented by all Worth Financial.
Here in fifty five KRC the talkstation you're listening to Simply Money presented by

(35:32):
all Worth Financial. I mean youWagner along with Steve Ruby. Tonight on
this show, we are talking aboutsomething we've never discussed before, but you
may have actually seen something about itrecently because they're starting to be talked about
out there. Virtual credit cards.Yeah. These are just like your physical
credit card, but without the plastics. So you get a sixteen digit card
number and expiration dates for each differenttransaction, and it provides an opportunity for

(36:00):
an added level of security when you'reonly using a credit card one time,
one and done. So my husbandmakes fun of me because I of course
go over our credit card statements everymonth with a fine tooth comp and so
I'm constantly what is this charge andwhat is this charge? And it drives
them crazy, but I think it'snecessary. One of the reasons I also
think it's necessary is because we havefour children who have cell phones, and

(36:22):
just a few months ago came acrossthis charge and I was like, what
is this sixty dollars charge? Well, it was an app that one of
our kids signed up for thinking itwas free, and it was free for
the initial period, and then shedidn't cancel it, and so it charged
our credit card and we were ableto go back and get rid of that.
But this is one of the mainreasons why I love the concept of

(36:45):
these. If you are going totry a subscription service or an app or
something like that, you put itin, but you know so many times
that after the initial period then theywant to start charging that card regularly.
If you use one of these virtualcredit cards, they can't hoe if subscription
services are going to play catch upon this one and say you have to

(37:06):
use a physical credit card, nodigital credit cards allow. Would they know
the difference though, I mean,you're putting in credit card information. It's
coming from your credit card company.I'm sure at some point they will catch
up to this, but this isone of those times when you can be
ahead. So if you've gotten maybeone of these emails from your credit card
companies, then ignored it. Iwould kind of file this away for later
and the next time you're signing upfor something, you know, I'm always

(37:29):
putting a note into my phone onthis date, the day before the six
Buyers go back in and cancel this, and it's really such a pain to
get a hold of anyone in customerservice. This makes it that much easier
because you don't have to call themback. They have nothing that they can
charge. They can try to chargethat number. It's not going to work.
Yes, it doesn't exist anymore reallybecause it was tiled that single transaction.

(37:50):
Now, as far as how toget when, there are three major
issuers that are offering them, that'sAmerican Express, Capital One, and City
Bank. So it's worth taking alook at what these providers may have available
for you negatives I guess you know, maybe for in store transactions might be
a little more challenging to use oneof these things. Well, so think
about this. If you were touse one of these in store and you

(38:13):
were buying clothes, and then yougot home and you were like, well
I tried this on, I didn'tlike it. You go to take it
back. Well, often what they'lldo is put that credit back on your
credit card. Will that credit cardnumber no longer works? They're not going
to let you use a different number, right, These stores aren't set up
that way, So then you endup leaving that store with a chunk of
store credit that you may or maynot use later. That's one of the

(38:35):
drawback. And if you make areservation online for a hotel or something like
that and you need to present thecredit card that you use to book it,
that could that could create an issuefor you too. So there are
some great reasons to use these andsome not so great reasons to use these.
I think the key is knowing thatthey're out there and what the difference
is. Thanks for listening tonight.We hope you're going to tune in tomorrow.
We're talking about the push to provideyou with more guaranteed income in retirement.

(39:00):
You've been listening to Simply Money,presented by all Worth Financial here on
fifty five KRC, the talk station