Episode Transcript
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Speaker 1 (00:03):
Tonight a look at how and why the stock market,
the economy, and you, frankly are so resilient. You're listening
to simply Money, presented by all Worth Financial Aimi Wagner
along with Bob Sponseller. Bob, I remember when my daughter
was a freshman in high school. They took this weird
online test that asked them a bunch of personal questions
(00:24):
and then they sent the results to parents, and one
of the things they were measuring is the resilience of
these kids who took the test. And I thought that's
a really interesting thing to be testing. First of all,
a freshman girl, but I thought, gosh, from a longer
term perspective, this is really helpful information because you can't
(00:46):
control what's thrown at you in life, but you certainly
can control how you respond to it. And so I
think resilience is actually a really good thing to have
some awareness about in tonight. I think the reminder is
regardless of what we're dealing with in the headlines today,
and it's going to change from day to day, and
(01:07):
we've got some new information out here right now. Ultimately,
the markets, these large corporations, and we as investors, we
digest the information and we move on. We're incredibly resilient people.
Speaker 2 (01:23):
Absolutely, And first of all, it's great to get that data,
you know, on your own daughter. That's great stuff to have.
And I know from coaching high school baseball for a
long time, I was always uh surprised and pressed blown
away by the resiliency of these kids that played baseball
for us. They can handle stuff and they let it
(01:43):
roll off their back and they move on. But anyway,
good to hear that about it.
Speaker 1 (01:47):
Well, and then let's continue with that, because on the
flip side, in sports, right, something bad happens and inevitably does.
If you're so focused on the bad thing that doesn't
you can't get back in the game.
Speaker 2 (01:57):
Well, especially in baseball. Baseball is a game of failure.
Yeah right, you get out seven out of ten times,
you're still going to the Baseball Hall of Fame. And
don't get me talking about baseball or will waste the
whole show?
Speaker 1 (02:09):
Listen, Marry, I took us there. But it is a
great point to make. And so you know, when you
look at the resilience, Also, you need to understand how
the US economy is built. In seventy seventy five percent
of It is based on consumer spending. And during this
time of insane market volatility, lots of unknowns, consumers are
(02:30):
still spending. We are resilience.
Speaker 2 (02:34):
Yeah, and you and I got to hear doctor David
Kelly from JP Morgan what about three weeks ago, give
a very compelling and very very informative speech. You know,
he's the global strategist for JP Morgan, looks at a
lot of data, talks to a lot of people. And
the one thing he said during that speech that stuck
(02:54):
with me the most amy is he said, the American
people will always do two things. They will work a
little bit too hard yep, and they will spend a
little bit too much. And I think that ecomy it
keeps on rolling. So yeah, seventy percent of gross domestic
product is made up of good old consumer spending. And
(03:18):
the latest retail sales report, retail sales in the US
surged one point four percent in March, the biggest increase
in more than two years. Why that happened, we don't know.
You know, people might be pre purchasing items. And we
talked about this yesterday, joking around things. Yeah, people went
(03:39):
out to eat. Sales at restaurants jumped one point eight
percent in March to mark the biggest increase since January
of twenty twenty three. I don't know why all the
restaurants were full in March and empty in January. Maybe
it has something to do with.
Speaker 1 (03:54):
Winter, Yeah, the weather, Maybe it does.
Speaker 2 (03:57):
The point is we're still, you know, pumping along here,
spending money. Things are moving along. So yep. The the
American people are resilient and they will always spend money
as long as they have some in their pocket and spending.
Speaker 1 (04:11):
More even than Wall Street expected here. And that certainly
doesn't mean we have no issues coming down the pike,
but it means that, you know, despite all of it.
And I think it's really interesting because in a lot
of this research, Americans will say we're going to do
one thing, but we're actually going to do another. So
if you talk to if you look at some of
the research, it'll say, oh, when I get my tax
return this year, I'm going to save it because I
(04:34):
because of this volatility, or you know, I am going
to go on less vacations this year. But in reality,
people are still going to go on vacation.
Speaker 2 (04:42):
I think it goes back to answering to teachers and parents,
our whole life. Amy when somebody.
Speaker 3 (04:47):
Asks you tower you know what the right answer is exactly,
and you're going to give that right answer just to
avoid somebody punishing you or telling you you're wrong.
Speaker 2 (04:55):
Meanwhile, you're going to go off and do what you
need to do. You're going to do it, You're gonna
do You're taking me back to my seventh grade misbehavior years.
Speaker 1 (05:03):
I'm sure they didn't end in seventh grade, but I
don't know. We'll see. But yeah, we're still spending. And
it's not just you know, the latest retail sales numbers
that I've seen. There's new research out from American Express
that says we're still spending. All the numbers point to that.
And you know, for those who are getting nervous right now, thinking,
you know, maybe you need to make a change with
(05:24):
your four one K because of this volatility, this is
where I say it's really really important to understand how
our economy and how markets work, because when people stop spending,
there will be a change. But people are still spending,
and there's no sign in the near future that we're
(05:44):
going to take our foot off the gas when it
comes to spending.
Speaker 2 (05:49):
Yeah, people will generally spend less money when fewer people
are working.
Speaker 1 (05:54):
Right, Yeah, that's concerned about your next.
Speaker 2 (05:56):
And now let's put all the joking aside. I mean,
if we go into words recession and unemployment starts to rise,
people lose their jobs, they don't have that money in
their pocket to spend, and that's where you'll see spending
come down. Is that coming down the pike? We don't know.
But based on the latest data, you know, taking emotion
and politics out of it and looking at data, so far,
(06:19):
we've seen no let up in consumer spending money as
of March.
Speaker 1 (06:24):
You're listening to simply Money presented by all Worth Financial.
I mean, me Wagner, along with Bob Sponseller, we're talking
about resilience. How resilient are you? Consumers? Collectively? We're very resilient.
We're still spending and so I think it's easy to
look at these headlines and all the volatility and all
of the uncertainty in the markets and in the headlines
(06:45):
right now and think, oh, should I be doing something?
But you got to understand, first of all, we are resilient,
but second of all, these large companies are incredibly resilient.
They're always innovating, they're already digesting you know, what do
tariffs mean for US? Ways around these tariffs? And I
think that's maybe one of the biggest points. And it
was like when a light bulb went off for me
(07:06):
a couple of years ago, when our chief investment officer,
Andy Stouts it was probably one of them. He's incredibly smart.
It was probably one of the most profound things I've
ever heard him say. But he essentially made the point
that as an investor, what you're investing in is corporate greed.
These large companies figuring out new ways to make money.
So we can get really into the latest policy the
(07:30):
impact of that. You know, now there's headlines about you know,
interest rates and where they should go in the future,
and what the Federal Reserve, our nation central bank should
be doing. You've got our president saying we need to
fire the head of you know, the FED, and that
can that can feel like, oh my gosh, what next?
What next? Honestly, regardless of how that plays out, two
(07:54):
things are going to happen. You're going to keep spending
and these companies are going to figure a way around
the implications of whatever decisions are made in all of
these respects and they're going to figure out new ways
to make money.
Speaker 2 (08:07):
Yeah. I think what you're referring to here, Amy is
is the power of companies, which are made up of
people smart, hardworking, intelligent.
Speaker 1 (08:16):
People, incentivized, highly incentivized.
Speaker 2 (08:18):
Incentivize people to innovate and find new ways to make money.
And that word greed means different things to different people.
I would just say, companies are there to make a profit. Yeah,
I mean that's why they're there. And if companies aren't
making a profit, they're going to go out of business,
which means people lose their jobs. So a couple of
(08:38):
example here, go back to Apple in the early two thousands,
they were just a computer company. Well then Lo and behold.
Then came the iPod, the iPhone, iPhone, the whole Apple ecosystem.
Now they're into AI, cloud stuff. They just constantly innovate
and they became one of the biggest tech firms on
the planet. And you talk all the time about Amazon,
(09:01):
I mean, look at what Look at the innovation that's
gone on with that company. They started off as just
a selling books, Yeah, and now they're selling everything, They're
delivering everything. They have totally revolutionized the customer experience. No
one saw that coming, but a bunch of creative, hardworking,
to your point, highly incentivized people found a way during
(09:26):
all the market turbulence and geopolitical stuff going on, and
they built themselves into a global powerhouse.
Speaker 1 (09:32):
Yeah. I got something from Amazon yesterday. And it's funny
that we're talking about this now because I literally stood
there with the package in my hands and thought, this
is so crazy that I ordered this super random kitchen
gadget and in less than twenty four hours later, it
is on my doorstep. The logistics of that being able
to happen are truly beyond my comprehension. But yes, these
(09:55):
companies are figuring out ways to blow our minds all
of the time in order to money and to continue
to grow. They're going to continue to do that. And
then what you have to understand too, that keeps those
things on the rails, right, that keeps us as consumers spending,
and that keeps those companies in a place where they
can innovate and continue to grow, is the fact that
(10:16):
our government is built in a way that when things
get off the rails, they have the power, hopefully to
put them back on. And that's when you look at
policy and the Federal Reserve, our nation central bank and
what it's set up to do.
Speaker 2 (10:30):
Well, up, they're set up to keep us at full
employment and control inflation.
Speaker 1 (10:35):
Yeah, which is important, right, because those are the things
that when they get off the rails, that's where the
economy goes sideways.
Speaker 2 (10:41):
Right. And I'll say, never underestimate the ability or the
power of any government to print money and stimulate the economy. Yeah,
And we've seen that happen, you know, going back to
the financial crisis, where we had we were running a
big risk of banks failing, and we got quantitative of easing,
we got you know, the two big to fail stuff,
(11:02):
stimulus tests. And then it's recently is the COVID pandemic
in twenty in two thousand, twenty twenty, you know, you
saw the government with the economy shut down. People couldn't work.
If nothing had happened, that could have been a disastrous recession.
And the CO and the FED and the government came
in with stimulus texts to try to keep things on
(11:25):
the rails, so to speak. I mean, you gotta we
got to eventually pay for that because it adds to
national debt. But it does tend to smooth out the
severity of economic declines in the country. And never underestimate
the power of Congress and the Fed to do that.
That's part of why they're there.
Speaker 1 (11:44):
They have certain tools in their tool blox for exactly
those things. Often those tools, when used have longer term
implications on the economy, but yeah, they can smooth out
a lot of that volatility in the short term. And
I think, you know, going back to that just concept
of resilience, our government is set up for this capitalism
and the way that our country runs, these big business runs,
(12:07):
and we are also wired for the spending in all
of that together means when you do feel anxious, remember
you are resilient in every We're a very resilient country.
Here's the all Worth advice, do not estimate underestimate the
power of resilience. The next time you're reading headlines that
predict worst case scenarios, we're incredibly resilient people. Coming up next,
(12:30):
we're talking about how to survive a bear market. Depending
on how old you are. You're listening to Simply Money
presented by all Worth Financial here on fifty five KRC,
the talk station you're listening to Simply Money, presented by
all Worth Financial. I mean you Wagner alone with Bob's
spond teller. If you miss our show one night, you
(12:50):
don't have to miss anything we talk about. We've got
a daily podcast, just search Simply Money. It's on the
iheartapp or wherever you get your podcasts. Coming up at
six forty three. You guys have so many questions about
estate planning, a really good one about bond laddering, and
a whole lot more. We'll get to those in just
a few minutes. I think regards. I think when I'm
(13:11):
having these conversations right now Bob about market volatility, it
depends on how old the investor is, on what kind
of response I get. When I'm talking to someone who
has been putting money into their four one case since
they were in their twenties, and they're their seventies now,
even though they're retired and maybe have a reason to
be a little nervous, they're like, not my first rodeo, right,
(13:33):
not my first rodeo. This can feel different market volatility
and even bear markets, depending on what age you are
and your stage in life.
Speaker 2 (13:44):
Yeah, I think the phrase you know time in the
market not timing the market applies here, but there's also
some behavior components, behavioral components on the kind of things
you need to be thinking about depending on your age
and time horizons. So, you know, let's talk about folks
in their twenties and thirties. And I've got three, you know,
my wife and I have three adult sons that are
(14:04):
in this you know phase, and they're just kind of
getting started out, you know, in four to oh one,
k's bought their first homes, setting up emergency funds, having
their first kid, all that kind of stuff. And then
along comes, you know, market volatility, and people react differently
to that. And I hate to paint with a broad,
(14:24):
too broad of a brush, but sometimes folks in their
twenties and thirties really don't understand or want to listen
to the whole concept of an emergency fund. Yeah, they
either want that money in their pocket to buy the
next ticket to the Jewel concert, or or you know,
they they don't have a lot of extra money laying around.
(14:47):
And what tends to happen is if you get yourself
into a situation where you don't haven't prepared for any
kind of an emergency, that's where that credit card balance
can rear its ugly head, and that's where you can
dig your yourself, you know, a good hole. So a
thing to keep in mind, especially for younger people. It
is boring, it's not exciting. You're not taking advantage of these,
(15:10):
you know, recent market drops. But make sure you've got
that emergency fund built up in case you change jobs,
lose your job, you know, your car breaks down, something
like that.
Speaker 1 (15:20):
I think it's easy to be like, oh, it's not
going to happen to me. Yeah, when you're in your
twenties and thirties, you feel invincible. We all remember well or.
Speaker 2 (15:27):
If it happens, mom and dad took care of it.
Speaker 1 (15:29):
Yeah, that's true. So now you're on your own for
the first time. I have some friends who in our
thirties and it wasn't an emergency. It was big brother
had a really cool car. It was a BMW. He
was selling it. He was going to sell it to
them at a really good price. They didn't have any
money for it. What did they do? They rated their
four oh one ks, you know, and it was like oh.
Speaker 2 (15:49):
And paid taxes and penalties and all that across the board.
Speaker 1 (15:52):
Not the best financial decision because there wasn't an emergency
fund sitting there, so was that an emergency? Not necessarily,
It was an opportunity, but they had to go to
a place that wasn't the best for them long term
to turn to it. And I find it's credit cards
and it's rating our retirement accounts that we do. So yes,
(16:13):
I think, listen, how to survive a bear market in
your twenties and thirties, understand market cycles, and make sure
that you have a well funded emergency fund.
Speaker 2 (16:23):
All right, Amy, let's shift gears and talk about what
you should be thinking about maybe in your if you're
in your forties and fifties right now.
Speaker 1 (16:30):
Yeah, And I think this is important to understand too.
Time is still on your side. I'm in my late
forties now. My friends are starting to talk about retirement right.
It seems like it's a little bit on the horizon now.
And I have some that are nervous. They're like, huh,
I never really paid attention to market fall utility before,
but now it feels like this could impact us, could it.
I mean, we've got maybe two three for you know,
(16:52):
more market cycles before we're actually probably going to retire cash.
Still having that cash reserves is part of the process.
And then I think it's really important to drill down
on your acid allocation. Right when you're in your twenties
and thirties, one hundred percent in the stock market might
feel exactly right for you. You've got years and years
and years get yourself exposed to as much growth as
(17:13):
you possibly can. But now I think is a really
good time to take your pulse again and say, do
I still feel that way? Can I still you know,
stomach this volatility. Maybe the answer as you get closer
to retirement and it's on the horizon, is dialing back
your your stock market exposure.
Speaker 2 (17:30):
Yeah, you took a lot of those words right out
of my mouth, so I won't repeat them. But I
think what happens for folks in their forties and fifties is,
you know, you get to that point, this is where
people actually have some money.
Speaker 1 (17:40):
It's real money to you well, and there's more of it.
Speaker 2 (17:43):
Yes, So when you see a six eight ten percent
market decline, you're looking at dollar signs, and the dollar
signs of that drop tend to be bigger, and you're
like wow.
Speaker 1 (17:52):
And you know how long it took you? You had
absolutely get that money.
Speaker 2 (17:56):
Yeah. Yeah, So to your point, Amy, I think that's
this is it's times like that where you want to
stress test your portfolio and you want to dovetail that
with your long term financial plan and make sure that
your overall investment allocation Number one is going to get
you to your long term retirement goals. But number two,
(18:16):
we are investing your money within guardrails, so to speak,
where if we have volatility, it's not going to emotionally
overwhelm you to the point where you make that phone
call that somebody should never make, and that's say, you know,
get me to cash. I can't take it anymore. And
I've told you this before, like if for me, if
(18:37):
a client ever does that, that's when I feel like
I've failed as an advisor because we haven't had that
talk in advance about what your guard rails from a
risk standpoint actually are.
Speaker 1 (18:48):
And I think you know, for those who are in
your sixties, this is like a maybe losing sleep right now,
you plan for this, right you make sure that you
know maybe your income is coming from less volatile assets
that you have planned for it. That's when cash reserves
become incredibly important. Maybe we turn off distributions that we're
taking from our investment assets and live off of those
(19:10):
cash reserves. So this is where when I say you
build your boat for the storm man, if you were
getting close to retirement, you better not only build that boat,
you better stress tested and make sure it's not lenken well.
Speaker 2 (19:22):
And as far as a distribution strategy goes, this is
where it's important, I think, to have that two to
three years worth of cash needs in non volatile assets
so you could take your income from those assets during
volatile times and not have to sell stocks when they're down.
And a lot of people in their sixties and seventies,
(19:43):
to your point, they've been through this before. They understand that,
and they follow that advice.
Speaker 1 (19:48):
Here's the all Worth advice. The key to surviving a
bear market staying disciplined, keep investing, be diversified, and align
your strategy with your long term goals, no matter how
old you are. Coming up next, let's take deep breath
from all of this heavy stuff we've been talking about
market volatility and focus on spring. We've got the top
spring home makeovers for less than hundred bucks. That's next.
(20:09):
You're listening to Simply Money presented by all Worth Financial
Here in fifty five car see the talk station you're
listening to Simply Money, presented by all Worth Financial Imm
Wagner along with Bob Sponseller. You know, for many the
question is should I stay or should I go? Talking
about in your current house or does it make sense
(20:30):
to move? And I would say, wherever you land on this,
there are some affordable upgrades that you can make that
are either going to make where you're staying more enjoyable
for you, or if you're going to put your home
on the market, it's more attractive to other home buyers.
Joining us tonight with some great perspective on some really
affordable things you can do to your home right now
(20:53):
is our real estate expert Michelle Sloan, of course, owner
of Remax Time. Michelle, I think we run the gamut
on this, but many times we think about, Okay, if
I'm going to do something that's going to be really
impactful to my house, it's like a fifty thousand dollars
kitchen upgrade. We don't have to spend that much.
Speaker 2 (21:10):
No, we don't.
Speaker 3 (21:10):
And I think if we're doing little things along the
way as we own our property, it will always make
it refreshed, make you feel refreshed about your home. And
then when the time comes, because sometimes we decide to
sell our home because and we weren't even we're not
even looking for it, maybe an opportunity comes along that
you just cannot pass up, and you're like, oh, my gosh,
(21:33):
I want to buy this other house. Maybe it's two
doors away from my kids or my grandkids or something
like that. I want to buy this house. I didn't
even think about putting my home on the market. But
if you've been doing little upgrades along the way, of course,
the big ones we always talk about kitchens, bathrooms, flooring,
all of that. Absolutely, you should do that when the
(21:55):
time is right. But you know, we're focusing today on
the little things that we can do under one hundred dollars.
The first one is how many photos have you taken
on your phone and you're like, oh, that's gorgeous. You
have digital photos of vacations and our kids and our
grandkids and our dogs. I mean, that can be a
(22:19):
DIY kind of art project where you can actually and
people don't do this as much as we used to
actually print some of those, enlarge some of those photos
and display them in your home so that you can
enjoy them over and over again and look at them
every single day and remember how happy that vacation was
(22:41):
and how sunny that vacation was. Well, because we don't
see that all the time around here.
Speaker 1 (22:47):
And that's a great point. I have a good friend
who I recently visited and they printed out just some
eight x ten black and whites of their kids when
they were younger, and it was a DIY project. They
put it through a couple pieces in the middle of
a couple pieces of plexiglass and mounted it on the wall.
It looked so cool. It was such a statement and
she was like, we did this for less than one
hundred bucks, you know. So I think sometimes it's a
(23:09):
you know, you can get creative and you can do
things for really affordable too. Sometimes too, we get into
a rut in our homes and it's like the way
that the furniture is is the way that it's always been,
and you can just kind of rearrange things and have
a really different feel. Absolutely.
Speaker 3 (23:26):
I mean, along with the spring cleaning, and that's going
to be one of my top tips. It's something that
I think everybody does not like to do at least
for me, I hate it. But at the same time,
if I'm doing spring cleaning and I want to get
really underneath the couches and behind the chairs while you're
doing that cleaning, how about mixing up that room, mixing
(23:47):
up the furniture, putting the couch in a different location.
If you can in a couple of the chairs, and
you have a whole new space, and you're like, oh wow,
I remember when I was a kid, you know, we
would do spring cleaning and we would move I bet
in my room to the opposite wall, and it was
like I had a new bedroom and it was kind
of cool. And at the same time, you know, it
(24:09):
makes you feel like, oh wow, you know, you're enjoying
your space. You're just cleaning and a clean space maybe
with a new layout, is always fun.
Speaker 2 (24:22):
All right, Michelle, Speaking of clean spaces, I want to
touch on a topic that's near and dear to my
wife's heart, the whole topic of organizing and decluttering your home.
I know, personally, if there's something I haven't worn or
used within three to four months, I'm in danger of
having that stuff packed up and shipped out. So how
(24:43):
important as a real estate professional that it helps people
market and sell their homes. How important is it to
have a potential buyer walk into a home that is
in fact decluttered.
Speaker 3 (24:55):
It is the most important thing that you can do.
Aside from cleaning, Cluttering can make your space look bigger,
and your closets. So if again, I have my primary closet,
I share with Scott Sloan. He's the neat guy, so
his all of his shirts are lined up, his pants
(25:15):
are all lined up, everything's all put away, real nice
and pretty. My side is a little bit of a
jumpled mess. I know exactly where everything is, but it
is not pretty to look at. So if I were
to sell my home, I would probably have to take
ninety percent of the clutter in my closet away, whether
I pack it into boxes and decide that I'm going
(25:37):
to take it with me, or at least at this
point you can put away well, I don't know. I
hope that we can put away all of our winter clothes.
Speaker 1 (25:46):
That's debatable and Cincinnati.
Speaker 3 (25:48):
Right, we can pack away and like the whole closet.
If the hole closet is a place where you have
three or four jackets, you have shoes and boots and
scarfs and hats and you know, so many things. A
lot of that stuff can be pared down to one
ball cap, two jackets, and maybe one extra pair of
(26:09):
shoes in that closet and that's it. So you really
need to So as far as moving stuff out, Bob,
I don't know.
Speaker 2 (26:17):
So my fifty and I'm not exaggerating here, my fifty
baseball caps that I've got lined up in my class,
that's a no no, Right.
Speaker 3 (26:26):
You get those in a box. Yeah, find a clear
box for yourself.
Speaker 2 (26:30):
I knew this was all going to end up in
me having to listen to my wife. So thanks, Michelle,
You're welcome.
Speaker 3 (26:35):
You're welcome.
Speaker 2 (26:36):
See.
Speaker 3 (26:36):
I also have to take my own advice, and honestly,
it is not easy. And when I go to people's
homes and they're like, oh my gosh, don't look at
this mess, I'm like, yeah, that's the way we live.
I mean, we have more stuff than we actually need.
We're all so blessed for the most part, right, we
are so blessed and we have more than we need.
(26:56):
So when you are selling your home or when you're
just going and doing this really deep spring cleaning, really
think of those thirty ball caps. How many of them
do you really wear?
Speaker 1 (27:11):
Two?
Speaker 2 (27:12):
I better not answers.
Speaker 1 (27:15):
I think the takeaway for Bob here is that you're
never going to find any guests coming on our show
that's going to say that your wife is wrong. She's
just really smart. So Carrie is always right in Michelle.
What other things should we be thinking about decluttering? Uh,
you know, deep cleaning, maybe moving furniture around, maybe some
diy wall or anything else we can be thinking about
(27:36):
right now.
Speaker 3 (27:37):
You can easily refresh your decor as well. So if
you have and this is what I always recommend, that
you have a neutral paint color on the walls. If
you have that neutral accessible beige or agreeable gray on
your walls, and you can find some different pops of
color in maybe some decorative pillows, and it really will
(28:02):
add a little pop and a little something new to
your home. Now again, if you come home with new
pillows every three months, someone may not be happy about that.
But if you're getting rid of the old and bringing
in the new, okay, that's fine. But you can definitely
shop at the discount realtors have or discount retailers.
Speaker 2 (28:23):
Actually, they have a lot.
Speaker 3 (28:24):
Of different kinds of just throw pillows or maybe some
area rugs. That won't be too expensive, but it will
add just a little bit of extra flair to your home.
And then if we go back to the paint situation,
if you have not painted and you have bright yellow walls,
it may cost more than one hundred bucks. It probably will,
(28:46):
but you know, paint is the most affordable way to
change your space, update your space and give you a fresh,
clean and very very nice look.
Speaker 1 (28:57):
Yeah, I think great ideas.
Speaker 2 (28:59):
Right.
Speaker 1 (28:59):
You don't have to be moving this spring to give
yourself an entirely different feel to your own home, and
you can do that super affordably. Great insights as always
from Michel Sloane, our real estate expert. You're listening to
Simply Money presented by all Worth Financial here on fifty
five KRC, the talk station. You're listening to Simply Money
presented by all Worth Financial. I mean Me Wagner along
(29:20):
with Bob Spondseller. Do you have a financial question you
really want to figure out right now? There's a red
button you can click on while you're listening to the show.
It's right there on the iHeart opera. Coord your question.
It's coming straight to us and we're getting straight to
your questions. First one from Martin and Anderson. I have
some company stock makes up about fifteen percent of my portfolio,
but I feel like I've got plenty of money, and
(29:42):
I plan on leaving that stock to my heirs. Since
my time horizon is so long, shouldn't I just leave
it alone?
Speaker 2 (29:49):
Well, there's usually a couple of reasons why people hold
on to these concentrated positions. One is they have in
depth knowledge of the company. They've worked for the company,
and they feel like they know the company and are
very loyal to the company. Another reason is they might
have inherited that stock and there's some emotional attachment to
it because it came from a parent and aunt and
(30:10):
uncle something like that. So the first thing I'd say
to Martin is why why is it important? Is it
important to hold fifteen percent of your net worth in
any one company? And if it's not, what are the
tax implications of gradually diversifying out of that position. Fifteen
percent is a whole lot better than forty percent or
(30:31):
sixty percent. But people are hesitant to sell these stocks
sometimes because of capital gain exposure, and if it makes
sense for your plan, Martin there are ways to gradually
move out of a highly concentrated position, get more diversification,
and not have to pay as much in taxes as
(30:52):
you might think.
Speaker 1 (30:53):
Yeah, we don't know enough about martin situation today. You're
definitely never going to have to touch this, right, But
if you're reasonably certain that you're not going to to
from an inheritance standpoint, it may not be such a
bad thing, right because you might create significant capital gains
if you sold it now your heirs will inherit that
at a stepped up basis. What I think is missing is,
(31:14):
and I often see this, and I came across someone
recently who inherited a lot of company stock. The company
is not doing well, and she is not going to
sell it because she is so emotionally tied to it
meanwhile to the detriment of her entire financial situation. So
if you do think it's smart to earmark this particular
(31:35):
company assets for your children, that's fine. But also don't
pass on to them the burden of holding on to it,
because they get to start over with the cost basis
of it, and it might make sense for them to
sell out of that position rather quickly. Don't guilt trip
them and holding on to something that shouldn't be emotional
to them because it's an asset that could be life changing,
(31:59):
that could greatly them. So I think it's important and
it's weird, but I see it far too often an
emotional tie. And sometimes you even have people saying, do
not sell this company's doc. Well, then you're just passing
on that's right, something else that someone has to hold
on to till the next generation doesn't make any sense
to me. Next question from John and Villa Hills. He
was listening earlier this week. He said, you briefly spoke
(32:20):
about bond laddering the other day. Can you please give
me a more detailed explanation of how that works?
Speaker 2 (32:26):
Yeah, John, our industry is great about having all this
jargon and complex terms that nobody understands. Let me do
the best I can to simplify this. All bond laddering
is is holding a portfolio of bonds that mature at
different dates. Think about it. If you walked into the bank,
you can buy a three month CD, you can buy
a six month CD. You could buy a three month CD,
(32:48):
you can buy a five year CD. The same thing
happens with the bond market, and like we talk about
all the time, it is extremely difficult to predict the
movement of short terms and that's why most people don't try.
You know, just like with a stock portfolio, you build
a diversified bond portfolio, and all laddering means is you
(33:11):
have different time horizons of different bonds, they mature at
different times, and then you've got that cash available to
take a look at, well, what is the interstrate environment,
what's the best bond by now based on the current
interstrate environment. Rather than having all your bonds or all
your eggs tied up into one maturity, laddering it out,
(33:34):
diversifying out in terms of time horizon. That's what bond
laddering means. I hope that helps, And if it doesn't, John,
call back and ask again and we'll address it again.
Speaker 1 (33:44):
Yeah, yep. Next question from Dan and Westchester. How do
I know if my portfolio is still aligned with my
goals when the market keeps shifting? I would say the
market's shifting is a really good test of whether your
portfolio is aligned with your goals. For instance, if you
decided several years ago that the proper asset allocation for
(34:04):
you is eighty percent stock exposure, twenty percent bonds fixed income. Right,
and then all of a sudden markets went on a
tear in twenty twenty three, twenty twenty four, and now
you are losing sleep at night because there's so much
volatility in your portfolio. Okay, well, then that's probably a
good sign that it's not well designed for where you
are right now and your long term needs.
Speaker 2 (34:25):
Yeah. And the piggyback on that, I mean Andy Stout,
our chief investment officer, always makes a great point. He's like, hey,
when you talk to a client about risk tolerance, that's
one snapshot in.
Speaker 1 (34:35):
Time, yep, and during how they're feeling that day.
Speaker 2 (34:38):
That's right, And when the market's really going gangbusters, people
have an entirely sometimes entirely different tolerance for risk is
when the market is down yep. And that's why we
do annual reviews with our clients. We talk about their
risk tolerance all the time, and then we dovetail that
with their long term financial plan and make sure all
of that stuff is aligned because job number one here,
(35:00):
irrespective of short term market movement, our job is to
make sure our clients don't make mistakes from which they
can't recover and amy. We like to have our clients
with an eighty five to ninety five percent probability that
they are going to meet their long term financial goals
irrespective of what goes on in the markets, and that's
(35:21):
what helps our clients sleep at night.
Speaker 1 (35:23):
Yep. Coming up next, we're going to an interesting place
inside Bob's mind.
Speaker 2 (35:28):
I don't know if you want to go there this week.
Speaker 1 (35:29):
I don't know is world of wealth bonds? What do
you need to be thinking about? You're listening to Simply
Money presented by all Worth Financial here on fifty five KRC,
the talk station. You're listening to Simply Money presented by
all Worth Financial. I mean you Wagner along with Bob's bondsellar.
But we've been talking about the bond market a lot lately,
(35:52):
and in today's Bob's World of Wealth, let's get into
a little more detail on that.
Speaker 2 (35:58):
Yeah, I figured we touch on this because we haven't
been able to touch on it earlier. This week. We've
talked about bond maturities, we've talked about bonds cushioning, portfolio volatility,
but what we haven't talked about is to make darn
sure you're checking the credit quality of your bonds. Here's
what I mean by that. A lot of investors can
be enamored by that term high yield bond fund. Everybody
(36:21):
likes high yield, high interest. I just want to draw
attention to the fact that oftentimes high yield comes with
lower credit quality. When you're talking about these high yield
bond funds, those are generally all corporate bonds that are
below investment grade rated. And if you're just chasing yield
and not looking at credit quality, amy, I've seen this
(36:44):
happen many, many times throughout my career. These high yield
bonds funds can often move and be as volatile as
the stock market, and people can get surprised by that.
And I even short term high yield bond fund I
saw a period of time about twenty years ago where
those things went down. You know, I'm talking short term maturities.
Speaker 1 (37:07):
Yeah.
Speaker 2 (37:08):
Uh, they went down ten to fifteen percent in an eyelid,
you know, in an instant. So be careful about the
credit quality of your bond portfolio. And if you're not
sure how to do that, that's another reason to sit
down with a fiduciary advisor that could show you what
you own, and make sure we keep you out of
harm's way.
Speaker 1 (37:28):
Not all bonds are created equal, and I think that
a lot of investors don't fully understands bonds. So it's
like a bond is a bond is a bond, That's right,
And that's not actually true. You could be investing in bonds,
you know, high yield bonds to your point, that are
as volatile as anything in the stock market, any individual
stocks that you can find in the stock market. So
(37:50):
you know, I'm glad that you're kind of, you know,
looking under the hood here and explaining this about bonds,
because I think there is the interests with volatility in
the stock market right now of bond. Next step that
is to say, okay, I'm interested. I'm doing my research
to make sure that these are the right kinds of
bonds for me to be invested in.
Speaker 2 (38:08):
Yeah. Again, the shiny object there is yield and high interest,
and we naturally gravitate to that, and that makes sense.
But again to your point, we got to look under
the hood and know what we're buying and why.
Speaker 1 (38:20):
Yeah, just incredibly important and I think it's smart during
times of volatility to say, am I truly diversified. Maybe
I haven't thought about bonds in my portfolio before, and
maybe it's something that I should be considering now.
Speaker 2 (38:32):
Right.
Speaker 1 (38:32):
They often do work really well as shock absorbers, and
then you've got to figure out am I investing in
the right kinds of bonds? Thanks for listening. You've been
listening to Simply Money, presented by all Worth Financial here
on fifty five care see the talk station
Tonight a look at how and why the stock market,
the economy, and you, frankly are so resilient. You're listening
to simply Money, presented by all Worth Financial Aimi Wagner
along with Bob Sponseller. Bob, I remember when my daughter
was a freshman in high school. They took this weird
online test that asked them a bunch of personal questions
(00:24):
and then they sent the results to parents, and one
of the things they were measuring is the resilience of
these kids who took the test. And I thought that's
a really interesting thing to be testing. First of all,
a freshman girl, but I thought, gosh, from a longer
term perspective, this is really helpful information because you can't
(00:46):
control what's thrown at you in life, but you certainly
can control how you respond to it. And so I
think resilience is actually a really good thing to have
some awareness about in tonight. I think the reminder is
regardless of what we're dealing with in the headlines today,
and it's going to change from day to day, and
(01:07):
we've got some new information out here right now. Ultimately,
the markets, these large corporations, and we as investors, we
digest the information and we move on. We're incredibly resilient people.
Speaker 2 (01:23):
Absolutely, And first of all, it's great to get that data,
you know, on your own daughter. That's great stuff to have.
And I know from coaching high school baseball for a
long time, I was always uh surprised and pressed blown
away by the resiliency of these kids that played baseball
for us. They can handle stuff and they let it
(01:43):
roll off their back and they move on. But anyway,
good to hear that about it.
Speaker 1 (01:47):
Well, and then let's continue with that, because on the
flip side, in sports, right, something bad happens and inevitably does.
If you're so focused on the bad thing that doesn't
you can't get back in the game.
Speaker 2 (01:57):
Well, especially in baseball. Baseball is a game of failure.
Yeah right, you get out seven out of ten times,
you're still going to the Baseball Hall of Fame. And
don't get me talking about baseball or will waste the
whole show?
Speaker 1 (02:09):
Listen, Marry, I took us there. But it is a
great point to make. And so you know, when you
look at the resilience, Also, you need to understand how
the US economy is built. In seventy seventy five percent
of It is based on consumer spending. And during this
time of insane market volatility, lots of unknowns, consumers are
(02:30):
still spending. We are resilience.
Speaker 2 (02:34):
Yeah, and you and I got to hear doctor David
Kelly from JP Morgan what about three weeks ago, give
a very compelling and very very informative speech. You know,
he's the global strategist for JP Morgan, looks at a
lot of data, talks to a lot of people. And
the one thing he said during that speech that stuck
(02:54):
with me the most amy is he said, the American
people will always do two things. They will work a
little bit too hard yep, and they will spend a
little bit too much. And I think that ecomy it
keeps on rolling. So yeah, seventy percent of gross domestic
product is made up of good old consumer spending. And
(03:18):
the latest retail sales report, retail sales in the US
surged one point four percent in March, the biggest increase
in more than two years. Why that happened, we don't know.
You know, people might be pre purchasing items. And we
talked about this yesterday, joking around things. Yeah, people went
(03:39):
out to eat. Sales at restaurants jumped one point eight
percent in March to mark the biggest increase since January
of twenty twenty three. I don't know why all the
restaurants were full in March and empty in January. Maybe
it has something to do with.
Speaker 1 (03:54):
Winter, Yeah, the weather, Maybe it does.
Speaker 2 (03:57):
The point is we're still, you know, pumping along here,
spending money. Things are moving along. So yep. The the
American people are resilient and they will always spend money
as long as they have some in their pocket and spending.
Speaker 1 (04:11):
More even than Wall Street expected here. And that certainly
doesn't mean we have no issues coming down the pike,
but it means that, you know, despite all of it.
And I think it's really interesting because in a lot
of this research, Americans will say we're going to do
one thing, but we're actually going to do another. So
if you talk to if you look at some of
the research, it'll say, oh, when I get my tax
return this year, I'm going to save it because I
(04:34):
because of this volatility, or you know, I am going
to go on less vacations this year. But in reality,
people are still going to go on vacation.
Speaker 2 (04:42):
I think it goes back to answering to teachers and parents,
our whole life. Amy when somebody.
Speaker 3 (04:47):
Asks you tower you know what the right answer is exactly,
and you're going to give that right answer just to
avoid somebody punishing you or telling you you're wrong.
Speaker 2 (04:55):
Meanwhile, you're going to go off and do what you
need to do. You're going to do it, You're gonna
do You're taking me back to my seventh grade misbehavior years.
Speaker 1 (05:03):
I'm sure they didn't end in seventh grade, but I
don't know. We'll see. But yeah, we're still spending. And
it's not just you know, the latest retail sales numbers
that I've seen. There's new research out from American Express
that says we're still spending. All the numbers point to that.
And you know, for those who are getting nervous right now, thinking,
you know, maybe you need to make a change with
(05:24):
your four one K because of this volatility, this is
where I say it's really really important to understand how
our economy and how markets work, because when people stop spending,
there will be a change. But people are still spending,
and there's no sign in the near future that we're
(05:44):
going to take our foot off the gas when it
comes to spending.
Speaker 2 (05:49):
Yeah, people will generally spend less money when fewer people
are working.
Speaker 1 (05:54):
Right, Yeah, that's concerned about your next.
Speaker 2 (05:56):
And now let's put all the joking aside. I mean,
if we go into words recession and unemployment starts to rise,
people lose their jobs, they don't have that money in
their pocket to spend, and that's where you'll see spending
come down. Is that coming down the pike? We don't know.
But based on the latest data, you know, taking emotion
and politics out of it and looking at data, so far,
(06:19):
we've seen no let up in consumer spending money as
of March.
Speaker 1 (06:24):
You're listening to simply Money presented by all Worth Financial.
I mean, me Wagner, along with Bob Sponseller, we're talking
about resilience. How resilient are you? Consumers? Collectively? We're very resilient.
We're still spending and so I think it's easy to
look at these headlines and all the volatility and all
of the uncertainty in the markets and in the headlines
(06:45):
right now and think, oh, should I be doing something?
But you got to understand, first of all, we are resilient,
but second of all, these large companies are incredibly resilient.
They're always innovating, they're already digesting you know, what do
tariffs mean for US? Ways around these tariffs? And I
think that's maybe one of the biggest points. And it
was like when a light bulb went off for me
(07:06):
a couple of years ago, when our chief investment officer,
Andy Stouts it was probably one of them. He's incredibly smart.
It was probably one of the most profound things I've
ever heard him say. But he essentially made the point
that as an investor, what you're investing in is corporate greed.
These large companies figuring out new ways to make money.
So we can get really into the latest policy the
(07:30):
impact of that. You know, now there's headlines about you know,
interest rates and where they should go in the future,
and what the Federal Reserve, our nation central bank should
be doing. You've got our president saying we need to
fire the head of you know, the FED, and that
can that can feel like, oh my gosh, what next?
What next? Honestly, regardless of how that plays out, two
(07:54):
things are going to happen. You're going to keep spending
and these companies are going to figure a way around
the implications of whatever decisions are made in all of
these respects and they're going to figure out new ways
to make money.
Speaker 2 (08:07):
Yeah. I think what you're referring to here, Amy is
is the power of companies, which are made up of
people smart, hardworking, intelligent.
Speaker 1 (08:16):
People, incentivized, highly incentivized.
Speaker 2 (08:18):
Incentivize people to innovate and find new ways to make money.
And that word greed means different things to different people.
I would just say, companies are there to make a profit. Yeah,
I mean that's why they're there. And if companies aren't
making a profit, they're going to go out of business,
which means people lose their jobs. So a couple of
(08:38):
example here, go back to Apple in the early two thousands,
they were just a computer company. Well then Lo and behold.
Then came the iPod, the iPhone, iPhone, the whole Apple ecosystem.
Now they're into AI, cloud stuff. They just constantly innovate
and they became one of the biggest tech firms on
the planet. And you talk all the time about Amazon,
(09:01):
I mean, look at what Look at the innovation that's
gone on with that company. They started off as just
a selling books, Yeah, and now they're selling everything, They're
delivering everything. They have totally revolutionized the customer experience. No
one saw that coming, but a bunch of creative, hardworking,
to your point, highly incentivized people found a way during
(09:26):
all the market turbulence and geopolitical stuff going on, and
they built themselves into a global powerhouse.
Speaker 1 (09:32):
Yeah. I got something from Amazon yesterday. And it's funny
that we're talking about this now because I literally stood
there with the package in my hands and thought, this
is so crazy that I ordered this super random kitchen
gadget and in less than twenty four hours later, it
is on my doorstep. The logistics of that being able
to happen are truly beyond my comprehension. But yes, these
(09:55):
companies are figuring out ways to blow our minds all
of the time in order to money and to continue
to grow. They're going to continue to do that. And
then what you have to understand too, that keeps those
things on the rails, right, that keeps us as consumers spending,
and that keeps those companies in a place where they
can innovate and continue to grow, is the fact that
(10:16):
our government is built in a way that when things
get off the rails, they have the power, hopefully to
put them back on. And that's when you look at
policy and the Federal Reserve, our nation central bank and
what it's set up to do.
Speaker 2 (10:30):
Well, up, they're set up to keep us at full
employment and control inflation.
Speaker 1 (10:35):
Yeah, which is important, right, because those are the things
that when they get off the rails, that's where the
economy goes sideways.
Speaker 2 (10:41):
Right. And I'll say, never underestimate the ability or the
power of any government to print money and stimulate the economy. Yeah,
And we've seen that happen, you know, going back to
the financial crisis, where we had we were running a
big risk of banks failing, and we got quantitative of easing,
we got you know, the two big to fail stuff,
(11:02):
stimulus tests. And then it's recently is the COVID pandemic
in twenty in two thousand, twenty twenty, you know, you
saw the government with the economy shut down. People couldn't work.
If nothing had happened, that could have been a disastrous recession.
And the CO and the FED and the government came
in with stimulus texts to try to keep things on
(11:25):
the rails, so to speak. I mean, you gotta we
got to eventually pay for that because it adds to
national debt. But it does tend to smooth out the
severity of economic declines in the country. And never underestimate
the power of Congress and the Fed to do that.
That's part of why they're there.
Speaker 1 (11:44):
They have certain tools in their tool blox for exactly
those things. Often those tools, when used have longer term
implications on the economy, but yeah, they can smooth out
a lot of that volatility in the short term. And
I think, you know, going back to that just concept
of resilience, our government is set up for this capitalism
and the way that our country runs, these big business runs,
(12:07):
and we are also wired for the spending in all
of that together means when you do feel anxious, remember
you are resilient in every We're a very resilient country.
Here's the all Worth advice, do not estimate underestimate the
power of resilience. The next time you're reading headlines that
predict worst case scenarios, we're incredibly resilient people. Coming up next,
(12:30):
we're talking about how to survive a bear market. Depending
on how old you are. You're listening to Simply Money
presented by all Worth Financial here on fifty five KRC,
the talk station you're listening to Simply Money, presented by
all Worth Financial. I mean you Wagner alone with Bob's
spond teller. If you miss our show one night, you
(12:50):
don't have to miss anything we talk about. We've got
a daily podcast, just search Simply Money. It's on the
iheartapp or wherever you get your podcasts. Coming up at
six forty three. You guys have so many questions about
estate planning, a really good one about bond laddering, and
a whole lot more. We'll get to those in just
a few minutes. I think regards. I think when I'm
(13:11):
having these conversations right now Bob about market volatility, it
depends on how old the investor is, on what kind
of response I get. When I'm talking to someone who
has been putting money into their four one case since
they were in their twenties, and they're their seventies now,
even though they're retired and maybe have a reason to
be a little nervous, they're like, not my first rodeo, right,
(13:33):
not my first rodeo. This can feel different market volatility
and even bear markets, depending on what age you are
and your stage in life.
Speaker 2 (13:44):
Yeah, I think the phrase you know time in the
market not timing the market applies here, but there's also
some behavior components, behavioral components on the kind of things
you need to be thinking about depending on your age
and time horizons. So, you know, let's talk about folks
in their twenties and thirties. And I've got three, you know,
my wife and I have three adult sons that are
(14:04):
in this you know phase, and they're just kind of
getting started out, you know, in four to oh one,
k's bought their first homes, setting up emergency funds, having
their first kid, all that kind of stuff. And then
along comes, you know, market volatility, and people react differently
to that. And I hate to paint with a broad,
(14:24):
too broad of a brush, but sometimes folks in their
twenties and thirties really don't understand or want to listen
to the whole concept of an emergency fund. Yeah, they
either want that money in their pocket to buy the
next ticket to the Jewel concert, or or you know,
they they don't have a lot of extra money laying around.
(14:47):
And what tends to happen is if you get yourself
into a situation where you don't haven't prepared for any
kind of an emergency, that's where that credit card balance
can rear its ugly head, and that's where you can
dig your yourself, you know, a good hole. So a
thing to keep in mind, especially for younger people. It
is boring, it's not exciting. You're not taking advantage of these,
(15:10):
you know, recent market drops. But make sure you've got
that emergency fund built up in case you change jobs,
lose your job, you know, your car breaks down, something
like that.
Speaker 1 (15:20):
I think it's easy to be like, oh, it's not
going to happen to me. Yeah, when you're in your
twenties and thirties, you feel invincible. We all remember well or.
Speaker 2 (15:27):
If it happens, mom and dad took care of it.
Speaker 1 (15:29):
Yeah, that's true. So now you're on your own for
the first time. I have some friends who in our
thirties and it wasn't an emergency. It was big brother
had a really cool car. It was a BMW. He
was selling it. He was going to sell it to
them at a really good price. They didn't have any
money for it. What did they do? They rated their
four oh one ks, you know, and it was like oh.
Speaker 2 (15:49):
And paid taxes and penalties and all that across the board.
Speaker 1 (15:52):
Not the best financial decision because there wasn't an emergency
fund sitting there, so was that an emergency? Not necessarily,
It was an opportunity, but they had to go to
a place that wasn't the best for them long term
to turn to it. And I find it's credit cards
and it's rating our retirement accounts that we do. So yes,
(16:13):
I think, listen, how to survive a bear market in
your twenties and thirties, understand market cycles, and make sure
that you have a well funded emergency fund.
Speaker 2 (16:23):
All right, Amy, let's shift gears and talk about what
you should be thinking about maybe in your if you're
in your forties and fifties right now.
Speaker 1 (16:30):
Yeah, And I think this is important to understand too.
Time is still on your side. I'm in my late
forties now. My friends are starting to talk about retirement right.
It seems like it's a little bit on the horizon now.
And I have some that are nervous. They're like, huh,
I never really paid attention to market fall utility before,
but now it feels like this could impact us, could it.
I mean, we've got maybe two three for you know,
(16:52):
more market cycles before we're actually probably going to retire cash.
Still having that cash reserves is part of the process.
And then I think it's really important to drill down
on your acid allocation. Right when you're in your twenties
and thirties, one hundred percent in the stock market might
feel exactly right for you. You've got years and years
and years get yourself exposed to as much growth as
(17:13):
you possibly can. But now I think is a really
good time to take your pulse again and say, do
I still feel that way? Can I still you know,
stomach this volatility. Maybe the answer as you get closer
to retirement and it's on the horizon, is dialing back
your your stock market exposure.
Speaker 2 (17:30):
Yeah, you took a lot of those words right out
of my mouth, so I won't repeat them. But I
think what happens for folks in their forties and fifties is,
you know, you get to that point, this is where
people actually have some money.
Speaker 1 (17:40):
It's real money to you well, and there's more of it.
Speaker 2 (17:43):
Yes, So when you see a six eight ten percent
market decline, you're looking at dollar signs, and the dollar
signs of that drop tend to be bigger, and you're
like wow.
Speaker 1 (17:52):
And you know how long it took you? You had
absolutely get that money.
Speaker 2 (17:56):
Yeah. Yeah, So to your point, Amy, I think that's
this is it's times like that where you want to
stress test your portfolio and you want to dovetail that
with your long term financial plan and make sure that
your overall investment allocation Number one is going to get
you to your long term retirement goals. But number two,
(18:16):
we are investing your money within guardrails, so to speak,
where if we have volatility, it's not going to emotionally
overwhelm you to the point where you make that phone
call that somebody should never make, and that's say, you know,
get me to cash. I can't take it anymore. And
I've told you this before, like if for me, if
(18:37):
a client ever does that, that's when I feel like
I've failed as an advisor because we haven't had that
talk in advance about what your guard rails from a
risk standpoint actually are.
Speaker 1 (18:48):
And I think you know, for those who are in
your sixties, this is like a maybe losing sleep right now,
you plan for this, right you make sure that you
know maybe your income is coming from less volatile assets
that you have planned for it. That's when cash reserves
become incredibly important. Maybe we turn off distributions that we're
taking from our investment assets and live off of those
(19:10):
cash reserves. So this is where when I say you
build your boat for the storm man, if you were
getting close to retirement, you better not only build that boat,
you better stress tested and make sure it's not lenken well.
Speaker 2 (19:22):
And as far as a distribution strategy goes, this is
where it's important, I think, to have that two to
three years worth of cash needs in non volatile assets
so you could take your income from those assets during
volatile times and not have to sell stocks when they're down.
And a lot of people in their sixties and seventies,
(19:43):
to your point, they've been through this before. They understand that,
and they follow that advice.
Speaker 1 (19:48):
Here's the all Worth advice. The key to surviving a
bear market staying disciplined, keep investing, be diversified, and align
your strategy with your long term goals, no matter how
old you are. Coming up next, let's take deep breath
from all of this heavy stuff we've been talking about
market volatility and focus on spring. We've got the top
spring home makeovers for less than hundred bucks. That's next.
(20:09):
You're listening to Simply Money presented by all Worth Financial
Here in fifty five car see the talk station you're
listening to Simply Money, presented by all Worth Financial Imm
Wagner along with Bob Sponseller. You know, for many the
question is should I stay or should I go? Talking
about in your current house or does it make sense
(20:30):
to move? And I would say, wherever you land on this,
there are some affordable upgrades that you can make that
are either going to make where you're staying more enjoyable
for you, or if you're going to put your home
on the market, it's more attractive to other home buyers.
Joining us tonight with some great perspective on some really
affordable things you can do to your home right now
(20:53):
is our real estate expert Michelle Sloan, of course, owner
of Remax Time. Michelle, I think we run the gamut
on this, but many times we think about, Okay, if
I'm going to do something that's going to be really
impactful to my house, it's like a fifty thousand dollars
kitchen upgrade. We don't have to spend that much.
Speaker 2 (21:10):
No, we don't.
Speaker 3 (21:10):
And I think if we're doing little things along the
way as we own our property, it will always make
it refreshed, make you feel refreshed about your home. And
then when the time comes, because sometimes we decide to
sell our home because and we weren't even we're not
even looking for it, maybe an opportunity comes along that
you just cannot pass up, and you're like, oh, my gosh,
(21:33):
I want to buy this other house. Maybe it's two
doors away from my kids or my grandkids or something
like that. I want to buy this house. I didn't
even think about putting my home on the market. But
if you've been doing little upgrades along the way, of course,
the big ones we always talk about kitchens, bathrooms, flooring,
all of that. Absolutely, you should do that when the
(21:55):
time is right. But you know, we're focusing today on
the little things that we can do under one hundred dollars.
The first one is how many photos have you taken
on your phone and you're like, oh, that's gorgeous. You
have digital photos of vacations and our kids and our
grandkids and our dogs. I mean, that can be a
(22:19):
DIY kind of art project where you can actually and
people don't do this as much as we used to
actually print some of those, enlarge some of those photos
and display them in your home so that you can
enjoy them over and over again and look at them
every single day and remember how happy that vacation was
(22:41):
and how sunny that vacation was. Well, because we don't
see that all the time around here.
Speaker 1 (22:47):
And that's a great point. I have a good friend
who I recently visited and they printed out just some
eight x ten black and whites of their kids when
they were younger, and it was a DIY project. They
put it through a couple pieces in the middle of
a couple pieces of plexiglass and mounted it on the wall.
It looked so cool. It was such a statement and
she was like, we did this for less than one
hundred bucks, you know. So I think sometimes it's a
(23:09):
you know, you can get creative and you can do
things for really affordable too. Sometimes too, we get into
a rut in our homes and it's like the way
that the furniture is is the way that it's always been,
and you can just kind of rearrange things and have
a really different feel. Absolutely.
Speaker 3 (23:26):
I mean, along with the spring cleaning, and that's going
to be one of my top tips. It's something that
I think everybody does not like to do at least
for me, I hate it. But at the same time,
if I'm doing spring cleaning and I want to get
really underneath the couches and behind the chairs while you're
doing that cleaning, how about mixing up that room, mixing
(23:47):
up the furniture, putting the couch in a different location.
If you can in a couple of the chairs, and
you have a whole new space, and you're like, oh wow,
I remember when I was a kid, you know, we
would do spring cleaning and we would move I bet
in my room to the opposite wall, and it was
like I had a new bedroom and it was kind
of cool. And at the same time, you know, it
(24:09):
makes you feel like, oh wow, you know, you're enjoying
your space. You're just cleaning and a clean space maybe
with a new layout, is always fun.
Speaker 2 (24:22):
All right, Michelle, Speaking of clean spaces, I want to
touch on a topic that's near and dear to my
wife's heart, the whole topic of organizing and decluttering your home.
I know, personally, if there's something I haven't worn or
used within three to four months, I'm in danger of
having that stuff packed up and shipped out. So how
(24:43):
important as a real estate professional that it helps people
market and sell their homes. How important is it to
have a potential buyer walk into a home that is
in fact decluttered.
Speaker 3 (24:55):
It is the most important thing that you can do.
Aside from cleaning, Cluttering can make your space look bigger,
and your closets. So if again, I have my primary closet,
I share with Scott Sloan. He's the neat guy, so
his all of his shirts are lined up, his pants
(25:15):
are all lined up, everything's all put away, real nice
and pretty. My side is a little bit of a
jumpled mess. I know exactly where everything is, but it
is not pretty to look at. So if I were
to sell my home, I would probably have to take
ninety percent of the clutter in my closet away, whether
I pack it into boxes and decide that I'm going
(25:37):
to take it with me, or at least at this
point you can put away well, I don't know. I
hope that we can put away all of our winter clothes.
Speaker 1 (25:46):
That's debatable and Cincinnati.
Speaker 3 (25:48):
Right, we can pack away and like the whole closet.
If the hole closet is a place where you have
three or four jackets, you have shoes and boots and
scarfs and hats and you know, so many things. A
lot of that stuff can be pared down to one
ball cap, two jackets, and maybe one extra pair of
(26:09):
shoes in that closet and that's it. So you really
need to So as far as moving stuff out, Bob,
I don't know.
Speaker 2 (26:17):
So my fifty and I'm not exaggerating here, my fifty
baseball caps that I've got lined up in my class,
that's a no no, Right.
Speaker 3 (26:26):
You get those in a box. Yeah, find a clear
box for yourself.
Speaker 2 (26:30):
I knew this was all going to end up in
me having to listen to my wife. So thanks, Michelle,
You're welcome.
Speaker 3 (26:35):
You're welcome.
Speaker 2 (26:36):
See.
Speaker 3 (26:36):
I also have to take my own advice, and honestly,
it is not easy. And when I go to people's
homes and they're like, oh my gosh, don't look at
this mess, I'm like, yeah, that's the way we live.
I mean, we have more stuff than we actually need.
We're all so blessed for the most part, right, we
are so blessed and we have more than we need.
(26:56):
So when you are selling your home or when you're
just going and doing this really deep spring cleaning, really
think of those thirty ball caps. How many of them
do you really wear?
Speaker 1 (27:11):
Two?
Speaker 2 (27:12):
I better not answers.
Speaker 1 (27:15):
I think the takeaway for Bob here is that you're
never going to find any guests coming on our show
that's going to say that your wife is wrong. She's
just really smart. So Carrie is always right in Michelle.
What other things should we be thinking about decluttering? Uh,
you know, deep cleaning, maybe moving furniture around, maybe some
diy wall or anything else we can be thinking about
(27:36):
right now.
Speaker 3 (27:37):
You can easily refresh your decor as well. So if
you have and this is what I always recommend, that
you have a neutral paint color on the walls. If
you have that neutral accessible beige or agreeable gray on
your walls, and you can find some different pops of
color in maybe some decorative pillows, and it really will
(28:02):
add a little pop and a little something new to
your home. Now again, if you come home with new
pillows every three months, someone may not be happy about that.
But if you're getting rid of the old and bringing
in the new, okay, that's fine. But you can definitely
shop at the discount realtors have or discount retailers.
Speaker 2 (28:23):
Actually, they have a lot.
Speaker 3 (28:24):
Of different kinds of just throw pillows or maybe some
area rugs. That won't be too expensive, but it will
add just a little bit of extra flair to your home.
And then if we go back to the paint situation,
if you have not painted and you have bright yellow walls,
it may cost more than one hundred bucks. It probably will,
(28:46):
but you know, paint is the most affordable way to
change your space, update your space and give you a fresh,
clean and very very nice look.
Speaker 1 (28:57):
Yeah, I think great ideas.
Speaker 2 (28:59):
Right.
Speaker 1 (28:59):
You don't have to be moving this spring to give
yourself an entirely different feel to your own home, and
you can do that super affordably. Great insights as always
from Michel Sloane, our real estate expert. You're listening to
Simply Money presented by all Worth Financial here on fifty
five KRC, the talk station. You're listening to Simply Money
presented by all Worth Financial. I mean Me Wagner along
(29:20):
with Bob Spondseller. Do you have a financial question you
really want to figure out right now? There's a red
button you can click on while you're listening to the show.
It's right there on the iHeart opera. Coord your question.
It's coming straight to us and we're getting straight to
your questions. First one from Martin and Anderson. I have
some company stock makes up about fifteen percent of my portfolio,
but I feel like I've got plenty of money, and
(29:42):
I plan on leaving that stock to my heirs. Since
my time horizon is so long, shouldn't I just leave
it alone?
Speaker 2 (29:49):
Well, there's usually a couple of reasons why people hold
on to these concentrated positions. One is they have in
depth knowledge of the company. They've worked for the company,
and they feel like they know the company and are
very loyal to the company. Another reason is they might
have inherited that stock and there's some emotional attachment to
it because it came from a parent and aunt and
(30:10):
uncle something like that. So the first thing I'd say
to Martin is why why is it important? Is it
important to hold fifteen percent of your net worth in
any one company? And if it's not, what are the
tax implications of gradually diversifying out of that position. Fifteen
percent is a whole lot better than forty percent or
(30:31):
sixty percent. But people are hesitant to sell these stocks
sometimes because of capital gain exposure, and if it makes
sense for your plan, Martin there are ways to gradually
move out of a highly concentrated position, get more diversification,
and not have to pay as much in taxes as
(30:52):
you might think.
Speaker 1 (30:53):
Yeah, we don't know enough about martin situation today. You're
definitely never going to have to touch this, right, But
if you're reasonably certain that you're not going to to
from an inheritance standpoint, it may not be such a
bad thing, right because you might create significant capital gains
if you sold it now your heirs will inherit that
at a stepped up basis. What I think is missing is,
(31:14):
and I often see this, and I came across someone
recently who inherited a lot of company stock. The company
is not doing well, and she is not going to
sell it because she is so emotionally tied to it
meanwhile to the detriment of her entire financial situation. So
if you do think it's smart to earmark this particular
(31:35):
company assets for your children, that's fine. But also don't
pass on to them the burden of holding on to it,
because they get to start over with the cost basis
of it, and it might make sense for them to
sell out of that position rather quickly. Don't guilt trip
them and holding on to something that shouldn't be emotional
to them because it's an asset that could be life changing,
(31:59):
that could greatly them. So I think it's important and
it's weird, but I see it far too often an
emotional tie. And sometimes you even have people saying, do
not sell this company's doc. Well, then you're just passing
on that's right, something else that someone has to hold
on to till the next generation doesn't make any sense
to me. Next question from John and Villa Hills. He
was listening earlier this week. He said, you briefly spoke
(32:20):
about bond laddering the other day. Can you please give
me a more detailed explanation of how that works?
Speaker 2 (32:26):
Yeah, John, our industry is great about having all this
jargon and complex terms that nobody understands. Let me do
the best I can to simplify this. All bond laddering
is is holding a portfolio of bonds that mature at
different dates. Think about it. If you walked into the bank,
you can buy a three month CD, you can buy
a six month CD. You could buy a three month CD,
(32:48):
you can buy a five year CD. The same thing
happens with the bond market, and like we talk about
all the time, it is extremely difficult to predict the
movement of short terms and that's why most people don't try.
You know, just like with a stock portfolio, you build
a diversified bond portfolio, and all laddering means is you
(33:11):
have different time horizons of different bonds, they mature at
different times, and then you've got that cash available to
take a look at, well, what is the interstrate environment,
what's the best bond by now based on the current
interstrate environment. Rather than having all your bonds or all
your eggs tied up into one maturity, laddering it out,
(33:34):
diversifying out in terms of time horizon. That's what bond
laddering means. I hope that helps, And if it doesn't, John,
call back and ask again and we'll address it again.
Speaker 1 (33:44):
Yeah, yep. Next question from Dan and Westchester. How do
I know if my portfolio is still aligned with my
goals when the market keeps shifting? I would say the
market's shifting is a really good test of whether your
portfolio is aligned with your goals. For instance, if you
decided several years ago that the proper asset allocation for
(34:04):
you is eighty percent stock exposure, twenty percent bonds fixed income. Right,
and then all of a sudden markets went on a
tear in twenty twenty three, twenty twenty four, and now
you are losing sleep at night because there's so much
volatility in your portfolio. Okay, well, then that's probably a
good sign that it's not well designed for where you
are right now and your long term needs.
Speaker 2 (34:25):
Yeah. And the piggyback on that, I mean Andy Stout,
our chief investment officer, always makes a great point. He's like, hey,
when you talk to a client about risk tolerance, that's
one snapshot in.
Speaker 1 (34:35):
Time, yep, and during how they're feeling that day.
Speaker 2 (34:38):
That's right, And when the market's really going gangbusters, people
have an entirely sometimes entirely different tolerance for risk is
when the market is down yep. And that's why we
do annual reviews with our clients. We talk about their
risk tolerance all the time, and then we dovetail that
with their long term financial plan and make sure all
of that stuff is aligned because job number one here,
(35:00):
irrespective of short term market movement, our job is to
make sure our clients don't make mistakes from which they
can't recover and amy. We like to have our clients
with an eighty five to ninety five percent probability that
they are going to meet their long term financial goals
irrespective of what goes on in the markets, and that's
(35:21):
what helps our clients sleep at night.
Speaker 1 (35:23):
Yep. Coming up next, we're going to an interesting place
inside Bob's mind.
Speaker 2 (35:28):
I don't know if you want to go there this week.
Speaker 1 (35:29):
I don't know is world of wealth bonds? What do
you need to be thinking about? You're listening to Simply
Money presented by all Worth Financial here on fifty five KRC,
the talk station. You're listening to Simply Money presented by
all Worth Financial. I mean you Wagner along with Bob's bondsellar.
But we've been talking about the bond market a lot lately,
(35:52):
and in today's Bob's World of Wealth, let's get into
a little more detail on that.
Speaker 2 (35:58):
Yeah, I figured we touch on this because we haven't
been able to touch on it earlier. This week. We've
talked about bond maturities, we've talked about bonds cushioning, portfolio volatility,
but what we haven't talked about is to make darn
sure you're checking the credit quality of your bonds. Here's
what I mean by that. A lot of investors can
be enamored by that term high yield bond fund. Everybody
(36:21):
likes high yield, high interest. I just want to draw
attention to the fact that oftentimes high yield comes with
lower credit quality. When you're talking about these high yield
bond funds, those are generally all corporate bonds that are
below investment grade rated. And if you're just chasing yield
and not looking at credit quality, amy, I've seen this
(36:44):
happen many, many times throughout my career. These high yield
bonds funds can often move and be as volatile as
the stock market, and people can get surprised by that.
And I even short term high yield bond fund I
saw a period of time about twenty years ago where
those things went down. You know, I'm talking short term maturities.
Speaker 1 (37:07):
Yeah.
Speaker 2 (37:08):
Uh, they went down ten to fifteen percent in an eyelid,
you know, in an instant. So be careful about the
credit quality of your bond portfolio. And if you're not
sure how to do that, that's another reason to sit
down with a fiduciary advisor that could show you what
you own, and make sure we keep you out of
harm's way.
Speaker 1 (37:28):
Not all bonds are created equal, and I think that
a lot of investors don't fully understands bonds. So it's
like a bond is a bond is a bond, That's right,
And that's not actually true. You could be investing in bonds,
you know, high yield bonds to your point, that are
as volatile as anything in the stock market, any individual
stocks that you can find in the stock market. So
(37:50):
you know, I'm glad that you're kind of, you know,
looking under the hood here and explaining this about bonds,
because I think there is the interests with volatility in
the stock market right now of bond. Next step that
is to say, okay, I'm interested. I'm doing my research
to make sure that these are the right kinds of
bonds for me to be invested in.
Speaker 2 (38:08):
Yeah. Again, the shiny object there is yield and high interest,
and we naturally gravitate to that, and that makes sense.
But again to your point, we got to look under
the hood and know what we're buying and why.
Speaker 1 (38:20):
Yeah, just incredibly important and I think it's smart during
times of volatility to say, am I truly diversified. Maybe
I haven't thought about bonds in my portfolio before, and
maybe it's something that I should be considering now.
Speaker 2 (38:32):
Right.
Speaker 1 (38:32):
They often do work really well as shock absorbers, and
then you've got to figure out am I investing in
the right kinds of bonds? Thanks for listening. You've been
listening to Simply Money, presented by all Worth Financial here
on fifty five care see the talk station
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