Let's Talk Money

September 16th, 2023

Episode Transcript

(00:03):
Chill Group. Are you working witha fiduciary to help manage your wealth?
Bouche Financial Group as a fiduciary andhas offices in historic Downtown Troy, Saratoga
Springs, Boston, and South Florida, advising clients in thirty four states.
Steven Bouche founded Bouchet Financial Group innineteen ninety and has acted as a fiduciary

(00:24):
for over thirty years. As afiduciary, first and foremost, all we
care about is what's best for ourclients, where every part of the relationship
is transparent. We manage our client'sassets by fee only and do not sell
investments. We have no conflict ofinterest. Learn more by visiting their website

(00:46):
Bouche dot com. That's boucchey dotcom. Listen to Steve's weekly commentary on
WGY Mornings with Doug Goudy every Wednesdaymorning at six fifty am. Tune in
every Saturday at ten am and Sundaysat eight am for let's Talk Money.

(01:06):
Have you come into sudden money becauseof life insurance proceeds, divorce, retirement,
lumps on payout or did you hitthe lottery? If so, do
you know what to do call innow with any questions pertaining to your financial
future. One eight hundred Talk wgY. That's one eight hundred eight two

(01:26):
five, five nine four nine.Here is WG wyse financial analyst Stephen Bouche
or one of his capable colleagues.Good morning and welcome on this Saturday,

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September sixteenth. Looks to be apretty decent day out there. A little
cloudy, but better than rain orsnow. And we've had our fill of
rain, that's for sure, allsummer folks. Thanks for tuning in today.
I can't thank you enough every Saturdayand Sunday Saturdays at ten Sunday mornings
at eight for you to take timeout of your day. Believe me,

(02:24):
it just makes me excited to behere to hopefully get you pointed in the
right direction. Whatever questions you mayhave, remember there's not a question that
you shouldn't have asked. I canassure you there's another listener who would love
to hear the answer. So ifyou have any questions pertaining to your financial
future, one eight hundred talk wg Y one eight hundred eight two five

(02:47):
five nine four nine, any questionswhatsoever today I have Tom Godzlowski. He
is the man. Zach's taking aday off, and Tom's on the board.
So when you call in, youwon't get Zach, you'll get Tom.
That's one eight hundred eight two fivefifty nine forty nine. Love to

(03:09):
talk to you. Any questions whatsoever, give me a call. So you
know, it was an interesting week. We started off. Oh wow on
Monday, such a good day inthe markets. You know, if you
look at NASDAK up one hundred andfifty six points, you know, the

(03:30):
Dow up about eighty seven points.But we don't care about the Dow,
right it only represents thirty stocks andanyone's stock and move the price of the
Dow. SMP is a much much, much better barometer of what's going on
in the stock market those five hundredand five companies, believe it or not,

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Yes, you heard me right,it's called the SMP five hundred index.
But then you have like Google Berkshirehand Away, they have two different
clay share so there's actually a littlebit more than five hundred stocks, and
that represents probably almost eighty five ninetypercent of the market. So if you're
looking at any benchmark to compare yourportfolio, too. That's the benchmark you

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want to look at, even thoughit's it's it's you know, market weighted,
and god, we know this year, Holy cow, I mean the
Magnificent seven. You think about thetop ten holdings, and you know,
Apple, Microsoft, Amazon, theVideo Google better known as Alphabet, I
guess Tesla Meta. I mean,they really drove the share or the returns

(04:42):
in the SMP and also Nastac.These these these companies have had taken the
world by storm. And that's that'sone reason why you know, if you
didn't have those in your portfolio,somehow, some way, you probably lag.
Because with the SMP up oh,as I sit here, the SMP

(05:05):
year to date is up about sixteenpercent, with dividends probably seventeen percent.
But the equal weighted Large Cap Indexthat means, rather than having in the
SMP, Apple for instance, representsseven percent, the same with Microsoft.
You have Google ad about four percent, Amazon almost three and a half percent,

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Navidia three percent of the SMP fivehundred, those of the weightings,
whereas with the equal weight everybody hasan equal weights of these Magnificent seven,
they just don't shine like they doin the Nastac composite or the SMP or
any good technology etf that and youmay be invested in. And so the

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equal weight year to date is upabout not even six percent compared to the
SMP up sixteen seventeen. And that'sthe difference, folks. It's really the
Magnificent seven. So far. We'revery good with it because as you hear
me say, I've been doing radionow for twenty eight years, and for

(06:12):
over twenty we've been as weighted withNasdaq as we are with the broad Stock
Market Index. So our clients areriding the returns of the Magnificent seven.
And we've had really a great yearon behalf of our clients because of our
conviction to those type companies were overweighttechnology. And we're very comfortable being overweight

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technology. There's a saying around theoffice that until I die or I'm mentally
incompetent, where what I say doesn'tmatter, we'll probably always be overweight technology.
I won't say always, but probablyalways. That's as close to being
always as we're going to get.And that's because technology plays such a big

(06:57):
part in our day. I mean, just look at this week, you
know the Apple news of the iPhonefifteen, I mean, huge, huge,
huge news. You know, everybody, everybody who has an iPhone or
an I watch, they're probably goingto upgrade, whether they need to or

(07:18):
not, because they're just such aloyal customer base for Apple. An Apple
happens to be our number one holding, and out of all the holdings that
we have, even though we don'tbuy individual stocks, we predominantly manage ETFs
exchange traded funds, although we dohave two individual stocks in the portfolio right

(07:40):
now, Apple and Amazon. Butfor the most part, we really believe
in ETFs exchange traded funds. Everyonce in a while we will use a
mutual fund. At the moment,we don't have any mutual funds in the
portfolio, but the ETFs give usall the representation that we want, and
as they said, every once ina while, we'll we'll add an individual

(08:01):
stock and an individual stock like Apple. I think it's one of the greatest
companies in the world, and that'sone of the Magnificent Seven. And you
know, year to date, youknow, Apple is just you know hitting
it right, you know, rightout of the park, almost up forty
percent. Amazon up, you knowthe same, just you know, two

(08:26):
dynamite holdings for our clients and inour ETFs, we're able to add Wilhelm
our portfolio trader. He is whenI tell you he's a numbers guy,
he's a numbers guy. He actuallywent to see Anna College. He was
the captain of the rugby team andthe statistics was his course. He can

(08:48):
work and excel spreadsheet like there's notomorrow, and right to the right,
to the percent. We can tella client exactly what they own and how
much they own of it. Sowe own a lot of the magnificent seven.
I guess that's the point I'm making, and that's that's why the returns
are what they what they are oneeight hundred eight two five five nine four

(09:09):
nine one eight hundred eight two fivefifty nine forty nine. So for the
week, you know, this pastweek, we we it was a crazy
week. You know, I saidthat Monday was really a phenomenal day.
You know when when you look atnastack up one hundred and fifty six points,
but it was down one hundred andforty four on Tuesday, and then

(09:31):
it was up forty on Wednesday,and up one hundred and twelve on Thursday,
but then it was down two hundredand seventeen on on on Friday.
For the week, you know,the markets it was like, you know,
not much happened. If you wereRip van Winkle and you kind of
missed the week, you didn't missmuch. The SMP was down point one

(09:52):
six percent, the Nastack Composite downpoint three nine percent. The qq Q.
When you buy QQQ, you're actuallybuying the hundred largest companies in NASTAC
down a half a percent, andthe Russell two thousands down point to four
percent. That's that's how we faredfor the week. So not much,

(10:13):
not much happening, not much goingon. But you know, it's been
it's been a great year. Youknow. The SMP up, as I
said, sixteen percent, seventeen percentwith dividends, Nastac Composit up thirty one
percent, QQQ up almost forty percent, folks. I mean, that's nothing
to sneeze at. That's those arepretty good returns compared to the last year,

(10:39):
where the SMP was down with dividendsabout eighteen percent. NASDAC was down
over thirty percent last year. NASDACtook it on the chin. It's more
of a growth index. A lotof technology companies, and when interest rates
go up, technology companies get hurtthe most, especially I should say growth
companies get hurt the most, tospecially technology companies. And we still don't

(11:01):
own any international investments. In yearto day, emerging markets are up about
three percent. The rest of theworld, excluding this great country of ours,
great Usa, the rest of theworld up about seven percent compared to
the S and P up sixteen percent. So there's a reason why I've been

(11:22):
underweight international holdings forever and ever andever. We've been completely out of them
for several years now. And that'sanother good reason why our clients have really,
you know, their performance numbers havebeen really pretty stellar because of our
foresight. I always say we learnfrom the past, but when we're investing,

(11:45):
we're looking into the future and whatwe see, and we make some
changes in the portfolio that are sometimesun orthodox. We don't follow the modern
portfolio theory and one on one whereyou need to have forty percent of your
portfolio and international stocks, and youknow, we just don't follow it.
As I said, if we did, our performance numbers would be lagging because

(12:09):
international holdings really have taken it onthat chin one eight hundred eight two five
five nine four nine. I'm gonnatake a quick fifteen second break. Don't
go anywhere. I'm one eight hundredeight two five fifty ninety nine. If
you want to learn more about BoucheFinancial Group, visit their website Bouche dot
com. That's b O U ch e y dot com. Sign up

(12:33):
for their blog, which is updatedevery week Stephen Bousche dot com. Follow
them on Twitter at Bouchet Group.Like them on Facebook. The phone lines
are open eight hundred talk w gY. That's eight hundred eight two five
five nine four nine. Here isStephen Bouchet. Hello and well come back,

(13:00):
folks. Thank you for tuning in. I can't thank you enough.
It's it's my pleasure to be hereevery Saturday at ten, every Sunday at
eight. And believe me, ifyou have any questions pertaining to your financial
future, give me a call.One eight hundred and eight two five five
nine four nine. So for theweek, as they said, Apple big

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news about their new phone, iPhone, fifteen, air pods, you know,
USB cables, Apple Watch. Wealso had CPI came out. We
have you know, oil prices ashigh as they've been in quite some time.
We had an IPO that really cameout and and it was surprising how

(13:50):
well it did. I'm not sosure you should be buying into it.
If we get time later in theshow, we'll talk about it. We
may have you know, the economy. May you know, we got twenty
seven thousand United Auto workers who walkedout at selected you know, whether it
be GM, Ford Stilantist plants.It's a targeted strike and you could see

(14:16):
that effect the markets and the economyif the strike carries out. Folks,
you have already GM came out.Now they have to lay off I think
two thousand more workers because of thestriking workers. They're not able to get
the product that they need. Sothere's going to be a lot of eyes
focused on how long this strike betweenthe big automakers and UAW will will last.

(14:43):
You had Walt Disney and Charter Communicationsand at their cable TV you know
little you know spat that they hadgoing on. You know, you had
arm holdings that the IPO that cameout that when through the roof, came
back came back to reality the nextday, and as they said, the

(15:05):
valuations of it when you look atit don't be rushing into this, folks.
Wait till the dust settles, Waittill the share price. You know,
see where the share price is headed. You had JM. Smucker announced
a deal to buy Hostess Brands.I talk with Doug Goudy on Wednesday morning
about this. I mean, whenyou think Hostess, you're thinking Ding Dong's

(15:28):
Twinkies, Apple pot. You talkabout processed foods. That's what you're talking
when you when you think Hostess brands, you are talking obesity at its best.
And you know some other news.But this week, this week Tuesday
and Wednesday, the Federal Open MarketCommittee, they will announce their monetary policy

(15:50):
decision. I'm hoping that they don'tdo anything. I'm hoping that they are
done with their rate hikes. Ithink there's a lot of good evidence out
there that shows that they should bedone. You know, Ken Griffin,
who who is one of the greatinvestors, runs a huge Citadel hedge fund,

(16:14):
and he was interviewed over the lastcouple of days and as he reminded
anybody who was listening that you know, it takes a year, year and
a half for the impact of ratehikes to be felt through the economy,
and you know, we're just ayear and a half into these rate hikes.
So I'm hoping after eleven rate hikes, with the FED funds rate going

(16:38):
up as high as it is rightnow, we're holding between five point two
five five point five percent that range, there's a forty percent chance of a
quarter percent hike maybe in December,but I'm hoping that. I'm hoping that
the Fed is done. I'm inthat camp where and I've been saying it

(17:00):
all along, and now you haveso many people saying the same thing that
if we go into a recession,and it's a big if at this point,
piece we may not go into arecession, and if we do,
it'll be shallow, it'll be asoft recession. And there's no reason to

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fear that, folks. Recessions comewith investing. We've had many recessions through
the years. Do not fret overa recession or recession is nothing, nothing
to be scared about. It's partof investing. If you have a well
diversified portfolio, you're invested long term, you're going to have corrections, You're
going to have bear markets, you'regoing to have recessions, and when they

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happen. Do not do not getyou know, crazy over, don't have
those panic attacks. Don't have theknee jerk reactions where you make decisions in
your portfolio that could really hurt you. Just think about last year. Last
year was that perfect storm. Stockswere down, bonds were down first first

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of three times in the last Ithink hundred years where bonds were down as
much as stocks. A well diversifiedportfolio, even a conservative portfolio, lost
almost as much as a growth orientedportfolio, because the bond market was down
as much as the stock market.And that, you know, I guess
for the first time in probably fortyyears, because bonds had been on a

(18:33):
bull market rally for forty years.In nineteen eighty one, September of nineteen
eighty one, the ten year yieldwas sixteen point one percent, and it
went down as low as point fivetwo percent just two years ago. And
here we are sitting somewhere around fourpoint three percent. So bonds when there's

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an inverse relationship when that yield fromsixteen percent all the way down the point
five percent. When that happened,when the yield came down, the price
of the bonds went up. Ifyou look at historical returns for bonds over
the last three four decades, theylook pretty darn good. But last year

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it was an eye opener for investorsto realize that bonds don't just go up,
bonds can go down as well.And people lost money in the bond
market. As they said, bondswere down as much as stocks. So
you have to you can't panic whenwhen you get volatility. It comes with

(19:37):
the territory. I give this statisticoften over the last thirty nine years,
the average swing in the market peakto trough, high to low is about
fourteen percent average swing year and yearout, some years more, some years
less. That's the average. Sowhen you and last year we were down,
you know, with dividends about eighteenpercent, you know, no big

(20:00):
deal. But the headlines, theheadlines were just you know, people really
got crazy over the headlines. Sothe Fed Open Market Committee they meet Tuesday
and Wednesday, and I'm hopeful thatthey don't come out and say anything that
really scares investors too much. I'mhoping that they realized that their hard work

(20:21):
eleven interest rate hikes and it wasn'teasy for them. I mean, believe
me, they were they were disciplined, They were dedicated, committed to hiking
those rates. They were going tohold off inflation. The best they could
remember. A year ago June,inflation was nine point one percent. As
of this week's CPI were down atthree point seven. It was three percent

(20:45):
two months ago, and it creakedback up to about three point seven.
But the trend has been coming downfrom that nine point one a year ago
June, and that's what the FEDhas to look at, that inflation is
coming down. Now the Fed hasa target rate of two percent. I
don't think it's reasonable. I don'tthink it's realistic. How can it be

(21:07):
if you look over the last ninetyyears, inflation averaged about three point four
percent. So why all of asudden does the Fed have a target rate
of two percent? Because they gotgreedy over the last fifteen years after the
Great Recession, inflation was nonexistent.It was close to the zero than anything.
And you know, it was theGoldilocks economy. The markets loved it.

(21:33):
Interest rates were low, inflation wasnon existent. Everybody got along.
So why does the Fed all ofa sudden want that two percent target?
I think because they had their eyesfixated on the last fifteen years. How
come we can't get inflation back totwo percent? And one of the reasons
why they can't is because unemployment.I don't think unemployment's going up to five

(21:56):
six percent like the Fed. Someof their talk over the last several months
is that they felt that millions ofpeople needed to lose their job in order
for a recession to hit hard inorder to stave off inflation. Well guess
what after there eleven hikes, Inflationis really taking care of itself. Inflation

(22:17):
is higher than we would like tosee it, It's still I think there's
room for it to come down.I think over the next several months you'll
see inflation come down more. I'mjust not sure it's going to get to
two percent. I could be provenwrong, folks. It's you know that
three percent is probably more of atarget than two percent a realistic target.
But as they said, the FEDknows more than I do. What do

(22:41):
I know? Although heck, acouple of years ago I told you that
inflation was rearing its ugly head.We were paying more at the gas pumps
in the grocery stores and writing abigger check for our heating bills, and
the FED said inflation was temporary,transitory. The White House said the same
thing, and a yell on ourTreasury secretary said the same thing. What

(23:03):
the little old Stevie Bouchet. No. I just looked at common sense,
and common sense was guess what.People had less money in their pocket because
they were spending more on items thatthey need. They need food, they
need energy, they need a roofover their head, and inflation was out
of control. Took the FED awhile before they caught on, and once

(23:27):
they did, as I said,I had to applaud them. They were
committed and they have eleven interest ratehikes under their belt. So we'll see
what they say on Wednesday, usuallyaround two o'clock FED Reserve Chair J.
Powell will come out and give ushis summary of the two day meeting.

(23:48):
And I don't think we'll see inhike, and I'm hoping the hikes are
done and before we know the folksnext year you're probably going to see some
cuts, some just rate cuts.And not only are we coming out with
our big announcement in this great countryof ours, but it's going to be
a busy week for central banks aroundthe world. You got England, you

(24:11):
got Sweden, Swiss, they're allannouncing monetary policy decisions. So it's going
to be a busy week all aroundthe world, but especially especially for us
because we're you know, we watchwhat they fed every time they have a
meeting. We are watching what they'resaying, what they're doing. I'm hopeful

(24:32):
that they won't do anything too crazy. One eight hundred eight two five five
nine four nine. One eight hundredeight two five fifty nine forty nine.
If you have any questions, giveme a call. I'd love to talk
to you. You know, there'sno silly question, folks, so please
ask away. If you have aquestion, you just call tom My producer.

(24:57):
Will will get you up on theboard. I'll take you one eight
hundred eight two five five nine fournine. You're listening to Let's Talk Money,
brought to you by Bouschef and ANDSWGroup, where we help our clients
prioritize their health while we manage theirwealth for life. If you if you
want to hang in through the news, call in one eight hundred eight two

(25:18):
five fifty nine forty nine. I'llbe here to take you. Website bouche
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Sign up for their blog, whichis updated every week Stephen Bousche dot com.
Follow them on Twitter at Bouchet Group. Like them on Facebook. The
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(26:04):
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(26:25):
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(26:47):
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one eight seven two zero thirty threethirty three. That's five one eight seven

(27:07):
two zero thirty three thirty three.Stephen Bouche has surrounded himself with twenty talented
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(27:32):
private wealth adviser. Now this isexpertise you can trust. Thank you for
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talk wg Y. That's one eighthundred eight two five five nine four nine,
And without any further ado, hereis WGY's financial analyst, Stephen Bouche

(27:57):
or one of his capable colleagues.It's all about money, folks, not

(28:29):
really, It's really about your health. Without your health, it doesn't matter
how much money you have. Weall believe in it. Believe me.
I can't say it enough. Ifyou don't have your health, it doesn't
matter how much money you have.And we do a lot of financial planning
for clients, and we tell them, when you have your health, you're
pretty lucky. When you have yourloved one, your spouse partner, and

(28:55):
you both have your health, wow, you're really doing well and in financially
you can do things. Don't putit off because you never know when your
health or your loved one that scenariomay change. And when I tell you
it's all about your health, it'sall about your health. We've had some
clients recently let have gone through somepretty pretty bad health issues. I call

(29:22):
each and every one of them.When when any client who engages our services,
I tell them it's something that Iand my entire team don't take lightly
and I don't I truly when theyput their trust in us to manage their
wealth, it's something that's that's reallywe take it seriously. Every Everybody that

(29:45):
I bless the work with think likeI do, and it's you know,
all we care about is what's rightfor our client. That's one of the
best things about being a filuciary.We don't sell investments at all. We
really care about is what's right forour clients. Folks, If you have
any questions, any questions whatsoever.One eight hundred eight two five five nine

(30:08):
four nine. One eight hundred eighttwo five fifty nine forty nine, any
questions, give me a call.I can assure you there's going to be
somebody else listening that would love tohear the answer that I have my opinion,
my professional opinion on whatever it isthat that you have a question on.

(30:30):
One eight hundred eight two five fiftynine forty nine. So yesterday was
kind of an ugly day. TheSMP down one point two percent yesterday,
NASTAC down one point six percent.You know, even though for the week,
the you know, SMP and theNASTAC were off not a whole lot.

(30:51):
You know, as I said,the SMP down about point one six
percent and as that compositive point fourh per cent QQ the NAZAC one hundred
was off about a half percent.And you know, yesterday the stocks open
lower and the losses just got worseas that they got longer. Tech stocks,

(31:12):
you know, this this year's youknow, there were stars, they
were they were the worst performers yesterday, the SMP the information technology sector down
about two percent, and as Isaid that, that just dragged everything down.
Shares of Adobe dropped about four percentafter earnings on Thursday night. That

(31:34):
was one of the bigger market youknow, laggards, and the software company
shares, you know, led someinvestors to take a more cautious stance towards
other tech companies. Shares a Microsoftoff two point five percent, Apolo Alto
Networks down two point three percent,Meta Navidia about three percent. So technology

(32:00):
was not the place to be yesterday, That's that's for sure. And stocks,
you know, they've been trading ina tight range for weeks now.
Remember the SMP was almost up twentypercent at one point. We're still about
eight nine ten percent off the highs. So we still have a little bit

(32:21):
to go, and we will getthere. I can't tell you when I
don't have a crystal ball. Ican't tell you when will make new all
time highs. I know we will, and I'm in the camp that there's
more reason to be optimistic that stockswill go up, they will finish the
year higher. And I'm you know, I'm not running for the hills I

(32:44):
don't buy into the camp of theworld's coming to an end and stocks have
a big correction coming down the pike. Now once again, I could be
wrong. In hindsight, everything's crystalclear. I promise you three to six
months. If I'm wrong, I'lllet you know, and I'll probably let
you know if I'm right. ButI'm just in the camp. We manage

(33:07):
a lot of money on behalf ofour clients, and we are we are
fully invested, our allocation towards stocksand bonds were fully invested. Were as
giddy about bonds as we are aboutstocks for most of the year and it's
been a good place to be there. Anybody who got scared out of the

(33:28):
markets last year, and I meanlast year, the markets bottomed in October
and they've you know, once theyturned around, there was no looking back,
other than for the last you know, four or five six weeks where
stocks kind of gave a little bitback. It was a long summer.
Not only was it rainy hair,but it was kind of you know,

(33:49):
dismal on the stock market side asas well. We had the CPI report
August came out this week and it, you know, it showed that prices
went up more than they've gone ina long time, a big jump in

(34:09):
energy costs. You know. Dougand I talked about inflation on Wednesday,
And when you think about the priceof gas, just a couple of years
ago, gas was closer to twodollars, and over the last year it
was closer to five dollars. Herewe are sitting at almost four dollars.

(34:29):
So gas has gone from two dollarstwo point two dollars and thirty cents approximately,
I think was the low point overthe last couple of years, all
the way up to almost five dollars, and here we sit just shy of
four dollars. People are spending alot more for gas today than they did
just a couple of years ago.Folks, there's no getting around that.

(34:52):
Now. For a lot of people, they can afford that extra ten twenty
thirty dollars in the gas tank aweek to get back and forth to work,
but a lot of people can't affordthem. There's a lot of people
that are still fighting hard to tryto put food on the table and take
care of their family and make surethat they're doing well for them. They're

(35:13):
out there working hard. We knowUnemployment is still as low as it's been
in quite some time, not atits lowest point, but it's still fairly
low unemployment rate. So there's alot of people out there working. Unfortunately,
there's a lot of people working oneand two and three jobs, but
a lot of people, those lowerincome folks, they can't afford to put

(35:37):
that extra ten twenty thirty dollars intothe gas tank. That takes so much
out of them. Food inflation forlast month was about seven percent. Now
here we are inflation, as Ijust said, the CPI is at three
point seven percent year over year.So food is a whole lot more.

(35:59):
And we need food, We needgas in our car. You pay for
it one way or the other,whether it be you know, putting gas
in your gas tank or taking anuber or having a piece of delivered.
The price of gas effects all ofthe above. So the CPI came out
it was up point six percent inAugust from the prior month. According to

(36:22):
the Labor Department, more than halfof the increase was due to higher gasoline
prices. So there you go.Gas is really really affecting inflation and what
people are paying so called core prices, which does not include food or energy
rows by a mild point three percentlast month, even after lower readings in

(36:45):
June and July. The August risebasically, you know, airfar is up.
I'm looking at the headlines on CNBC. More companies, especially airlines worn
higher costs will eat into profits.The higher gas prices, obviously labor costs,

(37:06):
so that that you know, thatreally hit the core items without food
and energy and car insurance. Youknow little things that that you know,
we we we need you write outthat check for your car insurance because you
need that car insurance. So theCPI came out year over year about three

(37:29):
point seven percent compared to three pointtwo in July, and the core inflation
up four point three percent in Augustfrom four point seven the prior months.
So the core you can see howenergy influenced energy and food I guess influenced
that overall number. Because the coreactually came down, which was a good

(37:52):
sign that that shows slow inflation.I think that gives the Fed more ammunition
to realize that the eleven hikes thatthey put into place so far, their
hard work is paying off. Andthat's why I'm hopeful that we're not going
to have an interest rate hike thisweek, and maybe the Fed will even

(38:15):
talk about maybe no more interest ratehikes at least that's what we're hoping.
So what do we have to lookout for over the near future, Well,
Saudi Arabia h you know, theirdecision to extend cuts on oil output,
that's you know, from now tothe end of the year. That

(38:36):
could keep gas prices high. Andas I just said, gas prices are
a big part of inflation. Astrike that we're right in the middle of
right now with the UAW union,the Workers Union, could you know the
production and we already saw it.I said in the first half of the

(38:58):
show that GM is off two thousandworkers because they just they just can't get
the products, so they can't employthese workers. So there's going to be
a trickle down effect to the UnitedAuto Workers Union and the strike against the
big carmakers. You know, youhave some some labor contracts in the airline

(39:22):
and healthcare industries, which you know, once again labor costs they're getting a
boost and pay so that could affectinflation down down the road. We'll see
what happens. I'm in the I'min the camp that that things will will
will will get better than not.As they said, Gas is the big,

(39:45):
big driver of this, no punintended, but drivers paid more at
the pump in August, up abouteleven percent from July. And you know,
the average price of gas right nowis about three dollars and eighty four
cents in August compared to three dollarsand sixty cents in July. And that's
really that's the big culprit. That'sone of the big reasons why we're facing

(40:08):
inflation like we are. One eighthundred eight two five five nine four nine
one eight hundred eight two five fiftynine forty nine. Any questions that you
have, folks, give me acall. I would love to talk to
you, love to get you pointedin the right direction. Let me take
a quick fifteen second break toop don'tgo anywhere. If you want to learn

(40:30):
more about Bouche Financial Group, visittheir website Bouche dot com. That's b
O U C h e y dotcom. Sign up for their blog,
which is updated every week Stephen Bouschedot com. Follow them on Twitter at
Bouchet Group. Like them on Facebook. The phone lines are open eight hundred
talk wgy that's eight hundred eight two, five five nine four nine. Here

(40:54):
is Stephen Bousche. Hello, folks, thanks for letting me wet my whistle,
Thanks for hanging in, and thanksfor tuning in today. One eight
hundred eight two five fifty nine fortynine. Those are the phone numbers.

(41:15):
Give us a call any questions thatyou have. So I said a little
while ago that I'm I'm as giddyabout bonds as I am about stocks,
and I really am, and folks, and I give this number out often,
these these stats because I like toremind investors that if you are a

(41:39):
long term investor, you have timeon your side, you really shouldn't get
spooked by all the headlines and thebad news bears, because, folks,
markets go up, markets go down, it's part of being investing. Now
you can take your money sticking underyour mattress. You won't get a good

(42:01):
night's sleep because obviously you're not goingto get a good night's sleep if you
got lumps in the bed. Sowhere can you invest your money? There's
different asset classes. Let's look atstocks over the last fifteen years. Even
though the SMP is up about eighteenpercent year to date, over the last
fifteen years takes into consideration the GreatRecession fifteen years ago where the SMP was

(42:24):
down fifty percent from October seventh throughMarch of o nine fifty percent. Think
about that. It takes into considerationthree and a half years ago where the
SMP was down thirty four percent.When COVID reared, you know, it
changed the world really for the mostpart. And then last year the perfect
storm. Not that the markets weredown a whole lot at the end of

(42:47):
the day, the markets were down, you know, eighteen percent after dividends,
so that's okay, but it wasthe headlines that really got to people.
Inflation, interest rates going up,bonds going down. So your average
return year in year out was almosteleven and a half percent over the last
fifteen years. If you look atNASTAC and I only bring up NASTAC,

(43:12):
you know, year to date we'reup forty percent, but last year we
were down about thirty two thirty threepercent. Your average return over the last
fifteen years, which takes into considerationthree major bear markets, almost seventeen percent
a year, year in year out. So just think about that, SMP

(43:32):
up year in year out almost twelvepercent and NASTAC almost seventeen percent. That's
a huge, huge difference, andthat means a year like last year,
where the SMP was down eighteen percent, NASTAC was down thirty two thirty three
percent. You shouldn't if you're along term investor, you shouldn't have gotten

(43:53):
worried last year. That comes withthe territory. Now, let's look at
bonds. Bonds over the last fifteenyears, your average return two point three
percent, two point three percent yearin year out. So we're bonds a
safe place to be sure. Youjust didn't make as much money as you

(44:14):
would have in a in a youknow, stock market asset class. And
stock markets aren't for everybody. Althoughin our you know stable of clients,
every client owns stock somehow some wayevery client reets real estate Investment trusts is

(44:37):
in other asset class. And i'dlike to use the Vanguard Real Estate v
n q A is a proxy you'reto date up about one point two percent.
Last year. It was down twentysix percent, and if you look
over the last fifteen years, aboutsix point five percent over the last fifteen
years. Commodities, let's look atgold beause I get this action more times

(45:00):
than not. Should I buy goldas gold good time? Right now?
Gold sits here at nineteen hundred fortyfive dollars announce that's that's where it's at,
or nineteen hundred twenty three dollars announcedup about six percent year to date,
and you can buy gold in theform of an ETFGLD. So last

(45:21):
year gold was down point seven sevenpercent, so obviously it wasn't the place
to be. This year up fivepoint one three percent, and over the
last fifteen years five point seven onepercent. That would have been your average
return year in, year out ifyou're invested in gold over the last fifteen
years. So there you have it. For the most part. You have

(45:43):
the SMP at eleven, nastack atsixteen, bonds at two point three,
reads at about six and a half, gold just less than six percent.
And if you look at the developedworld outside of the US over the last
fifteen years, your average return andI bring it up because some people feel

(46:07):
you should be invested overseas. We'renot there yet. I don't know when
we will. But if you wereinvested in developed countries over the last fifteen
years, your average return was fourpoint four four percent. And if you
look at emerging markets your average returnover the last fifteen years, and you
know, thank god, we haven'tbeen invested in a long time. Three

(46:30):
percent. So you compare you know, international investments from three to four percent,
compare to the US stock markets betweentwelve and sixteen percent. Give me
this great country of ours. Allday long. Ryan heads up our investment
committee, my son Ryan, andyou know, we we we talk about

(46:52):
should we think about international holdings.There's there's a lot of good dat out
out there that shows they could beyou know, good pe ratios, good
value. But when I look atour returns in our US equity sleep and
we haven't had one client yet thathas asked us to invest overseas, not

(47:15):
one. They've been very comfortable withus really investing exclusively in this great country
of ours, the good old USA. Our clients have been very good with
it, and the returns speak forthemselves. So we don't have any clients
that have been upset. We haven'tbeen invested overseas. And as I said,

(47:37):
I'm as giddy about bonds as Iam in stocks when I look at
the bond market this week, andI was wrong a couple of months ago.
I told you when the US tenurehit four point two percent, that
I thought that was the high watermark, while I was proven wrong.

(47:58):
As we sit here right now,the US ten year yield on a US
Treasury notice four point three four percent. Four point three four percent. You
can get a three month, sixmonths, you know, one year all
at almost five point five percent.Short term yields are higher than long term

(48:19):
yields, and you shouldn't get greedy. Right now is a good time,
I think to buy bonds and laddera portfolio and diversified. Don't just buy
all of those short term bonds becausewhen they mature, and it's going to
be short term, that's why they'recalled short term bonds, When they mature
over the next twelve months, wellwhere are you going to go with those

(48:44):
proceeds? You're going to have toreinvest and yields may not be as high.
Now maybe they will be, butprobably not. They probably won't be
as high. So you have toreally be careful about what you do with
those proceeds. And that's why wetell our clients were our fixed income portion
of the portfolio were well diversified andladdered out to ten years and We're okay

(49:09):
making a little bit less on aten year because remember what I said in
the first half of the show,that ten year yield just two years ago
was point five percent. Today it'sfour point three four percent. Think about
that now. I know forty twoyears ago it was sixteen percent, but

(49:30):
that's past history. We can onlylearn from that and remember and to talk
about inflation. Inflation was through theroof. Mortgage rates were we're into the
twenty percent range, and it justwas not a good time in the US

(49:50):
economy back in the early eighties.That's that's for sure. One eight hundred
eight two five, five, nine, four nine. Give me a quick
call if you have a question.So I said in the first half of
the show, we had an IPOcame out arm Holdings and believe me,
this made it to the public marketon Thursday. It's a British chip designer

(50:10):
and its shares were listed on Nastact. It's it's you know, it came
out with with with a it wasup twenty five percent and then it came
down about five percent yesterday. Thevaluation of it is through the roof.

(50:31):
It should be valued somewhere around youknow, a whole lot less than where
it's at. You know, themarket value is more than the VideA and
the video is trading at about fourteentimes projected revenue. This ARM Holdings is
trading at eighteen times projected revenue.And it's a new company. So that's

(50:55):
why I say it may have gottena lot of headline. It could be,
it could be, you know,it's best days maybe behind it.
And we see this a lot withIPOs. You see IPOs come out,
people want to jump in them becausethe headlines are great. There's a lot
of good reason to think that theipo price will will continue to go up.

(51:21):
And all of a sudden, usuallywithin a short period of time of
a company like this going public,all of a sudden, the share price
comes down. And I think thisis what we're going to see with ARM
Holdings. I think you're going tosee the share price come down sooner than
later. And when that happens,you don't want to really be in it,

(51:45):
folks. I can't believe that thehour is flying by. I will
be back tomorrow morning, eight am. If you think of any questions,
come back tomorrow, tune in,give us a call. Any questions whatsoever.
In the meantime, go to ourwebsite bouche dot com bouche Y learn

(52:06):
all about us and our team.I got a dynamite team. I'm sitting
here in our Saratoga office. Igot Marty Shields right next to me.
I actually should have had him onthe show if I thought fast enough.
He scared me to death in thehallway. I didn't know anybody was in
the office. I walked out andthere he was. But in the meantime,
you're listening to Let's Talk Money,brought to you by Bouchet and Andrew,
where we help our clients prioritize theirhealth while we manage their wealth for

(52:30):
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