Episode Transcript
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Speaker 1 (00:11):
When I wake up in the morning. Long Why that's
nice subtle music, Zach on a beautiful day that it is, Folks.
After all the rain that we've had, we deserve some nice,
splendid weather and let's hope that we get a good
stretch of it, because I'm telling you we are waterlogged,
(00:34):
just saturated with all the rain that we've had. Folks,
I thank you for tuning in today. I am Stephen
Bouchet and I am sitting here live your hosts today.
I know I have some amazing colleagues that do the
show alongside me, and today you are stuck with me.
(00:55):
And if you have any questions pertaining to your financial future,
I would love to speak with you. Any questions whatsoever,
give me a holler. The phone lines are open. The
numbers are the same as they've been for almost thirty
years that I've been giving them out. One eight hundred
talk WGY one eight hundred eight two five five nine
(01:18):
four nine. That's one eight hundred eight two five fifty
nine forty nine. Any questions whatsoever, folks, give me a call.
I'm here and I would love to get your pointed
in the right direction. Give you my opinion Anyway, the
question came up last week. Different folks give different you know,
(01:42):
answers to different questions. I guess different folks different strokes. Right,
So we're you know, I'm a professional. I'm a fiduciary.
I have no conflicts of interest. We don't sell investments.
So all the advice that we give our clients and
all the you know, the sound comments that I make
(02:04):
on radio are what I feel professionally is is prudent
and it's good. Just a good way to go. That's
all we care about in our firm. And I have
twenty colleagues. We all believe in it. Our clients come
first and foremost. Nothing else matters, nothing other than our clients.
(02:26):
Eight eighty two five five nine four nine. So last
week I was with you, and I thought, you know
that Thursday and Friday entering the weekend was crazy, couple
down days week, jobs report, the economy slowing, the FED
(02:46):
just a few days before that coming out saying we
will probably have a quarter point interest rate cut at
our next meeting. We will not be looking or entertained
aero point five zero half a percent cut. We don't
feel it's in the cards. And as they said, last week,
(03:07):
just two days later. I'm sure if they could go back,
if they had that report in front of them before
their meeting on Tuesday and Wednesday that week, I'm pretty
sure they would have said, you know what, maybe today
is the day we should be cutting rates because what
they don't want to do is be late to this
(03:27):
party again. And I say that because they've been late
to the party before. Not to beat up on them,
but let's beat up on them. They've been wrong. I'm
not so sure. They use a whole lot of common
sense a lot of times. They're smart people. They had
their nose stuck in the textbook. I keep saying. They
have a great job. They never really left college. They
just kept studying and they look at all the data.
(03:51):
But they're really not in touch with reality. And I
said that a few years ago when they said inflation
was transitory, temporary, inflation wasn't really going to stick, I said,
what are you crazy? When was the last time you
filled up your car at the gas station. When was
(04:11):
the last time you went and bought milk or bread,
paid your utility bill. Inflation was as real as real
can be, and it shot through the roof nine point
one percent it was. That's a real number, and they
just felt that it was transitory. So they really missed
(04:32):
that boat completely. Now, they did a good job. I'll
give them credit for it. They had eleven interest rate hikes.
They were pretty aggressive, they talked like a good bully
in a school yard, and they brought inflation down to
about the three percent neighborhood cores in the two percent
neighborhood and they did what they were supposed to do,
(04:54):
but we suffered, We suffered terribly because of it. Well,
now now all eyes are on the Fed because now
we're wondering should the Fed have started cutting before this? Now,
the other side of the argument is, I'm sure if
you want to talk politics, and I do not want
to talk politics, there's a lot of people that feel
(05:17):
the Fed shouldn't make any cuts until after the presidential
election in November, because that will if they start cutting
interest rates, that will help the economy and that may
may make the current administration look better than maybe they
truly are. But as I said, I don't want to
talk politics. That's just another argument of why the Fed
(05:41):
shouldn't cut rates. But I don't know, I don't know
how they cannot cut interest rates at their next meeting
September seventeenth and eighteenth. There's just no way. And some
people feel they really should speed it up and cut
interest rates sooner than that. They really should cut interest
rates like now, and maybe they should. I know that
(06:02):
jobs report showed the you know, softening of the labor market,
not as many people were getting jobs, and that's a
big number. That's a big piece of the data that
they look at. We had the CPI report coming out
this coming week. That's another big report showing, you know,
(06:22):
just where consumer price index is. There's a lot of
data that the Fed looks at. Let's hope, Let's hope
they they really are ahead of the curve, even if
they're just a little bit late to the party. Let's
hope they get to the party soon and do the
job that we really hope they do. They're supposed to
(06:45):
be an independent, autonomous, you know part of the workings.
You know, the Federal Reserve really doesn't answer to anybody.
They're not supposed to answer to anybody. Agree with that,
but we also we need them to have a touch
of reality, get out there with the ordinary folk and
(07:09):
talk about what's going on. There's a lot of people
that aren't feeling too good about their financial future, and
that's something Remember, the consumer makes up two thirds of
the economy two thirds. The consumer is an important part
of what goes on in this country, and the FED
(07:29):
really needs to get out there and be in touch
with the consumer and see what the consumer is experiencing.
So we don't want the economy to slip into a recession.
We're still praying that there's a good chance that will
continue to have a soft landing where we don't go
into a recession and things turn around. But right now
(07:53):
a lot of people are worried about the economy being
you knowsicly losing a lot of its steam. So today
we're going to talk about this wild, crazy week in
the stock market, and as I said, call me with
any questions you have with regards to your portfolio. If
(08:16):
you're thinking about selling these you don't like the headlines,
I will do my best to talk you out of that,
because what you don't want to do is sell. You
don't want to have any knee jerk reactions. You don't
want to panic just because of the headlines, just because
we have some volatility in the market that's part of
being an investor, and that will come with time, and
(08:37):
I guarantee you it's not going away. We'll always have volatility.
We'll always have corrections and bear markets and recessions. There's
no getting around that. It's part of It's just life.
So you can't you can't panic when all of a
sudden you're listening to a financial show or you're you know, coworkers,
(09:03):
you know, standing around the coffee machine and you know,
talking doom and gloom. You just can't panic. It's the
worst thing that a good investor can do. And this
was This was a crazy week. So if you want
to talk about your feelings, your portfolio, maybe what your
advisor is advising you or selling you and you're just
(09:25):
not sure if it's right for you, give me a
call one eight hundred eighty two five five nine four
nine one eight hundred eighty two, five fifty nine forty nine,
any questions whatsoever. So it was, as I said, a
crazy week, just a crazy week. Monday and listen, I
was on the show last weekend, and I told you
(09:47):
we had Thursday and Friday were pretty bad. Wednesday, the
Fed Reserve chair finished up at two day meeting left
interest rates alone. Gave us a little hope that there
will be cuts coming down pike. But then all of
a sudden, you know, between the tech earnings and the
week jobs report and consumer sentiment, you know, Thursday and
(10:09):
Friday were just a Debbie downer. We found out Saturday,
I broke the news to you that Warren Buffett sold
half of his Apple steak. That was a huge, huge sell,
especially for us because Apples really it's our number one holding.
So you know, between the earnings that came out with
Apple and Amazon and other technology companies that week. I
(10:35):
was on the show last week and I thought last
week was a crazy week, but this past week, this
past week was really a wild week. So we had
Thursday and Friday, we're down weeks. The Nasdaq officially went
into a correction territory, which means it lost ten percent
from its market high. So Nasdaq last weekend when I
(10:58):
was with you, ten percent correction. Officially, a correction. A
correction is when the stock market or any market, bond market,
whatever market you're you're looking at, but we're talking the
stock market, when you go from a high point and
you lose ten percent, that's a correction. When you lose
(11:19):
twenty percent, that's a bear market. So NASDAK went into correction,
down ten percent. Now the SMP was down just less
than six percent from it's high, so it hung in there.
And I've been saying this for years on the show
because we own as much Nasdaq as we do the
SMP Broad Stock Market Index, we own equally as much.
(11:42):
It's our core position. I like Nasdaq. NASDAK is our
growth part of the portfolio. Great companies in there, and
you buy it with the simple QQQ better known as
Nasdaq Composite one hundred. It's the hundred largest companies in
NASA stack, So you're not buying all three thousand plus companies.
(12:04):
You're buying just the top one hundred companies. And these
companies are good companies. And the top ten make up
fifty percent of Nasdaq. So you have companies you know,
all of the Magnificent Seven are in the top ten.
Then you have a couple other bell Weather companies. So
when you buy QQQ, the top ten holdings are making
(12:25):
up fifty percent of all of Nasdaq. So Nasdaq went
into ten percent correction as they did the show last week.
The S and P was down five point seven percent,
and then on Monday, Monday, holy moly, you know, the
floodgates open just like yesterday with Debbie coming through the area.
(12:47):
It's I mean, when I tell you it was a
crazy day, it was a crazy day on Monday, basically
over fears of recession, the unwinding, and the so called
en carry trade. That's basically when traders borrow cheap yen,
use it to invest in other assets like US stocks,
(13:08):
then sell in the currency rallies. And when Japan raised
the rates, that kind of put a scare in the
in the in the en carry trade market, we had. God,
the politics has been crazy. We have Vice President Harris
(13:29):
kind of bringing on board her new VP. They had
Donald Trump, the former president, and I mean they were
going at it like a good boxing match. Politics is
I don't know about you, but I am sick of politics.
I just I can't. I can't stand to even listen
(13:50):
to it anymore. I almost wish November six would come
and whoever our president is will be our president, hopefully,
hopefully it'll be a good choice. In hindsight, everything is
is is really crystal clear. So you know, for the week,
the Dow was down point six percent, SMP down point
zero four percent, So it's like kissing your grandmother. Just
(14:14):
kind of a whole hum week for the SMP, even
with it being down over three percent on Monday alone.
NASDAK was down over three percent as well, so Nansdak
was down thirteen percent from it's high on Monday. For
the week, Nansdak was off point one eight percent. The
good news is, and it's good news because when when
(14:36):
you buy NANSDAC, that Nasdaq composite isn't what you're buying.
You're buying QQQ, which is the NANSDAK one hundred that
was actually up point four percent one eight hundred eight
two five five nine four nine one eight hundred eighty
two five fifty nine forty nine. Or the phone line
or the phone numbers, give us a call, any questions whatsoever.
(14:58):
I'm going to go to the phone and we're going
to pick up Mike in Delmart.
Speaker 2 (15:02):
Hello, Mike Tice, Steve. I'm glad to see you back
on the air, and I'm hoping that you and your
family are doing well well.
Speaker 1 (15:10):
You know, Mike, it's been a long few months and
I appreciate those comments. I've been easing my way back in.
Over the last couple of weeks, I missed doing the
radio after doing it for thirty years straight every weekend.
It was tough for me being off, and I've been
off since the beginning of April and had a lot
of stuff going on in my life. But I'm trying
(15:34):
to ease my way back and I appreciate the comments.
Speaker 3 (15:37):
What can I help you with this moody?
Speaker 2 (15:40):
Well, I was thinking about my core holding, which has
always been just a S and P five hundred ETF.
But now I'm thinking that the straight S and P
five hundred being market way to the kind of top
have you with all their texts and meg seven and
all that. So I was thinking about going to a
like a an equal weight to ets instead. I wonder
(16:02):
if you're familiar with those, what you think about that?
Speaker 1 (16:05):
Oh? Yeah, I love the equal weight. We actually have
it in the portfolio. We use RSP as the symbol.
It's the S and P five hundred equal weight. And basically,
you know when when when when you look at the
S and P five hundred, and you're right, Mike, you
know the S and P five hundred is is weighted
(16:26):
when you look at the top holdings of the S
and P five hundred. You know, it's like the NANSDAK.
I said, the top ten holdings make up fifty percent
of the NASDAC. And you know, you when when you
look at the S and P, same thing. You know,
the S and P your top holdings. Apple makes up
(16:48):
seven percent, Microsoft almost seven percent in the video, almost
six percent, Amazon three point four, Meta, which is Facebook
two point five you have Google. Between both share classes,
you're looking at about four percent Berkshire Hathaway, which is
a great holding, almost two percent, Eli Lilly one point four,
(17:10):
Broadcom one point four JP, Morgan Chase one point three two.
The top ten make up thirty three percent, so it's
not as much as the SMP. When you look at
the equal weight, they're all equal weighted, which means that
instead of having Apple make up you know, seven percent,
(17:33):
Apple makes up as much as the lowest cap company
in there, and it's like zero point six percent. So
when you buy that equal weight, you're what you're doing
is you're broadening out your portfolio. And I'm very very
in support of having the equal weight and the portfolios.
(17:55):
I've been saying the stock market really for the stock
market to really do well, you need the rest of
the market, those other four hundred and ninety three companies
outside of the magnificent seven. You need to have the
rest of the market take part in the rally. So
(18:16):
when you buy the equal weight, what you're doing is
you're counter balancing that S and P five hundred and
as they said, I want to be too concerned about
the top ten holdings making up thirty three percent of
the SMP. I'm actually comfortable with that. You know, we
actually use the broad stock market, which is very similar,
(18:36):
highly correlated. The differences the broad stock market takes into consideration,
for instance, the SMP mid cap four hundred and also
the SMP small cap six hundred. But you know that
equal weight you got point two six percent of every company,
(18:58):
all five hundred companies, and the top ten account for
two and a half percent instead of thirty three percent.
So I think it's a good, good counterbalance to the SMP.
I think if you put that in your portfolio, you
won't be disappointed. As I said, when they start cutting
(19:18):
interest rates, and I can almost assure you I can't
make guarantees, but i'd bet I'd bet everything in my
pocket that they will cut rates on September eighteenth, when
they come out of their two day meeting. If they
don't cut rates, I think the FED is really missing
missing an opportunity. I think it's time for them to
(19:41):
just fess up and say, hey, listen, we need to
cut rates. We need to get this economy going again.
So I'm hopeful that they'll cut rates at least by then,
if not before, And when that happens, you're going to
see the economy get better. And when the economy gets better,
you're going to going to see mid cap and small
(20:01):
cap companies do well. That's what we call it broadening
out the stock market rally and having these other companies
take part, so that equal weight allows you to own
all those other companies. And if you were to have,
you know, if you take your core position and split
(20:22):
it between the SMP and the equal weight, I don't
think that's a bad thing. We don't have that much
equal weight in our portfolio because you know, I always
say we're more of a growth manager, and our portfolios
have done extremely well because of our belief in growth.
And that's one reason why we have NANSDAK. So we
(20:43):
have as much NASDAC in our portfolio as we do
the Broad Stock Market Index. But I like the equal
weight it gives you. It just gives you exposure to
companies that you're not getting as much exposure in the SMP.
Speaker 2 (20:59):
Yeah it sounds good. I kind of like that, but
you're still.
Speaker 1 (21:05):
Oh yeah, I you know, there's a saying in my office,
until the day I die, or I retire, or I'm
mentally incompetent, And I'll tell you I don't want to
die to prove this out, and I don't think I'll
ever retire. I love what I do. I keep surrounding
myself by great colleagues and they help me with the
(21:25):
day to day operations so that as I mature in life,
I can, you know, not worry about as much as
I as I used to. So I don't foresee myself retiring,
and hopefully I'm not going to be mentally incompetent. But
I say in my office quite often, until one of
(21:46):
those three things happen, we will never take NASDAC out
of the portfolios. I love NANSDAC that much. NASDAC today
is different than the NASDAC or the turn of the century.
A lot of those companies disappeared forever. When you look
at Nansdak and the holdings of Nansdac, I mean Nansdak
(22:07):
is just I think a good growth index full of technology.
Sixty five percent of Nansdak is technology, So it's really
we have a slant towards technology. And that's my other
saying in the office, technology is such a part of
(22:28):
our life. It's not going anywhere. And anybody who thinks
technology is going away, it's not. Just look at everything
that you do in your in your day to day
you know, activities, you're you're using a lot of technology somehow,
some way, and you're using more and more of it.
(22:50):
So Nasdak not only is our growth holding, it's really
our technology holding as well. And there's just a lot
of good companies in Nasdak. So no, I'm not souring
on Nasdak. You know, year to date, Nansdak is up
about eleven percent. The broad stock market in decks is
(23:12):
up twelve percent. But when you you know, look at
at Nasdak over time, give this, I give this statistic,
got and over the last fifteen years, your average return
in the S and P year in year out is
about thirteen percent, and it's nineteen percent for Nasdak. I
(23:34):
love Nansdak. Hey, Mike, we're going to take a quick
break for the news, so I'm gonna let you go. Folks,
you're listening to Let's Talk Money, brought to you by
Bouchet Fin Answer Group, where we help our clients prioritize
their health while we manage their wealth for life. I
truly appreciate you tuning in today. I hope that you
(23:54):
hang in through the news. On the other side of
the news break, I would love to talk to you.
The phone lines are open one eight hundred talk WGY
one eight hundred eight two five five nine four nine
one eight hundred eighty two five fifty nine forty nine.
If you have any questions whatsoever, give me a call
and I'll see you on the other side of the
(24:16):
news break when I wake up in the morning low
and the sunlight hurts my Hello, folks, thank you for
(24:38):
hanging it through the news, and thank you for tuning
in today, and Zach, thank you for that nice soft
music leading into the show. I can't thank you enough, folks,
really can't thank you enough. And if you have any questions,
give me a call one eight hundred eight two five
five nine four nine. So you know I've been You know,
(25:00):
I've hit a long few months, and I believe me,
pray every day. And I saw this quote that from
Pearl Bailey. People see God every day, they just don't
recognize him. I thought that was a pretty good quote
when you really give it some thought. People see God
(25:22):
every day, they just don't recognize him. Really, really, you know,
caught my attention. If you have any questions, any questions whatsoever.
One eight hundred eight two five five nine four nine,
I'd love to talk to you, get your pointed in
the right direction, give you my honest opinion. You may
or may not like it, but I promise it'll come
(25:43):
from my heart and it'll be as professional as listen.
I've been helping clients for thirty seven years. In business,
thirty four years. I've been a fiduciary, which means we
have no conflict of interests. We don't sell mutual funds
or annuities or insurances, we don't make high end commissions.
All we care about is what's right for our clients,
(26:05):
and our advice is really rock solid. One five ft nine.
Let's go back to the phone lines. We have Ron
on hold. Hello, Ron, mister.
Speaker 4 (26:18):
How are you welcome back?
Speaker 1 (26:20):
Thank you.
Speaker 4 (26:22):
It's a really quick question. And maybe it's it's the
closing the bond door after the horse runs out. But
I am I'm retired. I'm seventy four, and I have
like most of my holdings are in I work for
the government, so it's in the TSP. And because I'm
(26:43):
attention of Social Security, I basically was taking a very
conservative view of my TSP and so like most of
it is in the G Fund, so because I just
wanted to protect it. But I'm wondering whether or at
seventy four, with the pension and Social security, which is
(27:04):
enough to cover living expenses and stuff, and we have
no deaths outstanding, is it crazy to take some of
the G fund money and move it into like the
the S fund or is it is it like too late?
Speaker 1 (27:23):
Discribe well, I mean, is it too late if you
live another twenty plus years. No, it's not too late,
you know, if you were our client. So we manage
one point three billion dollars. We don't have one client.
(27:43):
This is going to be a double negative. We don't
have one client who doesn't have stock in their portfolio.
Every one of our clients, no matter how mature they are,
they could be in their eighties nineties. I had Missus
D pass away two years ago at one hundred, and
they all own stock. But we take time to educate
(28:04):
our clients and really teach them the reasons why they
should have stock in the portfolio. And you know, there's
there's a lot of good reasons why people should have
stock in the portfolio. I give this statistic out often.
Over the last fifteen years, your average return and the
(28:26):
S and P five hundred is about thirteen percent your
average return in QQQ, which is our you know, I
only bring it up because it's our you know, we
own as much as that as we do. The S
and P is like nineteen percent. And when you look
at bonds, if you look at the ICE Share Core
(28:49):
US Aggregate Bond Index, so your g fund will be
comparable to this, it's like two and a half percent
year in year out over the last fifteen years. So
to answer your question, is it too late? You know,
I don't think you should be swinging for the fences.
You don't need to. You just said that you're you're
in a comfortable position with your with your social security pension,
(29:12):
and you're not really you're you're debt free and you're
not really using this money. But you know, having a
well diversified portfolio with some exposure to equity, there's there's
absolutely nothing wrong with it. You know, year to date,
you know the the growth and income which is like
(29:32):
a sixty forty mix. You know you're going to be
up about seven percent in a portfolio like that. And
I look at you know Ed Wilhelm, He's one of
my traders, and he's amazing with stats and he gives
me I'm looking at it right now, year to date,
one year, three year, five year, ten year, fifteen year,
and whether it's our all equity portfolio or our conservative portfolio,
(29:56):
we outperform. And I compare it to Schwab, Vanguarden Fidelity
because they all have the same model portfolios. So I
always want to know how we're doing because a client.
I never want a client to say, well, I can
go to Vanguard and do better than I can with you.
They can't our models. Our perform Schwab, Vanguarden Fidelity hands down,
(30:22):
and I'm proud of that. We put a lot of
thought into our methodology. But we every one of our
clients ron has stock in their portfolio because over time,
you know, even over the last ninety years, your average
return in the stock market's about ten percent, small caps
about twelve percent, and out of that ten percent return,
(30:42):
about three percent of it comes from dividends. Your average
return in the bond market is about five percent. Now
over the last ninety years, we had a forty year
bull market in bonds from the early eighties till just
a few years ago, So that ninety year bond average
return is a whole lot different than the last fifteen
(31:05):
years for sure. But the point is, no, it's never
it's never too late to ease into you know, maybe
have a thirty seventy or a forty sixty, just blending
some some stocks in there. That s fund, I think
that mirror image is the S and P five hundred index.
(31:27):
That's all you need. Don't put any any international holdings
in your portfolio. I'm just not a believer of international holdings.
Thank god, my investment committee has taken my direction on that.
And if you look over the last fifteen years, so
(31:48):
the SMP your average return is thirteen percent. Your average
return for the international market is less than six percent.
And I always say, give me, give me the good
old USA all day long. And our US equity sleeve
is just rock solid. We continue to really perform well.
(32:12):
And I like the US stock market. Remember, most of
the megacap stocks and large cap stocks have exposure overseas
through sales of their product or services and in essence,
through the back door. We have international exposure, but we
don't own one international fund. We don't own one emerging
(32:35):
market fund in our models, and I don't foresee us
adding them anytime too soon, no matter how good they look.
So if you do blend some stocks in your portfolio,
stick to the good old USA, the US S and
P five hundred index, which I think is what that
S fund is.
Speaker 4 (32:54):
Yes, I think it is. And then now that I'm
looking at the stock boarding, it has little dip. It
might be the time to put my foot in there.
Speaker 1 (33:03):
A little bit, but maybe maybe put your big toe. Don't, don't,
don't put your foot yet. Make sure you're comfortable. You
know you're no spring chicken, but yeah, sound like you
you are, so you know, it sounds like you have
a lot of energy and a good head on your shoulders.
But as I said, if you know now, if you
pass away next week, then yeah, maybe it's too late.
(33:26):
But if you're with us another twenty plus years, then
it's not too late. Everything's in relative and I always say,
in hindsight, everything is crystal clear.
Speaker 4 (33:36):
I appreciate that. And by the way, my daughter's Intelligence
accounts is still doing well.
Speaker 1 (33:41):
Oh good, Oh that's right you called me before. Yes, yes,
those actually if if you know, I go to Stewart's
every Saturday, I buy my papers. And this week's Barons
actually has a good, good article on the intelligent portfolio,
and it's you know, for people that are just investing
(34:06):
slowly and putting money in, you know, they kind of
rebalance the portfolio. And the only thing I don't like
about the intelligent portfolios or the lifestyle portfolios, which is
another good way of investing, is they just have a
lot of international holdings, which I just got done saying
we're not really interested in owning any international holdings. But
(34:30):
I'm glad your daughter got into it. She will not
be sorry. And if my memory is correct, her timing
should have been pretty good. She should be up pretty
pretty handsomely.
Speaker 4 (34:41):
Yeah good, yeah, yeah, and then she has like thirty
thousand in there now, so it's good.
Speaker 1 (34:45):
There you go, Well, you know what you know. I
try to tell people, especially people that are working, if
you're not putting ten to fifteen percent of your paycheck
into a savings program, especially retirement program, more so one
at your company that you work for, where they match
(35:07):
and give you free money. If you're not putting at
least ten percent away, you're not putting enough. And I
always promise anybody who takes me up on that that
they will not like me the first few paychecks because
they're going to have less money that they can spend.
But they get used to it. And when you get
used to it, and all of a sudden, just like
(35:29):
what you're saying with your daughter, your daughter's got thirty
thousand dollars there. Before she'll realize it, she'll have three
hundred thousand. And she's so young, she'll have three million
down the road. That's why. That's the power of saving.
So I'm glad your daughter, you know, listen to you,
and I'm glad you called me. And I remember that
(35:50):
phone call when you called in, and that makes me happy.
That puts a smile on my face knowing that I
was able to help you and your daughter out, because
I'm sure you're happy that your daughter took your advice.
Speaker 4 (36:03):
And the best news is that she starts her her
teaching career at sen Middle School in September and sixteen,
the seventh grade.
Speaker 3 (36:11):
So good grade.
Speaker 1 (36:13):
Good Well, she will tell.
Speaker 4 (36:14):
Her money into the retirement yep.
Speaker 1 (36:17):
There she'll have what they call a four O three B.
They won't have a match the you know, obviously the
schools are lucky they can keep their head aflow. But
she's able to put money away and she won't be
taxed on it. So if she puts you know, if
she makes fifty thousand dollars a year, making these numbers up,
(36:37):
if she makes fifty thousand dollars a year and puts
ten percent away five thousand dollars, she's not going to
be taxed on that five thousand, and she's probably going
to get a I don't know, around a two thousand
dollars savings on her tax bill. So it's really she's
only going to miss three thousand dollars out of her pocket,
(36:58):
but she's putting five thousand dollars away. That's the beauty
about saving with before tax dollars and paying yourself first.
There's no better way of getting ahead, Ron than paying
yourself first before that money can hit her checking account.
It's the first ten percent goes into her pension plan
(37:22):
and she can't spend that. And it's a beautiful thing
paying yourself first. Hey, Ron, good, good.
Speaker 4 (37:28):
Appreciate everything, Steve.
Speaker 1 (37:30):
You take care, congratulations, Ron Wan, thank you all right, Ron,
thank you. It's always nice to hear people that have
have listened to the show and believed in me and
taken my advice and done the right thing one eight
hundred eighty two five five nine four nine. And paying
(37:51):
yourself first is the right thing. One eight hundred eighty
two five fifty nine forty nine. Any questions that you have,
give me a call, Let me talk to you, let
me get you pointed in the right direction. Let me
try to you know, you know, give you my viewpoint.
You know it's just my personal opinion. But believe me,
(38:13):
I've been doing this long enough. I have a pretty
good opinion on things, and in hindsight, you know, I'd
like to think that I've been right more than i've
been wrong. And I always say to my clients, we
get paid to take the emotion out of the decision
making process. That's what we get paid the most to do,
is take the emotion out of the decision making process.
(38:36):
And when you think about that, you think of how
you felt Monday when the market was down three percent.
Think of how you felt a week aldgo, Thursday, Friday,
when those two days the market was down and all
you heard about was the economy is crashing, We're going
into a recession. Those emotions make some investors do some
(38:58):
crazy things, things that I guarantee they will regret. The
stock market, I guarantee you it will go down. I
can't tell you what day, week, what month, but the
stock market, it goes down fourteen percent top to bottom,
(39:19):
low to high. The average peak to trough swing in
the stock market year in, year out is fourteen percent.
Comes with the territory of investing. So even last weekend
when I told you NASDAK was down ten percent in
correction territory. So that's part of the Actually on Monday,
(39:42):
when I saw that cell off true story, folks, true story,
I got ed Willhelm on the phone. I you know,
came into some cash recently, and I said that I
want to invest all of that cash, and we hit
my sandbox accounts, play accounts, because my core money, most
(40:04):
you know, my entire pension plan has invested just like
my clients' moneies is in our model. But I like
to play, like everybody likes to play. So I have
some accounts that I play in, and you know, one
of the accounts, believe it or not, I told ED
to split it between the Magnificent Seven. That's how much
(40:26):
I believe in the Magnificent Seven. They were all beaten up,
pretty good and down in value. So so there were
three accounts, I said, ED, just divide it between those
seven stocks. And then the other account I have a
sector allocated portfolio with different you know, sectors, mostly technology,
(40:52):
and we invested in that. And then the third account
was sprinkling of about twenty stocks. So sandbox accounts, if
I lose everything in them, I'm not going to have
to worry because my core investments are rock solid in
our models. But the point I'm making is, and I
(41:14):
said to my investment committee last Monday, there's blood in
the street. Guys. Take all the cash we have for
our clients and invest it. Invest it, because sometimes clients
come on board, and they do what we call dollar
cost averaging, and they'll say, well, I don't want to
really put all that money in all at once, Let's
(41:36):
do it over three months or four months. And they
know that because we have discretion over managing their portfolios,
they know that if we see a buying opportunity, we
will automatically speed that up. And I instructed my investment
committee last Monday to do just that. When there's blood
in the streets, those are opportunities. Volativity creates some great
(41:59):
investment opportunities. That's how a good investor needs to think.
A long term investor. You know how many people need
their money over the next twelve months, and if they do,
that money shouldn't be invested in the stock market. So
if you're invested properly, you know that money that you're
investing that's going to be in there longer than twelve
(42:21):
to twenty four months. It's going to be in there
over the next few to several years. And when you
see blood in the street like last week after Thursday, Friday,
the week before and Monday, you know that was blood
in the street. And my estimation, I think the market overreacted.
It could have been to Warren Buffets selling fifty percent
(42:42):
of his apple stack steaks. It could have been for
a host of reasons, but there was blood in the street.
People were panicking, people were selling out, going to safe
havens like treasury bonds and you know, the utilities and
you know, just places that they fell. Was was was
a safer place to be invested. But me, I want
(43:05):
to go where where the action is. I want to
go and have some good growth opportunities. I want to
make money. That's why our returns have been pretty stellar
over the years two five, five, nine, four nine. Let's
go back to the phone lines. We have David in Virginia.
Speaker 3 (43:24):
Hello David, Yes, good morning, Thanks for taking my call.
Speaker 1 (43:29):
Absolutely, thank you for calling all the way from Virginia.
What can I do for you?
Speaker 3 (43:33):
Well, the gentleman just spoke to on the TSP. I
think you may have had the wrong funds that you mentioned.
Speaker 1 (43:41):
Yeah, you know, I get mixed up on those. That's
why I said, I think the S is the S
and P. So help me out.
Speaker 3 (43:47):
Do you know the answer? Yeah, yes, I hate to
correct you, but.
Speaker 1 (43:52):
No, you're not correcting me. That's why I said I
think so, no, help help these the you know, there's
others on on listening as well, so they will appreciate
this answer. So and you'll help me. Remember sometimes I
get with all the letters.
Speaker 3 (44:09):
And it's great to have you back, but I forgot
to mention that, Thank you, David, Thank you very much. Okay.
C fund is the S and P oh okay, all right,
ok The S fund is the I guess it's the
forty five the Dow Jones Completion.
Speaker 1 (44:26):
Oh so it's the MidCap small cap index.
Speaker 3 (44:30):
Yes, yeah, minicipall and of course the I you know,
pypehon but that's the international yeah that yeah. And and
the F fund is the A g G, the the
tolls aggregate bombar bond index F is fixed.
Speaker 1 (44:50):
All right, Okay, so hopefully if Ron's listening, so Ron,
you know, have some of that C fund in there,
and I'm okay with you funding in a little bit
of that S fund because we you know, going back
to that you know, the question came up on the
equal weight when you buy that S fund. So the
(45:10):
S and P five hundred or the first five hundred companies,
the remaining forty five hundred companies are mid cap small cap,
so that S fund having you know, maybe you know,
maybe forty percent in the C fund and twenty percent
and that S fund and forty percent in the F
fund the bond index might be a good mix for
(45:32):
a good sixty forty portfolio. David, I appreciate you calling
and helping me. Remember, you know, at my age, my
memory is not what it used to be. I guess
David's gone. Thank you for calling David all the way
from Virginia. And and you know he is not correcting me,
(45:54):
He's helping me. One eight hundred eighty two five nine
four nine.
Speaker 3 (46:00):
You know.
Speaker 1 (46:00):
The other thing that on a personal note, you know,
obviously the last few months have been pretty pretty emotional
for me, and I've been going through a lot, losing
my wife and everything, and you know, settling up personal
affairs and things. And I had a family meeting with
(46:21):
my son and daughter and I told them, I said,
the one thing that that promises is I'm putting everything
in order. And I told them where everything will be
if something happens to Dad, not that I want anything
to happen to Dad, but there will be a list
of where all the financial assets are, who you should call,
(46:42):
phone numbers and so forth, and folks believe it or not,
it's a good, good thing to do, good thing to
do for your family, those that you leave behind, especially
those that are going to be kind of helping finalize
(47:02):
your estate, let's say, especially the executor of the estate,
having all of this laid out. And I just bring
it up because you know, obviously I personally have been
dealing with it and you don't realize. And I've been
telling clients for thirty seven years they should do this,
but you know, until you have to do it yourself,
(47:23):
you don't realize just the how powerful it is and
why they should be doing it. So, you know, I
had a family meeting with my son and daughter and
went over that with them. I told them exactly, you know,
where all the insurance policies are, and I told them
(47:45):
where the deeds are to our property, and you know,
told them there will be a list in there of
all of Dad's financial assets right down to who to
call to you know, sell the cars, you know, just
just to help them along. And on a personal note,
(48:07):
you know, I'm just bringing it up because you know,
sometimes we don't talk enough about this. I know I
often talk about life insurance and how important life insurance
is and if you know, especially for people with families
with young children. You know, I make a blanket statement
almost like I say, if you're not saving ten percent
(48:29):
in your retirement plan, you're not saving enough. If you
don't have at least one to two million dollars of
life insurance, you don't have enough anyway. Just you know,
some some some food for thought. Folks. We're coming up
to the end of the show. You're listening to Let's
Talk Money, brought to you by Bouchhaf and Andrew, where
we help our clients prioritize their health while we manage
(48:50):
the wealth for life. I truly appreciate you tuning in.
Go to our website for more information on our firm
Bouchet dot com. And I meantime, enjoy the day, be well,
stay healthy,
When I wake up in the morning. Long Why that's
nice subtle music, Zach on a beautiful day that it is, Folks.
After all the rain that we've had, we deserve some nice,
splendid weather and let's hope that we get a good
stretch of it, because I'm telling you we are waterlogged,
(00:34):
just saturated with all the rain that we've had. Folks,
I thank you for tuning in today. I am Stephen
Bouchet and I am sitting here live your hosts today.
I know I have some amazing colleagues that do the
show alongside me, and today you are stuck with me.
(00:55):
And if you have any questions pertaining to your financial future,
I would love to speak with you. Any questions whatsoever,
give me a holler. The phone lines are open. The
numbers are the same as they've been for almost thirty
years that I've been giving them out. One eight hundred
talk WGY one eight hundred eight two five five nine
(01:18):
four nine. That's one eight hundred eight two five fifty
nine forty nine. Any questions whatsoever, folks, give me a call.
I'm here and I would love to get your pointed
in the right direction. Give you my opinion Anyway, the
question came up last week. Different folks give different you know,
(01:42):
answers to different questions. I guess different folks different strokes. Right,
So we're you know, I'm a professional. I'm a fiduciary.
I have no conflicts of interest. We don't sell investments.
So all the advice that we give our clients and
all the you know, the sound comments that I make
(02:04):
on radio are what I feel professionally is is prudent
and it's good. Just a good way to go. That's
all we care about in our firm. And I have
twenty colleagues. We all believe in it. Our clients come
first and foremost. Nothing else matters, nothing other than our clients.
(02:26):
Eight eighty two five five nine four nine. So last
week I was with you, and I thought, you know
that Thursday and Friday entering the weekend was crazy, couple
down days week, jobs report, the economy slowing, the FED
(02:46):
just a few days before that coming out saying we
will probably have a quarter point interest rate cut at
our next meeting. We will not be looking or entertained
aero point five zero half a percent cut. We don't
feel it's in the cards. And as they said, last week,
(03:07):
just two days later. I'm sure if they could go back,
if they had that report in front of them before
their meeting on Tuesday and Wednesday that week, I'm pretty
sure they would have said, you know what, maybe today
is the day we should be cutting rates because what
they don't want to do is be late to this
(03:27):
party again. And I say that because they've been late
to the party before. Not to beat up on them,
but let's beat up on them. They've been wrong. I'm
not so sure. They use a whole lot of common
sense a lot of times. They're smart people. They had
their nose stuck in the textbook. I keep saying. They
have a great job. They never really left college. They
just kept studying and they look at all the data.
(03:51):
But they're really not in touch with reality. And I
said that a few years ago when they said inflation
was transitory, temporary, inflation wasn't really going to stick, I said,
what are you crazy? When was the last time you
filled up your car at the gas station. When was
(04:11):
the last time you went and bought milk or bread,
paid your utility bill. Inflation was as real as real
can be, and it shot through the roof nine point
one percent it was. That's a real number, and they
just felt that it was transitory. So they really missed
(04:32):
that boat completely. Now, they did a good job. I'll
give them credit for it. They had eleven interest rate hikes.
They were pretty aggressive, they talked like a good bully
in a school yard, and they brought inflation down to
about the three percent neighborhood cores in the two percent
neighborhood and they did what they were supposed to do,
(04:54):
but we suffered, We suffered terribly because of it. Well,
now now all eyes are on the Fed because now
we're wondering should the Fed have started cutting before this? Now,
the other side of the argument is, I'm sure if
you want to talk politics, and I do not want
to talk politics, there's a lot of people that feel
(05:17):
the Fed shouldn't make any cuts until after the presidential
election in November, because that will if they start cutting
interest rates, that will help the economy and that may
may make the current administration look better than maybe they
truly are. But as I said, I don't want to
talk politics. That's just another argument of why the Fed
(05:41):
shouldn't cut rates. But I don't know, I don't know
how they cannot cut interest rates at their next meeting
September seventeenth and eighteenth. There's just no way. And some
people feel they really should speed it up and cut
interest rates sooner than that. They really should cut interest
rates like now, and maybe they should. I know that
(06:02):
jobs report showed the you know, softening of the labor market,
not as many people were getting jobs, and that's a
big number. That's a big piece of the data that
they look at. We had the CPI report coming out
this coming week. That's another big report showing, you know,
(06:22):
just where consumer price index is. There's a lot of
data that the Fed looks at. Let's hope, Let's hope
they they really are ahead of the curve, even if
they're just a little bit late to the party. Let's
hope they get to the party soon and do the
job that we really hope they do. They're supposed to
(06:45):
be an independent, autonomous, you know part of the workings.
You know, the Federal Reserve really doesn't answer to anybody.
They're not supposed to answer to anybody. Agree with that,
but we also we need them to have a touch
of reality, get out there with the ordinary folk and
(07:09):
talk about what's going on. There's a lot of people
that aren't feeling too good about their financial future, and
that's something Remember, the consumer makes up two thirds of
the economy two thirds. The consumer is an important part
of what goes on in this country, and the FED
(07:29):
really needs to get out there and be in touch
with the consumer and see what the consumer is experiencing.
So we don't want the economy to slip into a recession.
We're still praying that there's a good chance that will
continue to have a soft landing where we don't go
into a recession and things turn around. But right now
(07:53):
a lot of people are worried about the economy being
you knowsicly losing a lot of its steam. So today
we're going to talk about this wild, crazy week in
the stock market, and as I said, call me with
any questions you have with regards to your portfolio. If
(08:16):
you're thinking about selling these you don't like the headlines,
I will do my best to talk you out of that,
because what you don't want to do is sell. You
don't want to have any knee jerk reactions. You don't
want to panic just because of the headlines, just because
we have some volatility in the market that's part of
being an investor, and that will come with time, and
(08:37):
I guarantee you it's not going away. We'll always have volatility.
We'll always have corrections and bear markets and recessions. There's
no getting around that. It's part of It's just life.
So you can't you can't panic when all of a
sudden you're listening to a financial show or you're you know, coworkers,
(09:03):
you know, standing around the coffee machine and you know,
talking doom and gloom. You just can't panic. It's the
worst thing that a good investor can do. And this
was This was a crazy week. So if you want
to talk about your feelings, your portfolio, maybe what your
advisor is advising you or selling you and you're just
(09:25):
not sure if it's right for you, give me a
call one eight hundred eighty two five five nine four
nine one eight hundred eighty two, five fifty nine forty nine,
any questions whatsoever. So it was, as I said, a
crazy week, just a crazy week. Monday and listen, I
was on the show last weekend, and I told you
(09:47):
we had Thursday and Friday were pretty bad. Wednesday, the
Fed Reserve chair finished up at two day meeting left
interest rates alone. Gave us a little hope that there
will be cuts coming down pike. But then all of
a sudden, you know, between the tech earnings and the
week jobs report and consumer sentiment, you know, Thursday and
(10:09):
Friday were just a Debbie downer. We found out Saturday,
I broke the news to you that Warren Buffett sold
half of his Apple steak. That was a huge, huge sell,
especially for us because Apples really it's our number one holding.
So you know, between the earnings that came out with
Apple and Amazon and other technology companies that week. I
(10:35):
was on the show last week and I thought last
week was a crazy week, but this past week, this
past week was really a wild week. So we had
Thursday and Friday, we're down weeks. The Nasdaq officially went
into a correction territory, which means it lost ten percent
from its market high. So Nasdaq last weekend when I
(10:58):
was with you, ten percent correction. Officially, a correction. A
correction is when the stock market or any market, bond market,
whatever market you're you're looking at, but we're talking the
stock market, when you go from a high point and
you lose ten percent, that's a correction. When you lose
(11:19):
twenty percent, that's a bear market. So NASDAK went into correction,
down ten percent. Now the SMP was down just less
than six percent from it's high, so it hung in there.
And I've been saying this for years on the show
because we own as much Nasdaq as we do the
SMP Broad Stock Market Index, we own equally as much.
(11:42):
It's our core position. I like Nasdaq. NASDAK is our
growth part of the portfolio. Great companies in there, and
you buy it with the simple QQQ better known as
Nasdaq Composite one hundred. It's the hundred largest companies in
NASA stack, So you're not buying all three thousand plus companies.
(12:04):
You're buying just the top one hundred companies. And these
companies are good companies. And the top ten make up
fifty percent of Nasdaq. So you have companies you know,
all of the Magnificent Seven are in the top ten.
Then you have a couple other bell Weather companies. So
when you buy QQQ, the top ten holdings are making
(12:25):
up fifty percent of all of Nasdaq. So Nasdaq went
into ten percent correction as they did the show last week.
The S and P was down five point seven percent,
and then on Monday, Monday, holy moly, you know, the
floodgates open just like yesterday with Debbie coming through the area.
(12:47):
It's I mean, when I tell you it was a
crazy day, it was a crazy day on Monday, basically
over fears of recession, the unwinding, and the so called
en carry trade. That's basically when traders borrow cheap yen,
use it to invest in other assets like US stocks,
(13:08):
then sell in the currency rallies. And when Japan raised
the rates, that kind of put a scare in the
in the in the en carry trade market, we had. God,
the politics has been crazy. We have Vice President Harris
(13:29):
kind of bringing on board her new VP. They had
Donald Trump, the former president, and I mean they were
going at it like a good boxing match. Politics is
I don't know about you, but I am sick of politics.
I just I can't. I can't stand to even listen
(13:50):
to it anymore. I almost wish November six would come
and whoever our president is will be our president, hopefully,
hopefully it'll be a good choice. In hindsight, everything is
is is really crystal clear. So you know, for the week,
the Dow was down point six percent, SMP down point
zero four percent, So it's like kissing your grandmother. Just
(14:14):
kind of a whole hum week for the SMP, even
with it being down over three percent on Monday alone.
NASDAK was down over three percent as well, so Nansdak
was down thirteen percent from it's high on Monday. For
the week, Nansdak was off point one eight percent. The
good news is, and it's good news because when when
(14:36):
you buy NANSDAC, that Nasdaq composite isn't what you're buying.
You're buying QQQ, which is the NANSDAK one hundred that
was actually up point four percent one eight hundred eight
two five five nine four nine one eight hundred eighty
two five fifty nine forty nine. Or the phone line
or the phone numbers, give us a call, any questions whatsoever.
(14:58):
I'm going to go to the phone and we're going
to pick up Mike in Delmart.
Speaker 2 (15:02):
Hello, Mike Tice, Steve. I'm glad to see you back
on the air, and I'm hoping that you and your
family are doing well well.
Speaker 1 (15:10):
You know, Mike, it's been a long few months and
I appreciate those comments. I've been easing my way back in.
Over the last couple of weeks, I missed doing the
radio after doing it for thirty years straight every weekend.
It was tough for me being off, and I've been
off since the beginning of April and had a lot
of stuff going on in my life. But I'm trying
(15:34):
to ease my way back and I appreciate the comments.
Speaker 3 (15:37):
What can I help you with this moody?
Speaker 2 (15:40):
Well, I was thinking about my core holding, which has
always been just a S and P five hundred ETF.
But now I'm thinking that the straight S and P
five hundred being market way to the kind of top
have you with all their texts and meg seven and
all that. So I was thinking about going to a
like a an equal weight to ets instead. I wonder
(16:02):
if you're familiar with those, what you think about that?
Speaker 1 (16:05):
Oh? Yeah, I love the equal weight. We actually have
it in the portfolio. We use RSP as the symbol.
It's the S and P five hundred equal weight. And basically,
you know when when when when you look at the
S and P five hundred, and you're right, Mike, you
know the S and P five hundred is is weighted
(16:26):
when you look at the top holdings of the S
and P five hundred. You know, it's like the NANSDAK.
I said, the top ten holdings make up fifty percent
of the NASDAC. And you know, you when when you
look at the S and P, same thing. You know,
the S and P your top holdings. Apple makes up
(16:48):
seven percent, Microsoft almost seven percent in the video, almost
six percent, Amazon three point four, Meta, which is Facebook
two point five you have Google. Between both share classes,
you're looking at about four percent Berkshire Hathaway, which is
a great holding, almost two percent, Eli Lilly one point four,
(17:10):
Broadcom one point four JP, Morgan Chase one point three two.
The top ten make up thirty three percent, so it's
not as much as the SMP. When you look at
the equal weight, they're all equal weighted, which means that
instead of having Apple make up you know, seven percent,
(17:33):
Apple makes up as much as the lowest cap company
in there, and it's like zero point six percent. So
when you buy that equal weight, you're what you're doing
is you're broadening out your portfolio. And I'm very very
in support of having the equal weight and the portfolios.
(17:55):
I've been saying the stock market really for the stock
market to really do well, you need the rest of
the market, those other four hundred and ninety three companies
outside of the magnificent seven. You need to have the
rest of the market take part in the rally. So
(18:16):
when you buy the equal weight, what you're doing is
you're counter balancing that S and P five hundred and
as they said, I want to be too concerned about
the top ten holdings making up thirty three percent of
the SMP. I'm actually comfortable with that. You know, we
actually use the broad stock market, which is very similar,
(18:36):
highly correlated. The differences the broad stock market takes into consideration,
for instance, the SMP mid cap four hundred and also
the SMP small cap six hundred. But you know that
equal weight you got point two six percent of every company,
(18:58):
all five hundred companies, and the top ten account for
two and a half percent instead of thirty three percent.
So I think it's a good, good counterbalance to the SMP.
I think if you put that in your portfolio, you
won't be disappointed. As I said, when they start cutting
(19:18):
interest rates, and I can almost assure you I can't
make guarantees, but i'd bet I'd bet everything in my
pocket that they will cut rates on September eighteenth, when
they come out of their two day meeting. If they
don't cut rates, I think the FED is really missing
missing an opportunity. I think it's time for them to
(19:41):
just fess up and say, hey, listen, we need to
cut rates. We need to get this economy going again.
So I'm hopeful that they'll cut rates at least by then,
if not before, And when that happens, you're going to
see the economy get better. And when the economy gets better,
you're going to going to see mid cap and small
(20:01):
cap companies do well. That's what we call it broadening
out the stock market rally and having these other companies
take part, so that equal weight allows you to own
all those other companies. And if you were to have,
you know, if you take your core position and split
(20:22):
it between the SMP and the equal weight, I don't
think that's a bad thing. We don't have that much
equal weight in our portfolio because you know, I always
say we're more of a growth manager, and our portfolios
have done extremely well because of our belief in growth.
And that's one reason why we have NANSDAK. So we
(20:43):
have as much NASDAC in our portfolio as we do
the Broad Stock Market Index. But I like the equal
weight it gives you. It just gives you exposure to
companies that you're not getting as much exposure in the SMP.
Speaker 2 (20:59):
Yeah it sounds good. I kind of like that, but
you're still.
Speaker 1 (21:05):
Oh yeah, I you know, there's a saying in my office,
until the day I die, or I retire, or I'm
mentally incompetent, And I'll tell you I don't want to
die to prove this out, and I don't think I'll
ever retire. I love what I do. I keep surrounding
myself by great colleagues and they help me with the
(21:25):
day to day operations so that as I mature in life,
I can, you know, not worry about as much as
I as I used to. So I don't foresee myself retiring,
and hopefully I'm not going to be mentally incompetent. But
I say in my office quite often, until one of
(21:46):
those three things happen, we will never take NASDAC out
of the portfolios. I love NANSDAC that much. NASDAC today
is different than the NASDAC or the turn of the century.
A lot of those companies disappeared forever. When you look
at Nansdak and the holdings of Nansdac, I mean Nansdak
(22:07):
is just I think a good growth index full of technology.
Sixty five percent of Nansdak is technology, So it's really
we have a slant towards technology. And that's my other
saying in the office, technology is such a part of
(22:28):
our life. It's not going anywhere. And anybody who thinks
technology is going away, it's not. Just look at everything
that you do in your in your day to day
you know, activities, you're you're using a lot of technology somehow,
some way, and you're using more and more of it.
(22:50):
So Nasdak not only is our growth holding, it's really
our technology holding as well. And there's just a lot
of good companies in Nasdak. So no, I'm not souring
on Nasdak. You know, year to date, Nansdak is up
about eleven percent. The broad stock market in decks is
(23:12):
up twelve percent. But when you you know, look at
at Nasdak over time, give this, I give this statistic,
got and over the last fifteen years, your average return
in the S and P year in year out is
about thirteen percent, and it's nineteen percent for Nasdak. I
(23:34):
love Nansdak. Hey, Mike, we're going to take a quick
break for the news, so I'm gonna let you go. Folks,
you're listening to Let's Talk Money, brought to you by
Bouchet Fin Answer Group, where we help our clients prioritize
their health while we manage their wealth for life. I
truly appreciate you tuning in today. I hope that you
(23:54):
hang in through the news. On the other side of
the news break, I would love to talk to you.
The phone lines are open one eight hundred talk WGY
one eight hundred eight two five five nine four nine
one eight hundred eighty two five fifty nine forty nine.
If you have any questions whatsoever, give me a call
and I'll see you on the other side of the
(24:16):
news break when I wake up in the morning low
and the sunlight hurts my Hello, folks, thank you for
(24:38):
hanging it through the news, and thank you for tuning
in today, and Zach, thank you for that nice soft
music leading into the show. I can't thank you enough, folks,
really can't thank you enough. And if you have any questions,
give me a call one eight hundred eight two five
five nine four nine. So you know I've been You know,
(25:00):
I've hit a long few months, and I believe me,
pray every day. And I saw this quote that from
Pearl Bailey. People see God every day, they just don't
recognize him. I thought that was a pretty good quote
when you really give it some thought. People see God
(25:22):
every day, they just don't recognize him. Really, really, you know,
caught my attention. If you have any questions, any questions whatsoever.
One eight hundred eight two five five nine four nine,
I'd love to talk to you, get your pointed in
the right direction, give you my honest opinion. You may
or may not like it, but I promise it'll come
(25:43):
from my heart and it'll be as professional as listen.
I've been helping clients for thirty seven years. In business,
thirty four years. I've been a fiduciary, which means we
have no conflict of interests. We don't sell mutual funds
or annuities or insurances, we don't make high end commissions.
All we care about is what's right for our clients,
(26:05):
and our advice is really rock solid. One five ft nine.
Let's go back to the phone lines. We have Ron
on hold. Hello, Ron, mister.
Speaker 4 (26:18):
How are you welcome back?
Speaker 1 (26:20):
Thank you.
Speaker 4 (26:22):
It's a really quick question. And maybe it's it's the
closing the bond door after the horse runs out. But
I am I'm retired. I'm seventy four, and I have
like most of my holdings are in I work for
the government, so it's in the TSP. And because I'm
(26:43):
attention of Social Security, I basically was taking a very
conservative view of my TSP and so like most of
it is in the G Fund, so because I just
wanted to protect it. But I'm wondering whether or at
seventy four, with the pension and Social security, which is
(27:04):
enough to cover living expenses and stuff, and we have
no deaths outstanding, is it crazy to take some of
the G fund money and move it into like the
the S fund or is it is it like too late?
Speaker 1 (27:23):
Discribe well, I mean, is it too late if you
live another twenty plus years. No, it's not too late,
you know, if you were our client. So we manage
one point three billion dollars. We don't have one client.
(27:43):
This is going to be a double negative. We don't
have one client who doesn't have stock in their portfolio.
Every one of our clients, no matter how mature they are,
they could be in their eighties nineties. I had Missus
D pass away two years ago at one hundred, and
they all own stock. But we take time to educate
(28:04):
our clients and really teach them the reasons why they
should have stock in the portfolio. And you know, there's
there's a lot of good reasons why people should have
stock in the portfolio. I give this statistic out often.
Over the last fifteen years, your average return and the
(28:26):
S and P five hundred is about thirteen percent your
average return in QQQ, which is our you know, I
only bring it up because it's our you know, we
own as much as that as we do. The S
and P is like nineteen percent. And when you look
at bonds, if you look at the ICE Share Core
(28:49):
US Aggregate Bond Index, so your g fund will be
comparable to this, it's like two and a half percent
year in year out over the last fifteen years. So
to answer your question, is it too late? You know,
I don't think you should be swinging for the fences.
You don't need to. You just said that you're you're
in a comfortable position with your with your social security pension,
(29:12):
and you're not really you're you're debt free and you're
not really using this money. But you know, having a
well diversified portfolio with some exposure to equity, there's there's
absolutely nothing wrong with it. You know, year to date,
you know the the growth and income which is like
(29:32):
a sixty forty mix. You know you're going to be
up about seven percent in a portfolio like that. And
I look at you know Ed Wilhelm, He's one of
my traders, and he's amazing with stats and he gives
me I'm looking at it right now, year to date,
one year, three year, five year, ten year, fifteen year,
and whether it's our all equity portfolio or our conservative portfolio,
(29:56):
we outperform. And I compare it to Schwab, Vanguarden Fidelity
because they all have the same model portfolios. So I
always want to know how we're doing because a client.
I never want a client to say, well, I can
go to Vanguard and do better than I can with you.
They can't our models. Our perform Schwab, Vanguarden Fidelity hands down,
(30:22):
and I'm proud of that. We put a lot of
thought into our methodology. But we every one of our
clients ron has stock in their portfolio because over time,
you know, even over the last ninety years, your average
return in the stock market's about ten percent, small caps
about twelve percent, and out of that ten percent return,
(30:42):
about three percent of it comes from dividends. Your average
return in the bond market is about five percent. Now
over the last ninety years, we had a forty year
bull market in bonds from the early eighties till just
a few years ago, So that ninety year bond average
return is a whole lot different than the last fifteen
(31:05):
years for sure. But the point is, no, it's never
it's never too late to ease into you know, maybe
have a thirty seventy or a forty sixty, just blending
some some stocks in there. That s fund, I think
that mirror image is the S and P five hundred index.
(31:27):
That's all you need. Don't put any any international holdings
in your portfolio. I'm just not a believer of international holdings.
Thank god, my investment committee has taken my direction on that.
And if you look over the last fifteen years, so
(31:48):
the SMP your average return is thirteen percent. Your average
return for the international market is less than six percent.
And I always say, give me, give me the good
old USA all day long. And our US equity sleeve
is just rock solid. We continue to really perform well.
(32:12):
And I like the US stock market. Remember, most of
the megacap stocks and large cap stocks have exposure overseas
through sales of their product or services and in essence,
through the back door. We have international exposure, but we
don't own one international fund. We don't own one emerging
(32:35):
market fund in our models, and I don't foresee us
adding them anytime too soon, no matter how good they look.
So if you do blend some stocks in your portfolio,
stick to the good old USA, the US S and
P five hundred index, which I think is what that
S fund is.
Speaker 4 (32:54):
Yes, I think it is. And then now that I'm
looking at the stock boarding, it has little dip. It
might be the time to put my foot in there.
Speaker 1 (33:03):
A little bit, but maybe maybe put your big toe. Don't, don't,
don't put your foot yet. Make sure you're comfortable. You
know you're no spring chicken, but yeah, sound like you
you are, so you know, it sounds like you have
a lot of energy and a good head on your shoulders.
But as I said, if you know now, if you
pass away next week, then yeah, maybe it's too late.
(33:26):
But if you're with us another twenty plus years, then
it's not too late. Everything's in relative and I always say,
in hindsight, everything is crystal clear.
Speaker 4 (33:36):
I appreciate that. And by the way, my daughter's Intelligence
accounts is still doing well.
Speaker 1 (33:41):
Oh good, Oh that's right you called me before. Yes, yes,
those actually if if you know, I go to Stewart's
every Saturday, I buy my papers. And this week's Barons
actually has a good, good article on the intelligent portfolio,
and it's you know, for people that are just investing
(34:06):
slowly and putting money in, you know, they kind of
rebalance the portfolio. And the only thing I don't like
about the intelligent portfolios or the lifestyle portfolios, which is
another good way of investing, is they just have a
lot of international holdings, which I just got done saying
we're not really interested in owning any international holdings. But
(34:30):
I'm glad your daughter got into it. She will not
be sorry. And if my memory is correct, her timing
should have been pretty good. She should be up pretty
pretty handsomely.
Speaker 4 (34:41):
Yeah good, yeah, yeah, and then she has like thirty
thousand in there now, so it's good.
Speaker 1 (34:45):
There you go, Well, you know what you know. I
try to tell people, especially people that are working, if
you're not putting ten to fifteen percent of your paycheck
into a savings program, especially retirement program, more so one
at your company that you work for, where they match
(35:07):
and give you free money. If you're not putting at
least ten percent away, you're not putting enough. And I
always promise anybody who takes me up on that that
they will not like me the first few paychecks because
they're going to have less money that they can spend.
But they get used to it. And when you get
used to it, and all of a sudden, just like
(35:29):
what you're saying with your daughter, your daughter's got thirty
thousand dollars there. Before she'll realize it, she'll have three
hundred thousand. And she's so young, she'll have three million
down the road. That's why. That's the power of saving.
So I'm glad your daughter, you know, listen to you,
and I'm glad you called me. And I remember that
(35:50):
phone call when you called in, and that makes me happy.
That puts a smile on my face knowing that I
was able to help you and your daughter out, because
I'm sure you're happy that your daughter took your advice.
Speaker 4 (36:03):
And the best news is that she starts her her
teaching career at sen Middle School in September and sixteen,
the seventh grade.
Speaker 3 (36:11):
So good grade.
Speaker 1 (36:13):
Good Well, she will tell.
Speaker 4 (36:14):
Her money into the retirement yep.
Speaker 1 (36:17):
There she'll have what they call a four O three B.
They won't have a match the you know, obviously the
schools are lucky they can keep their head aflow. But
she's able to put money away and she won't be
taxed on it. So if she puts you know, if
she makes fifty thousand dollars a year, making these numbers up,
(36:37):
if she makes fifty thousand dollars a year and puts
ten percent away five thousand dollars, she's not going to
be taxed on that five thousand, and she's probably going
to get a I don't know, around a two thousand
dollars savings on her tax bill. So it's really she's
only going to miss three thousand dollars out of her pocket,
(36:58):
but she's putting five thousand dollars away. That's the beauty
about saving with before tax dollars and paying yourself first.
There's no better way of getting ahead, Ron than paying
yourself first before that money can hit her checking account.
It's the first ten percent goes into her pension plan
(37:22):
and she can't spend that. And it's a beautiful thing
paying yourself first. Hey, Ron, good, good.
Speaker 4 (37:28):
Appreciate everything, Steve.
Speaker 1 (37:30):
You take care, congratulations, Ron Wan, thank you all right, Ron,
thank you. It's always nice to hear people that have
have listened to the show and believed in me and
taken my advice and done the right thing one eight
hundred eighty two five five nine four nine. And paying
(37:51):
yourself first is the right thing. One eight hundred eighty
two five fifty nine forty nine. Any questions that you have,
give me a call, Let me talk to you, let
me get you pointed in the right direction. Let me
try to you know, you know, give you my viewpoint.
You know it's just my personal opinion. But believe me,
(38:13):
I've been doing this long enough. I have a pretty
good opinion on things, and in hindsight, you know, I'd
like to think that I've been right more than i've
been wrong. And I always say to my clients, we
get paid to take the emotion out of the decision
making process. That's what we get paid the most to do,
is take the emotion out of the decision making process.
(38:36):
And when you think about that, you think of how
you felt Monday when the market was down three percent.
Think of how you felt a week aldgo, Thursday, Friday,
when those two days the market was down and all
you heard about was the economy is crashing, We're going
into a recession. Those emotions make some investors do some
(38:58):
crazy things, things that I guarantee they will regret. The
stock market, I guarantee you it will go down. I
can't tell you what day, week, what month, but the
stock market, it goes down fourteen percent top to bottom,
(39:19):
low to high. The average peak to trough swing in
the stock market year in, year out is fourteen percent.
Comes with the territory of investing. So even last weekend
when I told you NASDAK was down ten percent in
correction territory. So that's part of the Actually on Monday,
(39:42):
when I saw that cell off true story, folks, true story,
I got ed Willhelm on the phone. I you know,
came into some cash recently, and I said that I
want to invest all of that cash, and we hit
my sandbox accounts, play accounts, because my core money, most
(40:04):
you know, my entire pension plan has invested just like
my clients' moneies is in our model. But I like
to play, like everybody likes to play. So I have
some accounts that I play in, and you know, one
of the accounts, believe it or not, I told ED
to split it between the Magnificent Seven. That's how much
(40:26):
I believe in the Magnificent Seven. They were all beaten up,
pretty good and down in value. So so there were
three accounts, I said, ED, just divide it between those
seven stocks. And then the other account I have a
sector allocated portfolio with different you know, sectors, mostly technology,
(40:52):
and we invested in that. And then the third account
was sprinkling of about twenty stocks. So sandbox accounts, if
I lose everything in them, I'm not going to have
to worry because my core investments are rock solid in
our models. But the point I'm making is, and I
(41:14):
said to my investment committee last Monday, there's blood in
the street. Guys. Take all the cash we have for
our clients and invest it. Invest it, because sometimes clients
come on board, and they do what we call dollar
cost averaging, and they'll say, well, I don't want to
really put all that money in all at once, Let's
(41:36):
do it over three months or four months. And they
know that because we have discretion over managing their portfolios,
they know that if we see a buying opportunity, we
will automatically speed that up. And I instructed my investment
committee last Monday to do just that. When there's blood
in the streets, those are opportunities. Volativity creates some great
(41:59):
investment opportunities. That's how a good investor needs to think.
A long term investor. You know how many people need
their money over the next twelve months, and if they do,
that money shouldn't be invested in the stock market. So
if you're invested properly, you know that money that you're
investing that's going to be in there longer than twelve
(42:21):
to twenty four months. It's going to be in there
over the next few to several years. And when you
see blood in the street like last week after Thursday, Friday,
the week before and Monday, you know that was blood
in the street. And my estimation, I think the market overreacted.
It could have been to Warren Buffets selling fifty percent
(42:42):
of his apple stack steaks. It could have been for
a host of reasons, but there was blood in the street.
People were panicking, people were selling out, going to safe
havens like treasury bonds and you know, the utilities and
you know, just places that they fell. Was was was
a safer place to be invested. But me, I want
(43:05):
to go where where the action is. I want to
go and have some good growth opportunities. I want to
make money. That's why our returns have been pretty stellar
over the years two five, five, nine, four nine. Let's
go back to the phone lines. We have David in Virginia.
Speaker 3 (43:24):
Hello David, Yes, good morning, Thanks for taking my call.
Speaker 1 (43:29):
Absolutely, thank you for calling all the way from Virginia.
What can I do for you?
Speaker 3 (43:33):
Well, the gentleman just spoke to on the TSP. I
think you may have had the wrong funds that you mentioned.
Speaker 1 (43:41):
Yeah, you know, I get mixed up on those. That's
why I said, I think the S is the S
and P. So help me out.
Speaker 3 (43:47):
Do you know the answer? Yeah, yes, I hate to
correct you, but.
Speaker 1 (43:52):
No, you're not correcting me. That's why I said I
think so, no, help help these the you know, there's
others on on listening as well, so they will appreciate
this answer. So and you'll help me. Remember sometimes I
get with all the letters.
Speaker 3 (44:09):
And it's great to have you back, but I forgot
to mention that, Thank you, David, Thank you very much. Okay.
C fund is the S and P oh okay, all right,
ok The S fund is the I guess it's the
forty five the Dow Jones Completion.
Speaker 1 (44:26):
Oh so it's the MidCap small cap index.
Speaker 3 (44:30):
Yes, yeah, minicipall and of course the I you know,
pypehon but that's the international yeah that yeah. And and
the F fund is the A g G, the the
tolls aggregate bombar bond index F is fixed.
Speaker 1 (44:50):
All right, Okay, so hopefully if Ron's listening, so Ron,
you know, have some of that C fund in there,
and I'm okay with you funding in a little bit
of that S fund because we you know, going back
to that you know, the question came up on the
equal weight when you buy that S fund. So the
(45:10):
S and P five hundred or the first five hundred companies,
the remaining forty five hundred companies are mid cap small cap,
so that S fund having you know, maybe you know,
maybe forty percent in the C fund and twenty percent
and that S fund and forty percent in the F
fund the bond index might be a good mix for
(45:32):
a good sixty forty portfolio. David, I appreciate you calling
and helping me. Remember, you know, at my age, my
memory is not what it used to be. I guess
David's gone. Thank you for calling David all the way
from Virginia. And and you know he is not correcting me,
(45:54):
He's helping me. One eight hundred eighty two five nine
four nine.
Speaker 3 (46:00):
You know.
Speaker 1 (46:00):
The other thing that on a personal note, you know,
obviously the last few months have been pretty pretty emotional
for me, and I've been going through a lot, losing
my wife and everything, and you know, settling up personal
affairs and things. And I had a family meeting with
(46:21):
my son and daughter and I told them, I said,
the one thing that that promises is I'm putting everything
in order. And I told them where everything will be
if something happens to Dad, not that I want anything
to happen to Dad, but there will be a list
of where all the financial assets are, who you should call,
(46:42):
phone numbers and so forth, and folks believe it or not,
it's a good, good thing to do, good thing to
do for your family, those that you leave behind, especially
those that are going to be kind of helping finalize
(47:02):
your estate, let's say, especially the executor of the estate,
having all of this laid out. And I just bring
it up because you know, obviously I personally have been
dealing with it and you don't realize. And I've been
telling clients for thirty seven years they should do this,
but you know, until you have to do it yourself,
(47:23):
you don't realize just the how powerful it is and
why they should be doing it. So, you know, I
had a family meeting with my son and daughter and
went over that with them. I told them exactly, you know,
where all the insurance policies are, and I told them
(47:45):
where the deeds are to our property, and you know,
told them there will be a list in there of
all of Dad's financial assets right down to who to
call to you know, sell the cars, you know, just
just to help them along. And on a personal note,
(48:07):
you know, I'm just bringing it up because you know,
sometimes we don't talk enough about this. I know I
often talk about life insurance and how important life insurance
is and if you know, especially for people with families
with young children. You know, I make a blanket statement
almost like I say, if you're not saving ten percent
(48:29):
in your retirement plan, you're not saving enough. If you
don't have at least one to two million dollars of
life insurance, you don't have enough anyway. Just you know,
some some some food for thought. Folks. We're coming up
to the end of the show. You're listening to Let's
Talk Money, brought to you by Bouchhaf and Andrew, where
we help our clients prioritize their health while we manage
(48:50):
the wealth for life. I truly appreciate you tuning in.
Go to our website for more information on our firm
Bouchet dot com. And I meantime, enjoy the day, be well,
stay healthy,
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