Episode Transcript
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Speaker 1 (00:05):
Tonight, a lot to keep up with in the headlines,
but perspective on maybe what you should really be focusing
on and rather than looking at volatility, what are the
opportunities for you as an investor. You're listening to Simply
Money presented by all Worth Financial Ammi Wagner along with perhubsponseller.
We kind of have joked for many years about how
crazy the news cycle is, but lately it has sped
(00:28):
up times one hundred. There's a lot to keep up with,
and some of that, yes, is impacting your flour. O
one K joining us tonight as he does every Monday,
our chief investment officer from right here at all Worth
Financial and east out by the way, you know, he's
managing twenty five billion dollars, so he really is keeping
his finger on the pulse of what is going on
here and Amy.
Speaker 2 (00:49):
I think as an investor it's a little bit difficult
to even know.
Speaker 1 (00:52):
Which end is up what to focus on, because there
is so much I think affecting us right now.
Speaker 2 (00:58):
What do you think as investors maybe.
Speaker 1 (01:01):
The largest threat to our portfolios is or the number
one thing you think we need to be focusing on
right now?
Speaker 3 (01:08):
Well, the largest threat to your portfolio is probably yourself, right.
I mean, if you think about it, emotional decisions are
really what drives whether or not you get the returns
you need or you fall short, because all too often
you when you think about these news cycles, news is
best at tops and worst at bottoms. And in the meantime,
(01:29):
there's going to be lots of noise. And we're getting
a lot of noise right now, I mean, whether that
be on the trade front, and a lot of that's
conflicting noise even so.
Speaker 4 (01:38):
I mean, a couple of weeks.
Speaker 3 (01:40):
Ago we talked about the bet charge your own power
possibly getting fired. Now that appears to be completely off
the table. Then you have what's going on with the
trade war, which is, you know, i'll call it somewhat
conflicting information from you.
Speaker 4 (01:54):
Know, various sources.
Speaker 3 (01:56):
So if you just kind of think about the trade
front in general, it's a bit confusing. I mean, we
had some signs of de escalation last week. You know,
on the positive side, you had Scott Scent talking about
China tariffs being at that level unsustainable and the US
is open to a deal with China.
Speaker 4 (02:17):
However, this morning.
Speaker 3 (02:18):
He said that the first move needs to come from China.
It's up to them to really de escalate. So when
you look at all of this, there's just a lot
of moving pieces. So really the best advice, you know,
I can think of is to, you know, take a
step back, think about it from a big picture of perspective,
and don't make any emotional decisions.
Speaker 5 (02:40):
Andy, let's let's dovetail earnings announcements with the ongoing, ongoing
uncertainty about tariffs and trade deals. We've had about thirty
six percent of the S and P five hundred report
you know, quarterly earnings so far. What are you seeing
in terms of quarterly estimates moving forward into the next
couple of quarters given all of the uncertainty around trade policy.
Speaker 3 (03:05):
So far, earning season has been pretty good when you
look at just the overall picture, I mean, essentially, of
the roughly thirty six percent of these large cap companies
that have reported, three quarters of them have posted better
than expected profits.
Speaker 4 (03:22):
So that's definitely it sounds better than it is.
Speaker 3 (03:25):
Let me just put it that way, because when you
look at the historical average, it's right around seventy five
to eighty percent of the companies beating results. And the
reason for that is what you see is you see
companies' lower estimates get going into earning seasons so they
can beat them. It's really just a game to them
more than anything else. But it's important that they do
(03:46):
beat those essence, because that's kind of how it works.
Now we're seeing growth around nine point seven percent, and
that's pretty good. That's better than what the preseason estimate was.
The earning estimate at the beginning was around six point
six percent. That we're coming in about three percentage points higher.
And when you look at it, it's that's.
Speaker 4 (04:08):
Just the look back.
Speaker 3 (04:09):
You know.
Speaker 4 (04:09):
What also matters is the look forward.
Speaker 3 (04:13):
What's the guidance coming in at And that's where it's
been a little bit more I don't volatile, or a
little bit more all over the board, just because there's
a lot of uncertainty out there right now about the
trade and trying to determine how these companies are going
to navigate the environment when there is a lot of
unknowns out there.
Speaker 4 (04:33):
It's very interesting and very telling to watch, all right.
Speaker 5 (04:37):
Just to follow up through my prior question, any and
he again, you're encouraging us to look big, big picture,
and that's what I'm trying to do. I look big
picture here. As of Friday afternoon, the SMP's down five
point seven percent, not horrible. Bond markets up for the year.
There are asset classes like international equities that are up
for the year. It doesn't look that bad out there
(05:00):
right now. And my question is to your point about
forward looking earnings, is what typically moves this market. Are
folks factoring in resolutions on a lot of these tariffs?
Is they provide guidance for future quarters or is that
not yet baked into the equation.
Speaker 3 (05:21):
When you look at what companies are thinking about when
it comes to the earnings, they're not really adjusting too
much when it comes at least adjusting on a negative
basis when it comes to the terroffs, just because they
don't know how to essentially price in that uncertainty into
what their forecasts are. So I what people are looking
(05:41):
at right now is yes, it's going to be unknown
in the near term, but when you look out over
you know, by the end of this year we'll probably
be passed this.
Speaker 6 (05:53):
I mean, my.
Speaker 3 (05:53):
Guess is that you're going to look back at this
period and of course you know we're all panicking right well,
We're not all panicking right now. A lot of people
are panicking right now and think about, oh no, the
world's coming to an end. I guess when you look
back at this a year from now, it's just going
to be another blip on the road map to financial
peace of mind. Yeah.
Speaker 2 (06:12):
I think that's a great perspective too.
Speaker 1 (06:13):
Right how you feel right now isn't necessarily the reality
when you look at the numbers of what the market
is really down this year, despite all the volatility we've seen.
You're listening to Simply Money, presented by all Worth Financial.
I Meani Wagner along with Bob Sponseller. We're joined by
Andy stoutle Worth chief Investment Officer, to get his perspective
on the markets. Obviously, Andy, it really all comes down
(06:34):
to tariffs right now. I'd like to take you back
to the beginning of when we even started on this
path talking about tariffs.
Speaker 2 (06:41):
You kind of said, listen, there's a handful.
Speaker 1 (06:43):
Of reasons why President Trump might be considering these tariffs.
In my mind as an investor at the time, I thought, okay, well,
if it's negotiating tactics, we're probably not going to get
to the point of actually implementing these tariffs. I didn't
think about the strategist right that we have at.
Speaker 2 (07:01):
The helm here.
Speaker 1 (07:02):
You know President Trump, and you know he's as a
really good strategist.
Speaker 2 (07:06):
We don't know what exactly is going on.
Speaker 1 (07:08):
We did kind of wade into that territory of enacting
tariffs and then kind of step back as you look
at the different things that he may be trying to
accomplish here, can you talk through those and maybe where
we might be in the midst of all this.
Speaker 4 (07:24):
Well, when you.
Speaker 3 (07:25):
Think about the reasons for these terrorists, I mean you
already mentioned one of them, which is really a negotiating tactic,
and we've seen some progress there with Canada and Mexico
specifically moving more soldiers to the borders in order to
help shore up illegal migrants from entering the country. Now,
when you look at some of the other reasons, one
is to raise revenue, and I think that's an important
(07:47):
one for the president because what he wants to do
he wants to lower taxes later this year and he
needs to essentially get some more money from a budget perspective,
and this helps accomplish that goal.
Speaker 4 (07:57):
So he is able to hopefully push that forward and
the lower taxes.
Speaker 3 (08:03):
Now another reason is to you know, essentially rectify an
unfair trade balance, which appears to be really his main
talking points out there when he's talking about the trade
deficits that we have with other countries. So when we
look at it from that perspective, we're not quite there
(08:24):
yet because there's still obviously a lot of trade deficits
and we're never going to get rid of that deficit.
I mean, if you just think about, you know, just
how economies evolve over time. I mean, it's not as
if we're a big manufacturing hub in general. But when
you think about the tariffs and what's been enacted so far,
and then President Trump with that tariff board he had
(08:45):
held up that one day, and now that when we
see where we're at, I mean, we have ten percent
baseline tariffs pretty much across the globe. He's pulled back
or paused on the elevated reciprocal tariffs, but we still
have to deal with those ten percent, and I want
to be surprised if that sticks around for a bit
of time.
Speaker 5 (09:06):
All right, Andy, getting off of the tariff topic, we've
got an important jobs report coming out this week, and
we've got an important gross domestic product GDP report coming
out this week.
Speaker 6 (09:17):
What are you expecting on those two fronts.
Speaker 3 (09:20):
Yeah, the jobs report there's going to it's interesting because
it's going to show if there's beeny impact yet on
trade and also from some of the cuts, if you will,
from the DOGE Department of Government Efficiency led by Elon Musk,
although I guess he's going to be stepping back a
(09:40):
little bit there in terms of his involvement in that.
He talked about that last week during his earnings announcements.
As far as what's expected, the economists think there might
see one hundred and thirty thousand or so new jobs
in the month of April, and they also think that
the unemployment rate will remain at four point two percent.
(10:01):
So if those numbers come in as is, I mean,
that's that's an okay report, and that's what we would
hope to see. We don't want to see any weakness
there now on the GDP side or gross domestic product,
which is how much output the economy has or how
quickly it's growing, if you want to think about it
that way, And those estimates are all over the map
(10:24):
when you look at you know, what's expected some economists
are seeing gains of maybe one and a half percent.
Some are seeing a detraction or a contraction excuse me,
up two percent. It really just depends, and there's a
lot of uncertainty, especially around the trade because many companies
and business many companies and the individuals have pulled forward demand,
meaning that they've imported a lot more and that's going
(10:47):
to widen the overall trade deficit. So the consensus estimate
is zero point four percent, but it could be anywhere.
Risks are skewed to the downside.
Speaker 2 (10:57):
And you want to quickly get your take on.
Speaker 1 (11:00):
President Trump had been kind of critical of Fed chaired
Jerome Powell over the past weeks, kind of stepped away
from that recently. You have been very open through the
years about your thoughts on how Powell is doing. You
kind of said, hey, when they started to raise interest rates,
they were a little late to that game. If you
were to give him a report card, right, you've got kids,
give him a grade on how the Fed is doing.
(11:22):
At this point, I want to hear your honest opinion.
How do you think they're doing.
Speaker 4 (11:26):
What's my time period, like what semester or quarter?
Speaker 1 (11:31):
I mean, give us where we are over the past
six months with all this trade, you know, the tariffs
and everything like that.
Speaker 2 (11:37):
How do you feel they're doing right now?
Speaker 4 (11:39):
I'd give him a bee. I don't.
Speaker 3 (11:41):
I know there's been a lot of pressure on him
to cut interest rates, but with inflation where they're at
right where it's at right now. Yeah, I just don't
see how you know that's possible or how that makes
any sense because if he cuts rates right now, that's
where you're going to go ahead and see a possible resurgence.
Speaker 1 (12:01):
B I think that's good perspective there. Here's the all
Worth advice this day to day stuff. Man, it's important
for us as we try to identify real trends. You
need to stick to your long term plan. Coming up
next our list of opportunities that exist out there right now.
If you are an investor, long term investor during this
volatile time period. You're listening to Simply Money presented by
(12:21):
all Worth Financial here on.
Speaker 2 (12:22):
Fifty five KRC the talk station.
Speaker 1 (12:28):
You're listening to Simply Money presented by all Worth Financial
Ammi Wagner along with Bob Sponsell. Or if you can't
listen to our show every night, well things are changing pretty.
Speaker 2 (12:37):
Quickly these days, so you need to keep up. We've
got a daily podcast for you. Just search Simply Money.
Speaker 1 (12:42):
It's right there on the iHeart app or wherever you
get your podcasts. Coming up at six forty three Fact
or Fiction with the focus on the current market environment.
Speaker 2 (12:51):
Lots of good stuff there for you. You know, I think
the headlines are there, well, we know they're there. They're clickbait.
Speaker 1 (12:55):
They're there to try to freak you out and make
you click on whatever it is trying to peddle to
you as a long term investor, And we would say, listen,
during this market volatility, it's not all.
Speaker 2 (13:07):
Bad news in doom and gloom. There are opportunities out here, Bob.
Speaker 1 (13:11):
I also appreciate the fact that you gave us kind
of the perspective earlier in the show of market's a
really down less than six percent at this point, right
in the midst of all this volatility.
Speaker 2 (13:22):
That's great perspective. But let's talk about opportunities for investors
during markets like this.
Speaker 1 (13:30):
No.
Speaker 5 (13:30):
I love I love this segment, Amy, And one of
my favorite things I hear you say several times every
week on this show is control what you can control
and that's what we're going to talk about right now.
So I'd say a first opportunity, now that tax filing
for most people is over, most people have their twenty
twenty four tax return in hand. Now's a great time,
(13:53):
as you're doing a review with your fiduciary financial advisor,
take a look at all the positions in your account
and now we're especially talking about non retirement accounts, and
look at opportunities to do some tax loss harvesting. And
if you do have concentrated stock positions that you're trying
to gradually diversify out of, this is a time to
(14:16):
do some proactive planning and take advantage of some of
this volatility to harvest some of those short term losses
and offset those against gains in your portfolio.
Speaker 1 (14:26):
Yeah, and I think under that concept of tax planning,
right trying to get some tax alpha in your portfolio.
Speaker 2 (14:32):
You know, a conversation I'm having with with all of my.
Speaker 1 (14:35):
Investors, especially those who are retired right now, is he
do Wroth conversions make sense for you if you happen
to First of all, think Wroth conversions make sense this
year if you can hit it on a day when
markets are down well, you're going to pay slightly less
to convert those assets into a wrath, you.
Speaker 2 (14:53):
Know, just kind of an added bonus again if.
Speaker 1 (14:55):
The strategy fully makes sense for you, kind of regardless
of the volatility right now, but you get it timed right,
and there's kind of an extra little bonus there for you.
Speaker 5 (15:06):
Another opportunity I want to make sure we touch on
here is just assessing your overall tolerance for risk. Yes,
and Amy, we've talked about this several times over the
last couple of months.
Speaker 6 (15:16):
But you know, when everything's moving along smoothly, there's very
little headline risk, you know, like in twenty three twenty.
Speaker 5 (15:23):
Four markets just went nicely up, you know, twenty some percent.
Our tolerance for risk tends to gradually float upward because
we have that recency bias that things are always going.
Speaker 6 (15:36):
To go up.
Speaker 5 (15:37):
You move into twenty twenty five, we get reminded that, hey,
markets do go down occasionally, and I think now is
a good time to assess with your advisor what is
my true level of tolerance for investment risk, and to
make sure I combine that with my overall financial plan
(15:57):
to make sure we have our assets position correctly. Moving
forward from an allocation standpoint.
Speaker 2 (16:03):
I think I totally agree.
Speaker 1 (16:05):
I think you can get a kind of a false
sense of confidence in the markets when every time you
check them, there up and they're like, oh, yeah, I
can take on this level of risk because in the
back of your mind you're thinking, I'm not gonna lose,
you know.
Speaker 2 (16:15):
I mean markets have been going up and up and up.
But during a time when there's real market volatility. Okay,
let's put the finger.
Speaker 1 (16:22):
Back on the pulse and say, how are we really
doing right now?
Speaker 2 (16:25):
Am I still sleeping at night? Am I freaked out?
Speaker 1 (16:28):
Am I checking my four oh win K balance ten
times more than I usually would? Okay, then maybe what
the issue is is not necessarily the market volatility, because
that's actually normal. It's that you don't have your right
risk tolerance. So this is a great time to check that.
Speaker 2 (16:45):
And I'd also say, hey, it could also be just
a buying opportunity. I do not know what it is
about investors. Americans, Listen, we love a good deal.
Speaker 1 (16:53):
I am the person who walks into a store and
I'm never going to that full price rack.
Speaker 2 (16:58):
I'm always going to the sale rack or the clearance. Fact. Yet,
when stocks go on sale.
Speaker 1 (17:04):
When there's a discount, we all run for the exit
of the store because we're like, something's wrong, these are
flawed products.
Speaker 2 (17:10):
Nope, nope, same.
Speaker 1 (17:12):
Great companies that they were yesterday or last month or
last quarter. But there is some volatility, so it's an
opportunity to buy those those companies, the pieces of them
at a discount.
Speaker 5 (17:27):
Well, one of the good, the good things that are
going on with our clients here at all Worth is
our chief investment officer, Andy Stout, is already doing that
and has been doing that for our clients on a
regular basis in our model portfolios.
Speaker 6 (17:41):
So again, the.
Speaker 5 (17:42):
Market is not down that much year to date, but boy,
we've had a lot of swings up and down. It
feels like it's been an extremely volatile market so far
this year. And the key is you got to be
ready to pounce on opportunities when they exist, because they
don't always last for very long. And that's why you
want a good fiduciary managed portfolio where somebody has their
(18:07):
hands on the wheel every day to take advantage of
these short term opportunities, both from a buy low standpoint
and from a tax planning standpoint.
Speaker 2 (18:17):
I'd also say right now is a good opportunity to
assess your cash reserves, your emergency fund. Is it well funded.
Speaker 1 (18:25):
This is a conversation I have with all of my
investors that I work with, especially when they're getting closer
to retirement. The larger emergency fund that you have to
fall back on, the more options you give yourself when
you get to retirement. And it was a tougher conversation
to have the last couple of years when I was saying, hey,
that money does not belong exposed to the market, and
(18:46):
they're like, wait, what you know.
Speaker 2 (18:48):
I'm getting twenty percent right now and.
Speaker 1 (18:50):
You're telling me no market exposure. Yes I am, and
here's why any money.
Speaker 6 (18:55):
And they're thanking you now.
Speaker 5 (18:57):
Your clients are thanking you now for that advice they
thought was idiotic just eighteen months ago.
Speaker 1 (19:02):
Right, it was a tough conversation to have before, and
now it's a little bit like, oh, I get it.
Speaker 2 (19:07):
I know why we're talking about this. And I think, hey,
if you're someone who's getting closer to retirement.
Speaker 1 (19:13):
And you have not built adequate cash reserves, this is
a great reminder that this is a good time to
focus on building those cash reserves. So you know lots
to think about right now, but it is not all
neo doom and gloom. Headlines might tell you that, but
we think, hey, there are some great opportunities for smart
long term investors right now if you are looking to.
Speaker 2 (19:35):
Take advantage of them. Here's the all Worth advice.
Speaker 1 (19:37):
Sometimes the wild roller coaster rides in the market actually
provide some great opportunities. Point is, you got to know
what they are coming up next. All Worst Chief investment
Officer Andy Stout back with us.
Speaker 2 (19:48):
For those of you who are a little more aggressive investors.
We're going to talk about some opportunities for you.
Speaker 1 (19:54):
You're listening Disimply 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 Sponseller. For those of you who
have been investing for a long time and you understand that, wow,
(20:15):
market volatility is never fun. It's actually a very normal,
healthy part of market cycles.
Speaker 2 (20:21):
And so you're not freaking out right now. You understand that.
Speaker 1 (20:24):
Really the name of the game is growing your investments
outpacing inflation. And so where are the best ways to
get that growth in your investments, joining us or rejoining
us tonight is our chief investment officer, Andy Salt.
Speaker 2 (20:38):
Andy, I do find the people fall kind of into
two distinct camps.
Speaker 1 (20:42):
There, those who are a little more risk averse and
those who are like, you know, what I get it
and how do I get some growth regardless of what's
going on right now? So let's speak to those who
have maybe a slightly higher risk tolerance.
Speaker 3 (20:58):
Well, I think it really comes down to, in terms
of that risk tolerance, how much exposure you have overall.
So when you think about your investment mix, theer's different
levels of it. You could have all equities or all
risky assets, or you could maybe even go down a
little bit in the spectrum. Maybe you have eighty percent
risky asses, twenty percent bonds. Either way, when you think
(21:20):
about it, whether or not you're all in on risky
assets like stocks, or maybe it's even seventy thirty you know,
something like that, that still puts you in the camp
of being a little bit more tolerant towards risk. And
that's where you can start to think about some options
could be you know, something as something like a mixture
(21:43):
of stock of individual sorry equity funds, whether it be
ETFs exchange trade of funds or mutual funds that really
dominate your overall investment mix. Or you could go down
the route of individual stocks, so you can have strategies
that focus on maybe dividend paying stocks, or maybe just
large cap stocks, or maybe it's some like a total
US stock market. So when you're whether you're looking at
(22:03):
funds or whether you're looking at individual stocks, you have
options there essentially to add a little bit more risk,
because when you look at over the long period of time,
you know, stocks have been probably one of the, if
not the best, ways to beat inflation. And then you
can take it another level amy I mean, you can
look at taxable versus non taxable accounts. If you have
(22:27):
taxable accounts, one thing you can do is you can
look at something called a direct index, which is designed
to really just match an index return like the S
and P five hundred as an example, or the Russell
three thousand on a pre tax basis, but on an
after tax basis through continuous tax loss harvesting. Those type
of strategies look to add tax alpha in order to
(22:51):
reduce your tax burden. Now without getting too much into
the details on what tax alpha means. Just think of
it as extra earnings that can reduce your overall tax bill.
So say, for instance, you have a million dollars and
you get ten percent rate of return right here at
one hundred and ten thousand. Now, maybe you had tax
losses harvested of twenty five thousand, just as an example
(23:15):
that can be used to offset gains in other areas,
and all of a sudden, you have this extra return
above and beyond that, and now you got a two
and a half percent tax alpha. So when you think
about it from that perspective, you're able to not only
get the gains on the upside, but you're also lowering
your tax bill.
Speaker 5 (23:36):
Andy, as you look at a lot of our clients
and advisors that are bringing ideas and plans across your
desk to help them put together an investment strategy, talk
about how you dovetail some of this tax alpha, tax
loss harvesting, tax management type of approach with getting broad
market exposure to helping manage through maybe some concentrated stock
(23:59):
position to get better diversified on a tax advantage basis.
Speaker 3 (24:04):
Yeah, So whenever we're looking at any individual situation. It
really depends on the client's investment needs or the say
the investors and investment needs, and there are solutions for
basically any need that's out there in terms of concentrated stock.
And if you still want to have essentially a diversified
position and you want to you know, lessen that burden
(24:28):
of tax alpha. I mean we're talked about direct index.
Is that's something where you can definitely have part of
that position as your direct index and you can use
the losses from the direct index offset that gains.
Speaker 4 (24:41):
There.
Speaker 3 (24:41):
Now, another thing you can do is you can this
is definitely more advanced, but there are there are long
short funds out there that are really designed to generate
active return or alpha above and beyond an index, but
at the same time generate a lot of losses to
offset the gains. Now, that would reduce that concentrated position,
(25:04):
and that doesn't mean the losses magically go away. What's
really happening is the or the gains magically go away.
What's really happening is in that concentrated stock position where
you had that gain, instead of being in one position,
it's then spread out across numerous positions, hundreds or even
up to a thousand positions. So in order that way,
(25:25):
you're just you're not as concentrated in terms of that.
The taxes are still there, but that's still to come.
Speaker 6 (25:31):
Now.
Speaker 3 (25:31):
Another important thing that I can think about just from
a financial planning perspective. I mean we're talking about stocks only.
There are other things you can do as well that
would be considered risky assets and can be inflation over
a period of time. I mean commodities are one example,
whether it be you know, bitcoin. I hate to say
that too too much because people can have a pretty
(25:54):
conflicting opinion on that. But there's other investments as well
on the alternative assets side. As an example, private equity.
That's a really good one because you get a liquidity
premium and you still get that equity like exposure and
you get some potential upside. Of course, with alternative assets
do come many other risks, including potentially being locked up
(26:19):
where you can't access as funds for maybe a year
or two years. I mean, obviously read the perspectus on
those things, but they do offer some nice upside in
certain service in certain circumstances for some investors.
Speaker 2 (26:34):
Indy, I'm glad you went there.
Speaker 1 (26:35):
I'm glad you brought up alternative investments because I think
for a lot of investors who are a little more aggressive, right.
Speaker 2 (26:42):
Or not as opposed to risk, we will often.
Speaker 1 (26:46):
You know, they'll kind of lean in when you start
talking about alternative investments. But historically it has been not
something super accessible to normal investors. So you know, what
price point, what entry point? Do you think it makes
sense to start looking at old investments? And I also
like your point that, hey man, you got to know
(27:07):
what you're getting into here. These things can sound kind
of sexy as an investor, but you really have to
know the potential upside but also the risks associated.
Speaker 3 (27:18):
I don't think there's a hard number in terms of
investable assets that you have to have in order to
invest in alternative assets, because I think it really depends
on the individual investor themselves. Now, some alternative investments require
you to be a creditor or qualified investor, which is
really just a measurement of aum or assets under management
(27:40):
that the investor has as well as an experience. Now,
if they meet that criteria, then the question becomes how
much do you put in alternative assets? And you some
rules of thumb out there that I've seen or you know,
no more than twenty percent or twenty five percent. Some
people even say much lower than that, So it really
just depends on that own persons of financial plan and
(28:00):
what their financial needs are. The one thing that you know,
people definitely need to be aware of is that some
alternatives will issue K ones or K three's in that
situation you're not filing your taxes on April fifteenth, You're
going to have to file on extension and go out
to October fifteenth. Now with that said, you know there
are some what i'll call evergreen funds, which are not
(28:23):
episodic funds, So a lot of alternative assets have heard
to open and hard close dates during like a capital raise.
Some funds, though, are evergreen meanings they are always open,
always taking new investments, and those will sometimes issue at
ten ninety nine, meaning you don't have to delay paying
your taxes if you're not used to doing that.
Speaker 1 (28:41):
I'm glad you brought that up, Anny, because I do
think as an investor it's important to know, Hey, listen,
not only yes, these are an option for me, but
it could even affect my taxes, so I need to
know going into it eyes wide open what I'm investing
in great perspective for those of you who are not
afraid of risk and ready to go all in looking
at you know, where are my potential opportunities? Some great
(29:04):
insights from our chief investment officer, Andy Stout. You're listening
to Simply Money presented by all Worth Financial here in
fifty five cars the talk station.
Speaker 2 (29:15):
You're listening to Simply Money presented by all Worth Financial.
Speaker 1 (29:18):
I mean me Wagner along with Bob Spon's I already
have a financial question you need a little help with.
There's a red button you can click on while you're
listening to our show right there on the iHeart app
record your question. It's coming straight to us.
Speaker 2 (29:29):
And straight ahead. The blind spawns some have when it
comes to moving to their dream location, that dream state.
Speaker 1 (29:37):
My family and I were just talking about that this week.
We'll get to it in just a few minutes.
Speaker 2 (29:41):
But for now, let's look at fact or fiction.
Speaker 1 (29:45):
I'm going to get straight to it, Bob, fact or
fiction cash is king right now.
Speaker 5 (29:50):
Well, I'm already bracing for you to, you know, jump
my case right here, because this is where my it
depends answer comes out. Amy and I know you hate
that answer. It depends. And here's why I'm saying that.
Number One, you just gave an excellent point in the
last segment about this is a great time to check
your emergency fund balance. Make sure that's fully funded so
(30:11):
that you are positioned to not have to panic sell
or sell in a down market to fund short term
cashlow needs.
Speaker 6 (30:20):
So cash can.
Speaker 5 (30:21):
Be great for that purpose, but it could also be
great as a buying opportunity during volvatile markets. So yep,
I think the it depends answer applies here. Amy, Are
you willing to at least swallow that today on a Monday?
Speaker 2 (30:34):
You know, I'll take that. I will take it.
Speaker 1 (30:35):
I totally think I'm right on this one. I'm with
you on this one, Bob, you know. And I also think, hey,
on the flip side, cash is not king if you're
pulling all of your money out of the market because
it's volatile right now and putting it under your mattress,
Because what really is king is inflation. It is always
going to be there, whether markets are volatile or not.
So you have to figure out a way to invest
(30:58):
in a way that you can sleep at night but
also get some returns that are north of inflation so
that you're not eating up your buying power over the
course of time.
Speaker 2 (31:07):
So yes, in some instances, cash is king.
Speaker 1 (31:09):
In some cases, it's really not all right, Bob factor fiction.
Speaker 2 (31:14):
You should be harvesting tax losses year round, not just
a year end. This is not an it depends answer,
by the way, this.
Speaker 4 (31:24):
Is a fact.
Speaker 5 (31:24):
You should be doing this year round, and really amy
with the way things work now, with a lot of
the technology and things available to us with managing taxable accounts,
this should be an ongoing thing going on in the
background in your account, even without you.
Speaker 6 (31:42):
Having to be involved on a daily basis.
Speaker 5 (31:45):
And we have our clients on those programs here at
all worth right now. So when you have those tremendous
swing days up or down, our portfolio managers are already
taking advantage of that to harvest some of those tax
loss short term tax losses, so we can offset them
later on. And it's a wonderful strategy and so many
(32:08):
of our clients are taking advantage of it.
Speaker 2 (32:10):
Absolutely.
Speaker 1 (32:11):
Okay, let's turn our attention now to a state planning
fact or fiction. Estate planning is really mostly about who
gets what, and this is fiction.
Speaker 2 (32:19):
It is so much more. It is about keeping your
assets out of probate. I have seen research on this.
If what you have built over the course of your.
Speaker 1 (32:29):
Lifetime, your home, your vehicles, your four to one k,
whatever your investments are, if you've not done proper estate planning,
they're going to go through probate. Your loved ones are
then going to have to spend more money on that,
more time on it.
Speaker 2 (32:44):
It's more headache.
Speaker 1 (32:45):
So I think estate planning is mostly an act of
love to make sure that what you want to happen
with your assets that you've built after you're gone, actually happens.
Speaker 2 (32:56):
But estate planning is also power of attorney.
Speaker 1 (32:58):
It's advanced healthcare direct is it's to make sure that
your wishes about what happens to you while you're still here,
what happens to your money, if you're incapacitated in your
spouse or your loved ones have to pay the bills,
all of those things are part of a state planning.
Speaker 6 (33:13):
Yeah, and I'll just add to that quickly.
Speaker 5 (33:14):
For folks that are in their twenties and thirties and
early forties that maybe have children that have not reached
the age of majority yet, naming guardians for your kids
is it's huge.
Speaker 1 (33:26):
Yeah.
Speaker 5 (33:26):
And a lot of times people say, well, I don't
need a will, I don't have a ton of money.
If you've got kids, you need some type of legal
documents or estate planning just to name guardians in the event.
Speaker 6 (33:38):
That both spouses should pass away.
Speaker 5 (33:40):
So there's a lot of reasons, not just who gets
what to have a good estate.
Speaker 6 (33:46):
Plan in place.
Speaker 2 (33:46):
Well, and to your point too, on guardianship.
Speaker 1 (33:48):
I often get people in my office who are maybe
in their fifties or sixties, their kids are now eighteen
or twenty five or thirty, and they have not done
estate planning since that point when their kids were little,
and they were worried about guardianship. And it's like, well,
it's not such a pressing concern. Well, yes it is.
It's still a pressing concern. You may not have to
(34:09):
be thinking through guardianship at this point, but there's lots
of other things that you have to think through, even
for your kids as they are adults. Factor fiction, Bob,
you should wait for a market dip before investing access cash.
Speaker 5 (34:24):
Well, this is fiction, and it comes back to your
time horizon. If your time horizons is in a five, ten, fifteen,
twenty plus years. As hard as it is to stomach this,
during periods of volatility, there is never a bad time
to put long term money away in the stock market
because it's just a fact that you're going to get
(34:45):
a higher return in that asset class than you are
any other asset class. So there's never a bad time
to keep investing. And that's why it's great that folks
are in their four toh one k's putting money away
every pay period, dollar cost averaging. That's how you win
long term. The flip side of that is when we've
(35:06):
got these downtown downside volatile markets, it's good, as we've
just talked about, to have a little bit of cash
on the sidelines, and that's where you could pounce, you know,
buy low when other people are panicking, and that can
help you over the long term as well.
Speaker 1 (35:22):
Yeah, I think the takeaway is it's really never a
bad time to invest. Coming up next, the one thing
that a lot of people forget when they're thinking about
moving to their dream location maybe in retirement. You're listening
to Simply Money, presented by all Worth Financial here on
fifty five KRS the talk station. You're listening to Simply
money presented by all Worth Financial. I mean me Wagner
(35:44):
along with Bob Sponseller. I just got back from a
few days in Florida with my family. We were talking
about the fact that it was blue skies and sunny
every single day.
Speaker 6 (35:55):
You know.
Speaker 2 (35:55):
My son was making the point like, why wouldn't you
want to be here permanently?
Speaker 1 (35:59):
And I think I get it about the weather, but
there is a lot to think through. In another conversation though,
that we had is everywhere we drove there was a
toll road, and.
Speaker 2 (36:08):
My son was saying, what's up with all these toll roads?
And we kind of made the point.
Speaker 1 (36:11):
Listen, a lot of people think about Florida and want
to move there in retirement, and one of the reasons
is because there's no income tax here, but they still
have to run their government, They still have to build roads,
they still have to.
Speaker 2 (36:22):
Do infrastructure, the same as any other state.
Speaker 1 (36:24):
So it's like, if they're not going to get it
from your income tax, they are going to find a
way to get money from you.
Speaker 5 (36:32):
Yeah, and a couple of recent articles we've reviewed kind
of confirmed this fact. And I would say it's even
getting more and more the case that you really have
to look hard at the total cost of living in
all of these you know, quote unquote non tax states,
because to your point, Amy, they find a way to
get that money one way or the other, not just
(36:54):
on your state income taxes.
Speaker 1 (36:55):
Yeah, so you've got toll roads, You've got probably property taxes,
you know. In Another thing too, is we've had such
crazy weather the past few years that you know, I
know in Florida in particular, the cost of home insurance
has skyrocketed if you are anywhere close to the.
Speaker 2 (37:12):
Water, but really anywhere, you know, And I think a
lot of people aren't thinking through that.
Speaker 1 (37:16):
They're thinking through, well, the weather is beautiful, I can
play golf every day.
Speaker 5 (37:21):
Well and on that point, and I've read detailed articles
about just condos and how many condos are on sale
right now because of assessments coming down. And what I
mean by that is these condos that are thirty, forty
fifty years old do not have the same hurricane proof
you know, structures as the ones built in the last
(37:43):
five years. And that is really starting to make a
difference in the area of insurance rates and just what.
Speaker 6 (37:50):
People are willing to pay for these condos.
Speaker 5 (37:52):
So you got to look at those things as well,
because the price might look attractive. But if you're going
to get hit with a fifty sixty thousand dollars assessment
to make necessary improvements to that condo, well, that all
of a sudden can make that unaffordable for some folks.
Speaker 1 (38:09):
Yeah, I agree, and I think even beyond money concerned,
there's several other things right where your children and grandchildren are.
I know lots of people who had moving to Florida
and their plans and then change their minds once grandkids
came along.
Speaker 2 (38:22):
And even healthcare right later in life.
Speaker 1 (38:25):
If you have a set of doctors, the network of
doctors here that you're comfortable with, it feels very different
kind of moving across the country and having to.
Speaker 2 (38:32):
Start fresh when you're a little older. Here's the all
Worth advice.
Speaker 1 (38:35):
Well, the idea of moving to a loo tax state
can be appealing, you really have to think through the
full picture here, and if you're getting stuck with that,
find a fiduciary financial advisor that can help you figure
that out.
Speaker 2 (38:47):
Thanks for listening, tune in tomorrow.
Speaker 1 (38:49):
We're talking about Well, you might have more of a
shot at achieving financial freedom than most. Even listening to
simply money, presented by all Worth Financial here on fifty
five KRC the talk station
Tonight, a lot to keep up with in the headlines,
but perspective on maybe what you should really be focusing
on and rather than looking at volatility, what are the
opportunities for you as an investor. You're listening to Simply
Money presented by all Worth Financial Ammi Wagner along with perhubsponseller.
We kind of have joked for many years about how
crazy the news cycle is, but lately it has sped
(00:28):
up times one hundred. There's a lot to keep up with,
and some of that, yes, is impacting your flour. O
one K joining us tonight as he does every Monday,
our chief investment officer from right here at all Worth
Financial and east out by the way, you know, he's
managing twenty five billion dollars, so he really is keeping
his finger on the pulse of what is going on
here and Amy.
Speaker 2 (00:49):
I think as an investor it's a little bit difficult
to even know.
Speaker 1 (00:52):
Which end is up what to focus on, because there
is so much I think affecting us right now.
Speaker 2 (00:58):
What do you think as investors maybe.
Speaker 1 (01:01):
The largest threat to our portfolios is or the number
one thing you think we need to be focusing on
right now?
Speaker 3 (01:08):
Well, the largest threat to your portfolio is probably yourself, right.
I mean, if you think about it, emotional decisions are
really what drives whether or not you get the returns
you need or you fall short, because all too often
you when you think about these news cycles, news is
best at tops and worst at bottoms. And in the meantime,
(01:29):
there's going to be lots of noise. And we're getting
a lot of noise right now, I mean, whether that
be on the trade front, and a lot of that's
conflicting noise even so.
Speaker 4 (01:38):
I mean, a couple of weeks.
Speaker 3 (01:40):
Ago we talked about the bet charge your own power
possibly getting fired. Now that appears to be completely off
the table. Then you have what's going on with the
trade war, which is, you know, i'll call it somewhat
conflicting information from you.
Speaker 4 (01:54):
Know, various sources.
Speaker 3 (01:56):
So if you just kind of think about the trade
front in general, it's a bit confusing. I mean, we
had some signs of de escalation last week. You know,
on the positive side, you had Scott Scent talking about
China tariffs being at that level unsustainable and the US
is open to a deal with China.
Speaker 4 (02:17):
However, this morning.
Speaker 3 (02:18):
He said that the first move needs to come from China.
It's up to them to really de escalate. So when
you look at all of this, there's just a lot
of moving pieces. So really the best advice, you know,
I can think of is to, you know, take a
step back, think about it from a big picture of perspective,
and don't make any emotional decisions.
Speaker 5 (02:40):
Andy, let's let's dovetail earnings announcements with the ongoing, ongoing
uncertainty about tariffs and trade deals. We've had about thirty
six percent of the S and P five hundred report
you know, quarterly earnings so far. What are you seeing
in terms of quarterly estimates moving forward into the next
couple of quarters given all of the uncertainty around trade policy.
Speaker 3 (03:05):
So far, earning season has been pretty good when you
look at just the overall picture, I mean, essentially, of
the roughly thirty six percent of these large cap companies
that have reported, three quarters of them have posted better
than expected profits.
Speaker 4 (03:22):
So that's definitely it sounds better than it is.
Speaker 3 (03:25):
Let me just put it that way, because when you
look at the historical average, it's right around seventy five
to eighty percent of the companies beating results. And the
reason for that is what you see is you see
companies' lower estimates get going into earning seasons so they
can beat them. It's really just a game to them
more than anything else. But it's important that they do
(03:46):
beat those essence, because that's kind of how it works.
Now we're seeing growth around nine point seven percent, and
that's pretty good. That's better than what the preseason estimate was.
The earning estimate at the beginning was around six point
six percent. That we're coming in about three percentage points higher.
And when you look at it, it's that's.
Speaker 4 (04:08):
Just the look back.
Speaker 3 (04:09):
You know.
Speaker 4 (04:09):
What also matters is the look forward.
Speaker 3 (04:13):
What's the guidance coming in at And that's where it's
been a little bit more I don't volatile, or a
little bit more all over the board, just because there's
a lot of uncertainty out there right now about the
trade and trying to determine how these companies are going
to navigate the environment when there is a lot of
unknowns out there.
Speaker 4 (04:33):
It's very interesting and very telling to watch, all right.
Speaker 5 (04:37):
Just to follow up through my prior question, any and
he again, you're encouraging us to look big, big picture,
and that's what I'm trying to do. I look big
picture here. As of Friday afternoon, the SMP's down five
point seven percent, not horrible. Bond markets up for the year.
There are asset classes like international equities that are up
for the year. It doesn't look that bad out there
(05:00):
right now. And my question is to your point about
forward looking earnings, is what typically moves this market. Are
folks factoring in resolutions on a lot of these tariffs?
Is they provide guidance for future quarters or is that
not yet baked into the equation.
Speaker 3 (05:21):
When you look at what companies are thinking about when
it comes to the earnings, they're not really adjusting too
much when it comes at least adjusting on a negative
basis when it comes to the terroffs, just because they
don't know how to essentially price in that uncertainty into
what their forecasts are. So I what people are looking
(05:41):
at right now is yes, it's going to be unknown
in the near term, but when you look out over
you know, by the end of this year we'll probably
be passed this.
Speaker 6 (05:53):
I mean, my.
Speaker 3 (05:53):
Guess is that you're going to look back at this
period and of course you know we're all panicking right well,
We're not all panicking right now. A lot of people
are panicking right now and think about, oh no, the
world's coming to an end. I guess when you look
back at this a year from now, it's just going
to be another blip on the road map to financial
peace of mind. Yeah.
Speaker 2 (06:12):
I think that's a great perspective too.
Speaker 1 (06:13):
Right how you feel right now isn't necessarily the reality
when you look at the numbers of what the market
is really down this year, despite all the volatility we've seen.
You're listening to Simply Money, presented by all Worth Financial.
I Meani Wagner along with Bob Sponseller. We're joined by
Andy stoutle Worth chief Investment Officer, to get his perspective
on the markets. Obviously, Andy, it really all comes down
(06:34):
to tariffs right now. I'd like to take you back
to the beginning of when we even started on this
path talking about tariffs.
Speaker 2 (06:41):
You kind of said, listen, there's a handful.
Speaker 1 (06:43):
Of reasons why President Trump might be considering these tariffs.
In my mind as an investor at the time, I thought, okay, well,
if it's negotiating tactics, we're probably not going to get
to the point of actually implementing these tariffs. I didn't
think about the strategist right that we have at.
Speaker 2 (07:01):
The helm here.
Speaker 1 (07:02):
You know President Trump, and you know he's as a
really good strategist.
Speaker 2 (07:06):
We don't know what exactly is going on.
Speaker 1 (07:08):
We did kind of wade into that territory of enacting
tariffs and then kind of step back as you look
at the different things that he may be trying to
accomplish here, can you talk through those and maybe where
we might be in the midst of all this.
Speaker 4 (07:24):
Well, when you.
Speaker 3 (07:25):
Think about the reasons for these terrorists, I mean you
already mentioned one of them, which is really a negotiating tactic,
and we've seen some progress there with Canada and Mexico
specifically moving more soldiers to the borders in order to
help shore up illegal migrants from entering the country. Now,
when you look at some of the other reasons, one
is to raise revenue, and I think that's an important
(07:47):
one for the president because what he wants to do
he wants to lower taxes later this year and he
needs to essentially get some more money from a budget perspective,
and this helps accomplish that goal.
Speaker 4 (07:57):
So he is able to hopefully push that forward and
the lower taxes.
Speaker 3 (08:03):
Now another reason is to you know, essentially rectify an
unfair trade balance, which appears to be really his main
talking points out there when he's talking about the trade
deficits that we have with other countries. So when we
look at it from that perspective, we're not quite there
(08:24):
yet because there's still obviously a lot of trade deficits
and we're never going to get rid of that deficit.
I mean, if you just think about, you know, just
how economies evolve over time. I mean, it's not as
if we're a big manufacturing hub in general. But when
you think about the tariffs and what's been enacted so far,
and then President Trump with that tariff board he had
(08:45):
held up that one day, and now that when we
see where we're at, I mean, we have ten percent
baseline tariffs pretty much across the globe. He's pulled back
or paused on the elevated reciprocal tariffs, but we still
have to deal with those ten percent, and I want
to be surprised if that sticks around for a bit
of time.
Speaker 5 (09:06):
All right, Andy, getting off of the tariff topic, we've
got an important jobs report coming out this week, and
we've got an important gross domestic product GDP report coming
out this week.
Speaker 6 (09:17):
What are you expecting on those two fronts.
Speaker 3 (09:20):
Yeah, the jobs report there's going to it's interesting because
it's going to show if there's beeny impact yet on
trade and also from some of the cuts, if you will,
from the DOGE Department of Government Efficiency led by Elon Musk,
although I guess he's going to be stepping back a
(09:40):
little bit there in terms of his involvement in that.
He talked about that last week during his earnings announcements.
As far as what's expected, the economists think there might
see one hundred and thirty thousand or so new jobs
in the month of April, and they also think that
the unemployment rate will remain at four point two percent.
(10:01):
So if those numbers come in as is, I mean,
that's that's an okay report, and that's what we would
hope to see. We don't want to see any weakness
there now on the GDP side or gross domestic product,
which is how much output the economy has or how
quickly it's growing, if you want to think about it
that way, And those estimates are all over the map
(10:24):
when you look at you know, what's expected some economists
are seeing gains of maybe one and a half percent.
Some are seeing a detraction or a contraction excuse me,
up two percent. It really just depends, and there's a
lot of uncertainty, especially around the trade because many companies
and business many companies and the individuals have pulled forward demand,
meaning that they've imported a lot more and that's going
(10:47):
to widen the overall trade deficit. So the consensus estimate
is zero point four percent, but it could be anywhere.
Risks are skewed to the downside.
Speaker 2 (10:57):
And you want to quickly get your take on.
Speaker 1 (11:00):
President Trump had been kind of critical of Fed chaired
Jerome Powell over the past weeks, kind of stepped away
from that recently. You have been very open through the
years about your thoughts on how Powell is doing. You
kind of said, hey, when they started to raise interest rates,
they were a little late to that game. If you
were to give him a report card, right, you've got kids,
give him a grade on how the Fed is doing.
(11:22):
At this point, I want to hear your honest opinion.
How do you think they're doing.
Speaker 4 (11:26):
What's my time period, like what semester or quarter?
Speaker 1 (11:31):
I mean, give us where we are over the past
six months with all this trade, you know, the tariffs
and everything like that.
Speaker 2 (11:37):
How do you feel they're doing right now?
Speaker 4 (11:39):
I'd give him a bee. I don't.
Speaker 3 (11:41):
I know there's been a lot of pressure on him
to cut interest rates, but with inflation where they're at
right where it's at right now. Yeah, I just don't
see how you know that's possible or how that makes
any sense because if he cuts rates right now, that's
where you're going to go ahead and see a possible resurgence.
Speaker 1 (12:01):
B I think that's good perspective there. Here's the all
Worth advice this day to day stuff. Man, it's important
for us as we try to identify real trends. You
need to stick to your long term plan. Coming up
next our list of opportunities that exist out there right now.
If you are an investor, long term investor during this
volatile time period. You're listening to Simply Money presented by
(12:21):
all Worth Financial here on.
Speaker 2 (12:22):
Fifty five KRC the talk station.
Speaker 1 (12:28):
You're listening to Simply Money presented by all Worth Financial
Ammi Wagner along with Bob Sponsell. Or if you can't
listen to our show every night, well things are changing pretty.
Speaker 2 (12:37):
Quickly these days, so you need to keep up. We've
got a daily podcast for you. Just search Simply Money.
Speaker 1 (12:42):
It's right there on the iHeart app or wherever you
get your podcasts. Coming up at six forty three Fact
or Fiction with the focus on the current market environment.
Speaker 2 (12:51):
Lots of good stuff there for you. You know, I think
the headlines are there, well, we know they're there. They're clickbait.
Speaker 1 (12:55):
They're there to try to freak you out and make
you click on whatever it is trying to peddle to
you as a long term investor, And we would say, listen,
during this market volatility, it's not all.
Speaker 2 (13:07):
Bad news in doom and gloom. There are opportunities out here, Bob.
Speaker 1 (13:11):
I also appreciate the fact that you gave us kind
of the perspective earlier in the show of market's a
really down less than six percent at this point, right
in the midst of all this volatility.
Speaker 2 (13:22):
That's great perspective. But let's talk about opportunities for investors
during markets like this.
Speaker 1 (13:30):
No.
Speaker 5 (13:30):
I love I love this segment, Amy, And one of
my favorite things I hear you say several times every
week on this show is control what you can control
and that's what we're going to talk about right now.
So I'd say a first opportunity, now that tax filing
for most people is over, most people have their twenty
twenty four tax return in hand. Now's a great time,
(13:53):
as you're doing a review with your fiduciary financial advisor,
take a look at all the positions in your account
and now we're especially talking about non retirement accounts, and
look at opportunities to do some tax loss harvesting. And
if you do have concentrated stock positions that you're trying
to gradually diversify out of, this is a time to
(14:16):
do some proactive planning and take advantage of some of
this volatility to harvest some of those short term losses
and offset those against gains in your portfolio.
Speaker 1 (14:26):
Yeah, and I think under that concept of tax planning,
right trying to get some tax alpha in your portfolio.
Speaker 2 (14:32):
You know, a conversation I'm having with with all of my.
Speaker 1 (14:35):
Investors, especially those who are retired right now, is he
do Wroth conversions make sense for you if you happen
to First of all, think Wroth conversions make sense this
year if you can hit it on a day when
markets are down well, you're going to pay slightly less
to convert those assets into a wrath, you.
Speaker 2 (14:53):
Know, just kind of an added bonus again if.
Speaker 1 (14:55):
The strategy fully makes sense for you, kind of regardless
of the volatility right now, but you get it timed right,
and there's kind of an extra little bonus there for you.
Speaker 5 (15:06):
Another opportunity I want to make sure we touch on
here is just assessing your overall tolerance for risk. Yes,
and Amy, we've talked about this several times over the
last couple of months.
Speaker 6 (15:16):
But you know, when everything's moving along smoothly, there's very
little headline risk, you know, like in twenty three twenty.
Speaker 5 (15:23):
Four markets just went nicely up, you know, twenty some percent.
Our tolerance for risk tends to gradually float upward because
we have that recency bias that things are always going.
Speaker 6 (15:36):
To go up.
Speaker 5 (15:37):
You move into twenty twenty five, we get reminded that, hey,
markets do go down occasionally, and I think now is
a good time to assess with your advisor what is
my true level of tolerance for investment risk, and to
make sure I combine that with my overall financial plan
(15:57):
to make sure we have our assets position correctly. Moving
forward from an allocation standpoint.
Speaker 2 (16:03):
I think I totally agree.
Speaker 1 (16:05):
I think you can get a kind of a false
sense of confidence in the markets when every time you
check them, there up and they're like, oh, yeah, I
can take on this level of risk because in the
back of your mind you're thinking, I'm not gonna lose,
you know.
Speaker 2 (16:15):
I mean markets have been going up and up and up.
But during a time when there's real market volatility. Okay,
let's put the finger.
Speaker 1 (16:22):
Back on the pulse and say, how are we really
doing right now?
Speaker 2 (16:25):
Am I still sleeping at night? Am I freaked out?
Speaker 1 (16:28):
Am I checking my four oh win K balance ten
times more than I usually would? Okay, then maybe what
the issue is is not necessarily the market volatility, because
that's actually normal. It's that you don't have your right
risk tolerance. So this is a great time to check that.
Speaker 2 (16:45):
And I'd also say, hey, it could also be just
a buying opportunity. I do not know what it is
about investors. Americans, Listen, we love a good deal.
Speaker 1 (16:53):
I am the person who walks into a store and
I'm never going to that full price rack.
Speaker 2 (16:58):
I'm always going to the sale rack or the clearance. Fact. Yet,
when stocks go on sale.
Speaker 1 (17:04):
When there's a discount, we all run for the exit
of the store because we're like, something's wrong, these are
flawed products.
Speaker 2 (17:10):
Nope, nope, same.
Speaker 1 (17:12):
Great companies that they were yesterday or last month or
last quarter. But there is some volatility, so it's an
opportunity to buy those those companies, the pieces of them
at a discount.
Speaker 5 (17:27):
Well, one of the good, the good things that are
going on with our clients here at all Worth is
our chief investment officer, Andy Stout, is already doing that
and has been doing that for our clients on a
regular basis in our model portfolios.
Speaker 6 (17:41):
So again, the.
Speaker 5 (17:42):
Market is not down that much year to date, but boy,
we've had a lot of swings up and down. It
feels like it's been an extremely volatile market so far
this year. And the key is you got to be
ready to pounce on opportunities when they exist, because they
don't always last for very long. And that's why you
want a good fiduciary managed portfolio where somebody has their
(18:07):
hands on the wheel every day to take advantage of
these short term opportunities, both from a buy low standpoint
and from a tax planning standpoint.
Speaker 2 (18:17):
I'd also say right now is a good opportunity to
assess your cash reserves, your emergency fund. Is it well funded.
Speaker 1 (18:25):
This is a conversation I have with all of my
investors that I work with, especially when they're getting closer
to retirement. The larger emergency fund that you have to
fall back on, the more options you give yourself when
you get to retirement. And it was a tougher conversation
to have the last couple of years when I was saying, hey,
that money does not belong exposed to the market, and
(18:46):
they're like, wait, what you know.
Speaker 2 (18:48):
I'm getting twenty percent right now and.
Speaker 1 (18:50):
You're telling me no market exposure. Yes I am, and
here's why any money.
Speaker 6 (18:55):
And they're thanking you now.
Speaker 5 (18:57):
Your clients are thanking you now for that advice they
thought was idiotic just eighteen months ago.
Speaker 1 (19:02):
Right, it was a tough conversation to have before, and
now it's a little bit like, oh, I get it.
Speaker 2 (19:07):
I know why we're talking about this. And I think, hey,
if you're someone who's getting closer to retirement.
Speaker 1 (19:13):
And you have not built adequate cash reserves, this is
a great reminder that this is a good time to
focus on building those cash reserves. So you know lots
to think about right now, but it is not all
neo doom and gloom. Headlines might tell you that, but
we think, hey, there are some great opportunities for smart
long term investors right now if you are looking to.
Speaker 2 (19:35):
Take advantage of them. Here's the all Worth advice.
Speaker 1 (19:37):
Sometimes the wild roller coaster rides in the market actually
provide some great opportunities. Point is, you got to know
what they are coming up next. All Worst Chief investment
Officer Andy Stout back with us.
Speaker 2 (19:48):
For those of you who are a little more aggressive investors.
We're going to talk about some opportunities for you.
Speaker 1 (19:54):
You're listening Disimply 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 Sponseller. For those of you who
have been investing for a long time and you understand that, wow,
(20:15):
market volatility is never fun. It's actually a very normal,
healthy part of market cycles.
Speaker 2 (20:21):
And so you're not freaking out right now. You understand that.
Speaker 1 (20:24):
Really the name of the game is growing your investments
outpacing inflation. And so where are the best ways to
get that growth in your investments, joining us or rejoining
us tonight is our chief investment officer, Andy Salt.
Speaker 2 (20:38):
Andy, I do find the people fall kind of into
two distinct camps.
Speaker 1 (20:42):
There, those who are a little more risk averse and
those who are like, you know, what I get it
and how do I get some growth regardless of what's
going on right now? So let's speak to those who
have maybe a slightly higher risk tolerance.
Speaker 3 (20:58):
Well, I think it really comes down to, in terms
of that risk tolerance, how much exposure you have overall.
So when you think about your investment mix, theer's different
levels of it. You could have all equities or all
risky assets, or you could maybe even go down a
little bit in the spectrum. Maybe you have eighty percent
risky asses, twenty percent bonds. Either way, when you think
(21:20):
about it, whether or not you're all in on risky
assets like stocks, or maybe it's even seventy thirty you know,
something like that, that still puts you in the camp
of being a little bit more tolerant towards risk. And
that's where you can start to think about some options
could be you know, something as something like a mixture
(21:43):
of stock of individual sorry equity funds, whether it be
ETFs exchange trade of funds or mutual funds that really
dominate your overall investment mix. Or you could go down
the route of individual stocks, so you can have strategies
that focus on maybe dividend paying stocks, or maybe just
large cap stocks, or maybe it's some like a total
US stock market. So when you're whether you're looking at
(22:03):
funds or whether you're looking at individual stocks, you have
options there essentially to add a little bit more risk,
because when you look at over the long period of time,
you know, stocks have been probably one of the, if
not the best, ways to beat inflation. And then you
can take it another level amy I mean, you can
look at taxable versus non taxable accounts. If you have
(22:27):
taxable accounts, one thing you can do is you can
look at something called a direct index, which is designed
to really just match an index return like the S
and P five hundred as an example, or the Russell
three thousand on a pre tax basis, but on an
after tax basis through continuous tax loss harvesting. Those type
of strategies look to add tax alpha in order to
(22:51):
reduce your tax burden. Now without getting too much into
the details on what tax alpha means. Just think of
it as extra earnings that can reduce your overall tax bill.
So say, for instance, you have a million dollars and
you get ten percent rate of return right here at
one hundred and ten thousand. Now, maybe you had tax
losses harvested of twenty five thousand, just as an example
(23:15):
that can be used to offset gains in other areas,
and all of a sudden, you have this extra return
above and beyond that, and now you got a two
and a half percent tax alpha. So when you think
about it from that perspective, you're able to not only
get the gains on the upside, but you're also lowering
your tax bill.
Speaker 5 (23:36):
Andy, as you look at a lot of our clients
and advisors that are bringing ideas and plans across your
desk to help them put together an investment strategy, talk
about how you dovetail some of this tax alpha, tax
loss harvesting, tax management type of approach with getting broad
market exposure to helping manage through maybe some concentrated stock
(23:59):
position to get better diversified on a tax advantage basis.
Speaker 3 (24:04):
Yeah, So whenever we're looking at any individual situation. It
really depends on the client's investment needs or the say
the investors and investment needs, and there are solutions for
basically any need that's out there in terms of concentrated stock.
And if you still want to have essentially a diversified
position and you want to you know, lessen that burden
(24:28):
of tax alpha. I mean we're talked about direct index.
Is that's something where you can definitely have part of
that position as your direct index and you can use
the losses from the direct index offset that gains.
Speaker 4 (24:41):
There.
Speaker 3 (24:41):
Now, another thing you can do is you can this
is definitely more advanced, but there are there are long
short funds out there that are really designed to generate
active return or alpha above and beyond an index, but
at the same time generate a lot of losses to
offset the gains. Now, that would reduce that concentrated position,
(25:04):
and that doesn't mean the losses magically go away. What's
really happening is the or the gains magically go away.
What's really happening is in that concentrated stock position where
you had that gain, instead of being in one position,
it's then spread out across numerous positions, hundreds or even
up to a thousand positions. So in order that way,
(25:25):
you're just you're not as concentrated in terms of that.
The taxes are still there, but that's still to come.
Speaker 6 (25:31):
Now.
Speaker 3 (25:31):
Another important thing that I can think about just from
a financial planning perspective. I mean we're talking about stocks only.
There are other things you can do as well that
would be considered risky assets and can be inflation over
a period of time. I mean commodities are one example,
whether it be you know, bitcoin. I hate to say
that too too much because people can have a pretty
(25:54):
conflicting opinion on that. But there's other investments as well
on the alternative assets side. As an example, private equity.
That's a really good one because you get a liquidity
premium and you still get that equity like exposure and
you get some potential upside. Of course, with alternative assets
do come many other risks, including potentially being locked up
(26:19):
where you can't access as funds for maybe a year
or two years. I mean, obviously read the perspectus on
those things, but they do offer some nice upside in
certain service in certain circumstances for some investors.
Speaker 2 (26:34):
Indy, I'm glad you went there.
Speaker 1 (26:35):
I'm glad you brought up alternative investments because I think
for a lot of investors who are a little more aggressive, right.
Speaker 2 (26:42):
Or not as opposed to risk, we will often.
Speaker 1 (26:46):
You know, they'll kind of lean in when you start
talking about alternative investments. But historically it has been not
something super accessible to normal investors. So you know, what
price point, what entry point? Do you think it makes
sense to start looking at old investments? And I also
like your point that, hey man, you got to know
(27:07):
what you're getting into here. These things can sound kind
of sexy as an investor, but you really have to
know the potential upside but also the risks associated.
Speaker 3 (27:18):
I don't think there's a hard number in terms of
investable assets that you have to have in order to
invest in alternative assets, because I think it really depends
on the individual investor themselves. Now, some alternative investments require
you to be a creditor or qualified investor, which is
really just a measurement of aum or assets under management
(27:40):
that the investor has as well as an experience. Now,
if they meet that criteria, then the question becomes how
much do you put in alternative assets? And you some
rules of thumb out there that I've seen or you know,
no more than twenty percent or twenty five percent. Some
people even say much lower than that, So it really
just depends on that own persons of financial plan and
(28:00):
what their financial needs are. The one thing that you know,
people definitely need to be aware of is that some
alternatives will issue K ones or K three's in that
situation you're not filing your taxes on April fifteenth, You're
going to have to file on extension and go out
to October fifteenth. Now with that said, you know there
are some what i'll call evergreen funds, which are not
(28:23):
episodic funds, So a lot of alternative assets have heard
to open and hard close dates during like a capital raise.
Some funds, though, are evergreen meanings they are always open,
always taking new investments, and those will sometimes issue at
ten ninety nine, meaning you don't have to delay paying
your taxes if you're not used to doing that.
Speaker 1 (28:41):
I'm glad you brought that up, Anny, because I do
think as an investor it's important to know, Hey, listen,
not only yes, these are an option for me, but
it could even affect my taxes, so I need to
know going into it eyes wide open what I'm investing
in great perspective for those of you who are not
afraid of risk and ready to go all in looking
at you know, where are my potential opportunities? Some great
(29:04):
insights from our chief investment officer, Andy Stout. You're listening
to Simply Money presented by all Worth Financial here in
fifty five cars the talk station.
Speaker 2 (29:15):
You're listening to Simply Money presented by all Worth Financial.
Speaker 1 (29:18):
I mean me Wagner along with Bob Spon's I already
have a financial question you need a little help with.
There's a red button you can click on while you're
listening to our show right there on the iHeart app
record your question. It's coming straight to us.
Speaker 2 (29:29):
And straight ahead. The blind spawns some have when it
comes to moving to their dream location, that dream state.
Speaker 1 (29:37):
My family and I were just talking about that this week.
We'll get to it in just a few minutes.
Speaker 2 (29:41):
But for now, let's look at fact or fiction.
Speaker 1 (29:45):
I'm going to get straight to it, Bob, fact or
fiction cash is king right now.
Speaker 5 (29:50):
Well, I'm already bracing for you to, you know, jump
my case right here, because this is where my it
depends answer comes out. Amy and I know you hate
that answer. It depends. And here's why I'm saying that.
Number One, you just gave an excellent point in the
last segment about this is a great time to check
your emergency fund balance. Make sure that's fully funded so
(30:11):
that you are positioned to not have to panic sell
or sell in a down market to fund short term
cashlow needs.
Speaker 6 (30:20):
So cash can.
Speaker 5 (30:21):
Be great for that purpose, but it could also be
great as a buying opportunity during volvatile markets. So yep,
I think the it depends answer applies here. Amy, Are
you willing to at least swallow that today on a Monday?
Speaker 2 (30:34):
You know, I'll take that. I will take it.
Speaker 1 (30:35):
I totally think I'm right on this one. I'm with
you on this one, Bob, you know. And I also think, hey,
on the flip side, cash is not king if you're
pulling all of your money out of the market because
it's volatile right now and putting it under your mattress,
Because what really is king is inflation. It is always
going to be there, whether markets are volatile or not.
So you have to figure out a way to invest
(30:58):
in a way that you can sleep at night but
also get some returns that are north of inflation so
that you're not eating up your buying power over the
course of time.
Speaker 2 (31:07):
So yes, in some instances, cash is king.
Speaker 1 (31:09):
In some cases, it's really not all right, Bob factor fiction.
Speaker 2 (31:14):
You should be harvesting tax losses year round, not just
a year end. This is not an it depends answer,
by the way, this.
Speaker 4 (31:24):
Is a fact.
Speaker 5 (31:24):
You should be doing this year round, and really amy
with the way things work now, with a lot of
the technology and things available to us with managing taxable accounts,
this should be an ongoing thing going on in the
background in your account, even without you.
Speaker 6 (31:42):
Having to be involved on a daily basis.
Speaker 5 (31:45):
And we have our clients on those programs here at
all worth right now. So when you have those tremendous
swing days up or down, our portfolio managers are already
taking advantage of that to harvest some of those tax
loss short term tax losses, so we can offset them
later on. And it's a wonderful strategy and so many
(32:08):
of our clients are taking advantage of it.
Speaker 2 (32:10):
Absolutely.
Speaker 1 (32:11):
Okay, let's turn our attention now to a state planning
fact or fiction. Estate planning is really mostly about who
gets what, and this is fiction.
Speaker 2 (32:19):
It is so much more. It is about keeping your
assets out of probate. I have seen research on this.
If what you have built over the course of your.
Speaker 1 (32:29):
Lifetime, your home, your vehicles, your four to one k,
whatever your investments are, if you've not done proper estate planning,
they're going to go through probate. Your loved ones are
then going to have to spend more money on that,
more time on it.
Speaker 2 (32:44):
It's more headache.
Speaker 1 (32:45):
So I think estate planning is mostly an act of
love to make sure that what you want to happen
with your assets that you've built after you're gone, actually happens.
Speaker 2 (32:56):
But estate planning is also power of attorney.
Speaker 1 (32:58):
It's advanced healthcare direct is it's to make sure that
your wishes about what happens to you while you're still here,
what happens to your money, if you're incapacitated in your
spouse or your loved ones have to pay the bills,
all of those things are part of a state planning.
Speaker 6 (33:13):
Yeah, and I'll just add to that quickly.
Speaker 5 (33:14):
For folks that are in their twenties and thirties and
early forties that maybe have children that have not reached
the age of majority yet, naming guardians for your kids
is it's huge.
Speaker 1 (33:26):
Yeah.
Speaker 5 (33:26):
And a lot of times people say, well, I don't
need a will, I don't have a ton of money.
If you've got kids, you need some type of legal
documents or estate planning just to name guardians in the event.
Speaker 6 (33:38):
That both spouses should pass away.
Speaker 5 (33:40):
So there's a lot of reasons, not just who gets
what to have a good estate.
Speaker 6 (33:46):
Plan in place.
Speaker 2 (33:46):
Well, and to your point too, on guardianship.
Speaker 1 (33:48):
I often get people in my office who are maybe
in their fifties or sixties, their kids are now eighteen
or twenty five or thirty, and they have not done
estate planning since that point when their kids were little,
and they were worried about guardianship. And it's like, well,
it's not such a pressing concern. Well, yes it is.
It's still a pressing concern. You may not have to
(34:09):
be thinking through guardianship at this point, but there's lots
of other things that you have to think through, even
for your kids as they are adults. Factor fiction, Bob,
you should wait for a market dip before investing access cash.
Speaker 5 (34:24):
Well, this is fiction, and it comes back to your
time horizon. If your time horizons is in a five, ten, fifteen,
twenty plus years. As hard as it is to stomach this,
during periods of volatility, there is never a bad time
to put long term money away in the stock market
because it's just a fact that you're going to get
(34:45):
a higher return in that asset class than you are
any other asset class. So there's never a bad time
to keep investing. And that's why it's great that folks
are in their four toh one k's putting money away
every pay period, dollar cost averaging. That's how you win
long term. The flip side of that is when we've
(35:06):
got these downtown downside volatile markets, it's good, as we've
just talked about, to have a little bit of cash
on the sidelines, and that's where you could pounce, you know,
buy low when other people are panicking, and that can
help you over the long term as well.
Speaker 1 (35:22):
Yeah, I think the takeaway is it's really never a
bad time to invest. Coming up next, the one thing
that a lot of people forget when they're thinking about
moving to their dream location maybe in retirement. You're listening
to Simply Money, presented by all Worth Financial here on
fifty five KRS the talk station. You're listening to Simply
money presented by all Worth Financial. I mean me Wagner
(35:44):
along with Bob Sponseller. I just got back from a
few days in Florida with my family. We were talking
about the fact that it was blue skies and sunny
every single day.
Speaker 6 (35:55):
You know.
Speaker 2 (35:55):
My son was making the point like, why wouldn't you
want to be here permanently?
Speaker 1 (35:59):
And I think I get it about the weather, but
there is a lot to think through. In another conversation though,
that we had is everywhere we drove there was a
toll road, and.
Speaker 2 (36:08):
My son was saying, what's up with all these toll roads?
And we kind of made the point.
Speaker 1 (36:11):
Listen, a lot of people think about Florida and want
to move there in retirement, and one of the reasons
is because there's no income tax here, but they still
have to run their government, They still have to build roads,
they still have to.
Speaker 2 (36:22):
Do infrastructure, the same as any other state.
Speaker 1 (36:24):
So it's like, if they're not going to get it
from your income tax, they are going to find a
way to get money from you.
Speaker 5 (36:32):
Yeah, and a couple of recent articles we've reviewed kind
of confirmed this fact. And I would say it's even
getting more and more the case that you really have
to look hard at the total cost of living in
all of these you know, quote unquote non tax states,
because to your point, Amy, they find a way to
get that money one way or the other, not just
(36:54):
on your state income taxes.
Speaker 1 (36:55):
Yeah, so you've got toll roads, You've got probably property taxes,
you know. In Another thing too, is we've had such
crazy weather the past few years that you know, I
know in Florida in particular, the cost of home insurance
has skyrocketed if you are anywhere close to the.
Speaker 2 (37:12):
Water, but really anywhere, you know, And I think a
lot of people aren't thinking through that.
Speaker 1 (37:16):
They're thinking through, well, the weather is beautiful, I can
play golf every day.
Speaker 5 (37:21):
Well and on that point, and I've read detailed articles
about just condos and how many condos are on sale
right now because of assessments coming down. And what I
mean by that is these condos that are thirty, forty
fifty years old do not have the same hurricane proof
you know, structures as the ones built in the last
(37:43):
five years. And that is really starting to make a
difference in the area of insurance rates and just what.
Speaker 6 (37:50):
People are willing to pay for these condos.
Speaker 5 (37:52):
So you got to look at those things as well,
because the price might look attractive. But if you're going
to get hit with a fifty sixty thousand dollars assessment
to make necessary improvements to that condo, well, that all
of a sudden can make that unaffordable for some folks.
Speaker 1 (38:09):
Yeah, I agree, and I think even beyond money concerned,
there's several other things right where your children and grandchildren are.
I know lots of people who had moving to Florida
and their plans and then change their minds once grandkids
came along.
Speaker 2 (38:22):
And even healthcare right later in life.
Speaker 1 (38:25):
If you have a set of doctors, the network of
doctors here that you're comfortable with, it feels very different
kind of moving across the country and having to.
Speaker 2 (38:32):
Start fresh when you're a little older. Here's the all
Worth advice.
Speaker 1 (38:35):
Well, the idea of moving to a loo tax state
can be appealing, you really have to think through the
full picture here, and if you're getting stuck with that,
find a fiduciary financial advisor that can help you figure
that out.
Speaker 2 (38:47):
Thanks for listening, tune in tomorrow.
Speaker 1 (38:49):
We're talking about Well, you might have more of a
shot at achieving financial freedom than most. Even listening to
simply money, presented by all Worth Financial here on fifty
five KRC the talk station
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