Let's Talk Money

August 12th, 2023

Episode Transcript

(00:00):
Good morning and welcome to Let's TalkMoney. I'm your host this morning,
Nicole Goebel, director of financial planningand one of the wealth advisors with de
Bouchet's team. So happy to behere with you this lovely summer morning in
the Capitol region. Hopefully we alsowill have our guest John Malay on a
bit later, but just wanted toagain thank you all for tuning in.

(00:23):
So our lines are open. Pleasegive us a call if there's anything we
can answer for you. We welove to talk to our listeners. Eight
hundred Talk WGY. That's eight hundredeight two five fifty nine forty nine.
So, you know, we've hadsome mixed markets this past week, coming
off of a down weeks the weekbefore. We did have some mixed moves

(00:45):
in the market this week. Sowe're going to definitely talk about what's been
happening in the stock market, thebond market, economic data, and then
also you know, just share someplanning items with you as well. You
know, some of the things thatwe look at throughout the week for you
know, really how could be investingour client portfolios and what are the moves

(01:07):
that we should be making, youknow, to really take advantage of what
we think is going to be happeninggoing forward. So again, we've had
a really strong economy this year comparedto the expectation. So I think John's
joined us. Now, John,do you want to say hello? Yes,
good morning Nicole. Sorry about thathaving some technical difficulty here in the

(01:30):
in the office, but thank youfor filling in and opening up there.
So you know, I am JohnMalay, Nicole and I are going to
be your host for the next hour. I'm a CPA and Chief Operating Officer
and CFO and wealth advisor at BouchetFinancial Group. So this morning, you

(01:53):
know, we are sitting in forour colleague Stephen Bouche, who is enjoying
a well deserved break on this beautifulsummer morning. However, Steve will be
returning to the mic right and earlytomorrow morning at eight am and we'll be
hosting another amazing show. So Nicoledid the opening, so you obviously know

(02:15):
Nicole is here with me this morning. So I'm honored to be joined by
Nicole. Nicole is a CPA,a certified divorce Financial Analyst, a wealth
advisor and director of Financial Planning atBouchet Financial Group. She's also a member
of our key member of our taxteam and just an all around amazing person.

(02:38):
For so good morning, Nicole,and thank you for jumping on the
hotline and getting things rolling while Iwas dealing with some technical difficulties. So
thank you for being here, Nicole. Thanks John, And I was just
starting to talk about kind of themixed week we had, so I don't
know if you want to share withthe listening audience just kind of what went

(03:00):
on this past week and the variousyou know, indicase and also kind of
the reaction to you know, inflationnumbers this week as well. Absolutely absolutely
it was a busy week and we'llget into that in just a second,
you know. So one, Iwant to thank you all for tuning in
with us this morning, and wehope you enjoy the next sixty minutes with

(03:23):
us. With that said, Iencourage any listeners to call in with questions.
You can reach us at eight hundredtalk wg Y. That's eight hundred
eight two five five nine four nine. And you know, this is uh,
you know, it's great to behere, you know, on this
beautiful Sunday or Saturday morning. Youknow, here we are mid August summer

(03:46):
is flying by. I'm trying toslow down the last few weeks. But
you know, every summer, Ipersonally go into the summer trying to,
you know, enjoy all that ourregion has to offer. And for me,
that enjoying things, that's back enjoyingLake George August. Now we're in
Saratoga race season, so I certainlylike to get up to the track a

(04:11):
couple of days to enjoy that.Also, have you know, Tanglewood right
over in Massachusetts with uh, youknow a lot of my friends. Uh,
I still have friends over in theBerkshires who go there. It's just
a great, great environment. Butthe Adirondacks, Lake, Champlain, Lake,
Plastic, we have so many amazingresources around here. So got a
few more weeks of this summer toenjoy those, but I definitely encourage everyone

(04:34):
else to get out there enjoy everythingthat our region. You know, we
really are so blessed to have,you know, such an amazing, rich
region. So a few more weeksto get that under our belt. And
you know, I also just liketo mention, you know, Steve loves
to use this radio show really toshowcase, you know, the talent on
our firm. So you know,over the last few weeks you've got to

(04:56):
hear Nicole uh actually hosting the show, but also Ryan Bouchet, Marty Shields,
Paolo La Pietra, Harmony Wagner,Samantha Macy, and Vinny Testas.
So really like to get the wholefirm involved, and you know, Steve
definitely thinks it's a you know,it's a great honor to share our collective
knowledge with the listening audience. So, you know, with all that said,

(05:19):
again, we encourage, you know, Nicole and I are here to
share some information about markets, investing, financial planning topics, but also to
answer any questions you have. Sowe certainly encourage any listeners to call in
with questions. You can reach usat eight hundred talk w GUI. That's
eight hundred eight two five five ninefour nine. So, you know,

(05:43):
Nicole mentioned, you know, we'llstart off with the market overview, and
it definitely wasn't up and down week, you know in the markets, and
so some of the factors that impactedthe up and down nature was you know,
we had investment or we had inflationnumbers released, right, so Thursday
and Friday had the CPI and PPInumbers released. Also had the continuation of

(06:04):
the second quarter earnings season, sowe've got some major companies releasing earnings.
You know, still a little bitof you know, noise around the downgrade
that Fitch did the prior week,right, and how that affects UH potentially
bond market. And you know,now the concern is, you know,

(06:25):
how FED is going to react toall these key economic indicators, you know,
as they look at inflation. Jobsdata came out a week before and
that was certainly you know, stillgave some some good you know news about
the job market, inflation still being, the unemployment of being a such a
low number. So now it's abouthow the FED is going to digest all

(06:46):
these economic indicators, and you knowwhat's going to happen with rates. So
h But but you know, theNASDAC, you know, the NASDAC and
posit fell one point nine percent forthe week, you know, ending Friday
session with a point seven percent decline, you know, and it marks the
tech heavy index's first two week losingstreak of the year. And you know,

(07:09):
August is traditionally, you know,a slow month, and this month
has delivered, you know, inseven of the past nine trading days and
that's as DAK has been down andit's down four point nine percent for the
month of August. However, it'sstill up a red hot thirty point four
percent year to date. So eventhough you know, August were giving back

(07:30):
some of those games NASDAC, thetech sector certainly is is delivering in a
big way this year. You know, the dial was on the flip side
this week, which rose point sixpercent for the week, and you know,
the dial has been up for thepast five weeks and is up a
little over six percent six point fourfour percent year to date. You know,

(07:51):
the S and P five hundred,which is you know, more of
an index we we uh follow uh. You know, it was somewhere in
the middle, fall point three percentfor the week. The benchmark has been
down for two straight weeks, butstill up a solid uh sixteen point three
percent year today. So you know, mixed, mixed market for the week

(08:13):
and nothing too significant. And youknow, one of these we're encouraged to
see is definitely the market recovery isbroadening and we're starting to see sectors other
than the megacap tech starting to toadd to some of the increases. So
we're starting to see value in smallcap which is which is nice. You
know, in bonds, you know, we we love bonds this year and

(08:35):
certainly August, you know, it'sdefinitely seeing a tremendous flow of funds into
treasuries, you know, as investors, you know, maybe taking some gains
in the equity market, but alsomaybe still a little concerned about what the
Fed is going to do. Arethey going to keep rates higher for longer?
So investors are on pace this yearto set like a record two hundred

(08:56):
billion dollars into treasury bonds this year, and you know data recent data suggesting
that in August, you know,investors have been taking money out of equities
and again maybe cashing in some gains, but also you know, pulling back
a little bit and putting those intobonds. And we'll certainly see you know,
the ten year notes up to yieldof four point one six percent,

(09:18):
two year note was up to fourpoint eight eight nine percent yields, and
the thirty year bond up three pointup to four point two seven percent yields.
So you know, bonds, we'restill you know, we're very encouraged
with bonds and think it's a greatyear. We haven't seen a buying opportunity
like this in a long time,so it's, uh, we're certainly using

(09:41):
them with our portfolio, and certainlyas an individual investor, you know,
the idea of hey, not quitesure where interest rates are going to go
from here, if you can lockin some you know low for mid four
and even on shorter duration you know, five percent yields, you know,
that's really rich free as long asyou hold can you know, in a

(10:01):
position to hold those bonds to maturity, really risk free in our eyes,
some great opportunities there, So youknow, just touching on you know,
in the inflation you know, soThursday we had the Consumer Price Index released
by the Bureau of Labor Statistics.You know, the data show that the
CPI rose three point two percent forthe year through July, and you know

(10:26):
that was up from three percent forthrough June. So you know, it's
the first time we've seen a raisedin the annual increase in UH in the
CPI in thirteen months. So certainly, see, you know, that was
a little change, seeing an uptick, but quite frankly, uh, the
economists were expecting that, right,so they were expect expectations were for a

(10:50):
three point three percent increase. Soalthough CPI did show an uptick right from
three percent in June to three pointtwo, it was below expectation and so,
you know, no major surprises there. And you know, so prices
on a month basis increased by pointtwo percent and that was like largely driven

(11:11):
by shelter costs. Shelter costs representninety percent of that increase. So the
good news there is certainly seeing thefight on inflation is working, you know,
at a broader level right now.So we're certainly seeing cooling kind of
across the board, which which isa good thing. Now, Core CPI,

(11:31):
which is excludes the kind of morevolatile food and energy prices, was
up four point seven percent for theyear, but it was again below consensus
by you know, point one percent, so you know, and on core,
you know, certainly the expectation.There's certainly indicators out there showing that

(11:52):
shelter costs are definitely starting to cooloff. And so the hope is,
the belief is that you know,if if shelter costs continue to come down,
which you know, or the rateof increase slows down, that that'll
have a positive impact on future CPIin core CPI reading, so you know,

(12:13):
good good news that you know,inflation is declining at a broader level.
You know, however, the feed'sgoing to be cautious. You know.
Remember you know, even at threepercent three point two percent, feed
target is two percent, right,so we're still above that, and you
know, FET's going to be cautiouswith this, and uh, you know,
their biggest concern is, you know, a pause on rates or starts

(12:37):
to decline rates and if inflation startsto tick up. I mean, their
concern is that, you know,end of twenty twenty three or mid twenty
twenty four, we start to seeinflation creep from that three percent up back
up to four, back up tofive, that would be disastrous. And
you know the feed is not goingto let that happen. So, uh,
you know they're certainly digesting the inflationdata across, you know, with

(13:01):
with other economic data, trying tofigure out, you know, what to
do with rates. You know,Friday, we had PPI, the Producer
Price index numbers come out, uhand you know, uh, you know
the PPI is uh somewhat of aforward inflation view if you think about it.
You know, this is PPI represents, you know, the increase that

(13:24):
wholesalers have in manufacturing goods. Right, So think about it, if I
manufacturer sneakers and might costs go up, right, I've really got there's really
gonna be two outcomes of that.And so if the costs to produced now,
the consumer hasn't felt it yet becauseI may not have sold those products.
But what's going to happen is eitherI'm gonna increase those prices right down

(13:48):
the road to cover that cost increase, or I'm gonna have margin compression and
make less earnings. So you know, the belief from you know, one
of the reasons that the FED likesthe PPI number. It is kind of
a forward view. So if they'reseeing me, you know, if they're
seeing wholesale prices going up, youknow, the concern is that may flow
into to the consumer downstream. Right. And so you know, we did

(14:11):
see the PPI rows point eight percentannually, and you know that was higher
than expectations. Expectations was point sevenpercent, so not dramatically above expectation,
but above expectation. And you know, producer price prices heked uh point three
percent from June to July so it'sit was actually the highest monthly increase since

(14:35):
January. So again not a majormyth there, but certainly this is definitely
kind of that forward looking inflation gauge, and the FETE has definitely shown a
propensity to pay a lot of attentionto this number. So their concern is
this showing some built up you know, inflation at the manufacturer, at the

(14:58):
whole sale a level. So youknow, the big concern with inflation,
right is how's the FED going tolook at that? So we know FED
met in in late July and hikedthe FED funds rate by another twenty five
basis points, but that was expectedright to no surprise there, So markets

(15:20):
dealt with that and and no majormajor issue. Now we have meetings in
you know, September and then lateOctober, early in November, and you
know, so the concern is notwhat's going to be what's gonna happen at
those so Fed, you know,Fed fund range rate was increased twenty five
basis points to the five and aquarter to five fifty range. You know,

(15:41):
I will say consensus is starting tochange. I think I think there's
still believe that there will be apause in September, but but maybe an
increase in November. You're I'm quitesure that the Fed is done, and
you know, I think the feelingis starting to go towards even if they
don't raise that, that looks like, you know, rates are going to
be of this for longer, right, so rates it can be higher longer,

(16:03):
and you know, certainly the marketis starting to price that in and
we're starting to see that. Andbut that's that's clearly going to be one
of the concerns and Powell and andthe Fed's going to continue to look at
data, but certainly their biggest concern, right is it would be a disaster
to go through all these rate hikes, all the pain, and then have

(16:25):
inflations start to tick back up nextyear. So they're you know, they're
they're not going to start reversing rateswithout data that clearly shows, uh,
not only is inflation hitting the targetsthey want, but it's going to show
proof that it's going to be sustainedat that level. So I know,
that was a lot just through outthere, and Nicole, anything that you

(16:48):
would want to add to that aswe approached this part of the show,
Yeah, I think just you know, again, the economy has been strong
and and you know, I thinkI was looking at this GDP now tool,
that the FED forecasting tool, andit's showing new theory at you know,
four point one percent of real GDP, and you know, just thinking

(17:11):
about it again, coming into thisyear, the expectation was, oh,
it's it's going to be tough,and we're going to have a dramatic slowdown
and we're going to continue to seedifficulty in the stock market. And aside
from a you know, a fewminor pullbacks that we've seen around you know,
the Silicon Valley bank debacle as wellas you know, again the last

(17:33):
couple of weeks we've seen a bitof a pullback, but really again everything
has has remained very strong. We'revery encouraged, and I know Ryan released
a piece yesterday that was great because, as we've talked about on the show
before, early this year, itwas really the mega capped technology companies and

(17:55):
artificial intelligence that was driving some ofthe biggest gains in the market. And
now we're really seeing that broad inright, So we're seeing a recovery in
small cap, we're seeing a recoveryin more of the traditional value type companies.
And again, as I know youknow, Ryan and Paolo and Steve
have talked about it on the show. We're not necessarily giving up on growth,

(18:17):
certainly not. That's been a flagshipfor Steve for many, many years,
and we love technology. But wedo have a really well diversified portfolio.
Again, we use low cost exchangetraded funds so that we do have
some of those dividend producing and whatwe would call good quality companies. So
from our perspective, again, we'revery comfortable how we're positions to both take

(18:41):
advantage of continued uptick in growth.And as John said, the NASDAC has
pulled back a bit, but atthe same time up thirty point four percent
year to date, so almost doublewhat the S and P has been up
for the year. So we're veryhappy with that. But again just saying,
hey, we know that we're goingto have you pull back at some
point in the future, right It'sit's not if it's one. As Steve

(19:03):
would always say, he's going toguarantee each one of our clients, you're
you're gonna see, you know,losses in the market at some point.
But we always go on to makeall time highs. So you know,
that's what I would say is,you know, we're really poised to be
both taking advantage of the growth buthave some more of that safety. And
as John talked about, you know, the treasury market has been really attractive

(19:26):
and and you know, before thinkingabout getting you know, five percent in
a short term treasury or five anda half percent you know on a three
month treasury bill, was you know, really we're scratching our heads saying,
oh, this is this is great. And I do think part of those
inflows, John, is also justcash that has been sitting on the sidelines
in your traditional brick and water banksthat's earning you know, maybe two to

(19:48):
three percent unless you're you know,taking money from an outside source and putting
it in and they're they're giving yousome reward for putting new money into their
bank. You're not seeing that typeof money market rates right at the brick
and mortar bank. Some of theonline banks certainly, you know, we're
offering more attractive rates stay between fourand five percent, but to be able

(20:11):
to guarantee that you're getting that youknow five and a half percent yield,
you know, annualized, but ina three months treasury bill or a six
months treasury bill. Really, Iwould understand why, like you said,
people are kind of taking some ofthe gains off, maybe they're big winners
they've had this year and putting itinto a little bit more safety. Absolutely,

(20:32):
absolutely, And we're going to takea quick commercial break and when we
come back, we're going to talkabout some investing strategies, asset allocations,
some of the vehicles we use.So please stay tuned. It will be
right back with Let's Talk Money oneight ten w g Y. All right,

(20:56):
thank you for staying with us throughthe break. I am John Malay.
I am your host for this morning'sprogram on Let's Talk Money on eight
ten w g Y, and I'mjoined by Nicole Golbel, who is CPA,
CDFA and just all around amazing advisorat our firm. So just encourage

(21:19):
any listeners to call in with anyquestions. You can reach us at eight
hundred talk w g Y. That'seight hundred eight two five five nine four
nine. Nicole and I just kindof went through market recaps and where you
know, where were things we're lookingat in the economy, and certainly you

(21:40):
know one of the questions you know, I get a lot especially from friends,
is you know, where where dowe invest in this market? Right?
And what stocks should I invest in? And that's typically the question.
And you know, Nicole had mentionedthat our CIO Chief Investment Officer, Ryan
Bouche penda a recent client communication andin that he cited a research report that

(22:03):
was titled long Term Shareholder Returns andEvidence from sixty four thousand Global Stocks.
You know, in this report analyzedstock performance around the world from nineteen ninety
to twenty twenty two, and therewere some amazing takeaways in there that really,
you know, investors should should thinkabout and keep in mind. And
you know, one is that youknow, only during that time period,

(22:26):
only two point four percent of stockswere responsible for all the gains in the
global markets from nineteen ninety to twentytwenty two. And of the remaining ninety
eight percent of the stocks, theirgains only matched the average one year Treasury
bill. So some amazing data.And we'll touch back on this is we're

(22:48):
gonna be getting close to a breakhere. But what's important here is picking
individual stocks is hard, and we'regoing to come back to that after the
break. You know, we arealmost at the halfway points through today's show
and we'll be taking a break.We thank you for tuning in with us
today. We hope you are enjoyingthe show, and we'll join us after

(23:11):
the break. We encourage any listenersto call in with any questions. You
can reach us at eight hundred TalkW Guy. That's eight hundred eight two
five five nine four nine. Youare listening to Let's Talk Money, brought
to you by Bouchet Financial Group,where we help our clients prioritize their health
while we manage their wealth for life. Thank you and hope you stick with

(23:34):
us through the break. Hello,and thank you for staying with us through
the break. I'm John Malay,your host for today's show. I'm a
CPA and chief financial Officer chief operatingofficer at Bouchet Financial Group, and I'm
shared with my colleague Nicole Golbel.So we've been going through market updates and

(24:00):
you know, want to encourage anycolors to reach out to us at eight
hundred eight Talk WGY. That's eighthundred eight two five five nine four nine.
We have Dennis on the line.Dennis, we appreciate you listening and
look forward to your question. Yeah, How are you doing? I'm doing

(24:25):
great, Dennis, How are yougood? I have a question on the
CDs. I opened a CD forseven months. The rate was five point
five percent. I was told thatyou're not going to get five point five

(24:45):
percent. You're only going to geta little half of about a little over
half of that because you're only gettingit for seven months. Is that true?
So? I think what they Imeant to say to you is that
you know you're gonna get it annualized, right, And I'm just going to

(25:07):
you know, let's I'll make iteasy. That you had it for half
the year, right, So you'regonna get five point five percent, but
only during that six month, right. So uh so each month you're gonna
receive that, but it's only gonnabe six months at that rate, right,
And so it's annualized by the bythe the length of the CD.

(25:32):
So if you had that exactly fortwelve months, you would get that stated
rate, right. So you're you'regetting that rate each month, right,
but but only for for the timeperiod that you you have that CD.
So that's that's the annualized rate.So if so, if you're right,
So if you're if you don't holdit for a whole year, let's say,

(25:53):
and I'm just trying to keep themass simple. If you know,
if you had a five percent CDand you only held it there for half
the year, you you would gethalf that interest. Now you've got the
rest of the half of the year, right, So if you go invested
at now another five percent and thesecond half, you'd get five percent annualized

(26:15):
too, about yeah. So sobecause the rate that they're quoting you to
five point five percent is annualized,they're taking that rate and dividing it by
twelve, right, So basically it'sabout point four six percent per month you're
getting on that money. So bythe seven months, you'll be at about
three point two percent, right,So that's where they're saying. And I

(26:37):
know John was just you know,cutting that in half, but basically,
you know, they're just cutting thatin twelfth and giving you that kind of
monthly So that's why you're you're notgoing to reach that five and a half
percent. And that's what we've reallyseen too, is that right? Again,
just like we talked about the threemonth or six month treasure bills,
the rate you're getting for shorter termfunds is longer, and if you locked

(27:00):
it up for say twelve months ortwo years, because the expectation is rates
will eventually come back down. Sono bank is willing to say, oh,
I'm going to lock in a rateof five point five percent for two
years, because certainly the expectation isthat second year we're going to start seeing
rates come down, and it's goingto be costing them too much to give

(27:22):
you that rate because they're not goingto be getting the same on their investments
such as short term treasuries, rightright, Yeah, they don't know what's
going to happen in the future.I realized that, and somebody told me,
say, now they're advertising seven months. That was their big advertisements.
We have a seven month CD fivepoint five zero and that was your advertisement.

(27:48):
And then they had a twelve monthin two year and all of that,
and they were all lower. SoI said, well, give me
the seven months, it's a higherrate. And then somebody told me,
but the seven months, they're onlygoing to say you a little over half
of the five and a half percent. You're only keeping it in there for
less than a year correct annualized number, So it's a little misleading. What

(28:15):
now if I if I kept thatin for the year, if I renew
it when it comes due, whatdo I have to go with the newer
rate? Right? And what woulddo? Right? So? Right,
so think about this if you andI apologize. Was it a seven month

(28:37):
CD that you mentioned, Yeah,yep, So when that CD mature,
you're you're gonna have the opportunity,right, So that that CD mature,
that's done, and then now youwould have the opportunity to reinvest, but
at whatever the rates are at thattime, right, So they could be
different, right, and they mostlikely will be different. And so yeah,

(29:00):
the end of that seven months,that certificate deposit is done, and
then now you're going to reinvest it, roll it into another CD or something
else. Right. And so ifyou now put it into a CD that
had an annual percentage rate of fivepercent, right, you're going to get
that annual rate of five percent.But again it's gonna depend on the term.
Right. So again, if youif you roll into a year CD

(29:22):
exactly a year, then you wouldget five percent. If you if you
roll it into a nine month CD, you're going to get credited interest rate
at an annualized rate of five percent, but you're only going to get it
over that nine month period and thenyou're gonna be in the same situation that
CD is gonna come due and you'regonna you're going to have to make a

(29:45):
decision. And so sometimes what wesee individuals do is laddering CDs. Right,
So when this comes due, youknow, maybe you look at one
and you know, say, okay, see what your options are. And
you might say, well, andI'm just making numbers up here. Let's
say you had twenty thousand dollars andyou might say, well, five of

(30:06):
that I want to go into ayou know, a two year CD five
into a year CD five thousand intoa three month CD. Right, So
you're laddering. So you're kind ofprotecting yourself a little bit. But part
it'll depend on you know what whatrates. Yep, you have the money
if you need it, you know, yeah, exactly, I read all

(30:27):
about that, but I talked toa couple of different people. They said,
oh, yeah, you're only goingto get half of that money,
but they do it. So theydo it monthly, so up to the
seven months, I'm gonna get fivepercent at first, and then they're gonna
lower it every month. Is thathow that works? No? So the
way, Yeah, so if youread all the fine print right that they're

(30:52):
quoting you an annual rate, that'san annualized rate, and because you're holding
it for less than a year,right, you're you're getting a proportion of
that. You're you're getting you know, you know, seven months worth of
that. Okay, but with Dadactually cut it just about it in half,
say it was a six month CDwith that cut it weight in half.

(31:15):
Do you interstuate, right, becauseas Nicole mentioned, right, so
they annualize that, so they turnthat into a monthly rate. You'd be
credited at each each month. Yeah, so the seven months about three point
two percent, So it's a littleover half, right because half would be
two point seventy five. So it'sabout three point two percent for that seven

(31:38):
month period. Yeah, okay,yeah, I got it? Everready?
Thank you appreciate it yea, yeah, No, appreciate you listening, Appreciate
your calling in and uh, youknow, thank you for that. Jedison
again. You know, one thingI'll say about investing, and it's important
stuff. And I'm you know,no question is too big or no questions

(32:01):
too small. So we appreciate Dennisreaching in on that. We also have
a bill on hold, so ifappreciate you listening and look forward to your
question as well. Hi, goodmorning. My question might be a little
more complicated because I'm retired international bank. I retired about fifteen years ago.

(32:23):
From that, I've been doing otherthings. But I have a very intelligent
but extremely conservative friend who kept ontelling me that the bricks, Bricks being
Brazil, Russia, India, China, and South Africa, wanted to issue
their own currency for you to replacepetrol dollars, and I sort of scotted

(32:45):
at them. Then I've been listeningto this radio station a couple of times,
and some gold company wants you tobuy a bullion from them. Is
say, oh, August twenty second, this month, the bricks are going
to replace the dollar international trade markets. I've never heard anything about that on
regular news, just on this radiostation in the ads and from my wacky

(33:07):
conservative friends. I know that thebricks had a summit and they're doing nothing.
But why why are they they advertisingthat they're going to issue a new
currency in August of this month onthe radio and what would that do to
our markets? Well, you know, great question. And I'll say this

(33:30):
that that we certainly we don't wewe have we sponsored this show, right,
and we control the content that thatwe talk about, So I can
I can guarantee that that wasn't mentionedon our show, and so no later
conservative right, right, you know, and you know there's there's I will

(33:53):
just say there's you know, andI know this has nothing to do with
cryptocurrency, right, but there's justthere's been a lot of uh emotion raised
by talking about new currencies, whetherthey're digital or not, and trying to
get people to make moves and andand invest in certain products. You know,

(34:17):
we definitely are more long term investors, right and uh, really our
primary investment vehicles that we look atreally and not that we don't ignore,
you know, what's happening with cryptoand other currencies across the board. You
know, we're really looking at theyou know, broader markets, invest a
lot in exchange traded funds, arevery bullish on you know, the US

(34:39):
market, and so we certainly seeyou know how currency fluctuations certainly can you
know a lot of our you know, even US companies with their foreign operations
can be impacted. But uh,you know, certainly, you know,
uh, you know, that's notan area we're pushing and looking you know,

(35:00):
to people invest in gold. Youknow, gold has been looked at.
It's the hedge to inflation over theyears, not always especially as we
saw the last few years, notalways an efficient hedge. But it's not
something that we have on our radarfor sure. And Nicole, I don't
know if there's anything you would wantto add to that. No, you
know, I would just say again, certainly we've seen articles about it.

(35:22):
It's it's not something that that wewere certainly interested in participating in. I
know, you know you've heard ussay before. And actually this is a
big part of what you know,Bryan's kind of newsletter yesterday was is we're
still not investing in even developed internationalright and from our perspective, we are

(35:42):
very comfortable with the US economy.So you know, again that's bricks.
The bricks currency and again I knowthey've talked about it being backed by by
gold or by blockchain is not somethingthat you know, again we're we're going
to you know, give any credenceto at this point because we're in the
camp that and and I know,you know, John was going to talk

(36:04):
a bit more about the article beforewe started receiving callers. But you know,
with the top fifty companies out therein the last you know, nineteen
ninety to twenty twenty, of them, thirty five of them were in the
US markets. However, you know, from our viewpoint when we think about
kind of investing internationally, we're notinvesting directly in international right now. But

(36:28):
of those top companies, right fiftypercent of their revenues are coming from overseas,
So you're naturally getting exposure to internationalmarkets through our you know, megacap
companies in the US. So that'swhere we feel like we are, you
know, internationally diversified without having tocurrently invest directly in overseas markets. And
again, when we've talked about thestrong US economy, just from the perspective

(36:52):
of of having again a higher levelof comfort with what we're seeing here,
we have a very strong economy.You know, we come out of COVID
much stronger than you know, you'rehearing again the news about China and then
just you know, the the uhyou know, unemployment among young people and
you know, reading articles of howthey're all going back to become full time

(37:14):
children to their parents' homes because youknow, basically there's no jobs, and
there's thousands and thousands of people applyingfor the same state job in China,
and so from our perspective, youknow, definitely a bricks currency is nothing
we would touch or promote, right, And I wasn't thinking of investing of
it. But you know, Ilike to listen to your program because,

(37:35):
like John did this morning, youget a very good, you know,
overview what's going on in the marketsthat you know, since I'm not in
a day to day it's nice everyweek to get caught up on that.
But since one of the my reallyconservative Acke friends, it's very smart and
very well educated, he keeps sayingthat they're going to try to screw the
dollar in vernacular terms, and andthen this company that's advertising on the station

(38:02):
keeps saying we're backed by gold andyou should put your money in gold with
us, and watch out, thisis going to happen. So I just
I just want to know if maybeI'd been missing something, you guys heard
of something. But knowing I supposethat that it's just advertising and false advertising
a thing, absolutely, and againfrom our perspective, again, As John

(38:23):
mentioned, gold has been certainly seenas a hedge to inflation in the past.
I don't personally like gold as aninvestment because if you think about it,
right, it's it's it's really allyou're doing is investing in the possibility
someone is going to pay you morefor it in the future, right,
because it's a commodity versus when we'reinvesting in you know, quality companies or

(38:45):
you know, whether it's bonds,whether it's treasuries, you're investing for a
future cash flow and the expectation thatearnings are going to drive that cash flow
going forward. So you know,whereas again gold is completely driven by demand
for that specific commodity. And againwe don't really look at it from the

(39:05):
the the actual like use of goldand you know, jewelry or I know,
you know, Steve mentioned how inChina they give this as gifts,
but but more so of you know, is it going to go up because
people are fearful and we honestly,you know, as much as gold has
done, okay, it did notdo as well as one would expect where
you saw huge inflation increases last year, so that's where it should have done

(39:30):
extremely well, and did not comparatively, So you know that's where I guess
we don't currently hold it. Again, we we have used commod broad market
commodities ETFs in the past in ourportfolio, but right now, again we're
very comfortable with the US equity andbond market and alternatives that we've used before

(39:52):
as a well diversified portfolio, rightexactly. And and I and I tell
anybody that's interested in bullion, Isaid, if you're not going to be
using it for jewelry, don't havebullion in your in your desk draw.
I'm going to do nothing for you. If you're going to invest in natural
resources, goes through an ETF anddo it that way. So look,

(40:12):
thanks very much, Thank you,Bill. We appreciate and we appreciate you
listening to the show. And youknow, just encourage any other listeners you
can call in with questions. Youcan reach us at eight hundred talk w
g Y. That's eight hundred eighttwo five five nine four nine. I
think at this point we also haveDave on Hold still Dave listening and look

(40:36):
forward to your questions. Yeah,yeah, I'm here. Thanks, very
very diplomatic answer on that last question. I have an easier question. I'm
pretty sure on five year treasuries oror even you know, ten year treasuries.
How liquid are they? It knowsif you buy them, you know,
how easy is it? Can youcan you sell them? And how

(40:57):
do you do that? Yes?So great, great question, and you
know the treasuries are very liquid.But I will say this, and we
always talk about treasuries, you know, being as a risk free but that's
under the assumption that you're going tohold them to maturity, right because they
they their value will change right basedon what's going on with interest rates.

(41:21):
Right, So if you had atreasury yielding one point five percent when rates
are now, if at five anda half percent, you're not going to
pay full value for that, you'llyou'll be able to you know, you'll
be able to sell it, butyou're gonna get uh, you know,
you'll get a decline and so,uh that's where but there is an avenue
to sell and you know, wecertainly you know, especially with the rates

(41:45):
out there that are right now,it could be if somebody has money that
they know they're not going to touch, you know, and it could be
money they're putting aside. Either isa part of uh, you know,
the retirement plan or maybe things thathey, I'm putting. I know I'm
gonna have a major expenditure in twoyears. I want to lock in a

(42:05):
high interest rate, but I'm notgoing to touch that, so I know
there's not going to be any potentialprice flux when I need to worry about.
Really from a credit risk point ofview, You're gonna get your money,
you know, and so then it'sjust you know, locking in a
positive yield. So let me giveyou an example. Like giving example,
he says for ten years right now, we're paying roughly what four point zero
nine four point one percent? Soif I what a ten year treasury,

(42:30):
how would I go about selling it? If if I wanted to sell it
before the ten years? Sure,so so again it would be if you're
it would depend how you're buying it, right. So obviously for our clients,
we're buying them within their their accountsat SWAB, so we're using the
SWAB trading desk, and there's anelectronic market you know for that as well.

(42:52):
So as an investment firm, wehave access to that. I honestly,
as an individual investor, if you'rebuying it at Treasury direct I don't
you know, I don't know howthat would function. But to John's point,
you wouldn't want to do that.And the idea is because the yields
that we're talking about, that fourpoint z nine that you mentioned, right,

(43:15):
that tenure yield is based not necessarilyon Oh, I'm buying a newly
issued bond that has a four pointzero nine percent coupon. No, it's
it's what are treasuries yielding? Becausewe're buying, for example, a bond
that has a two point seven fivepercent coupon, right, stated interest rate,
but we're buying it at a discount. We're buying it at a reduced

(43:37):
price. So the combination of theinterest payments you'll get at that two point
seven five percent typically semi annually,right, plus the appreciation of let's say
you're buying, you know, aten thousand dollars bond. I bought it
at ninety six hundred dollars, Sothe extra four hundred dollars I'm getting between

(43:59):
when I buy it and when itmatures. The combination of those two is
four percent, right. So it'sa combination of actual interest payments and appreciation
from the discount you buy it at. So that's where again it's the what
you're hearing for the rates or theyields on treasuries is not truly the stated
rate, right, is not thatcoupon? Right, You're not necessarily buying

(44:22):
it if you're buying going out thereand buying a you know, an existing
treasury bond. And again, theperson who's selling that existing treasury bond needs
that money. So that's why they'rehaving to sell it at a lower cost
or a lower price to you,because they need their money for something.
And you're saying, hey, Ihave money to invest in, I might
as well, we'll buy this ata discount to get a higher overall return.

(44:45):
Okay, I think, I think, I think I have. Again,
there's I say, if I boughta ten year at four point zero
nine, and then if something sayI want to between now and then ten
years, I decided I want togo into the stock mar can buy you
buy a stock or an ETF.I wanted to see how how possible,
how realistic that would be. Youcould absolutely sell it, but you're not

(45:08):
going to be getting that full fourpercent. That full four percent assumes you
have to hold it all the waytill that that ends. Okay, you
know between again the interest payments.So again in that case, if if
you I would not tell somebody toput money into a ten year bond and
that's what they're very very comfortable andit's not a large portion of their liquid
portfolio. You know, again,you want to think about where do we

(45:30):
expect rates to go. So whilethat's an attractive long term rate on treasuries,
unless you know you don't need it. Again, you know you're retiring
ten years from now and you say, hey, at that point that's going
to be part of my retirement funds. I wouldn't lock it up for for
that long and an individual treasury yep, Okay, thank you for the for
the answer. Thank you very much. By thanks Dave, if we appreciate

(45:52):
you listening. Yeah, thank youDavid. Thank you Nicole for expanding on
that, and so we appreciate thecalls there. So that was excellent.
I know that that, you know, cuts short a few of the topics
we wanted to cover, Nicole,but you know, it's it's that time
of year, you know, almostheading into September, and I will say

(46:12):
this is uh what my youngest daughteris heading off to college in the fall,
so this is top of mine withme, and I know we talked
about maybe sharing some college savings ideasand some Nicole I wanted you to see
if you want had any information youwanted to share on that topic. Su
And you know we've mentioned five twentynine plans before, certainly and New York

(46:36):
Saves dot org. The Vanguard planis a great quality plan. But I
did want to note to our listeningaudience for any of you who have plans
or interested in their investment choices didchange a couple of weeks ago, so
Vanguard went from age based fonds conservativemoderate aggressive to target date fonds where you
can choose target dates. So Iwill say that in looking at those,

(47:00):
you know, again they do havea significant amount of international exposure. So
again I would just recommend that ifyou have that, that you certainly look
at the allocation you now have andmake changes if you feel that's necessary.
I think we're wrapping up, John, did you want to, you know,
say goodbye to our listening audience.Absolutely, And this this hour has

(47:22):
just flown by us. You know, we started with a little bit of
technical difficulties but got there. Sowe want to you know, thank everyone
for joining us today and I hopeyou enjoyed the show. I know Nicole
and I certainly did you know.Please join us again tomorrow. Steve will
be on the Mike tomorrow at rightand early at eight am. And join
us next week and check out ourwebsite www dot Bouchet dot com. You

(47:45):
are listening to Let's Talk Money,brought to you by Bouchet Financial Group,
where we help our clients prioritize theirhealth well we manage their wealth for life.