Episode Transcript
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(00:00):
Good morning and welcome to money.Since you're listening to the advisors of Kurston
Wealth Manager Group, Kevin Kurston andBrad Kurston, happy to be with you
this morning as we close out themonth of September, Brad, in the
overall market, the month of Septemberbasically did what it almost always does.
It's the weakest month of the yearhistorically, and it's been a pretty week
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month overall here in twenty twenty threeas well. Good news is October and
November are the two best combined monthswhen you put the two month performance together,
they're the two best combined months backto back that we have throughout the
calendar, or if you're gonna lookat the seasonality of it, so yeah,
and this could possibly have consolidated alittle bit in them in August and
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September, setting up for a nicelittle fourth quarter rally. I mean the
seasonality two is it is one ofthese things that when when the market knows
about it, it's almost a selffulfilling prophecy. And you could say maybe
the market would get ahead of it, or maybe that maybe you'd you'd buy
you'd be buying on the dips aheadof it. But the last three years
have kind of held true with thelast twenty years, and that is the
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last four September. It's kind ofin order here. Twenty twenty negative three
point nine, twenty one was negativefour point seven six, twenty two was
negative nine point three four, andthis year through through Thursday negative just over
five, negative five point two.So September and August when they're down,
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kind of bodes well for the secondpart of the year or the fourth quarter
of the year. And let's justtalk about the last three fourth quarters,
even last year's fourth quarter, whichwas positive, but twenty twenty eleven point
six nine for the fourth quarter,twenty one ten point six five for the
fourth quarter for the SMB five hundredand last year up seven point zero eight
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for the fourth quarter. Now,the seasonality that you mentioned kind of holds
true. When it's a negative Augustand September, it's even more dramatic on
the upside for the market. Onthe even on the longer term, twelve
of the last thirteen fourth quarters upwhen we have a negative September and August,
and the long term average for thefourth quarter going all the way back
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to World War Two, is itthe fourth quarters average is four percent,
but when you have a negative Augustand September, it almost doubles. It's
a little over seven percent on averagefor the fourth quarter. So just like
August and September, seasonality kind ofheld true, just like the the recovery
year of the first half of theyear held true. I think the market
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and investors are pretty hopeful that thatwhen some of these things that are kind
of a weighing drag on the sentimentof the of the economy kind of subside.
I think the fourth quarter in alllikelihoods as the winning it's back as
well. The other thing that investorshave to look at is when when you've
rallied this much off the lows forthis long, it's almost a one year
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rally from the lows. You veryrarely is that a bear market rally as
they call it, where it's justa rally in the course of an overall
downturn. And here we are abovethe two hundred day moving average. We've
rallied for almost twelve months. It'shard to see that this is the next
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leg down. When it's gone onthat law doesn't mean it can happen.
But at the same time, alsolooking under the hood at the various sectors
that are working and sectors that arenot working, and it's defense that is
not working. I mean, lookat the consumer staples sector and utilities.
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Those are the two major sectors ofwhat's called the low volatility index. That
would be what you expect low volatility. What's going to hold up the best
in a downturn. In these selloff months that we've had in twenty twenty
three, they're performing the worst.What is the utility one month in the
one year on both the let's goon utilities first, the year to day
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on utilities is negative twelve point seventwo. It's the worst of the year.
It's the worst for the one yearas well. The one year is
almost negative ten percent for utilities.The one month is negative five, the
one week is negative six. Soat this what do you tell it's like
the bottom of this recessing range.If it's a recession. What are you
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not going to cut You're not gonnacut your gas bill, You're not going
to cut out your electric bill.That's why utilities historically held up very hold
up very well in a recession.Recession resistant. Okay, staples, you're
not going to stop going to thegrocery store. You're not going to stop
buying toilet paper and laundry detersient andtoothpaste. You're not gonna stop taking out
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the trash. Those are staples.These are all things that last year where
you're outperformers, utilities were positive,staples were basically flat, and so those
kind of give and we're not justjust looking at the at the year to
date because everything else started the yearoff so well. You look at the
last week, in the last month, there's no signs that there is this
flight to quality or flight to defense. Even in this kind of orderly sell
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off that we've had, it's notunexpected to have a seven eight week pullback
after the rally that we've had.And I had a few people this week
say we're probably not even positive yearto date. Well, the market had
its best the nastick had its bestsix months to start the year of all
time ever, best six months everto start this year, so to give
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up a little bit of that iskind of normal. The SMP five hundred
had its best seven months to startthe year since nineteen ninety seven. So
the fact that we pulled back alittle bit after the best seven months for
the overall market. The SM fivehundred since nineteen ninety seven is not unusual.
It is two or three steps up, one step back. That's what
the market gives you. When youlook at a long term chart, it
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looks like a straight line up,but you zoom in and you have a
little bit of these pullbacks every coupleof months. We had one in March
and we're having one now. Butyou do have some of this this these
storm clouds that are just kind ofover the market right now. Today on
Thursday, you've got these the firstof these impeachment hearings for Biden. You've
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got the government shutdown looming for Saturdaynight or Sunday morning. Midnight on Sunday.
You've got the UAW strikes. You'vegot student loan repayments starting. I
think that's a little bit of anegative for just the sentiment what will that
mean for individual consumer spending if studentloan payments have to restart. You've got
oil kind of hovering right around ninetydollars a barrel. Now, gasoline prizes
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haven't moved much, but there's thisthis sentiment of what will this mean if
this stays up? This long.What will it mean when we get to
the winter. Will we be pushingup on five dollars a gallon? That's
the worry out there. But that'sthe reason the market went down in August
and September. These things, mostof these were already kind of weighing on
the market and they just haven't beenresolved yet. But most of these will.
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And I think that's why the sentimentis so bad and why the seasonality
kind of held true. It wasn'tlike we were going into it without anything
to worry about. And I waslooking for and I was looking at lpl's
Technicals chart weekly book, as heput out, and there was something interesting
that you said about the best sixmonths. So let me let me get
to that in a second, becauseafter having a sell off like we've had
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in September, what happens after that? And they and it was actually they
were pulling it from from another source, which is I think bespoke. But
let me get to this chart herereally quick. And they're also highlighting all
the different sectors in the tech inthis technical book. One of them is
consumer discretionary versus consumer staples. Okay, that is a great comparison to say,
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are are we in recessionary and slowingdown discretionary spending or versus staples spending,
And you look look at the opposite. So the bottom when you look
at the comparison of discretionary versus staples, the bottom was June of last year,
not October. Actually was the marketbottom, okay, And it really
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exploded higher beginning of this year,and then also exploded higher in June and
July. Okay, In the lastmonth, there's been a very small giveback
on that. So we are stillin a in a well defined uptrend line
of discussitionary stocks versus staples stocks.So that's a really good sign that this
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correction that we're in right now ismore of a correction than it is start
of another. The overall market.You take a look at staples over the
last month, they're down three pointnine seven. You look at discretionary over
the last month, they're down threepoint nine six. So in a identical
pullback, it's not like there isthere is money flowing out of the high
growth area and flowing over to thelow volatility, dividend paying area. It's
just an overall market sell off,very orderly kind of the timing of it
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pretty predictable. But if if there'sany if if the sasonality holds true for
the fourth quarter, all things kindof bode well. Okay, So here
here it was here, uh frombespoke. Each time the NAZDAC index has
traded at the lowest level in threemonths without having done so in the last
six you mentioned it was the bestsix months. There were no three month
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lows in the in the prior sixmonths. Okay, the performance going forward
has generally been positive, with notablystrong performance six and twelve months out.
So there's about twenty instances here wherethe NASDAK it hasn't only been around since
what mid nineties? Yeah, no, it's no, it's it's it goes
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back to the eighties for sure,because I have some nineteen eighties on here.
So making a three month low,making a three month low, which
it just did yesterday at eight pointtwo percent. On the downside, the
average three month return is six pointeight the average six month return is fourteen
point three. The average one yearreturn is over twenty percent. And that's
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exactly you were mentioning that six monthhigh. We just made it three month
low. And so looking at alltimes where that has happened, the one
year average is twenty percent on theNasdaq one hundred and the success ratio is
eighty six percent, So really goodnumbers when you when you see the NASDAC
trending higher for six months and thenit makes a three month low, really
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good numbers historically on that. Theonly time it failed, Brad, we
have nineteen eighty seven. It failed. We have April of two thousand,
so there was a huge three months, six month rally and three month low
that that failed by two thousand andtwo, and that certainly was the dot
com bubble, and it also failedin the three months ending October fourth,
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twenty twenty one. One year laterit was down twenty percent. So most
recently it failed as well, butnot a lot of examples where that failed.
So that's what's been leading the way, and the defensive sectors haven't.
I was I was actually looking atthe defensive sectors. You know, we're
talking about the defensive sectors not holdingup. I mean, look at previous
periods of time. Here you startwith, I had covid on here to
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take a look at it. Actually, SMP low volatility was down thirty three
percent during COVID, SMP was downthirty six, So, uh, that
was pretty much the same. Buteverything was selling off in conjunction. During
COVID twenty eighteen saw the market godown twenty percent in the fourth quarter,
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you saw defense hold up only ninepoint seven. So there you go.
You have half the pullback completely makessense. That is not happening today.
Two fifteen and sixteen, that wasa period of time where high to low
the SMP law sixteen percent, SMPlow volatility defense was down one point nine
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from high to low. Okay,you look at two thousand and eleven.
Two thousand and eleven saw the SMPfive hundred down nineteen point nine percent high
to low, SMP low volatility downfive. Okay. Two thousand and eight
you saw, and SMP low volatilitywasn't around in two thousand and eight.
So I'm gonna look at the twoindividual sectors that make up the most of
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it fifty five percent high to low. You saw utilities down forty six.
You saw staples down thirty two,so still out performance in that period of
time, which we're not seeing today. And then, of course two thousand
and two you saw high to lowforty five percent on the SMP five hundred
from two thousand to two thousand andtwo, staples down twenty Utilities actually down
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more than the SMP in that periodof time, So in two thousand and
two thousand and two, utilities weredown forty six percent. So that's what
we're looking for. If it reallytruly is the market rolling over defense holds
up and that's not happening. Yeah, I think the whole discussion goes to,
you know, when the market hasthese sell offs, as long as
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there are things like this that arepointing to the market isn't truly worried,
then we get more confident after apullback. When you have a run up
like the best six months for theNASTAC or the best seven months for in
thirty years for the SMP, weget a little concerned and with either new
dollars or maybe somebody that got alittle over over aggressive in portfolios start to
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pull back risk. But we're doingit after those kind of historic run ups,
and we're the opposite today. Ifeel a lot different in the next
after these last two months than Idid at the end of July. Now,
with new dollars coming in, we'renot waiting we're dollar cost averaging for
a while, but now at afterthis pullback that kind of almost bottomed out
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right out for the overall market fromintra day high to low almost exactly ten
percent, and a little liftoff heremidweek with a midday turnaround on Wednesday.
So we'll see. We'll see ifit's over with and maybe the government shutdown
being behind us before the weekend isover might give us that liftoff that the
market needs. Let's take our firstpause. You're listening to money since the
advisors of Kurston Wealth Management Group.We'll be right back and welcome back to
(14:13):
the show. You're listening to theadvisors of Kursten Wealth Manager Group, Kevin
Kurston and Brad Kurston. Happy tobe with you this morning. As a
reminder, we are professional financial advisorsand our offices are in Perrysburg. Give
us a call throughout the week ifyou want to set up a time to
go over your own financial plan.Whether you're just getting started, or you're
well on your way, or you'realready in retirement, be happy to help
four one nine eight seven two zerozero six seven or check us out online
(14:35):
at Kurstonwealth dot com government shut downlooming, Brad. This raises its ugly
had every year or so. Yeah, almost seems like, and everyone gets
scared. People will work for thegovernment, get some time off and then
get back pay. They don't losea dime. Everyone throws out scare tactics
and gloom and doom about you don'twant to pay I heard Republicans you don't
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have to pay food stamps and socialSecurity. Well, it's never part of
it. It's never you don't wantto pay the Coastguard, you don't want
to pay the border agents. They'vebeen through it before. They know they'll
get their back pay. Okay,so it's it's a nothing. It's a
nothing. We've had twenty one sincenineteen seventy six, only four have been
full government shutdowns, the last onebeing at the end of two thousand.
They go to a national park bythe way, if there is a government
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shutdown, because they won't charge youto get in. Yeah, well we
experienced that in twenty and eighteen.Went to a national park and you didn't
have to pay for parking. Youhave to pay to get in. There's
nobody working there at the gate totake your money. So they act like
everything's closed down. It's not closeddown, it's just that there's nobody there
to recollect the one of the longerones, actually the longest since nineteen seventy
six, did happen in twenty eighteen. Thirty five days is what the full
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length of the shutdown was. Butthe rest of the story is that in
that thirty five days, the SMPfive hundred was up ten point three percent,
and at the end of that periodof time, the twelve months following
those thirty five days, the marketwas up twenty three point seven So government
shutdown bad. I don't know.The most recent incidents would say no.
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Now, the FED had a littlebit of a pivot during that time in
twenty and eighteen. The end ofthe year, UH saw the twenty percent
drop in the market, and thiskind of coincided with the tail end of
that. Uh this was the twentysecond in December. I think the bottom
for the market in that downturn wasthe twenty fourth, So that that timing
is is a little bit uh uh, you know, perfect for those those
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stats. But part of the reasonfor the looming government shutdown was part of
the reason for the drop in themarket, and that's kind of where we
are today, this looming government shutdownand the fear that that, but really
both sides put out there to tryto get a deal done is what kind
of weighs on the market. Andit's definitely not all of the downturn that
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we've seen in the last two months, but it's part of it. But
most of the government shutdowns are resolvedright before in the eleventh hour literally is
going to be midnight on Saturday,so maybe at eleven pm they'll have a
deal or to last a day ortwo. We won't even perhaps come in
on Monday without it being resolved.A lot of them, even that had
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they have to take their extraordinary measuresand do some shutdown measures, they're they're
taking care of in two to threedays. And if you look at the
list of twenty one, very fewof them go even to double digits,
and most Americans, even if theydid go double digits, would have zero
effect on anything that you're doing.And even if you do find some sort
of effect, it will it wouldbe relatively minor, but it would take
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weeks for it to even happen.But the scare tactics are out there,
you know, talking about you won'tbe able to fly. Or talking about
TSA agents being short staffed, Imean they're probably already short staff but TSA
is one of the essential services,so they don't get sent home. The
essential services are basically anything that keepsthe government running and airline travel, and
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TSA is one of those, sowe like it. Take a look at
all twenty one instances going back tonineteen seventy six, the average for the
period of time, well, forone, the average is nine days,
the median is five days, andthe average is a positive point three over
those nine days. Pretty short samplingthere when we talk take a look at
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nine days. But what's more importantis what do the next twelve months look
like? Now, the twelve monthaverage for the market is just over ten
percent. We go all the wayback to nineteen seventy six, it's kind
of right in line with that tenpercent, But the average after the government
shutdown is twelve point seven percent andeighty six point four percent of the time
positive, So that's actually a significantfigure. It's more than it's about two
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and a half percent better than theaverage of the market, and instead of
seventy percent of the time or seventytwo percent of the time. It's the
market being positive eighty six percent ofthe time. So both of those are
kind of welcome figures once you getpast the government shutdown. Part of that
is that you might have a littlebit of a downturn going into the shutdown,
but once the shutdown is over with, there is a relief routy that's
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kind of held true at eighty sixpercent of the time going all the way
back to nineteen seventy six. Yeah, I mean, you can investors can
make a big deal about it,but it historically has not been anything.
Yeah. So and if it's beenanything at all, it's been a positive.
Uh, during and after leading upto it can be a little bit
of a negative, but we're alreadykind of past that period. I mean,
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if anything, it might help interms of what the FED does,
uh for their what last one ortwo meetings of the year. Yeah,
maybe if there's a little bit moreuncertainty with the shutdown, they won't want
to hike rate. That's that's true, and so that could be a net
positive to the overall market if ifthe Fed notes that, but either side
digging in that leads to less spending, the market will see that as a
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positive to get things under control witha little less spending it coming from our
government. Yeah. Uh, andwe'll we'll see what the what how that
affects the FED, because I thinkif the Fed gets to next year,
more than likely they're not going tobe raising anymore. So if they end
up skipping, it's not going tobe If they end up skipping the next
one or two, they're not goingto be skipping to then increase again.
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Yeah. And the economic predictions fornext month and the following month are back
down into the low point two topoint three point point three nine for the
next month, point two for thefollowing month, So we're already back on
a trend line of hovering right aroundthree percent for long term inflation. It's
what the FED needs to see ifwe can get them to pass one more
time, I believe we're done withall rate hikes at all. In the
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next move will probably be a rateto cut, because not only will inflation
be lower, but there'll be somestimulus that is needed in the housing market
and commercial market so that we canget mortgage rates to come back down a
little bit. Mortgage rates still abovethree percent on the spread between ten year
treasury and thirty year mortgage. Thehistorical is below too. If we were
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at historical averages, the thirty yearfixed rate mortgage will be about six and
a half. No, no,no, even it would be even lower.
We'd be at five and a halfof the ten year treasury today,
call it four and a half.Well, okay, we've been about six.
If it's five one and a half, and if it's two, you're
right, it would be it wouldbe it would be. Yeah, So
what where are we today? Sevenpoint eight three? So you're talking about
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somewhere between one and a quarter andone and a half percent drop if we
just had normal, Well, what'sit gonna take for that to happen.
It's gonna take the ten year treasurydropping a little bit. It's gonna take
the ten year treasury stabilizing a littlebit. And that will only happen if
the Fed fully announces they're done orgets a cut underway. And so I
don't maybe a little devil's advocate itcould get back to normal by the ten
year treasury going up and mortgang streetsstaying the same. That it could.
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It's just like our discussion of howwill the yield curve uninvert. Well that
you've got five point one on thetwo year, could we get five point
five on a ten year? Andthat's how it uninverts. Sure, what's
happening right now? Yeah, nobodywants bonds, So what has to happen?
Uh, You're you're looking at ata historic run for the NASTAC and
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people are still putting money into theseareas on every single dep So if nobody
wants bonds, then the price ofthose bonds goes up, and the has
to go down to attract the buyer, and the yield has to go up.
And that's what has continued to happeneven during this downturn for the stock
market over the last two months.Let's take our next bonus when we get
back, Brad, there was actuallythe second Republican primary debate, So let's
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hit some highlights from from that particulardebate. You're listening your money since Kevin
and Brad Kurston. We'll be rightback and welcome back to the show.
You're listening to the advisors of KurstenWealth Manager Group, Kevin Kurston and Brad
Kurston. Brad, there was aRepublican debate second debate. Trump was not
at either one, and I thinkmost people probably missed. It started late.
(22:44):
It was at the Reagan Library inCalifornia. She's I tuned in probably
about ten o'clock and I felt likethey were just getting started. So I
don't know what time this thing started, Probably nine thirty or something. Yeah,
And it's interesting you look at allthe names in there. They go
from the middle out in terms ofwho's polling the best. So who was
was the Santis in the middle?Zantis and vavec Or in the middle in
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the middle, and they neither onedirectly in the middle, but just those
two out from them would have beenNicky Haley. Nicky Haley on the other
side was Tim Scott, Chris Christie. Chris Christie would was on the right
of Nicky Hay or on the yeahhit her right, uh. And then
out from that was a either SouthDakos I think it's North Dakota, Dakota
commercial governor and I and I mentionedyou. They hardly let the guys on
(23:30):
the end speak and when he didspeak, he sounded great. But I
just if you're number eight on theon the totem poll two debates in,
you're probably not gonna And and onthe other side, uh was was Mike
Pence all the way out and soyou know Pennce and the the the North
go to governor. I mean,I don't know why they would even stick
around for another one unless they're pollingdramatically changes or unless they looked good.
(23:52):
Well Pence certainly doesn't. He isso robotic, and it is I don't
know who's telling Mike Penn it's thatpeople like him, Yeah, it's he
comes he comes across so unlikable.Yeah, he is like if if they
were going to do a caricature,the Democrats gonna do a caricature of the
(24:12):
classic Republican. It's it's everything thatMike Pence is. Yeah. Yeah,
And even when he is trying tobe clever or say the line that a
speech writer wrote and maybe the speechwriter said it and it sounded funny,
but when Mike Pence says it,it sounds horrible. And he had one
of those you need to win thepresidency on both sides. You need to
(24:34):
look at somebody and say, woulda Democrat vote for this person? Yeah?
Would a what somebody who's kind oflike I'm a Democrat but not really
yeah, And the same thing onthe other side, they would have to
say, what a Republican vote forthis person? Yeah, okay, And
and I don't know what that numberis. Is it five percent that go
either way? Is a ten percent? But you have to get some of
(24:56):
those otherwise the voting is the exactsame as the prior We'll get no,
one no. And I argued thatTrump has squeezed every last photo out too.
Well. What's interesting is just mygeneral thoughts in watching it. People
have to come across as normal humanbeings and not pre planned answers and and
(25:17):
so you have to do it thatway, and you have to come across
as someone who can speak very well. I mean, Vivet can speak very
well. He borders on being thethe smart kid in class who kind of
was a know it all. Yeah, he borders on that sometimes like Okay,
you're smart, I get it,but you're coming across is and know
(25:37):
it all and talking down to me, so that I think he needs to
be careful of that. DeSantis,I think, always comes across well because
of his track record. And he'llalso call to the carpet a bad question
or a question that is not rootedin truth, he did that at least
once last night. He'll he'll alwaysgive the what are you talking about?
As opposed to a lot of peoplewho just don't answer the question, and
(26:00):
even as a bad way, theydon't even answer the question, yea,
they just start talking and saying whateverthey want to say. Pence comes off
as a robot. Chris Christie,I just yes, no one's gonna vote
for him. And I look ifevact too. He seems to be so
complimentary of Trump. It's almost likehe's not running for president. He's running
for vice president. And maybe that'snot a bad thing, because if it's
(26:21):
gonna be Trump anyway, you've gotto have a vice president that's gonna get
some votes. And so if hecan get the young voter, and even
just in his cadence and not talkinglike a just not talking as robotic as
as Pence, I think it mightappeal to a younger person who doesn't know
where they want to vote yet,and so here you have somebody that can
relate to that. Well, ifTrump gets the nomination, there is no
(26:42):
way that he is not nominating someonewho has complimented him. Right in previous
times we had you know, BarackObama, you know, nominate Biden,
and they went head to head andHillary and and he went head to head,
right, So that won't happen withTrump. No, Trump has to
(27:03):
have someone who who not compliments hisstyle, someone who compliment literally says,
you're really sorry, you're really great, You're really great. So let me
go through some of these highlights thatI found online. You tell me what
you think. Brad de Santa's wasthe only one who said anything negative about
Trump. So the Santa said Trumpis missing in action. He should be
(27:26):
on the stage tonight. He owesit to you to defend his record.
And that's the one thing that Idon't understand that Republicans in this primary don't
go after is the absolute horrendous recordhe has on spending in the economy and
he gets away with it and theinflation that we've seen. Especially if that's
your talking point is we're gonna bea you know, a conservative and not
(27:48):
allow government spending. Why you wouldn'tgo back on that truck or you said
he was the only one in attack. Chris Chrissy also did, but with
a horrible line about not if you'regoing to keep ducking the debate. We're
going to call you Donald duck horrible. Rick. It's just the worst.
It's that. That was like amoment where sometimes I'm at home and I
make I try to make cheesy dadjokes, but I'm doing it on purpose.
(28:12):
Yes, he was dead serious.I feel like he practiced that in
the mirror and said nailed it.Yeah, or he tried it out on
his kids and his kids are like, talk to it. I actually I
actually followed dad jokes on Twitter whichis now x and they send me like
a daily one and I will oftendo them to the kids to be funny.
But I know what I'm doing,right. I don't think Chris Christoper
(28:32):
knew an ounce of irony. AndChris Christy delivered that line. He thought
it was gonna just it was gonnabe the line of the night. That's
right. So when when de Santiswas talking about Trump and Biden at the
same time in terms of spending withand think is a good thing to do,
he also hit Trump on abortion lateron. That probably is something you
want to do in the primary.But I've said it before, Brad.
(28:56):
In the general election, don't askany questions about abortion none. It's a
loser. Yeah, don't do it. Don't say anything good or bad in
the general election. You want todo it in the primary. Fine,
But you know that's that's something that'syou know, interesting to see. Uh.
They talked a lot about immigration,you know, going to be tough
(29:17):
on the border and stuff like that. H. I don't know if they
have it in your notes, butVec said some pretty bold things on immigration,
saying that, uh, that thatimmigrants who have birth here, I
don't know, the birthright citizenship,he would revoke it for someone who's not
already a citizen, and then thatwould probably take the Supreme Court getting involved.
(29:38):
He seemed to think that it's notpart of the fourteenth Amendment. Actually,
before the show here, I readthe fourteenth Amendment and it's pretty cut
and dry. If you're born here, you're a citizen. I don't I
don't know what Vvec was saying lastnight, and he's there's a small interpretation
where he's saying if if you camehere legally and you were born here,
(30:00):
that's what it's sad, But it'sthat's that's not the actual words of the
fourteenth Amendment, which would, inmy opinion, what Vec was saying would
require the Supreme Court to determine.Does that mean you, yes, you
have to have come here legally inorder for your children to have birthwaighters and
to change the constitution is a hurdlethat is way way too difficult to overcome.
(30:21):
So that may be just a politicalWhat are they doing, you know,
are they outpolling and saying, well, this actually would get a lot
of votes because people want this,and since since the non voter would be
the one that would want it,then why then then why not dig in
on this? Yeah? So theother cringe worthy moments that I found that
(30:42):
that are noted here in this articleas well is everyone they kept going back
and forth about these weird comments aboutChristy made an uncomfortable barbed Later at some
no one expected to be mentioned.He said something about Jill Biden and he
says the teacher's union have a stronginfluence in the White House, and he
(31:03):
declared the president is sleeping with amember of the teachers union, which is
just weird. Yes, so thatthat was Chris Christie saying that, yeah,
and she's not even a member ofthe teacher's union. Don't make like
you always stay on the show it'snot making me defend a Biden, right,
right, She's not. She's acommunity college teacher, so she's not
a member of the teacher's union.And then rather than just let it go,
(31:25):
that's why Pence stepped in, yeahand said, I have a great
clever line here, and this isdefinitely not Biden's been sleeping with somebody for
twenty five years. I was sleeping, and he goes, I've been sleeping
with a teacher for thirty eight years. That is the last visual anyone wants
regarding Mike Pence, right, Okay, Yeah, So I don't know why
Mike Pence thought that that would befunny. Well when he said it,
(31:48):
I don't know what what Mike Pence'swife's job is, so I had to
assume. And so with the listener, well, I guess he's married.
I don't even know that, andI guess that his wife is a teacher.
And that's the bois making. Butlook at all these leaps I have
to take to not picture Mike Penn'shaving an affair. It was really weird.
(32:08):
Line. Well, here's what youknow everyone talks about. You know,
she compliment Trump being a great presidentand all the great things that he
did, and you should, butyou should also talk about the bad things
that Trump did if you want tobeat him, right, you can't.
If he's not running, then fine, you don't have to talk about him.
But he's running, and nobody willtalk about All. Republicans seem to
(32:29):
think that that you have to tiptoearound the Trump voter because you got to
get the Trump voter. If Trump, you're gonna get the Trump voter.
Okay, Yeah, if you're runningon the Republican ticket, you're getting them.
You're getting And if they say they'renot voting for you, they're lining.
They're not voting for the Green Party, they're not voting for Democrats,
and they're not going to vote.Yeah, they're and they're not going to
vote for sleepy Joe Biden. Okay. So if you look, compliment the
(32:51):
good things that Trump did in termsof trying to do the drain the swamp
thing, trying to call China onthe carpet for for their policies on trade,
Compliment him on his tax cut.The tax cut was a good thing.
Compliment him on deregulation. But ifyou want to hit Trump hard,
okay, you go after him onhow weak he was during COVID yes week,
(33:17):
he folded. He let Anthony Faucibulldoze him into a total shutdown because
he got scared because Faucci put somefancy charts in front of him and said,
oh, well, but I havethis chart. This shows fifty million
people dying. And if he putthe current number of people dying, and
(33:37):
then you do some made up chart, and it's scared Trump into a shutdown.
And by the way, Pence wentright along with it too, because
when you look, Brad when theywere doing those COVID remember those ridiculous daily
COVID meetings, and Pence was standingup there. He loved that because that
was the only time a vice presidentcould ever be relevant. So Pence loved
(33:59):
to stay end up there and talkabout all the things that they were doing.
But Trump even used to tout thevaccine. The vaccine has been a
complete failure. They're trying to getpeople to do boosters. No one's doing
them. Yeah, there's ads everywhere, there's no one is signing up for
these boosters. The vaccine was acomplete failure. So even that which Trump
said, fastest best vaccine ever.And now it's like less than twenty five
(34:21):
percent effective. I mean, that'snot even any better than a pill of
vitamin C. Okay, but yougotta hit Trump on his COVID response and
his spending. I think that ifand less Trump is within ten points of
either one of these guys, he'snot going to do one single debate.
And I think, as it's trending, the last debate will be DeSantis and
Vavek, and they'll probably be twomore, and they'll have a few less
(34:45):
than the next one, and thenit'll be down to two guys in the
last one, and Trump won't bepart of it. And why would he
if these guys are pulling fifteen totwenty points behind him, why would he?
Bother? So everyone's giving DeSantis grieftoday because he said Trump should be
on the stage tonight. He owesit to you to defend his record where
he added a record amount to thenational debt that set the stage for the
(35:07):
inflation we have now. Then Biden, of course it wasn't Biden. Biden
doesn't even know how to use Twitter. But then Biden retweets a video of
de Santis saying I couldn't agree more, and everyone's saying, oh, see
De Santis and Biden are on thesame side. There's nothing wrong with the
Santist calling out Trump for his spendingand Biden agreeing with him. That's ridiculous
(35:28):
on Biden's part. And I saidto you before the show, Biden agreeing
with Desantists on Trump's spending would belike getting a tweet from Bernie Madoff when
some Ponzi schemer got arrested and BertieMadoff saying, Oh, I'm glad that
guy got arrested. I mean,Biden's been doing the same Bide, He's
been doing the same thing. Soit's it's not De Santis's fault that Biden
(35:49):
agree with and Biden has the sameproblem that Trump did. So let's look
at these numbers, brad on notonly total spending, but percent from the
previous president. Number one by farand away as Franklin Roosevelt. It was
an eight hundred percent increase to thenational debt. But he also was president
for sixteen years, well not sixteenyears, probably he wasn't well as four
elections it could have been. Itwas nineteen forty four. Forty two is
(36:15):
an election, so two more years. But keep in mind this is their
total presidency, so the fourteen yearsthe years don't match up. Woodrow Wilson
was second at seven hundred and fiftypercent. Ronald Reagan in terms of traditional
probably most recent, he was onehundred and sixty percent in his eight years
one point six trillion. George Bushseventy three percent, four point two trillion.
(36:37):
It's interesting after the two big ones, which are the great Depression presidents,
number one and number two are Republicans, so i've you know, Republicans,
Oh we we don't spend really.Barack Obama's number three, Okay,
he was seven point six trillion.That was sixty four percent increase in his
(37:00):
time. But those top three areall eight year people. How about this
one, George H. W.Bush. George H. W. Bush
was only four years and he wasa forty two percent increase at one point
two trillion, So in terms ofthe percentage, George H. W.
Bush was actually more than Trump.But here's the problem with Trump dollar amount
(37:22):
by far and away the most spendingpresident of all time. Right, it
was a thirty three percent increase infour years six point seven trillion dollars.
Biden up to this point three anda half years in excuse me, No,
two and a half years in right, Yeah, he's got one more.
Yeah, he's got all of twentytwenty four. If they're going to
count that two and a half year, and it's a two point five trillion,
(37:45):
So at Biden's current pace, he'llbe around four trillion at the end
of four years. Trump was sixpoint seven. And Trump goes out there
and rails against Biden for inflation.I don't know how the other Republican candidates
let him get away. So he'swhy it's relevant. Now we got a
government shutdown. Lois why we're talkingabout trying to not spend so much.
That's the reason for the government shutdown. So it's Republicans day in saying no,
(38:07):
we need a balance budget, weneed to cut some of the fat,
and we'll shut the government down ifyou don't let us do it.
That's why it's important. If you'regoing to run on a party of kind
of fiscal responsibility, you better doit and be willing to have the government
shutdown happen. I just don't understandwhy the other Republican candidates and De Santis
(38:30):
said it a little bit, Christiesaid it a little bit. Why they
don't point out the massive mistakes thatnot only the pain and suffering that people
went through with their businesses being shutdown and everything like that, but the
fact that it was all wrong andit didn't work. Yeah, okay,
and then you spend all this moneyand it causes this runaway inflation and now
(38:52):
we're still dealing with that today.And yes it's partially Biden's fault, but
Trump spent even more. So Idon't understand why he gets away with it.
And uh, maybe the people wholove him just want to put the
blinders on and vote for him.But that's the tactic to win. That's
the tactic to win. Because ifyou're gonna go into the primary and just
(39:13):
say Trump is great, Trump iswonderful, I'll do much of the same.
Who's going to vote for you,right right? I mean, look
at vec Trump is where Trump iswonderful. What if they get on the
stage and Vavec just compliments Trump fortwo hours, Well if vvec might be
realistic in the fact that none ofthem can beat Trump, and so if
he can come in as his vice, he's he's the president after after those
(39:34):
for you, Well, maybe he'llbe so complimentary that they'll just decide it
right there on the debate stage.Yeah, that's perhaps because once again I
said Trump will never he is,he will only put someone in there that
basically kisses up to him. Yeah, well that's that's that's already starting to
happen. We'll save let's say ourlast pause here and come back. A
couple of planning ideas for you withsocial security in particular. Always questions about
(39:55):
social security, and we had acouple this week, so we'll go over
those. You're listening to Money Sense, We'll be right back and welcome back.
You're listening to the advisor Kursten WealthManagement Group. Brad and Kevin here
with the other this morning. Kevinalways questions about social security. There's so
many different loopholes, and there's afew less loopholes, but there's still so
many different caveats to social security.And everyone's situation was social security, so
one to go over one talking tosomeone in their fifties who is divorced and
(40:22):
thinking about getting remarried, and theywere asking me about the rules for if
they remarry, at what age canthey remarry and still go back and forth
between either their ex spouses or theircurrent spouses so security. So that age
is sixty no matter when you getdivorced. If you don't remarry until sixty
and one day, then you're reallylooking at two different spouses so securities,
(40:46):
your current spouse and your X spousessocial security, and you could take either
one. If your ex spouse issecurity, half of that is more than
your current spouses you can take theX spouses social security. And where it
comes into play more off and thennot is if you're remarrying, or say
you don't even remarry and you're evenif you're taking your own so security.
(41:08):
If your ex spouse dies, thenyou are entitled to the full amount of
that X spouse's a benefit as awidow benefit. So you could start taking
it at age sixty as a widowbenefit even if you were divorced, as
long as you didn't remarry before sixty. You do get a reduction at age
sixty, and you can't be workingand make very much at age sixty.
(41:30):
The same rules for income would applyto you at age sixty or sixty two,
still to way to your full retirementage. But the ability on taking
Social Security as a widow benefit,that's the one loophole they haven't closed.
Your benefit still grows by eight percentsimple from your full retirement age all the
way up to age seventy, evenif you're taking a widow benefit. So
(41:52):
a widow benefit is the one whereyou can kind of still play off those
old rules of call it file andsuspend or being able to take a spouse
benefit and switch later. The widowbenefit still allows you to do that.
And if in some cases, ifyou're not remarried in taking your own soil
security and you hear at a muchlater age that your ex spouse died,
(42:14):
even if you're in your seventies oreighties, you can switch to that widow
benefit or have them calculate to determineif it's larger. And in most cases,
if you were not the primary workerin the household, or maybe you
didn't work at all, it's goingto be a larger Social security take.
Take your own benefit for instance,if it's say it was two thousand at
your full retirement age, but yourex spouses was three thousand, well,
(42:39):
then the spousal benefit there would befifteen hundred if you took it a full
retirement age, half of the spouse'sbenefit. So you take your own benefit
in that case, or it wouldcalculate to be your own benefit. But
if your ex spouse dies, thenyou would be able to collect that three
thousand instead of two thousand off thewidow's benefit even if you weren't married to
that person at the time of theirdebts, so the widow benefit still applies.
(43:01):
The other question we get is whatif they remarried and what if they
remarried before sixty It doesn't matter.Two people could be collecting a widow benefit
as long as you did not remarrybefore age sixty, so two people could
be electing the full amount of thatwidow benefit. There's no reduction of your
widow benefit if your ex spouse remarriedand they don't even know that you're collecting
(43:22):
it. All you need is they'reso security number to be filing for it,
and proof that you were married anddidn't remarry, and so you and
a current spouse could be collecting offthe same one. Those same rules apply
even even if they're not deceased twodifferent spouse and x spouses could be collecting
the spousal benefit off of one worker. So it's kind of some different rules
(43:46):
for widow benefit that haven't changed anda lot of different caveats for X spouses
and widow benefit that if anybody hasany questions on then give her off as
a call. If we don't knowthe answer right away, we'll definitely find
it for you with our contacts down. It's so secure purity. Yeah,
that's right, Brad. I meanthat's big decisions are with the file and
(44:06):
suspend part of it, but youalways get widows and divorces. There's a
lot more that goes into it.And as you mentioned, a lot of
times people are, especially on divorces, they're they're hesitant to do anything because
they feel like that they're something theyshould or their X is going to find
out yeah about something, Yeah,and they won't. It doesn't affect them
(44:28):
at all. Yeah, so thatit doesn't affect their benefit, but they
also aren't notified that you're collecting itoff of their benefits. Correct, Correct,
So that I always find that whenI'm having this conversation that that's a
hesitation as well. I just don'twant to deal with him or her that
shouldn't have nothing to do with it. You'd make the best decision for what's
available to you, and it's allworth a calculation. Even if you had
(44:49):
a spouse that died at a veryyoung age, you're not they're not penalized
and you're not penalized for their lackof work. When you're dividing it out,
they just divide it out by thennumber of years of work and are
no zeros in that calculation. Ifyou only work for ten years yourself and
try to collect your own benefit,there's a lot of years that are zeros
as part of that calculation. Adeceased spouse would not have that. They
(45:12):
just divide it out by the numberof years you actually worked. And the
benefits much larger than people realize.Yep. And I think the other part
that the benefit, other benefit that'smuch larger than people realize is the age
seventy benefit. I mean, wepreach this all the time, but it
can be a game changer for people'sretirement if they can postpone and yeah,
at least one age seventy benefit,at least one, at least one to
(45:32):
be larger than the other because you'regonna get to keep You get to keep
one once one of the spouses dies, so one of them you should wait
to have be larger. If youcan wait on the larger one. That's
the one you should wait on.Have it be a larger benefit, because
ultimately there's going to be a periodof years. Well that's the only one
you collect, So you should collectthe smaller one that's gonna go way first
first, and wait on the largerone. Even if it's a few years.
(45:55):
You don't have to go all theway to seventy, but just to
let it accrew by that eight percentsimple past your full retirement age for a
year or two is a big benefitfor your all of your income throughout retirement.
And there's a big compound interest effectto not only that eight percent simple
that you mentioned, but also you'regetting the inflation off of a bigger off
of a bigger number as well,so that the compound interest effect can can
(46:20):
put your soul security into I've seenpeople getting husbands and wives getting sixty seventy
eighty thousand a year from soul security. Take a look of the last couple
years, the last two years it'sbeen it's been seven and six percent the
last two years. Just say tenpercent on a two year if you collected
it earlier in a collect in twothousand, you've got a two hundred dollar
(46:40):
increase over the last two years.Somebody collecting thirty five hundred because they wait
un till seventy they're getting three hundredand fifty dollars a month more. So,
just that's what we're talking about,is getting that bigger number for the
lifetime of those inflationary increase. Willyou know, it's almost a double from
sixty two to seventy Put a coupleinflationary kickers in there. It will be
(47:00):
a double before too long, andbeyond that after you get ten and twenty
years down the road with inflation.Yeah, that's absolutely right. So if
you have any questions about social securityor any other planning topics, give us
a call at the office. Fourone nine eight seven two zero zero six
seven. Thanks for listening. We'lltalk to you next week. You've been
(47:20):
listening to Money since brought to youeach week by Kursten Wealth Management Group.
To contact Dennis Bratt or Kevin professionallycalled four one nine eight seven two zero
zero six seven or eight hundred eightseven five seventeen eighty six. Their email
address is Kurstenwealth at LPO dot comand their website is Kurstenwealth dot com.
Opinions voiced in this show or forgeneral information only, and are not intended
(47:44):
to provide specific advice or recommendations forany individual. To determine which investments may
be appropriate for you, consult withyour financial advisor prior to investing. Securities
are offered through LPL Financial member FINRAsipcut outs
Good morning and welcome to money.Since you're listening to the advisors of Kurston
Wealth Manager Group, Kevin Kurston andBrad Kurston, happy to be with you
this morning as we close out themonth of September, Brad, in the
overall market, the month of Septemberbasically did what it almost always does.
It's the weakest month of the yearhistorically, and it's been a pretty week
(00:20):
month overall here in twenty twenty threeas well. Good news is October and
November are the two best combined monthswhen you put the two month performance together,
they're the two best combined months backto back that we have throughout the
calendar, or if you're gonna lookat the seasonality of it, so yeah,
and this could possibly have consolidated alittle bit in them in August and
(00:44):
September, setting up for a nicelittle fourth quarter rally. I mean the
seasonality two is it is one ofthese things that when when the market knows
about it, it's almost a selffulfilling prophecy. And you could say maybe
the market would get ahead of it, or maybe that maybe you'd you'd buy
you'd be buying on the dips aheadof it. But the last three years
have kind of held true with thelast twenty years, and that is the
(01:07):
last four September. It's kind ofin order here. Twenty twenty negative three
point nine, twenty one was negativefour point seven six, twenty two was
negative nine point three four, andthis year through through Thursday negative just over
five, negative five point two.So September and August when they're down,
(01:27):
kind of bodes well for the secondpart of the year or the fourth quarter
of the year. And let's justtalk about the last three fourth quarters,
even last year's fourth quarter, whichwas positive, but twenty twenty eleven point
six nine for the fourth quarter,twenty one ten point six five for the
fourth quarter for the SMB five hundredand last year up seven point zero eight
(01:49):
for the fourth quarter. Now,the seasonality that you mentioned kind of holds
true. When it's a negative Augustand September, it's even more dramatic on
the upside for the market. Onthe even on the longer term, twelve
of the last thirteen fourth quarters upwhen we have a negative September and August,
and the long term average for thefourth quarter going all the way back
(02:12):
to World War Two, is itthe fourth quarters average is four percent,
but when you have a negative Augustand September, it almost doubles. It's
a little over seven percent on averagefor the fourth quarter. So just like
August and September, seasonality kind ofheld true, just like the the recovery
year of the first half of theyear held true. I think the market
(02:34):
and investors are pretty hopeful that thatwhen some of these things that are kind
of a weighing drag on the sentimentof the of the economy kind of subside.
I think the fourth quarter in alllikelihoods as the winning it's back as
well. The other thing that investorshave to look at is when when you've
rallied this much off the lows forthis long, it's almost a one year
(02:55):
rally from the lows. You veryrarely is that a bear market rally as
they call it, where it's justa rally in the course of an overall
downturn. And here we are abovethe two hundred day moving average. We've
rallied for almost twelve months. It'shard to see that this is the next
(03:17):
leg down. When it's gone onthat law doesn't mean it can happen.
But at the same time, alsolooking under the hood at the various sectors
that are working and sectors that arenot working, and it's defense that is
not working. I mean, lookat the consumer staples sector and utilities.
(03:37):
Those are the two major sectors ofwhat's called the low volatility index. That
would be what you expect low volatility. What's going to hold up the best
in a downturn. In these selloff months that we've had in twenty twenty
three, they're performing the worst.What is the utility one month in the
one year on both the let's goon utilities first, the year to day
(04:00):
on utilities is negative twelve point seventwo. It's the worst of the year.
It's the worst for the one yearas well. The one year is
almost negative ten percent for utilities.The one month is negative five, the
one week is negative six. Soat this what do you tell it's like
the bottom of this recessing range.If it's a recession. What are you
(04:20):
not going to cut You're not gonnacut your gas bill, You're not going
to cut out your electric bill.That's why utilities historically held up very hold
up very well in a recession.Recession resistant. Okay, staples, you're
not going to stop going to thegrocery store. You're not going to stop
buying toilet paper and laundry detersient andtoothpaste. You're not gonna stop taking out
(04:41):
the trash. Those are staples.These are all things that last year where
you're outperformers, utilities were positive,staples were basically flat, and so those
kind of give and we're not justjust looking at the at the year to
date because everything else started the yearoff so well. You look at the
last week, in the last month, there's no signs that there is this
flight to quality or flight to defense. Even in this kind of orderly sell
(05:04):
off that we've had, it's notunexpected to have a seven eight week pullback
after the rally that we've had.And I had a few people this week
say we're probably not even positive yearto date. Well, the market had
its best the nastick had its bestsix months to start the year of all
time ever, best six months everto start this year, so to give
(05:27):
up a little bit of that iskind of normal. The SMP five hundred
had its best seven months to startthe year since nineteen ninety seven. So
the fact that we pulled back alittle bit after the best seven months for
the overall market. The SM fivehundred since nineteen ninety seven is not unusual.
It is two or three steps up, one step back. That's what
the market gives you. When youlook at a long term chart, it
(05:48):
looks like a straight line up,but you zoom in and you have a
little bit of these pullbacks every coupleof months. We had one in March
and we're having one now. Butyou do have some of this this these
storm clouds that are just kind ofover the market right now. Today on
Thursday, you've got these the firstof these impeachment hearings for Biden. You've
(06:08):
got the government shutdown looming for Saturdaynight or Sunday morning. Midnight on Sunday.
You've got the UAW strikes. You'vegot student loan repayments starting. I
think that's a little bit of anegative for just the sentiment what will that
mean for individual consumer spending if studentloan payments have to restart. You've got
oil kind of hovering right around ninetydollars a barrel. Now, gasoline prizes
(06:30):
haven't moved much, but there's thisthis sentiment of what will this mean if
this stays up? This long.What will it mean when we get to
the winter. Will we be pushingup on five dollars a gallon? That's
the worry out there. But that'sthe reason the market went down in August
and September. These things, mostof these were already kind of weighing on
the market and they just haven't beenresolved yet. But most of these will.
(06:54):
And I think that's why the sentimentis so bad and why the seasonality
kind of held true. It wasn'tlike we were going into it without anything
to worry about. And I waslooking for and I was looking at lpl's
Technicals chart weekly book, as heput out, and there was something interesting
that you said about the best sixmonths. So let me let me get
to that in a second, becauseafter having a sell off like we've had
(07:18):
in September, what happens after that? And they and it was actually they
were pulling it from from another source, which is I think bespoke. But
let me get to this chart herereally quick. And they're also highlighting all
the different sectors in the tech inthis technical book. One of them is
consumer discretionary versus consumer staples. Okay, that is a great comparison to say,
(07:44):
are are we in recessionary and slowingdown discretionary spending or versus staples spending,
And you look look at the opposite. So the bottom when you look
at the comparison of discretionary versus staples, the bottom was June of last year,
not October. Actually was the marketbottom, okay, And it really
(08:05):
exploded higher beginning of this year,and then also exploded higher in June and
July. Okay, In the lastmonth, there's been a very small giveback
on that. So we are stillin a in a well defined uptrend line
of discussitionary stocks versus staples stocks.So that's a really good sign that this
(08:30):
correction that we're in right now ismore of a correction than it is start
of another. The overall market.You take a look at staples over the
last month, they're down three pointnine seven. You look at discretionary over
the last month, they're down threepoint nine six. So in a identical
pullback, it's not like there isthere is money flowing out of the high
growth area and flowing over to thelow volatility, dividend paying area. It's
just an overall market sell off,very orderly kind of the timing of it
(08:54):
pretty predictable. But if if there'sany if if the sasonality holds true for
the fourth quarter, all things kindof bode well. Okay, So here
here it was here, uh frombespoke. Each time the NAZDAC index has
traded at the lowest level in threemonths without having done so in the last
six you mentioned it was the bestsix months. There were no three month
(09:18):
lows in the in the prior sixmonths. Okay, the performance going forward
has generally been positive, with notablystrong performance six and twelve months out.
So there's about twenty instances here wherethe NASDAK it hasn't only been around since
what mid nineties? Yeah, no, it's no, it's it's it goes
(09:39):
back to the eighties for sure,because I have some nineteen eighties on here.
So making a three month low,making a three month low, which
it just did yesterday at eight pointtwo percent. On the downside, the
average three month return is six pointeight the average six month return is fourteen
point three. The average one yearreturn is over twenty percent. And that's
(10:01):
exactly you were mentioning that six monthhigh. We just made it three month
low. And so looking at alltimes where that has happened, the one
year average is twenty percent on theNasdaq one hundred and the success ratio is
eighty six percent, So really goodnumbers when you when you see the NASDAC
trending higher for six months and thenit makes a three month low, really
(10:24):
good numbers historically on that. Theonly time it failed, Brad, we
have nineteen eighty seven. It failed. We have April of two thousand,
so there was a huge three months, six month rally and three month low
that that failed by two thousand andtwo, and that certainly was the dot
com bubble, and it also failedin the three months ending October fourth,
(10:48):
twenty twenty one. One year laterit was down twenty percent. So most
recently it failed as well, butnot a lot of examples where that failed.
So that's what's been leading the way, and the defensive sectors haven't.
I was I was actually looking atthe defensive sectors. You know, we're
talking about the defensive sectors not holdingup. I mean, look at previous
periods of time. Here you startwith, I had covid on here to
(11:13):
take a look at it. Actually, SMP low volatility was down thirty three
percent during COVID, SMP was downthirty six, So, uh, that
was pretty much the same. Buteverything was selling off in conjunction. During
COVID twenty eighteen saw the market godown twenty percent in the fourth quarter,
(11:35):
you saw defense hold up only ninepoint seven. So there you go.
You have half the pullback completely makessense. That is not happening today.
Two fifteen and sixteen, that wasa period of time where high to low
the SMP law sixteen percent, SMPlow volatility defense was down one point nine
(11:56):
from high to low. Okay,you look at two thousand and eleven.
Two thousand and eleven saw the SMPfive hundred down nineteen point nine percent high
to low, SMP low volatility downfive. Okay. Two thousand and eight
you saw, and SMP low volatilitywasn't around in two thousand and eight.
So I'm gonna look at the twoindividual sectors that make up the most of
(12:20):
it fifty five percent high to low. You saw utilities down forty six.
You saw staples down thirty two,so still out performance in that period of
time, which we're not seeing today. And then, of course two thousand
and two you saw high to lowforty five percent on the SMP five hundred
from two thousand to two thousand andtwo, staples down twenty Utilities actually down
(12:43):
more than the SMP in that periodof time, So in two thousand and
two thousand and two, utilities weredown forty six percent. So that's what
we're looking for. If it reallytruly is the market rolling over defense holds
up and that's not happening. Yeah, I think the whole discussion goes to,
you know, when the market hasthese sell offs, as long as
(13:03):
there are things like this that arepointing to the market isn't truly worried,
then we get more confident after apullback. When you have a run up
like the best six months for theNASTAC or the best seven months for in
thirty years for the SMP, weget a little concerned and with either new
dollars or maybe somebody that got alittle over over aggressive in portfolios start to
(13:24):
pull back risk. But we're doingit after those kind of historic run ups,
and we're the opposite today. Ifeel a lot different in the next
after these last two months than Idid at the end of July. Now,
with new dollars coming in, we'renot waiting we're dollar cost averaging for
a while, but now at afterthis pullback that kind of almost bottomed out
(13:50):
right out for the overall market fromintra day high to low almost exactly ten
percent, and a little liftoff heremidweek with a midday turnaround on Wednesday.
So we'll see. We'll see ifit's over with and maybe the government shutdown
being behind us before the weekend isover might give us that liftoff that the
market needs. Let's take our firstpause. You're listening to money since the
advisors of Kurston Wealth Management Group.We'll be right back and welcome back to
(14:13):
the show. You're listening to theadvisors of Kursten Wealth Manager Group, Kevin
Kurston and Brad Kurston. Happy tobe with you this morning. As a
reminder, we are professional financial advisorsand our offices are in Perrysburg. Give
us a call throughout the week ifyou want to set up a time to
go over your own financial plan.Whether you're just getting started, or you're
well on your way, or you'realready in retirement, be happy to help
four one nine eight seven two zerozero six seven or check us out online
(14:35):
at Kurstonwealth dot com government shut downlooming, Brad. This raises its ugly
had every year or so. Yeah, almost seems like, and everyone gets
scared. People will work for thegovernment, get some time off and then
get back pay. They don't losea dime. Everyone throws out scare tactics
and gloom and doom about you don'twant to pay I heard Republicans you don't
(15:00):
have to pay food stamps and socialSecurity. Well, it's never part of
it. It's never you don't wantto pay the Coastguard, you don't want
to pay the border agents. They'vebeen through it before. They know they'll
get their back pay. Okay,so it's it's a nothing. It's a
nothing. We've had twenty one sincenineteen seventy six, only four have been
full government shutdowns, the last onebeing at the end of two thousand.
They go to a national park bythe way, if there is a government
(15:22):
shutdown, because they won't charge youto get in. Yeah, well we
experienced that in twenty and eighteen.Went to a national park and you didn't
have to pay for parking. Youhave to pay to get in. There's
nobody working there at the gate totake your money. So they act like
everything's closed down. It's not closeddown, it's just that there's nobody there
to recollect the one of the longerones, actually the longest since nineteen seventy
six, did happen in twenty eighteen. Thirty five days is what the full
(15:46):
length of the shutdown was. Butthe rest of the story is that in
that thirty five days, the SMPfive hundred was up ten point three percent,
and at the end of that periodof time, the twelve months following
those thirty five days, the marketwas up twenty three point seven So government
shutdown bad. I don't know.The most recent incidents would say no.
(16:07):
Now, the FED had a littlebit of a pivot during that time in
twenty and eighteen. The end ofthe year, UH saw the twenty percent
drop in the market, and thiskind of coincided with the tail end of
that. Uh this was the twentysecond in December. I think the bottom
for the market in that downturn wasthe twenty fourth, So that that timing
is is a little bit uh uh, you know, perfect for those those
(16:30):
stats. But part of the reasonfor the looming government shutdown was part of
the reason for the drop in themarket, and that's kind of where we
are today, this looming government shutdownand the fear that that, but really
both sides put out there to tryto get a deal done is what kind
of weighs on the market. Andit's definitely not all of the downturn that
(16:51):
we've seen in the last two months, but it's part of it. But
most of the government shutdowns are resolvedright before in the eleventh hour literally is
going to be midnight on Saturday,so maybe at eleven pm they'll have a
deal or to last a day ortwo. We won't even perhaps come in
on Monday without it being resolved.A lot of them, even that had
(17:11):
they have to take their extraordinary measuresand do some shutdown measures, they're they're
taking care of in two to threedays. And if you look at the
list of twenty one, very fewof them go even to double digits,
and most Americans, even if theydid go double digits, would have zero
effect on anything that you're doing.And even if you do find some sort
of effect, it will it wouldbe relatively minor, but it would take
(17:33):
weeks for it to even happen.But the scare tactics are out there,
you know, talking about you won'tbe able to fly. Or talking about
TSA agents being short staffed, Imean they're probably already short staff but TSA
is one of the essential services,so they don't get sent home. The
essential services are basically anything that keepsthe government running and airline travel, and
(17:55):
TSA is one of those, sowe like it. Take a look at
all twenty one instances going back tonineteen seventy six, the average for the
period of time, well, forone, the average is nine days,
the median is five days, andthe average is a positive point three over
those nine days. Pretty short samplingthere when we talk take a look at
(18:17):
nine days. But what's more importantis what do the next twelve months look
like? Now, the twelve monthaverage for the market is just over ten
percent. We go all the wayback to nineteen seventy six, it's kind
of right in line with that tenpercent, But the average after the government
shutdown is twelve point seven percent andeighty six point four percent of the time
positive, So that's actually a significantfigure. It's more than it's about two
(18:37):
and a half percent better than theaverage of the market, and instead of
seventy percent of the time or seventytwo percent of the time. It's the
market being positive eighty six percent ofthe time. So both of those are
kind of welcome figures once you getpast the government shutdown. Part of that
is that you might have a littlebit of a downturn going into the shutdown,
but once the shutdown is over with, there is a relief routy that's
(19:00):
kind of held true at eighty sixpercent of the time going all the way
back to nineteen seventy six. Yeah, I mean, you can investors can
make a big deal about it,but it historically has not been anything.
Yeah. So and if it's beenanything at all, it's been a positive.
Uh, during and after leading upto it can be a little bit
of a negative, but we're alreadykind of past that period. I mean,
(19:21):
if anything, it might help interms of what the FED does,
uh for their what last one ortwo meetings of the year. Yeah,
maybe if there's a little bit moreuncertainty with the shutdown, they won't want
to hike rate. That's that's true, and so that could be a net
positive to the overall market if ifthe Fed notes that, but either side
digging in that leads to less spending, the market will see that as a
(19:44):
positive to get things under control witha little less spending it coming from our
government. Yeah. Uh, andwe'll we'll see what the what how that
affects the FED, because I thinkif the Fed gets to next year,
more than likely they're not going tobe raising anymore. So if they end
up skipping, it's not going tobe If they end up skipping the next
one or two, they're not goingto be skipping to then increase again.
(20:07):
Yeah. And the economic predictions fornext month and the following month are back
down into the low point two topoint three point point three nine for the
next month, point two for thefollowing month, So we're already back on
a trend line of hovering right aroundthree percent for long term inflation. It's
what the FED needs to see ifwe can get them to pass one more
time, I believe we're done withall rate hikes at all. In the
(20:29):
next move will probably be a rateto cut, because not only will inflation
be lower, but there'll be somestimulus that is needed in the housing market
and commercial market so that we canget mortgage rates to come back down a
little bit. Mortgage rates still abovethree percent on the spread between ten year
treasury and thirty year mortgage. Thehistorical is below too. If we were
(20:51):
at historical averages, the thirty yearfixed rate mortgage will be about six and
a half. No, no,no, even it would be even lower.
We'd be at five and a halfof the ten year treasury today,
call it four and a half.Well, okay, we've been about six.
If it's five one and a half, and if it's two, you're
right, it would be it wouldbe it would be. Yeah, So
what where are we today? Sevenpoint eight three? So you're talking about
(21:14):
somewhere between one and a quarter andone and a half percent drop if we
just had normal, Well, what'sit gonna take for that to happen.
It's gonna take the ten year treasurydropping a little bit. It's gonna take
the ten year treasury stabilizing a littlebit. And that will only happen if
the Fed fully announces they're done orgets a cut underway. And so I
don't maybe a little devil's advocate itcould get back to normal by the ten
year treasury going up and mortgang streetsstaying the same. That it could.
(21:38):
It's just like our discussion of howwill the yield curve uninvert. Well that
you've got five point one on thetwo year, could we get five point
five on a ten year? Andthat's how it uninverts. Sure, what's
happening right now? Yeah, nobodywants bonds, So what has to happen?
Uh, You're you're looking at ata historic run for the NASTAC and
(21:59):
people are still putting money into theseareas on every single dep So if nobody
wants bonds, then the price ofthose bonds goes up, and the has
to go down to attract the buyer, and the yield has to go up.
And that's what has continued to happeneven during this downturn for the stock
market over the last two months.Let's take our next bonus when we get
back, Brad, there was actuallythe second Republican primary debate, So let's
(22:22):
hit some highlights from from that particulardebate. You're listening your money since Kevin
and Brad Kurston. We'll be rightback and welcome back to the show.
You're listening to the advisors of KurstenWealth Manager Group, Kevin Kurston and Brad
Kurston. Brad, there was aRepublican debate second debate. Trump was not
at either one, and I thinkmost people probably missed. It started late.
(22:44):
It was at the Reagan Library inCalifornia. She's I tuned in probably
about ten o'clock and I felt likethey were just getting started. So I
don't know what time this thing started, Probably nine thirty or something. Yeah,
And it's interesting you look at allthe names in there. They go
from the middle out in terms ofwho's polling the best. So who was
was the Santis in the middle?Zantis and vavec Or in the middle in
(23:06):
the middle, and they neither onedirectly in the middle, but just those
two out from them would have beenNicky Haley. Nicky Haley on the other
side was Tim Scott, Chris Christie. Chris Christie would was on the right
of Nicky Hay or on the yeahhit her right, uh. And then
out from that was a either SouthDakos I think it's North Dakota, Dakota
commercial governor and I and I mentionedyou. They hardly let the guys on
(23:30):
the end speak and when he didspeak, he sounded great. But I
just if you're number eight on theon the totem poll two debates in,
you're probably not gonna And and onthe other side, uh was was Mike
Pence all the way out and soyou know Pennce and the the the North
go to governor. I mean,I don't know why they would even stick
around for another one unless they're pollingdramatically changes or unless they looked good.
(23:52):
Well Pence certainly doesn't. He isso robotic, and it is I don't
know who's telling Mike Penn it's thatpeople like him, Yeah, it's he
comes he comes across so unlikable.Yeah, he is like if if they
were going to do a caricature,the Democrats gonna do a caricature of the
(24:12):
classic Republican. It's it's everything thatMike Pence is. Yeah. Yeah,
And even when he is trying tobe clever or say the line that a
speech writer wrote and maybe the speechwriter said it and it sounded funny,
but when Mike Pence says it,it sounds horrible. And he had one
of those you need to win thepresidency on both sides. You need to
(24:34):
look at somebody and say, woulda Democrat vote for this person? Yeah?
Would a what somebody who's kind oflike I'm a Democrat but not really
yeah, And the same thing onthe other side, they would have to
say, what a Republican vote forthis person? Yeah, okay, And
and I don't know what that numberis. Is it five percent that go
either way? Is a ten percent? But you have to get some of
(24:56):
those otherwise the voting is the exactsame as the prior We'll get no,
one no. And I argued thatTrump has squeezed every last photo out too.
Well. What's interesting is just mygeneral thoughts in watching it. People
have to come across as normal humanbeings and not pre planned answers and and
(25:17):
so you have to do it thatway, and you have to come across
as someone who can speak very well. I mean, Vivet can speak very
well. He borders on being thethe smart kid in class who kind of
was a know it all. Yeah, he borders on that sometimes like Okay,
you're smart, I get it,but you're coming across is and know
(25:37):
it all and talking down to me, so that I think he needs to
be careful of that. DeSantis,I think, always comes across well because
of his track record. And he'llalso call to the carpet a bad question
or a question that is not rootedin truth, he did that at least
once last night. He'll he'll alwaysgive the what are you talking about?
As opposed to a lot of peoplewho just don't answer the question, and
(26:00):
even as a bad way, theydon't even answer the question, yea,
they just start talking and saying whateverthey want to say. Pence comes off
as a robot. Chris Christie,I just yes, no one's gonna vote
for him. And I look ifevact too. He seems to be so
complimentary of Trump. It's almost likehe's not running for president. He's running
for vice president. And maybe that'snot a bad thing, because if it's
(26:21):
gonna be Trump anyway, you've gotto have a vice president that's gonna get
some votes. And so if hecan get the young voter, and even
just in his cadence and not talkinglike a just not talking as robotic as
as Pence, I think it mightappeal to a younger person who doesn't know
where they want to vote yet,and so here you have somebody that can
relate to that. Well, ifTrump gets the nomination, there is no
(26:42):
way that he is not nominating someonewho has complimented him. Right in previous
times we had you know, BarackObama, you know, nominate Biden,
and they went head to head andHillary and and he went head to head,
right, So that won't happen withTrump. No, Trump has to
(27:03):
have someone who who not compliments hisstyle, someone who compliment literally says,
you're really sorry, you're really great, You're really great. So let me
go through some of these highlights thatI found online. You tell me what
you think. Brad de Santa's wasthe only one who said anything negative about
Trump. So the Santa said Trumpis missing in action. He should be
(27:26):
on the stage tonight. He owesit to you to defend his record.
And that's the one thing that Idon't understand that Republicans in this primary don't
go after is the absolute horrendous recordhe has on spending in the economy and
he gets away with it and theinflation that we've seen. Especially if that's
your talking point is we're gonna bea you know, a conservative and not
(27:48):
allow government spending. Why you wouldn'tgo back on that truck or you said
he was the only one in attack. Chris Chrissy also did, but with
a horrible line about not if you'regoing to keep ducking the debate. We're
going to call you Donald duck horrible. Rick. It's just the worst.
It's that. That was like amoment where sometimes I'm at home and I
make I try to make cheesy dadjokes, but I'm doing it on purpose.
(28:12):
Yes, he was dead serious.I feel like he practiced that in
the mirror and said nailed it.Yeah, or he tried it out on
his kids and his kids are like, talk to it. I actually I
actually followed dad jokes on Twitter whichis now x and they send me like
a daily one and I will oftendo them to the kids to be funny.
But I know what I'm doing,right. I don't think Chris Christoper
(28:32):
knew an ounce of irony. AndChris Christy delivered that line. He thought
it was gonna just it was gonnabe the line of the night. That's
right. So when when de Santiswas talking about Trump and Biden at the
same time in terms of spending withand think is a good thing to do,
he also hit Trump on abortion lateron. That probably is something you
want to do in the primary.But I've said it before, Brad.
(28:56):
In the general election, don't askany questions about abortion none. It's a
loser. Yeah, don't do it. Don't say anything good or bad in
the general election. You want todo it in the primary. Fine,
But you know that's that's something that'syou know, interesting to see. Uh.
They talked a lot about immigration,you know, going to be tough
(29:17):
on the border and stuff like that. H. I don't know if they
have it in your notes, butVec said some pretty bold things on immigration,
saying that, uh, that thatimmigrants who have birth here, I
don't know, the birthright citizenship,he would revoke it for someone who's not
already a citizen, and then thatwould probably take the Supreme Court getting involved.
(29:38):
He seemed to think that it's notpart of the fourteenth Amendment. Actually,
before the show here, I readthe fourteenth Amendment and it's pretty cut
and dry. If you're born here, you're a citizen. I don't I
don't know what Vvec was saying lastnight, and he's there's a small interpretation
where he's saying if if you camehere legally and you were born here,
(30:00):
that's what it's sad, But it'sthat's that's not the actual words of the
fourteenth Amendment, which would, inmy opinion, what Vec was saying would
require the Supreme Court to determine.Does that mean you, yes, you
have to have come here legally inorder for your children to have birthwaighters and
to change the constitution is a hurdlethat is way way too difficult to overcome.
(30:21):
So that may be just a politicalWhat are they doing, you know,
are they outpolling and saying, well, this actually would get a lot
of votes because people want this,and since since the non voter would be
the one that would want it,then why then then why not dig in
on this? Yeah? So theother cringe worthy moments that I found that
(30:42):
that are noted here in this articleas well is everyone they kept going back
and forth about these weird comments aboutChristy made an uncomfortable barbed Later at some
no one expected to be mentioned.He said something about Jill Biden and he
says the teacher's union have a stronginfluence in the White House, and he
(31:03):
declared the president is sleeping with amember of the teachers union, which is
just weird. Yes, so thatthat was Chris Christie saying that, yeah,
and she's not even a member ofthe teacher's union. Don't make like
you always stay on the show it'snot making me defend a Biden, right,
right, She's not. She's acommunity college teacher, so she's not
a member of the teacher's union.And then rather than just let it go,
(31:25):
that's why Pence stepped in, yeahand said, I have a great
clever line here, and this isdefinitely not Biden's been sleeping with somebody for
twenty five years. I was sleeping, and he goes, I've been sleeping
with a teacher for thirty eight years. That is the last visual anyone wants
regarding Mike Pence, right, Okay, Yeah, So I don't know why
Mike Pence thought that that would befunny. Well when he said it,
(31:48):
I don't know what what Mike Pence'swife's job is, so I had to
assume. And so with the listener, well, I guess he's married.
I don't even know that, andI guess that his wife is a teacher.
And that's the bois making. Butlook at all these leaps I have
to take to not picture Mike Penn'shaving an affair. It was really weird.
(32:08):
Line. Well, here's what youknow everyone talks about. You know,
she compliment Trump being a great presidentand all the great things that he
did, and you should, butyou should also talk about the bad things
that Trump did if you want tobeat him, right, you can't.
If he's not running, then fine, you don't have to talk about him.
But he's running, and nobody willtalk about All. Republicans seem to
(32:29):
think that that you have to tiptoearound the Trump voter because you got to
get the Trump voter. If Trump, you're gonna get the Trump voter.
Okay, Yeah, if you're runningon the Republican ticket, you're getting them.
You're getting And if they say they'renot voting for you, they're lining.
They're not voting for the Green Party, they're not voting for Democrats,
and they're not going to vote.Yeah, they're and they're not going to
vote for sleepy Joe Biden. Okay. So if you look, compliment the
(32:51):
good things that Trump did in termsof trying to do the drain the swamp
thing, trying to call China onthe carpet for for their policies on trade,
Compliment him on his tax cut.The tax cut was a good thing.
Compliment him on deregulation. But ifyou want to hit Trump hard,
okay, you go after him onhow weak he was during COVID yes week,
(33:17):
he folded. He let Anthony Faucibulldoze him into a total shutdown because
he got scared because Faucci put somefancy charts in front of him and said,
oh, well, but I havethis chart. This shows fifty million
people dying. And if he putthe current number of people dying, and
(33:37):
then you do some made up chart, and it's scared Trump into a shutdown.
And by the way, Pence wentright along with it too, because
when you look, Brad when theywere doing those COVID remember those ridiculous daily
COVID meetings, and Pence was standingup there. He loved that because that
was the only time a vice presidentcould ever be relevant. So Pence loved
(33:59):
to stay end up there and talkabout all the things that they were doing.
But Trump even used to tout thevaccine. The vaccine has been a
complete failure. They're trying to getpeople to do boosters. No one's doing
them. Yeah, there's ads everywhere, there's no one is signing up for
these boosters. The vaccine was acomplete failure. So even that which Trump
said, fastest best vaccine ever.And now it's like less than twenty five
(34:21):
percent effective. I mean, that'snot even any better than a pill of
vitamin C. Okay, but yougotta hit Trump on his COVID response and
his spending. I think that ifand less Trump is within ten points of
either one of these guys, he'snot going to do one single debate.
And I think, as it's trending, the last debate will be DeSantis and
Vavek, and they'll probably be twomore, and they'll have a few less
(34:45):
than the next one, and thenit'll be down to two guys in the
last one, and Trump won't bepart of it. And why would he
if these guys are pulling fifteen totwenty points behind him, why would he?
Bother? So everyone's giving DeSantis grieftoday because he said Trump should be
on the stage tonight. He owesit to you to defend his record where
he added a record amount to thenational debt that set the stage for the
(35:07):
inflation we have now. Then Biden, of course it wasn't Biden. Biden
doesn't even know how to use Twitter. But then Biden retweets a video of
de Santis saying I couldn't agree more, and everyone's saying, oh, see
De Santis and Biden are on thesame side. There's nothing wrong with the
Santist calling out Trump for his spendingand Biden agreeing with him. That's ridiculous
(35:28):
on Biden's part. And I saidto you before the show, Biden agreeing
with Desantists on Trump's spending would belike getting a tweet from Bernie Madoff when
some Ponzi schemer got arrested and BertieMadoff saying, Oh, I'm glad that
guy got arrested. I mean,Biden's been doing the same Bide, He's
been doing the same thing. Soit's it's not De Santis's fault that Biden
(35:49):
agree with and Biden has the sameproblem that Trump did. So let's look
at these numbers, brad on notonly total spending, but percent from the
previous president. Number one by farand away as Franklin Roosevelt. It was
an eight hundred percent increase to thenational debt. But he also was president
for sixteen years, well not sixteenyears, probably he wasn't well as four
elections it could have been. Itwas nineteen forty four. Forty two is
(36:15):
an election, so two more years. But keep in mind this is their
total presidency, so the fourteen yearsthe years don't match up. Woodrow Wilson
was second at seven hundred and fiftypercent. Ronald Reagan in terms of traditional
probably most recent, he was onehundred and sixty percent in his eight years
one point six trillion. George Bushseventy three percent, four point two trillion.
(36:37):
It's interesting after the two big ones, which are the great Depression presidents,
number one and number two are Republicans, so i've you know, Republicans,
Oh we we don't spend really.Barack Obama's number three, Okay,
he was seven point six trillion.That was sixty four percent increase in his
(37:00):
time. But those top three areall eight year people. How about this
one, George H. W.Bush. George H. W. Bush
was only four years and he wasa forty two percent increase at one point
two trillion, So in terms ofthe percentage, George H. W.
Bush was actually more than Trump.But here's the problem with Trump dollar amount
(37:22):
by far and away the most spendingpresident of all time. Right, it
was a thirty three percent increase infour years six point seven trillion dollars.
Biden up to this point three anda half years in excuse me, No,
two and a half years in right, Yeah, he's got one more.
Yeah, he's got all of twentytwenty four. If they're going to
count that two and a half year, and it's a two point five trillion,
(37:45):
So at Biden's current pace, he'llbe around four trillion at the end
of four years. Trump was sixpoint seven. And Trump goes out there
and rails against Biden for inflation.I don't know how the other Republican candidates
let him get away. So he'swhy it's relevant. Now we got a
government shutdown. Lois why we're talkingabout trying to not spend so much.
That's the reason for the government shutdown. So it's Republicans day in saying no,
(38:07):
we need a balance budget, weneed to cut some of the fat,
and we'll shut the government down ifyou don't let us do it.
That's why it's important. If you'regoing to run on a party of kind
of fiscal responsibility, you better doit and be willing to have the government
shutdown happen. I just don't understandwhy the other Republican candidates and De Santis
(38:30):
said it a little bit, Christiesaid it a little bit. Why they
don't point out the massive mistakes thatnot only the pain and suffering that people
went through with their businesses being shutdown and everything like that, but the
fact that it was all wrong andit didn't work. Yeah, okay,
and then you spend all this moneyand it causes this runaway inflation and now
(38:52):
we're still dealing with that today.And yes it's partially Biden's fault, but
Trump spent even more. So Idon't understand why he gets away with it.
And uh, maybe the people wholove him just want to put the
blinders on and vote for him.But that's the tactic to win. That's
the tactic to win. Because ifyou're gonna go into the primary and just
(39:13):
say Trump is great, Trump iswonderful, I'll do much of the same.
Who's going to vote for you,right right? I mean, look
at vec Trump is where Trump iswonderful. What if they get on the
stage and Vavec just compliments Trump fortwo hours, Well if vvec might be
realistic in the fact that none ofthem can beat Trump, and so if
he can come in as his vice, he's he's the president after after those
(39:34):
for you, Well, maybe he'llbe so complimentary that they'll just decide it
right there on the debate stage.Yeah, that's perhaps because once again I
said Trump will never he is,he will only put someone in there that
basically kisses up to him. Yeah, well that's that's that's already starting to
happen. We'll save let's say ourlast pause here and come back. A
couple of planning ideas for you withsocial security in particular. Always questions about
(39:55):
social security, and we had acouple this week, so we'll go over
those. You're listening to Money Sense, We'll be right back and welcome back.
You're listening to the advisor Kursten WealthManagement Group. Brad and Kevin here
with the other this morning. Kevinalways questions about social security. There's so
many different loopholes, and there's afew less loopholes, but there's still so
many different caveats to social security.And everyone's situation was social security, so
one to go over one talking tosomeone in their fifties who is divorced and
(40:22):
thinking about getting remarried, and theywere asking me about the rules for if
they remarry, at what age canthey remarry and still go back and forth
between either their ex spouses or theircurrent spouses so security. So that age
is sixty no matter when you getdivorced. If you don't remarry until sixty
and one day, then you're reallylooking at two different spouses so securities,
(40:46):
your current spouse and your X spousessocial security, and you could take either
one. If your ex spouse issecurity, half of that is more than
your current spouses you can take theX spouses social security. And where it
comes into play more off and thennot is if you're remarrying, or say
you don't even remarry and you're evenif you're taking your own so security.
(41:08):
If your ex spouse dies, thenyou are entitled to the full amount of
that X spouse's a benefit as awidow benefit. So you could start taking
it at age sixty as a widowbenefit even if you were divorced, as
long as you didn't remarry before sixty. You do get a reduction at age
sixty, and you can't be workingand make very much at age sixty.
(41:30):
The same rules for income would applyto you at age sixty or sixty two,
still to way to your full retirementage. But the ability on taking
Social Security as a widow benefit,that's the one loophole they haven't closed.
Your benefit still grows by eight percentsimple from your full retirement age all the
way up to age seventy, evenif you're taking a widow benefit. So
(41:52):
a widow benefit is the one whereyou can kind of still play off those
old rules of call it file andsuspend or being able to take a spouse
benefit and switch later. The widowbenefit still allows you to do that.
And if in some cases, ifyou're not remarried in taking your own soil
security and you hear at a muchlater age that your ex spouse died,
(42:14):
even if you're in your seventies oreighties, you can switch to that widow
benefit or have them calculate to determineif it's larger. And in most cases,
if you were not the primary workerin the household, or maybe you
didn't work at all, it's goingto be a larger Social security take.
Take your own benefit for instance,if it's say it was two thousand at
your full retirement age, but yourex spouses was three thousand, well,
(42:39):
then the spousal benefit there would befifteen hundred if you took it a full
retirement age, half of the spouse'sbenefit. So you take your own benefit
in that case, or it wouldcalculate to be your own benefit. But
if your ex spouse dies, thenyou would be able to collect that three
thousand instead of two thousand off thewidow's benefit even if you weren't married to
that person at the time of theirdebts, so the widow benefit still applies.
(43:01):
The other question we get is whatif they remarried and what if they
remarried before sixty It doesn't matter.Two people could be collecting a widow benefit
as long as you did not remarrybefore age sixty, so two people could
be electing the full amount of thatwidow benefit. There's no reduction of your
widow benefit if your ex spouse remarriedand they don't even know that you're collecting
(43:22):
it. All you need is they'reso security number to be filing for it,
and proof that you were married anddidn't remarry, and so you and
a current spouse could be collecting offthe same one. Those same rules apply
even even if they're not deceased twodifferent spouse and x spouses could be collecting
the spousal benefit off of one worker. So it's kind of some different rules
(43:46):
for widow benefit that haven't changed anda lot of different caveats for X spouses
and widow benefit that if anybody hasany questions on then give her off as
a call. If we don't knowthe answer right away, we'll definitely find
it for you with our contacts down. It's so secure purity. Yeah,
that's right, Brad. I meanthat's big decisions are with the file and
(44:06):
suspend part of it, but youalways get widows and divorces. There's a
lot more that goes into it.And as you mentioned, a lot of
times people are, especially on divorces, they're they're hesitant to do anything because
they feel like that they're something theyshould or their X is going to find
out yeah about something, Yeah,and they won't. It doesn't affect them
(44:28):
at all. Yeah, so thatit doesn't affect their benefit, but they
also aren't notified that you're collecting itoff of their benefits. Correct, Correct,
So that I always find that whenI'm having this conversation that that's a
hesitation as well. I just don'twant to deal with him or her that
shouldn't have nothing to do with it. You'd make the best decision for what's
available to you, and it's allworth a calculation. Even if you had
(44:49):
a spouse that died at a veryyoung age, you're not they're not penalized
and you're not penalized for their lackof work. When you're dividing it out,
they just divide it out by thennumber of years of work and are
no zeros in that calculation. Ifyou only work for ten years yourself and
try to collect your own benefit,there's a lot of years that are zeros
as part of that calculation. Adeceased spouse would not have that. They
(45:12):
just divide it out by the numberof years you actually worked. And the
benefits much larger than people realize.Yep. And I think the other part
that the benefit, other benefit that'smuch larger than people realize is the age
seventy benefit. I mean, wepreach this all the time, but it
can be a game changer for people'sretirement if they can postpone and yeah,
at least one age seventy benefit,at least one, at least one to
(45:32):
be larger than the other because you'regonna get to keep You get to keep
one once one of the spouses dies, so one of them you should wait
to have be larger. If youcan wait on the larger one. That's
the one you should wait on.Have it be a larger benefit, because
ultimately there's going to be a periodof years. Well that's the only one
you collect, So you should collectthe smaller one that's gonna go way first
first, and wait on the largerone. Even if it's a few years.
(45:55):
You don't have to go all theway to seventy, but just to
let it accrew by that eight percentsimple past your full retirement age for a
year or two is a big benefitfor your all of your income throughout retirement.
And there's a big compound interest effectto not only that eight percent simple
that you mentioned, but also you'regetting the inflation off of a bigger off
of a bigger number as well,so that the compound interest effect can can
(46:20):
put your soul security into I've seenpeople getting husbands and wives getting sixty seventy
eighty thousand a year from soul security. Take a look of the last couple
years, the last two years it'sbeen it's been seven and six percent the
last two years. Just say tenpercent on a two year if you collected
it earlier in a collect in twothousand, you've got a two hundred dollar
(46:40):
increase over the last two years.Somebody collecting thirty five hundred because they wait
un till seventy they're getting three hundredand fifty dollars a month more. So,
just that's what we're talking about,is getting that bigger number for the
lifetime of those inflationary increase. Willyou know, it's almost a double from
sixty two to seventy Put a coupleinflationary kickers in there. It will be
(47:00):
a double before too long, andbeyond that after you get ten and twenty
years down the road with inflation.Yeah, that's absolutely right. So if
you have any questions about social securityor any other planning topics, give us
a call at the office. Fourone nine eight seven two zero zero six
seven. Thanks for listening. We'lltalk to you next week. You've been
(47:20):
listening to Money since brought to youeach week by Kursten Wealth Management Group.
To contact Dennis Bratt or Kevin professionallycalled four one nine eight seven two zero
zero six seven or eight hundred eightseven five seventeen eighty six. Their email
address is Kurstenwealth at LPO dot comand their website is Kurstenwealth dot com.
Opinions voiced in this show or forgeneral information only, and are not intended
(47:44):
to provide specific advice or recommendations forany individual. To determine which investments may
be appropriate for you, consult withyour financial advisor prior to investing. Securities
are offered through LPL Financial member FINRAsipcut outs
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