Episode Transcript
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Speaker 1 (00:04):
Well, good morning, and welcome to Let's Talk Money on
a ten WGY. I'm John Malay and I'm going to
be your host for the next hour. I appreciate you
tuning in with us this morning. I'm a certified public accountant,
the chief financial officer, chief operating officer, and a wealth
advisor at the firm. Again, I want to thank you
(00:26):
for tuning in this early February morning. February first, It's
hard to believe the month of January is in the.
Speaker 2 (00:34):
Books, but here we are.
Speaker 1 (00:37):
We had a nice in the Northeast, nice snowy morning,
and those of you who enjoy the outdoors this time
of year, I'm a snow I'm a skier, so I
certainly am looking forward to some more snow, so glad
to see that happen. Hopefully we'll get some skiing maybe
tomorrow and certainly hopefully next weekend. So again, appreciate you
tuning in this morning. You know, before we dive into
(01:00):
today's show, I just wanted to take a moment to
honor a dear friend and a colleague, Nicole Goebel, who
recently lost her life. Steve I know mentioned the news
on the shows last weekend you know, Nicole was an
incredible financial advisor, really a brilliant professional, and most importantly,
(01:23):
just a kind, caring person who had a gift for
connecting with people. You know, she connected with clients, colleagues
and friends. I would consider Nicole a close personal friend
and just a great person. And you know, yesterday we
gathered to celebrate her life, and it was just.
Speaker 2 (01:41):
A phenomenal gathering. You know, got a.
Speaker 1 (01:45):
Chance to meet her, more of her family, her friends,
and just a great time to share memories of Nicole
and her warmth, her humor and really the profound impact
she had on so many.
Speaker 2 (01:58):
So it was a really.
Speaker 1 (02:00):
A touching reminder of how much she meant to all
of us and how deeply she will be missed. And
you know, Nichole's legacy of kindness, dedication and generosity, you know,
we'll live on in many lives, in the many lives
she's touched. And you know, it was great to it
was great to meet more and more of her family.
You know, Nicole joined our firm only four years ago,
(02:22):
and that's when she when she joined us, she moved
from New Jersey to the area. So it was great
to hear stories about Nikki, how she was referred to
by many of her family, just to see a different
side of Nicole, and it was great to spend time
with friends and family, you know, and our thoughts continued
(02:42):
to be with their family, especially with her husband, Pete
and their two young children. You know, while we're heartbroken
and we are by her passing, you know we're also
very grateful that she was in our lives, even for
only a short period of time. You know, she made
a difference in the lives of so many and we
will continue to carry on her spirit. And you know,
(03:04):
she did make strong connections with everyone in our firm.
And you know, we're firm, and you know, I like
to say we we work hard, and we do because
you know, our work is very serious work, when you know,
and our our team is made up of professionals who
have advanced designations, and we take our work very very seriously.
(03:25):
But we also play hard, and we play hard together,
and we we not only spend a lot of time
at work, we spent a lot of time outside of
the office. And you know, Nicole has host hosted Game Night,
and only a weekend ago, several of us were together
at the Mayor's Cup of Hockey game. We've got some
(03:46):
RPI and Union alumni at the firm. I happen to
be an RPI alum, and uh, you know, many of
us gathered at that event, and you know, so we
do have deep connections and Nicole will be will be
missed for sure, but I just wanted to share some
of those thoughts there. You know, twenty twenty five, you know,
marks some significant milestones for our firm. And you know, we've.
Speaker 2 (04:10):
Been in business.
Speaker 1 (04:11):
Steve started the firm thirty five years ago, so thirty
five years of excellence and dedication. And you know, also
Steve's been hosting Let's Talk Money for an impressive thirty years.
And you know, these milestones are a testament to the
firm's legacy and of Steve's enduring commitment. And you know,
as a firm, we're proud of these commitments and we
are our team is very proud of everything we've achieved
(04:35):
and proud of you know, really what we're what we
see going forward too. We're excited for our future. So
a lot to be thankful for us we headed to
twenty twenty five, and one is I want to make
sure I encourage listeners show. I'm here really to answer
your questions. We always say when it comes to your money,
(04:58):
there is no dumb question. And also I guarantee if
you have that question, another caller is thinking of that.
So certainly pick up the phone. You can reach us
at eight hundred talk WGY. That's eight hundred eight to
five five nine four nine. So this morning, you know,
we're gonna talk about the markets, investing, some financial planning topics,
(05:21):
and whatever questions you call in with. So, you know,
start with a market update. You know, Friday session, you know,
wrapped up, put a bookend on the month of January,
and it closed out a volatile month, you know, for
the financial markets, and you know, despite the choppiness, the
markets ended the month broadly higher. However, this week, you know,
(05:43):
especially Monday and then Friday, which I'll talk about both
days a little bit more detailed, you know, highlighted just
how reactive investors can be to new data, you know. So,
you know, Friday yesterday, in the final hours of session,
you know, we saw heightened volatility after the White House
announced that it would impost tariffs on key trading partners,
(06:04):
particularly China, Mexico and Canada, and you know, there's talks
of the tariffs being delayed, but the White House came
out and clarified, Nope, they will not be delayed. They
will be effective in February first. So so there'll be
a twenty five percent tariff on Canadian and Mexican products
(06:26):
and at ten percent on Chinese. Now, I think we'll
hear more and more over the next few days to
a week. Is you know what products that will particularly
apply to. There may be some carve outs and exclusions,
but you know, well, you know, we started the day
with a very positive day in the markets yesterday on Friday,
(06:46):
after some solid corporate earnings. You know, Apple came out
with earnings on earnings on Thursday. After markets we had
some solid PCEE economic data and markets were Friday, we're
we're positive, we're doing great. And then you know, the
news of the tariff came out, and you know, we
saw like in the Nasdaq, you know, at one point
(07:08):
was up almost a point and a half one point
five percent, but closed down about point three percent for
the day. This S and P similarly shed about half
a percentage, and the Dow dropped point eight percent, partially
by the news, but also partially you know, buy some
(07:28):
you know, disappointing earnings from Chevron, so you know, so
that that was the news on Friday. You know, Monday,
we saw a huge sell off in tech as you know,
the news of the Chinese startup deep Seek, you know,
unveil a breakthrough in cheap AI models, and you know
(07:50):
that certainly sent some shockwaves through the tech industry. You know,
this was it did kind of come out of nowhere,
this Chinese startup, Deep Seek, for at a very cost
effective manner, really redecent, you know, showed some AI models
that performed very well and you know, continued the idea
(08:15):
of open source and it it it hit the tech
sector hard. You know, Nasdaq declined by over three percent
on Monday. Navidia, we know as the largest supplier of
AI chips, fell nearly seventeen percent on Monday and lost
a whopping five hundred and eighty eight billion in market value.
(08:37):
I mean, think about that, lost five hundred and eighty
eight billion in market value. That's by far the highest
market value that's ever been lost in a single day,
you know, more than doubling the previous record of two
hundred and forty billion by Meta so it was a
initial shock to the tech sector and you know, certainly
(09:01):
a reminder that there is there can be volatility in
the markets.
Speaker 2 (09:05):
Right.
Speaker 1 (09:05):
But but despite all that volatility, the S and P
was down only one percent for the week, the Nasdaq
Composite was down one point six percent for the week,
and the Dow is actually up point three percent, which
i you know, we'll talk a little bit more about,
you know, earning season, but we're certainly seeing some nice
(09:26):
broadening of positive earnings coming in and the Dow is
responding to that. And you know, as we talk about
market volatility, we precate, Hey, if you're in the markets,
you you have to expect some volatility. And you know,
we have a joke in the office. One thing that
Steve always promised his clients is there'll be days where
he loses the money. And that's just the facts. You know,
(09:47):
if you're in the markets, there's gonna be ups and downs.
You know, on an average year, you know you're gonna
have a fourteen to fifteen percent sell off from the
peak to the trauh and that's just a normal year.
So uh, you know, we have to say as investors,
you know something, don't overreact, right, And you know, certainly
this week, I would say both on Monday and Friday,
(10:09):
we saw an overreaction in the markets certainly. You know,
I think as the markets digested, uh, you know Monday's
uh information about deep Sea you know, certainly.
Speaker 2 (10:22):
Uh.
Speaker 1 (10:23):
I think the two things that it hit home is
there are some inexpensive ways of achieving some positive AI models.
H And also you know, maybe called into questions. Uh,
you know, the US is complete dominance in that field.
I think until this announcement, it was thought that, hey, AI,
(10:46):
this was an area that the US was gonna have
a dominant hold on. And and you know, I think
what we heard from even Tim Cook on Apple's earnings
earnings conference call is hey, when you've got a player
who's driving costs out, and that's what Deep Seek is
(11:08):
showing is you know, I think they spent under ten
million dollars in developing their their models, and we're hearing,
we're hearing some of the AI rivals in the US
talking about hundreds of millions of dollars. So again, I
think the belief is is you've got a player who's
(11:30):
driving costs out. And then continuing kind of with the
open source idea. I think others in the industry say,
there's could be positive effects of that, Right, It's going
to be faster and easier to develop AI applications, and
that can as a whole, can have some very positive
(11:50):
impacts in the industry. And I think Apple's been you know,
very cautious, I will say, in their introduction into AI,
and they have been really holding back on making some
significant capital expenditures in that area. And I think in
some ways this may be validating, uh, you know, some
(12:11):
of their moves. So I think although it was initial shock,
I think the markets digested certainly, NASDAK recovered from you know,
not fully, but recovered from the you know, the over
three percent down on Monday. And again, as an industry, uh,
you know, AI is so immature and it's got a
long way to go, and and they'll certainly be ups
(12:31):
and downs like this. But again I think many are
looking at it saying.
Speaker 2 (12:36):
This is a positive thing.
Speaker 1 (12:37):
This is a positive To have a player come in
and come in with a very cost effective solution is
just really bose well for the industry. But you know,
even as we even with all that choppiness, all the
major indexes ended the month of January, higher S and
P was up two point seven percent. NASDA Act, despite
(13:02):
the the initial shock of deep seek on Monday, finished
up the month one point six percent, and the Dow
big big gainer with four point seven percent increase. So certainly,
you know, we start off the year, I would say
month here, we have month of January in the books,
and I'd say, you know, as an investor, it'd have
(13:25):
to be happy overall, happy with those results. And you know,
the positive thing has been uh, you know, the earnings.
Earnings have been there, and you know, we're in the
midst of earning season right now, and I think we've
got just around a third of the companies have reported
earnings and it's been positive. And you know, we've got
a lot of earnings reporting next week.
Speaker 2 (13:47):
But I would say, you know, overall.
Speaker 1 (13:50):
The earnings have been very positive, and you know, maybe
some slight pullbacks on you know, estimates for you one
in Q two, but uh, a very you know, nice
to see kind of a broadening of of the earnings,
positive earnings releases, and I think we'll see, uh, well,
(14:12):
obviously we'll have a lot more to see next week,
over the next two weeks we'll have a number of
companies reporting, but you know, certainly this week we saw
the some positive inflation data come out and positive earnings
markets react, and then we had to you know, two
things come out, you know, the deep seek but also
(14:33):
the Trump administration's talks on tariffs on Friday, which creates
some uncertainty, and we saw the markets react. Right, We
know the markets don't like uncertainty, but I think from
an overall fundamentals, you know, good old earnings driving the
positive news, right, and maybe a little overreaction to news,
you know, driving some of the negative. And you know,
(14:54):
the the tariffs, those are an area where know, even
the Fed is saying we got to step back and
take a wait and see attitude, see how that is
really going to impact the economy. And you know, there's
there's really the devil will be in the details with
the tariffs, because you know they're already talk of you know,
(15:15):
oil being carved out of that. And I think you know,
certainly the concern is is with tariffs, it increased the
cost of products right coming into the US.
Speaker 2 (15:25):
So how will that trickle.
Speaker 1 (15:26):
Down into inflation? And uh, you know, certainly the administration
uh is not looking to increase inflation, and so I think,
you know, as they work out some of the details
of exactly how those tariffs will be applied, we'll have
a better sense of how that's going to impact uh,
the economy going forward. But hey, as we again, as
(15:49):
we we wrap up the month, I'd say, uh, you know,
those positive numbers with every index, uh, you know, great
to see. And you know the on the bond yield side,
you know, we did see bond yields going lower in January,
but you know they finish up the month coming up
a little higher. You know, the ten year closed Friday
(16:11):
at four point five sixty six, and again that some
of that was reactionary to the White House releasing some
of the tariff information.
Speaker 2 (16:21):
And so you know, this is you know.
Speaker 1 (16:25):
As we talk about what twenty twenty five has in store,
you know, I'm sure this is the type of this
is the time.
Speaker 2 (16:32):
Of year where you see.
Speaker 1 (16:36):
You see different economists and analysts making their predictions in
the year. And you know, what we always like to
say is when you go back and look how how
many got it right, and very rarely do they get
it right, and so predictions are going to be all
over the place, and as we look, you know, certainly
we've had back to back great years this year, you know,
(16:57):
I think I think generally, you know, we we agree
it's all going to be driven by heavily driven by earnings.
Speaker 2 (17:05):
And you know, the.
Speaker 1 (17:07):
FED is uh and I'll talk a little bit more
about the recent FED meeting, but they've they've really said, hey,
we're going to take a wait and see attitude. We're
gonna take a step back where we're taking a pause
on u on rate decreases and see how some of
the administrative's new administration's policies affect the economy.
Speaker 2 (17:27):
Uh.
Speaker 1 (17:28):
And so there's a lot of focus on on earnings,
corporate earnings and expectations for earnings really driving the market.
Speaker 2 (17:35):
And so uh. You know, again, as a as an investor.
Speaker 1 (17:39):
We we coach our clients, you know, it's about having
you know, evaluating your risk tolerance. We spend a lot
of time making sure we've got appropriate risk models for
our clients. But also, you know, in your financial planning process,
understanding what your cash flow needs are and if you've
got some immediate cash needs to pull for your portfolio, right,
(18:02):
there's things you can do to protect that money, maybe
you move that out of your equity sleeve and more
into fixed income or even more into cash and cash equivalents,
not into pure cash. And we certainly, you know, if
you can still be you know, yielding, you know, just
a little below five percent on you know, and money funds,
(18:23):
that's that's not a bad place to be if you're
looking to park money in a risk free environment. So
again a time of year where hey, we do know
in a year like this where there is an administrative change,
new policies coming into place. Certainly the Trump administration has
made it clear that they would like to extend some
of the tax cuts and really make up that revenue
(18:46):
through tariffs in other ways. And how that's going to
trickle through? Will that affect inflation? You know, So will
those tariffs come back in the form of increased prices
to consumers and therefore increase inflation? And how's the Fed
gonna react? So certainly there is uncertainty, there's no question.
But I think as we look at the US market,
(19:10):
you know, the fundamentals are strong, and you know, even
the inflation data coming out as soon as yesterday Friday
showing inflation you know, coming in as expected. No, no, no,
really major surprises. So you know, so a lot of
focus on earnings this year. So that'll be certainly what
(19:31):
to keep your eyes on as investor. And understand that, hey,
being in the markets, you will have volatility. I talked
about you know, the average draw down being fourteen to
fifteen percent, right, and so it's about being able to
make sure you're in the right risk tolerance, that you
have the portfolio mix that matches that, and understand there's
(19:53):
gonna be ups and downs, right, And we talk about
the need to set short term money side that if
you you know, if you know you have a wedding
coming up or some big expenditure, maybe your your kids education.
Right knowing that, hey, if that money is going to
be need to be coming out of the portfolio in
(20:14):
the next you know, maybe even up to twenty four months,
it's safest to take that out of maybe your equity
sleeve and put that into something.
Speaker 2 (20:23):
That less volatile.
Speaker 1 (20:26):
And so but put yourself in a position where you
don't overreact, right, you know, there's going to be ups
and downs, and uh, you know, I think the the
belief and we strongly believe this. We're very bullish on
US economy and US companies. Uh, you know, we like
(20:46):
to you know, we we've touted we've been out of
international equities for a number of years. Now, you know,
we've certainly were under exposed for a while and now
you know we've been out over six years. We've been
out of international and still believe. Uh Now again that
doesn't mean that we're closing our eyes and aren't looking
for opportunities, but we still believe the best opportunities for
(21:08):
our clients, for our portfolios are.
Speaker 2 (21:10):
In US equity. So that's where we've been.
Speaker 1 (21:13):
But again knowing that there's gonna be there's gonna be
ups and downs, and certainly, you know, we saw some
shocks to the tech sector, uh this this week and.
Speaker 2 (21:24):
Uh you know Navidia who uh.
Speaker 1 (21:27):
You know took it took some you know, significant hit
when you you think of that loss of market value,
market cap. But but it's uh, you know, rebounded a
little bit. But it's certainly I will say, AI is,
it's it's a driving force of many companies.
Speaker 2 (21:44):
Right now.
Speaker 1 (21:45):
You listen to you know, Ernie's conference calls, and you're
gonna hear a lot of talk about AI and a
whole that thought for a second. We have a caller,
Alan from Glenville. Alan appreciate you listening and what can
I do for you this morning?
Speaker 3 (21:59):
Yeah, good morning, great show. Quick questions on the tariffs.
I'm having a hot time understanding what's inflationary and what's not.
But if what's assume the tariff is basically attacks, but
we're not increasing the money supply. So if there were
(22:20):
just use an example, let's say an automobile that was
thirty thousand with one hundred percent tariff got bumped to
sixty at some point, doesn't the tariff become deflationary because
people will not be able to buy anything. I just
want to get your thoughts and I'll listen for your answer.
Speaker 1 (22:39):
Thank you, all right, thank you, Alan, appreciate you listen.
Appreciate that question. And that's a great question. And I
think it becomes to what level and what degree the
tariffs are. And you know, certainly I think the initial
impact could be if the lost of goods coming into
(23:03):
the US are increased because of those tariffs. You know,
really suppliers have the really two alternatives. One is to
absorb those or to pass those on to consumers. And
so I think in the first instance, some may be absorbed,
there may be enough in profit margin, but some will
be passed along. And I think Allen's point is if
(23:25):
the terriffs becomes so great and hit so many, so many.
Speaker 2 (23:31):
Products, it could actually, as to his.
Speaker 1 (23:35):
Point, become deflationary. And we're rate up a break, so
we're gonna take a short conversion of week. So I
want to We're halfway through today's show and get be
taking a break. I want to thank you for tuning
in with this today. We hope you're enjoying the show.
Hope you'll rejoin us after the break. We encourage any
listeners to call in with questions. You can reach me
at eight hundred Talk WGI. That's eight hundred eight two
(23:57):
five five nine four nine. You listening to Let's Talk Money,
brought to you by Bouchet Financial Group, where we help
our clients prioritize their health, where we manage their wealth
for life. Well, good morning, and thank you for staying
(24:19):
with us through that short commercial break. I'm John Malay
and I'm going to be the host for this morning show,
so appreciate you tuning in. You know, right before the break,
we had a call from Alan and Alan had great
question about you know, the tariffs, and you know, I
was talking about the concern and even the Fed's concern
about tariffs and how it may impact inflation, and you.
Speaker 2 (24:41):
Know, Alan's was fought on.
Speaker 1 (24:42):
You know, there's also the potential that you know, really
if tariffs lead to significantly higher prices, right, it could
be it could lead to demand destruction right where quite frankly,
consumers stop buying and the effect is slower economic growth,
reduced overall demand and you know, lower lower prices. And
(25:04):
so certainly that is a is a you know potential
outcome as well. And I think that's why, you know,
the Fed really, you know, they met this week, the
FOMC met on the twenty eighth and twenty ninth, and really,
you know, as many expected, you know, opted to leave
rates alone. And so they left the FED funds rate
(25:27):
the four point twenty five to four point five percent range.
And you know, really they they one they said, you know,
there's a solid economic backdrop, solid labor market. You know,
so they're in no hurry. And you know, really they've
got the luxury right now to have to take time
to regain confidence and where inflation is going uh, and
(25:48):
they were very clear in some of their their remarks
that they you know, they want to step back, take
a wait and see approach and see how some of
the Trump administrations policies, uh and tariff being one, and
you know there being other policies as well about immigration,
(26:11):
you know how those will impact the economy. And uh
so even the Fed, you know, unsure how this is
going to play out. And I think, you know, one,
there's not one hundred percent clarity on how the tariffs
will be applied, you know exactly what products will apply
to which ones will be carved out. But as Alan said,
(26:32):
you know there there certainly is potential that you know,
it could be deflationary. You know, I think that, you know,
the short term, the concern really is more about inflationary.
Speaker 2 (26:42):
You know, as.
Speaker 1 (26:43):
As the as the cost of products coming into the
US is increased, right, there's there's a high likelihood that
some of that price increase, if not all of it,
will be passed along to the consumer and therefore has
the potential to lead to uh, you know, an increase
(27:05):
in you know, in prices and potential inflationary. So that
will certainly be you know, as the FED is saying
a wait and see approach to see how these are
implemented and see how it's impacted. And you know, the Fed,
you know, I think one of the things that they've
made it clear is they're they're not signaling that they're
(27:27):
gonna be resuming a path of reducing rates until they're sure,
you know, have a better sense of of how some
of these policies are going to impact inflation. And certainly,
you know, we've got to still have a strong labor market.
Things that they're pointing to, you know, inflation, I'm sorry,
(27:48):
unemployments UH still just barely above four percent decent job
growth in UH December. The expectation is January will be
will be positive as well. And inflation, you know, even
you know, we got PCE report out on Friday and
the December CPI really showing inflation is you know, no
(28:12):
surprises there, you know, so certainly seeing you know, inflation
still above the Fed's target. You know, Feds targets two percent.
We're still above that, but really no surprises. You know,
the expectations were on the PCE UH and even the
CPI that they were going to be a little higher
than than prior month and they were, uh and really,
(28:35):
you know, when we look at when we dig into
the deep, it's still energy prices, food prices, and shelter,
you know, seemed to be the most stubborn with inflation
right now. So you know, the FED taking a wait
and see approach, and I think you know, again we
talked about markets, how they react, market surprises. Market expected that.
So when the FED came out and held rates and
(28:57):
really took a rate pause, the markets expected. That's really
really no no reaction by the markets really and the Fed,
you know where they go from here. You know this,
this Fed is shown that they are going to be
data driven. Uh and they've come out and this was
(29:17):
a unanimous decision. So that's I think important to see.
Uh the Fed was uh f O MC was unanimous
on taking a wait and see approach.
Speaker 2 (29:28):
Now we can see, you know, they're they're certainly.
Speaker 1 (29:31):
Some uh you know signs that the President Trump is
trying to engage with Chairman Powell. And certainly Trump does
not uh hide his feelings on the Fed. Uh, and
he seems to be poking them.
Speaker 2 (29:49):
A little bit.
Speaker 1 (29:49):
But uh, that's you know, uh, certainly I don't think
that's surprising. But I think you know, the you know, listen,
Chairman Powell is uh is a strong individual. He's gonna
certainly set the policy that they think is correct. And
I don't think be influenced by President Trump's comments or prodding.
(30:11):
You know, they're they're certainly you know, you certainly can
fault the FED for their early in action. You know,
you know back a few years when they were a
little slow to really realize that inflation was not transitory,
that it was here to stay, that was really digging
in deeply. But I'd have to say over the last
(30:33):
you know, twelve to eighteen months, they've done a good
job of reacting, not overreacting, and you know, raising rates
and starting to lower rates based on you know, what
was what the data was driving. So but certainly, I think,
you know, President Trump is exerting, trying to exert some
(30:54):
of his new power, and but I think the Fed,
you know, there's there's there's benefits of some independence there,
and I think Chairman Powell will stick to his guns
that they're going to look for data before they start
reducing rates. So they concluded their meeting this week and
(31:14):
opted to really take a wait and see leave, you know,
push pause on any rate reduction. You know, they had
reduced rates for the previous three meetings to the tune
of a queunt of one percent decline in rates. But now,
you know, I think it's fair to say we're we're
an environment where we should expect you know, higher rates
(31:35):
for longer. Now again, the market has priced that in,
you know, and so you know, no surprises there. So
just a reminder, you know, I'm here to answer any
questions you have, So I encourage listeners to call in
with questions. You can reach me at eight hundred talk
(31:55):
w g Y. That's eight hundred eight to five five
nine for nine. So one of the things I talked
about in the beginning segment was, you know, really we
saw the tech sector really take a big drawback on Monday,
you know, recovered most of what they gave up. And
as I mentioned, you know, for for the month of
(32:19):
January still Nasdaq was up you know, one points I'm sorry,
it was up, yeah, one point six percent for the month.
But this, you know, deep seek was certainly a big news.
And you know, we've talked so much about AI. I
don't think you can listen to a Ernie's conference call
without you know, the company mentioning AI, and you know,
(32:43):
there's been some significant capital expenditure discussions, especially particularly with
the Mag seven, you know, you know, to the tunes
of you know, over two hundred billion dollars expected in
twenty twenty five, and so a significant and you know,
certainly you know the company, you know, the major players
(33:07):
who were and certainly the Max seven are all part
of either you know, employing AI or supporting AI. Major
capital expenditures you know, being planned for this year. And
then here we had this startup out of China, which
you know, I think you know, they had mentioned spending
(33:29):
less than I think it was less than ten million dollars.
I know, I've got that figure here. Uh yeah, cost
of I mean it was a five point six million,
you know, so so a very cost effective approach. They
developed models and those models have been tested versus some
other models and they've held up very well. So this
(33:50):
was an eye opener that that you know, we've felt
that the US was kind of leading the charge and
the dominance in AI, and this certainly, you know, was
a surprise coming out of this Chinese startup, and really,
you know, in industries that are in their infasy.
Speaker 2 (34:10):
Uh, it's not.
Speaker 1 (34:11):
Unusual that that they're not cost effective. So I think
I think where the industry pundits are looking at this
and saying, this is actually very positive news and and
uh that when you get to a point where you
know there's some significant cost reductions and we are so
we are such in the beginning stages of AI. This
(34:34):
is so uh, we're so young. But to have some
significant reductions and costs and really in an approach that's
that's meant to promote AI development. You know, this this
is such openness uh in the AI community. And really
if that makes it more prolific inability for other companies
(34:55):
to use that open source code implement it in their applications,
it's really going to lead to the increased adoption of AI.
So what was you know, certainly hit the markets as
a shock because again we don't like new you know,
we don't like to be surprised, and I think the
deep Seek news was a surprise with the release of
(35:16):
their models. But overall, as we digested, it's probably going
to be a very positive thing. So but again, reason
to be diversified, reason to understand what your investment time,
Horizon Art make sure you're invested appropriately. We're going to
take a quick commercial break, so please stay tuned and
(35:37):
we'll be right back with Let's Talk Money on eight
ten WGY.
Speaker 2 (35:47):
Well, thank you for that quick commercial break.
Speaker 1 (35:49):
Just needed a little drink of water there, so appreciate
you tuning in with me this morning. I'm John Malay.
I'm the chief financial Officer, chief operating officer, and a
wealth advisor at Bouchet On the Age Group. Here we
are on this February first. It's so hard to believe
the month of January is past us, although I will say,
you know, in the Northeast, you know once you get
(36:11):
through January, and I love the winter. I will say
skiing has been a little difficult over the last few years,
but before bringing my daughter back to college, we did
a little family trip to Stow, Vermont, and this little
tradition we started last year, so got some great time
with my daughter, also with other friends and family, but
(36:34):
some great skiing. Stowe had some great snow and it's
good to see we're getting some snow here in the area,
so I definitely want to get out to some of
the mountains around here. So hopefully you're getting a chance
to enjoy some of this winter weather. But as we
do know, you know, February will be over in a
blink and then before we know it will be heading
(36:55):
into spring. So I don't, hey, don't want to wish
time too fast, because I do enjoy this this weather
for sure. You know, life, you know, has a way
of reminding us just how fragile is. And you know,
I opened up at the beginning about we had the
celebration of life yesterday for our colleague Nicole, and you know, certainly,
(37:17):
you know, the events of the last two weeks, you know,
have driven home the important of you know, dressing things
that some so often we put off. You know, we
plan for retirement, we plan for our kids, education, for
the next big milestone, you know, but how many of
us are truly prepared, you know, for the unexpected. So,
you know, a sudden loss like this, it is a
(37:39):
sobering reminder of why things like life insurance, estate plans,
having a will in place, why they matter. And you know,
it's not just for ourselves, you know, but it's for
the people we leave behind. And you know it's not
an easy conversation, but it is a necessary one, and
it's one that we have with our clients during the
financial planning process.
Speaker 2 (37:59):
But if you don't have an advisor.
Speaker 1 (38:01):
You're working with, right, you know, you need to ask
yourself these tough questions. And you know, I know we
talk about life insurance when we don't like life insurance
as an investment product, but life insurance as a replacement
of income. You know, there's there's certainly there are there
(38:21):
are purposes to use life insurance. And certainly if you're
young and you've got a family that relies on your
income and you may have a mortgage, you may have
other debt, certainly life insurance and we favor in that situation,
you know, buying the most term life insurance you can buy, right.
(38:43):
And so sometimes you know, people take our comments about
life insurance as an investment vehicle and think, well, you know,
they're against life insurance and we're not, you know, as
comprehensive financial planners, which we are. You know, life insurance
and other insurances have have a role, right and you know,
I think it's important to understand what that role is.
(39:05):
And you know, again we're not fans of using life
insurance as investment product, but certainly as an income or
protection term policies can have a great benefit, and like anything,
it's it's part of the financial planning process, right understanding
(39:26):
what your goals and objectives are and what your gaps are.
And so as part of the financial planning process, you know,
we have these conversations with our clients and it's it's
a natural conversation. But if you're not working with somebody,
you know, you have to step back and look at
yourself in the mirror and say, okay, you know, do
I have what would happen right if if my income
(39:49):
went away or my spouse is income went away? Are
we protected and so? And again I would say term
life insurance certainly can play a great role in that area.
And you know understanding you know, how term is different
than whole life insurance and how what role it should play?
(40:14):
Are those important questions. So if you don't have an advisor,
you know, I would say, you know, if you find
somebody you can ask these questions too, but understand, you know,
it's important as a consumer that you understand and you're
not get sold the product that you really don't need.
And I would always just advise that if if really
it's about income replacement, uh, really you want to be
(40:37):
looking at what's the what's the most amount of term
insurance you could get that could fill that gap. You know,
many times, if we're working with a client who's you know,
in their thirties forties, that's the time where it's most needed,
right and and you know there are times where it's
needed outside of that. Again, every you know, with with
(40:59):
investing in financial planning, there rarely are any just you know,
rules of thumb that apply to everyone. Right, So insurance
really it's insurance planning is really a part of financial planning,
and that planning is unique to that individual and understanding
what their needs are. You know, certainly there can be
needs even for individuals in their sixties, you know, where
(41:20):
there may be a need for life insurance. You know,
certainly we see that with buy sell agreements with maybe
partners in a business, but generally, right we see that,
you know, especially when you're building your with wealth the
earliest parts of your lives, where you're building your wealth
your twenties, thirties and forties, that's the biggest need, right
(41:41):
you get more individuals relying on your income and understanding
how insurance could fill a gap. You know, many times
we see individuals and you know, in their sixties and seventies,
where really you know, the need for insurance right there
really isn't in one isn't one And so we help
evaluate that and you know, help them look at their options.
Speaker 2 (42:02):
But again, like.
Speaker 1 (42:04):
Most things in investing, in financial planning, it's not a
broad brush. It doesn't apply to everyone the same way. Really,
you have to look at unique situation and so you know,
certainly do you have the insurances, do you have the
products that you need?
Speaker 2 (42:19):
Right? But also.
Speaker 1 (42:21):
You know, disability insurance again, you know many have may
have a basic policy provided through work, but but there
are other individual disabilities. They're not cheap, right, But again,
depending on what your profession is, there may be a
need for a disability policy. Again, work with a professional
(42:44):
to really understand the cost, benefits and do you have
you know, wills in place, do you have healthcare proxies
in place? All the things that you know? Really, if
something were to happen, is that information readily available? Is
it handy the people who need to get to it
know where to find it? And so you know, just say,
(43:05):
if this is one you've been putting off, you know,
consider this a reminder, you know, take the time. You know,
I always say we start the year off fresh. Although
we're now done with January, but you know, February is
still still fresh in the year. You know, if this
is something you've been putting off, you know, I would
highly encourage you to have that conversation. You know, if
(43:26):
if you have a spouse, have that conversation with your spouse,
if you have an outdated will or you don't have one,
or healthcare proxy or other documents, you know, I would
highly encourage work with a professional get all that put
in place. Again, it's something that we don't often think of,
right but when you need it, that's it just kind
(43:48):
of you know, brings home that you know, not having
that really puts a strain on your loved ones and
anyone who has to, you know, deal with what happens
when you pass away. So I would say just a reminder,
you know, have those conversations and evaluate really what you need.
Speaker 2 (44:09):
So I encourage listeners.
Speaker 1 (44:11):
We've got a few minutes left of this show, so
certainly if anybody has any questions, it's not too late
to sneak a question here. You can reach me at
eight hundred talk w g y that's eight hundred eight
to five five nine four nine.
Speaker 2 (44:28):
So here we are.
Speaker 1 (44:29):
You know, talked a little bit about earning season, and
you know, at this point about a third of the
companies have reported earnings, and you know, my colleague at
Wilhelm provided me a little bit of data. So certainly,
you know, we've got you know, a couple of factors
going on. You know, of the third that reported, you
(44:52):
know about almost just about eighty percent are you know,
beating estimates. So again seeing fair very positive earnings out
of S and P five hundred companies. We're also seeing
you know mag Sevin, you know, putting out some good data.
Speaker 2 (45:09):
You know, Apple, who released.
Speaker 1 (45:11):
Earnings on Thursday, you know, achieved you know, record quarterly
revenue and that was despite declining iPhone sales, and you know,
certainly their stock was rewarded for that. You know, Microsoft
reporting great revenue growth, great earnings, although you know they
are signaling some concerns. And that's what we're seeing is
(45:33):
you know, fourth quarter revenues that are being reported now
we're seeing very positive. We're seeing some caution and a
little bit of drawback of some of the twenty twenty
five expectations for earnings. So you know, I think at
this point, you know again, I think almost you know,
by the end of next week, we'll we'll have probably
(45:55):
just under two thirds of the S and P five
hundred reporting, So this week will be a an important
week of earnings releases. But so far, the other positive
news we're seeing is a broadening, right, so we're seeing
you know, twenty twenty four was a year of heavy
concentration of stock performance in the top companies, right.
Speaker 2 (46:16):
We talked about, you know, the.
Speaker 1 (46:19):
Mags, and it's just how they are driving the markets
and really the need to see it broadening. And so
some of the positive that we're seeing so far where
we are in the earning season so far in this
quarter is we're seeing a broadening of positive earnings, not
only above you know, along the top companies, but we're
(46:40):
seeing it broadening out and so that's positive, positive news.
We don't want to see such concentration risk in the market.
So overall, positive markets and positive news. And as we
look to the week ahead, this will be a very
very important week because there will be so many earnings
released and as we look at you know, other news,
(47:02):
you know, the positive so the things that we've got
behind us are the FED really saying they're gonna hold
rate steady, and inflation news all positive. I think we're
gonna hear more this week about the Trump's tariffs and
who they're gonna apply to exactly in terms of products,
what some of the cars carve outs will be, and
(47:26):
certainly some of that will impact market reactions. But I
think what we're gonna should be seeing in February is really,
you know, really having earnings driving some of.
Speaker 2 (47:38):
The results that we see.
Speaker 1 (47:40):
So we are coming up to the end of the show,
and I want to thank you for tuning in with
me today. I hope you enjoyed the show. I know
that I certainly did. I hope you enjoy the rest
of the weekend and have an amazing week ahead.
Speaker 2 (47:57):
Also, be sure to.
Speaker 1 (47:58):
Be sure to tune into tomorrow morning at aight am
for another great show. Check out our website Bouchet dot
com for great content and information on a variety of
investment topics. Also see our radio shows are also posted there. Well,
you have been listening to Let's Talk Money, brought to
you by Bouchet Financial Group, where we help our clients
(48:22):
prioritize their health while we manage their wealth for life.
Thank you for joining me this morning. Hope you enjoy
the rest of your day.
Well, good morning, and welcome to Let's Talk Money on
a ten WGY. I'm John Malay and I'm going to
be your host for the next hour. I appreciate you
tuning in with us this morning. I'm a certified public accountant,
the chief financial officer, chief operating officer, and a wealth
advisor at the firm. Again, I want to thank you
(00:26):
for tuning in this early February morning. February first, It's
hard to believe the month of January is in the.
Speaker 2 (00:34):
Books, but here we are.
Speaker 1 (00:37):
We had a nice in the Northeast, nice snowy morning,
and those of you who enjoy the outdoors this time
of year, I'm a snow I'm a skier, so I
certainly am looking forward to some more snow, so glad
to see that happen. Hopefully we'll get some skiing maybe
tomorrow and certainly hopefully next weekend. So again, appreciate you
tuning in this morning. You know, before we dive into
(01:00):
today's show, I just wanted to take a moment to
honor a dear friend and a colleague, Nicole Goebel, who
recently lost her life. Steve I know mentioned the news
on the shows last weekend you know, Nicole was an
incredible financial advisor, really a brilliant professional, and most importantly,
(01:23):
just a kind, caring person who had a gift for
connecting with people. You know, she connected with clients, colleagues
and friends. I would consider Nicole a close personal friend
and just a great person. And you know, yesterday we
gathered to celebrate her life, and it was just.
Speaker 2 (01:41):
A phenomenal gathering. You know, got a.
Speaker 1 (01:45):
Chance to meet her, more of her family, her friends,
and just a great time to share memories of Nicole
and her warmth, her humor and really the profound impact
she had on so many.
Speaker 2 (01:58):
So it was a really.
Speaker 1 (02:00):
A touching reminder of how much she meant to all
of us and how deeply she will be missed. And
you know, Nichole's legacy of kindness, dedication and generosity, you know,
we'll live on in many lives, in the many lives
she's touched. And you know, it was great to it
was great to meet more and more of her family.
You know, Nicole joined our firm only four years ago,
(02:22):
and that's when she when she joined us, she moved
from New Jersey to the area. So it was great
to hear stories about Nikki, how she was referred to
by many of her family, just to see a different
side of Nicole, and it was great to spend time
with friends and family, you know, and our thoughts continued
(02:42):
to be with their family, especially with her husband, Pete
and their two young children. You know, while we're heartbroken
and we are by her passing, you know we're also
very grateful that she was in our lives, even for
only a short period of time. You know, she made
a difference in the lives of so many and we
will continue to carry on her spirit. And you know,
(03:04):
she did make strong connections with everyone in our firm.
And you know, we're firm, and you know, I like
to say we we work hard, and we do because
you know, our work is very serious work, when you know,
and our our team is made up of professionals who
have advanced designations, and we take our work very very seriously.
(03:25):
But we also play hard, and we play hard together,
and we we not only spend a lot of time
at work, we spent a lot of time outside of
the office. And you know, Nicole has host hosted Game Night,
and only a weekend ago, several of us were together
at the Mayor's Cup of Hockey game. We've got some
(03:46):
RPI and Union alumni at the firm. I happen to
be an RPI alum, and uh, you know, many of
us gathered at that event, and you know, so we
do have deep connections and Nicole will be will be
missed for sure, but I just wanted to share some
of those thoughts there. You know, twenty twenty five, you know,
marks some significant milestones for our firm. And you know, we've.
Speaker 2 (04:10):
Been in business.
Speaker 1 (04:11):
Steve started the firm thirty five years ago, so thirty
five years of excellence and dedication. And you know, also
Steve's been hosting Let's Talk Money for an impressive thirty years.
And you know, these milestones are a testament to the
firm's legacy and of Steve's enduring commitment. And you know,
as a firm, we're proud of these commitments and we
are our team is very proud of everything we've achieved
(04:35):
and proud of you know, really what we're what we
see going forward too. We're excited for our future. So
a lot to be thankful for us we headed to
twenty twenty five, and one is I want to make
sure I encourage listeners show. I'm here really to answer
your questions. We always say when it comes to your money,
(04:58):
there is no dumb question. And also I guarantee if
you have that question, another caller is thinking of that.
So certainly pick up the phone. You can reach us
at eight hundred talk WGY. That's eight hundred eight to
five five nine four nine. So this morning, you know,
we're gonna talk about the markets, investing, some financial planning topics,
(05:21):
and whatever questions you call in with. So, you know,
start with a market update. You know, Friday session, you know,
wrapped up, put a bookend on the month of January,
and it closed out a volatile month, you know, for
the financial markets, and you know, despite the choppiness, the
markets ended the month broadly higher. However, this week, you know,
(05:43):
especially Monday and then Friday, which I'll talk about both
days a little bit more detailed, you know, highlighted just
how reactive investors can be to new data, you know. So,
you know, Friday yesterday, in the final hours of session,
you know, we saw heightened volatility after the White House
announced that it would impost tariffs on key trading partners,
(06:04):
particularly China, Mexico and Canada, and you know, there's talks
of the tariffs being delayed, but the White House came
out and clarified, Nope, they will not be delayed. They
will be effective in February first. So so there'll be
a twenty five percent tariff on Canadian and Mexican products
(06:26):
and at ten percent on Chinese. Now, I think we'll
hear more and more over the next few days to
a week. Is you know what products that will particularly
apply to. There may be some carve outs and exclusions,
but you know, well, you know, we started the day
with a very positive day in the markets yesterday on Friday,
(06:46):
after some solid corporate earnings. You know, Apple came out
with earnings on earnings on Thursday. After markets we had
some solid PCEE economic data and markets were Friday, we're
we're positive, we're doing great. And then you know, the
news of the tariff came out, and you know, we
saw like in the Nasdaq, you know, at one point
(07:08):
was up almost a point and a half one point
five percent, but closed down about point three percent for
the day. This S and P similarly shed about half
a percentage, and the Dow dropped point eight percent, partially
by the news, but also partially you know, buy some
(07:28):
you know, disappointing earnings from Chevron, so you know, so
that that was the news on Friday. You know, Monday,
we saw a huge sell off in tech as you know,
the news of the Chinese startup deep Seek, you know,
unveil a breakthrough in cheap AI models, and you know
(07:50):
that certainly sent some shockwaves through the tech industry. You know,
this was it did kind of come out of nowhere,
this Chinese startup, Deep Seek, for at a very cost
effective manner, really redecent, you know, showed some AI models
that performed very well and you know, continued the idea
(08:15):
of open source and it it it hit the tech
sector hard. You know, Nasdaq declined by over three percent
on Monday. Navidia, we know as the largest supplier of
AI chips, fell nearly seventeen percent on Monday and lost
a whopping five hundred and eighty eight billion in market value.
(08:37):
I mean, think about that, lost five hundred and eighty
eight billion in market value. That's by far the highest
market value that's ever been lost in a single day,
you know, more than doubling the previous record of two
hundred and forty billion by Meta so it was a
initial shock to the tech sector and you know, certainly
(09:01):
a reminder that there is there can be volatility in
the markets.
Speaker 2 (09:05):
Right.
Speaker 1 (09:05):
But but despite all that volatility, the S and P
was down only one percent for the week, the Nasdaq
Composite was down one point six percent for the week,
and the Dow is actually up point three percent, which
i you know, we'll talk a little bit more about,
you know, earning season, but we're certainly seeing some nice
(09:26):
broadening of positive earnings coming in and the Dow is
responding to that. And you know, as we talk about
market volatility, we precate, Hey, if you're in the markets,
you you have to expect some volatility. And you know,
we have a joke in the office. One thing that
Steve always promised his clients is there'll be days where
he loses the money. And that's just the facts. You know,
(09:47):
if you're in the markets, there's gonna be ups and downs.
You know, on an average year, you know you're gonna
have a fourteen to fifteen percent sell off from the
peak to the trauh and that's just a normal year.
So uh, you know, we have to say as investors,
you know something, don't overreact, right, And you know, certainly
this week, I would say both on Monday and Friday,
(10:09):
we saw an overreaction in the markets certainly. You know,
I think as the markets digested, uh, you know Monday's
uh information about deep Sea you know, certainly.
Speaker 2 (10:22):
Uh.
Speaker 1 (10:23):
I think the two things that it hit home is
there are some inexpensive ways of achieving some positive AI models.
H And also you know, maybe called into questions. Uh,
you know, the US is complete dominance in that field.
I think until this announcement, it was thought that, hey, AI,
(10:46):
this was an area that the US was gonna have
a dominant hold on. And and you know, I think
what we heard from even Tim Cook on Apple's earnings
earnings conference call is hey, when you've got a player
who's driving costs out, and that's what Deep Seek is
(11:08):
showing is you know, I think they spent under ten
million dollars in developing their their models, and we're hearing,
we're hearing some of the AI rivals in the US
talking about hundreds of millions of dollars. So again, I
think the belief is is you've got a player who's
(11:30):
driving costs out. And then continuing kind of with the
open source idea. I think others in the industry say,
there's could be positive effects of that, Right, It's going
to be faster and easier to develop AI applications, and
that can as a whole, can have some very positive
(11:50):
impacts in the industry. And I think Apple's been you know,
very cautious, I will say, in their introduction into AI,
and they have been really holding back on making some
significant capital expenditures in that area. And I think in
some ways this may be validating, uh, you know, some
(12:11):
of their moves. So I think although it was initial shock,
I think the markets digested certainly, NASDAK recovered from you know,
not fully, but recovered from the you know, the over
three percent down on Monday. And again, as an industry, uh,
you know, AI is so immature and it's got a
long way to go, and and they'll certainly be ups
(12:31):
and downs like this. But again I think many are
looking at it saying.
Speaker 2 (12:36):
This is a positive thing.
Speaker 1 (12:37):
This is a positive To have a player come in
and come in with a very cost effective solution is
just really bose well for the industry. But you know,
even as we even with all that choppiness, all the
major indexes ended the month of January, higher S and
P was up two point seven percent. NASDA Act, despite
(13:02):
the the initial shock of deep seek on Monday, finished
up the month one point six percent, and the Dow
big big gainer with four point seven percent increase. So certainly,
you know, we start off the year, I would say
month here, we have month of January in the books,
and I'd say, you know, as an investor, it'd have
(13:25):
to be happy overall, happy with those results. And you know,
the positive thing has been uh, you know, the earnings.
Earnings have been there, and you know, we're in the
midst of earning season right now, and I think we've
got just around a third of the companies have reported
earnings and it's been positive. And you know, we've got
a lot of earnings reporting next week.
Speaker 2 (13:47):
But I would say, you know, overall.
Speaker 1 (13:50):
The earnings have been very positive, and you know, maybe
some slight pullbacks on you know, estimates for you one
in Q two, but uh, a very you know, nice
to see kind of a broadening of of the earnings,
positive earnings releases, and I think we'll see, uh, well,
(14:12):
obviously we'll have a lot more to see next week,
over the next two weeks we'll have a number of
companies reporting, but you know, certainly this week we saw
the some positive inflation data come out and positive earnings
markets react, and then we had to you know, two
things come out, you know, the deep seek but also
(14:33):
the Trump administration's talks on tariffs on Friday, which creates
some uncertainty, and we saw the markets react. Right, We
know the markets don't like uncertainty, but I think from
an overall fundamentals, you know, good old earnings driving the
positive news, right, and maybe a little overreaction to news,
you know, driving some of the negative. And you know,
(14:54):
the the tariffs, those are an area where know, even
the Fed is saying we got to step back and
take a wait and see attitude, see how that is
really going to impact the economy. And you know, there's
there's really the devil will be in the details with
the tariffs, because you know they're already talk of you know,
(15:15):
oil being carved out of that. And I think you know,
certainly the concern is is with tariffs, it increased the
cost of products right coming into the US.
Speaker 2 (15:25):
So how will that trickle.
Speaker 1 (15:26):
Down into inflation? And uh, you know, certainly the administration
uh is not looking to increase inflation, and so I think,
you know, as they work out some of the details
of exactly how those tariffs will be applied, we'll have
a better sense of how that's going to impact uh,
the economy going forward. But hey, as we again, as
(15:49):
we we wrap up the month, I'd say, uh, you know,
those positive numbers with every index, uh, you know, great
to see. And you know the on the bond yield side,
you know, we did see bond yields going lower in January,
but you know they finish up the month coming up
a little higher. You know, the ten year closed Friday
(16:11):
at four point five sixty six, and again that some
of that was reactionary to the White House releasing some
of the tariff information.
Speaker 2 (16:21):
And so you know, this is you know.
Speaker 1 (16:25):
As we talk about what twenty twenty five has in store,
you know, I'm sure this is the type of this
is the time.
Speaker 2 (16:32):
Of year where you see.
Speaker 1 (16:36):
You see different economists and analysts making their predictions in
the year. And you know, what we always like to
say is when you go back and look how how
many got it right, and very rarely do they get
it right, and so predictions are going to be all
over the place, and as we look, you know, certainly
we've had back to back great years this year, you know,
(16:57):
I think I think generally, you know, we we agree
it's all going to be driven by heavily driven by earnings.
Speaker 2 (17:05):
And you know, the.
Speaker 1 (17:07):
FED is uh and I'll talk a little bit more
about the recent FED meeting, but they've they've really said, hey,
we're going to take a wait and see attitude. We're
gonna take a step back where we're taking a pause
on u on rate decreases and see how some of
the administrative's new administration's policies affect the economy.
Speaker 2 (17:27):
Uh.
Speaker 1 (17:28):
And so there's a lot of focus on on earnings,
corporate earnings and expectations for earnings really driving the market.
Speaker 2 (17:35):
And so uh. You know, again, as a as an investor.
Speaker 1 (17:39):
We we coach our clients, you know, it's about having
you know, evaluating your risk tolerance. We spend a lot
of time making sure we've got appropriate risk models for
our clients. But also, you know, in your financial planning process,
understanding what your cash flow needs are and if you've
got some immediate cash needs to pull for your portfolio, right,
(18:02):
there's things you can do to protect that money, maybe
you move that out of your equity sleeve and more
into fixed income or even more into cash and cash equivalents,
not into pure cash. And we certainly, you know, if
you can still be you know, yielding, you know, just
a little below five percent on you know, and money funds,
(18:23):
that's that's not a bad place to be if you're
looking to park money in a risk free environment. So
again a time of year where hey, we do know
in a year like this where there is an administrative change,
new policies coming into place. Certainly the Trump administration has
made it clear that they would like to extend some
of the tax cuts and really make up that revenue
(18:46):
through tariffs in other ways. And how that's going to
trickle through? Will that affect inflation? You know, So will
those tariffs come back in the form of increased prices
to consumers and therefore increase inflation? And how's the Fed
gonna react? So certainly there is uncertainty, there's no question.
But I think as we look at the US market,
(19:10):
you know, the fundamentals are strong, and you know, even
the inflation data coming out as soon as yesterday Friday
showing inflation you know, coming in as expected. No, no, no,
really major surprises. So you know, so a lot of
focus on earnings this year. So that'll be certainly what
(19:31):
to keep your eyes on as investor. And understand that, hey,
being in the markets, you will have volatility. I talked
about you know, the average draw down being fourteen to
fifteen percent, right, and so it's about being able to
make sure you're in the right risk tolerance, that you
have the portfolio mix that matches that, and understand there's
(19:53):
gonna be ups and downs, right, And we talk about
the need to set short term money side that if
you you know, if you know you have a wedding
coming up or some big expenditure, maybe your your kids education.
Right knowing that, hey, if that money is going to
be need to be coming out of the portfolio in
(20:14):
the next you know, maybe even up to twenty four months,
it's safest to take that out of maybe your equity
sleeve and put that into something.
Speaker 2 (20:23):
That less volatile.
Speaker 1 (20:26):
And so but put yourself in a position where you
don't overreact, right, you know, there's going to be ups
and downs, and uh, you know, I think the the
belief and we strongly believe this. We're very bullish on
US economy and US companies. Uh, you know, we like
(20:46):
to you know, we we've touted we've been out of
international equities for a number of years. Now, you know,
we've certainly were under exposed for a while and now
you know we've been out over six years. We've been
out of international and still believe. Uh Now again that
doesn't mean that we're closing our eyes and aren't looking
for opportunities, but we still believe the best opportunities for
(21:08):
our clients, for our portfolios are.
Speaker 2 (21:10):
In US equity. So that's where we've been.
Speaker 1 (21:13):
But again knowing that there's gonna be there's gonna be
ups and downs, and certainly, you know, we saw some
shocks to the tech sector, uh this this week and.
Speaker 2 (21:24):
Uh you know Navidia who uh.
Speaker 1 (21:27):
You know took it took some you know, significant hit
when you you think of that loss of market value,
market cap. But but it's uh, you know, rebounded a
little bit. But it's certainly I will say, AI is,
it's it's a driving force of many companies.
Speaker 2 (21:44):
Right now.
Speaker 1 (21:45):
You listen to you know, Ernie's conference calls, and you're
gonna hear a lot of talk about AI and a
whole that thought for a second. We have a caller,
Alan from Glenville. Alan appreciate you listening and what can
I do for you this morning?
Speaker 3 (21:59):
Yeah, good morning, great show. Quick questions on the tariffs.
I'm having a hot time understanding what's inflationary and what's not.
But if what's assume the tariff is basically attacks, but
we're not increasing the money supply. So if there were
(22:20):
just use an example, let's say an automobile that was
thirty thousand with one hundred percent tariff got bumped to
sixty at some point, doesn't the tariff become deflationary because
people will not be able to buy anything. I just
want to get your thoughts and I'll listen for your answer.
Speaker 1 (22:39):
Thank you, all right, thank you, Alan, appreciate you listen.
Appreciate that question. And that's a great question. And I
think it becomes to what level and what degree the
tariffs are. And you know, certainly I think the initial
impact could be if the lost of goods coming into
(23:03):
the US are increased because of those tariffs. You know,
really suppliers have the really two alternatives. One is to
absorb those or to pass those on to consumers. And
so I think in the first instance, some may be absorbed,
there may be enough in profit margin, but some will
be passed along. And I think Allen's point is if
(23:25):
the terriffs becomes so great and hit so many, so many.
Speaker 2 (23:31):
Products, it could actually, as to his.
Speaker 1 (23:35):
Point, become deflationary. And we're rate up a break, so
we're gonna take a short conversion of week. So I
want to We're halfway through today's show and get be
taking a break. I want to thank you for tuning
in with this today. We hope you're enjoying the show.
Hope you'll rejoin us after the break. We encourage any
listeners to call in with questions. You can reach me
at eight hundred Talk WGI. That's eight hundred eight two
(23:57):
five five nine four nine. You listening to Let's Talk Money,
brought to you by Bouchet Financial Group, where we help
our clients prioritize their health, where we manage their wealth
for life. Well, good morning, and thank you for staying
(24:19):
with us through that short commercial break. I'm John Malay
and I'm going to be the host for this morning show,
so appreciate you tuning in. You know, right before the break,
we had a call from Alan and Alan had great
question about you know, the tariffs, and you know, I
was talking about the concern and even the Fed's concern
about tariffs and how it may impact inflation, and you.
Speaker 2 (24:41):
Know, Alan's was fought on.
Speaker 1 (24:42):
You know, there's also the potential that you know, really
if tariffs lead to significantly higher prices, right, it could
be it could lead to demand destruction right where quite frankly,
consumers stop buying and the effect is slower economic growth,
reduced overall demand and you know, lower lower prices. And
(25:04):
so certainly that is a is a you know potential
outcome as well. And I think that's why, you know,
the Fed really, you know, they met this week, the
FOMC met on the twenty eighth and twenty ninth, and really,
you know, as many expected, you know, opted to leave
rates alone. And so they left the FED funds rate
(25:27):
the four point twenty five to four point five percent range.
And you know, really they they one they said, you know,
there's a solid economic backdrop, solid labor market. You know,
so they're in no hurry. And you know, really they've
got the luxury right now to have to take time
to regain confidence and where inflation is going uh, and
(25:48):
they were very clear in some of their their remarks
that they you know, they want to step back, take
a wait and see approach and see how some of
the Trump administrations policies, uh and tariff being one, and
you know there being other policies as well about immigration,
(26:11):
you know how those will impact the economy. And uh
so even the Fed, you know, unsure how this is
going to play out. And I think, you know, one,
there's not one hundred percent clarity on how the tariffs
will be applied, you know exactly what products will apply
to which ones will be carved out. But as Alan said,
(26:32):
you know there there certainly is potential that you know,
it could be deflationary. You know, I think that, you know,
the short term, the concern really is more about inflationary.
Speaker 2 (26:42):
You know, as.
Speaker 1 (26:43):
As the as the cost of products coming into the
US is increased, right, there's there's a high likelihood that
some of that price increase, if not all of it,
will be passed along to the consumer and therefore has
the potential to lead to uh, you know, an increase
(27:05):
in you know, in prices and potential inflationary. So that
will certainly be you know, as the FED is saying
a wait and see approach to see how these are
implemented and see how it's impacted. And you know, the Fed,
you know, I think one of the things that they've
made it clear is they're they're not signaling that they're
(27:27):
gonna be resuming a path of reducing rates until they're sure,
you know, have a better sense of of how some
of these policies are going to impact inflation. And certainly,
you know, we've got to still have a strong labor market.
Things that they're pointing to, you know, inflation, I'm sorry,
(27:48):
unemployments UH still just barely above four percent decent job
growth in UH December. The expectation is January will be
will be positive as well. And inflation, you know, even
you know, we got PCE report out on Friday and
the December CPI really showing inflation is you know, no
(28:12):
surprises there, you know, so certainly seeing you know, inflation
still above the Fed's target. You know, Feds targets two percent.
We're still above that, but really no surprises. You know,
the expectations were on the PCE UH and even the
CPI that they were going to be a little higher
than than prior month and they were, uh and really,
(28:35):
you know, when we look at when we dig into
the deep, it's still energy prices, food prices, and shelter,
you know, seemed to be the most stubborn with inflation
right now. So you know, the FED taking a wait
and see approach, and I think you know, again we
talked about markets, how they react, market surprises. Market expected that.
So when the FED came out and held rates and
(28:57):
really took a rate pause, the markets expected. That's really
really no no reaction by the markets really and the Fed,
you know where they go from here. You know this,
this Fed is shown that they are going to be
data driven. Uh and they've come out and this was
(29:17):
a unanimous decision. So that's I think important to see.
Uh the Fed was uh f O MC was unanimous
on taking a wait and see approach.
Speaker 2 (29:28):
Now we can see, you know, they're they're certainly.
Speaker 1 (29:31):
Some uh you know signs that the President Trump is
trying to engage with Chairman Powell. And certainly Trump does
not uh hide his feelings on the Fed. Uh, and
he seems to be poking them.
Speaker 2 (29:49):
A little bit.
Speaker 1 (29:49):
But uh, that's you know, uh, certainly I don't think
that's surprising. But I think you know, the you know, listen,
Chairman Powell is uh is a strong individual. He's gonna
certainly set the policy that they think is correct. And
I don't think be influenced by President Trump's comments or prodding.
(30:11):
You know, they're they're certainly you know, you certainly can
fault the FED for their early in action. You know,
you know back a few years when they were a
little slow to really realize that inflation was not transitory,
that it was here to stay, that was really digging
in deeply. But I'd have to say over the last
(30:33):
you know, twelve to eighteen months, they've done a good
job of reacting, not overreacting, and you know, raising rates
and starting to lower rates based on you know, what
was what the data was driving. So but certainly, I think,
you know, President Trump is exerting, trying to exert some
(30:54):
of his new power, and but I think the Fed,
you know, there's there's there's benefits of some independence there,
and I think Chairman Powell will stick to his guns
that they're going to look for data before they start
reducing rates. So they concluded their meeting this week and
(31:14):
opted to really take a wait and see leave, you know,
push pause on any rate reduction. You know, they had
reduced rates for the previous three meetings to the tune
of a queunt of one percent decline in rates. But now,
you know, I think it's fair to say we're we're
an environment where we should expect you know, higher rates
(31:35):
for longer. Now again, the market has priced that in,
you know, and so you know, no surprises there. So
just a reminder, you know, I'm here to answer any
questions you have, So I encourage listeners to call in
with questions. You can reach me at eight hundred talk
(31:55):
w g Y. That's eight hundred eight to five five
nine for nine. So one of the things I talked
about in the beginning segment was, you know, really we
saw the tech sector really take a big drawback on Monday,
you know, recovered most of what they gave up. And
as I mentioned, you know, for for the month of
(32:19):
January still Nasdaq was up you know, one points I'm sorry,
it was up, yeah, one point six percent for the month.
But this, you know, deep seek was certainly a big news.
And you know, we've talked so much about AI. I
don't think you can listen to a Ernie's conference call
without you know, the company mentioning AI, and you know,
(32:43):
there's been some significant capital expenditure discussions, especially particularly with
the Mag seven, you know, you know, to the tunes
of you know, over two hundred billion dollars expected in
twenty twenty five, and so a significant and you know,
certainly you know the company, you know, the major players
(33:07):
who were and certainly the Max seven are all part
of either you know, employing AI or supporting AI. Major
capital expenditures you know, being planned for this year. And
then here we had this startup out of China, which
you know, I think you know, they had mentioned spending
(33:29):
less than I think it was less than ten million dollars.
I know, I've got that figure here. Uh yeah, cost
of I mean it was a five point six million,
you know, so so a very cost effective approach. They
developed models and those models have been tested versus some
other models and they've held up very well. So this
(33:50):
was an eye opener that that you know, we've felt
that the US was kind of leading the charge and
the dominance in AI, and this certainly, you know, was
a surprise coming out of this Chinese startup, and really,
you know, in industries that are in their infasy.
Speaker 2 (34:10):
Uh, it's not.
Speaker 1 (34:11):
Unusual that that they're not cost effective. So I think
I think where the industry pundits are looking at this
and saying, this is actually very positive news and and
uh that when you get to a point where you
know there's some significant cost reductions and we are so
we are such in the beginning stages of AI. This
(34:34):
is so uh, we're so young. But to have some
significant reductions and costs and really in an approach that's
that's meant to promote AI development. You know, this this
is such openness uh in the AI community. And really
if that makes it more prolific inability for other companies
(34:55):
to use that open source code implement it in their applications,
it's really going to lead to the increased adoption of AI.
So what was you know, certainly hit the markets as
a shock because again we don't like new you know,
we don't like to be surprised, and I think the
deep Seek news was a surprise with the release of
(35:16):
their models. But overall, as we digested, it's probably going
to be a very positive thing. So but again, reason
to be diversified, reason to understand what your investment time,
Horizon Art make sure you're invested appropriately. We're going to
take a quick commercial break, so please stay tuned and
(35:37):
we'll be right back with Let's Talk Money on eight
ten WGY.
Speaker 2 (35:47):
Well, thank you for that quick commercial break.
Speaker 1 (35:49):
Just needed a little drink of water there, so appreciate
you tuning in with me this morning. I'm John Malay.
I'm the chief financial Officer, chief operating officer, and a
wealth advisor at Bouchet On the Age Group. Here we
are on this February first. It's so hard to believe
the month of January is past us, although I will say,
you know, in the Northeast, you know once you get
(36:11):
through January, and I love the winter. I will say
skiing has been a little difficult over the last few years,
but before bringing my daughter back to college, we did
a little family trip to Stow, Vermont, and this little
tradition we started last year, so got some great time
with my daughter, also with other friends and family, but
(36:34):
some great skiing. Stowe had some great snow and it's
good to see we're getting some snow here in the area,
so I definitely want to get out to some of
the mountains around here. So hopefully you're getting a chance
to enjoy some of this winter weather. But as we
do know, you know, February will be over in a
blink and then before we know it will be heading
(36:55):
into spring. So I don't, hey, don't want to wish
time too fast, because I do enjoy this this weather
for sure. You know, life, you know, has a way
of reminding us just how fragile is. And you know,
I opened up at the beginning about we had the
celebration of life yesterday for our colleague Nicole, and you know, certainly,
(37:17):
you know, the events of the last two weeks, you know,
have driven home the important of you know, dressing things
that some so often we put off. You know, we
plan for retirement, we plan for our kids, education, for
the next big milestone, you know, but how many of
us are truly prepared, you know, for the unexpected. So,
you know, a sudden loss like this, it is a
(37:39):
sobering reminder of why things like life insurance, estate plans,
having a will in place, why they matter. And you know,
it's not just for ourselves, you know, but it's for
the people we leave behind. And you know it's not
an easy conversation, but it is a necessary one, and
it's one that we have with our clients during the
financial planning process.
Speaker 2 (37:59):
But if you don't have an advisor.
Speaker 1 (38:01):
You're working with, right, you know, you need to ask
yourself these tough questions. And you know, I know we
talk about life insurance when we don't like life insurance
as an investment product, but life insurance as a replacement
of income. You know, there's there's certainly there are there
(38:21):
are purposes to use life insurance. And certainly if you're
young and you've got a family that relies on your
income and you may have a mortgage, you may have
other debt, certainly life insurance and we favor in that situation,
you know, buying the most term life insurance you can buy, right.
(38:43):
And so sometimes you know, people take our comments about
life insurance as an investment vehicle and think, well, you know,
they're against life insurance and we're not, you know, as
comprehensive financial planners, which we are. You know, life insurance
and other insurances have have a role, right and you know,
I think it's important to understand what that role is.
(39:05):
And you know, again we're not fans of using life
insurance as investment product, but certainly as an income or
protection term policies can have a great benefit, and like anything,
it's it's part of the financial planning process, right understanding
(39:26):
what your goals and objectives are and what your gaps are.
And so as part of the financial planning process, you know,
we have these conversations with our clients and it's it's
a natural conversation. But if you're not working with somebody,
you know, you have to step back and look at
yourself in the mirror and say, okay, you know, do
I have what would happen right if if my income
(39:49):
went away or my spouse is income went away? Are
we protected and so? And again I would say term
life insurance certainly can play a great role in that area.
And you know understanding you know, how term is different
than whole life insurance and how what role it should play?
(40:14):
Are those important questions. So if you don't have an advisor,
you know, I would say, you know, if you find
somebody you can ask these questions too, but understand, you know,
it's important as a consumer that you understand and you're
not get sold the product that you really don't need.
And I would always just advise that if if really
it's about income replacement, uh, really you want to be
(40:37):
looking at what's the what's the most amount of term
insurance you could get that could fill that gap. You know,
many times, if we're working with a client who's you know,
in their thirties forties, that's the time where it's most needed,
right and and you know there are times where it's
needed outside of that. Again, every you know, with with
(40:59):
investing in financial planning, there rarely are any just you know,
rules of thumb that apply to everyone. Right, So insurance
really it's insurance planning is really a part of financial planning,
and that planning is unique to that individual and understanding
what their needs are. You know, certainly there can be
needs even for individuals in their sixties, you know, where
(41:20):
there may be a need for life insurance. You know,
certainly we see that with buy sell agreements with maybe
partners in a business, but generally, right we see that,
you know, especially when you're building your with wealth the
earliest parts of your lives, where you're building your wealth
your twenties, thirties and forties, that's the biggest need, right
(41:41):
you get more individuals relying on your income and understanding
how insurance could fill a gap. You know, many times
we see individuals and you know, in their sixties and seventies,
where really you know, the need for insurance right there
really isn't in one isn't one And so we help
evaluate that and you know, help them look at their options.
Speaker 2 (42:02):
But again, like.
Speaker 1 (42:04):
Most things in investing, in financial planning, it's not a
broad brush. It doesn't apply to everyone the same way. Really,
you have to look at unique situation and so you know,
certainly do you have the insurances, do you have the
products that you need?
Speaker 2 (42:19):
Right? But also.
Speaker 1 (42:21):
You know, disability insurance again, you know many have may
have a basic policy provided through work, but but there
are other individual disabilities. They're not cheap, right, But again,
depending on what your profession is, there may be a
need for a disability policy. Again, work with a professional
(42:44):
to really understand the cost, benefits and do you have
you know, wills in place, do you have healthcare proxies
in place? All the things that you know? Really, if
something were to happen, is that information readily available? Is
it handy the people who need to get to it
know where to find it? And so you know, just say,
(43:05):
if this is one you've been putting off, you know,
consider this a reminder, you know, take the time. You know,
I always say we start the year off fresh. Although
we're now done with January, but you know, February is
still still fresh in the year. You know, if this
is something you've been putting off, you know, I would
highly encourage you to have that conversation. You know, if
(43:26):
if you have a spouse, have that conversation with your spouse,
if you have an outdated will or you don't have one,
or healthcare proxy or other documents, you know, I would
highly encourage work with a professional get all that put
in place. Again, it's something that we don't often think of,
right but when you need it, that's it just kind
(43:48):
of you know, brings home that you know, not having
that really puts a strain on your loved ones and
anyone who has to, you know, deal with what happens
when you pass away. So I would say just a reminder,
you know, have those conversations and evaluate really what you need.
Speaker 2 (44:09):
So I encourage listeners.
Speaker 1 (44:11):
We've got a few minutes left of this show, so
certainly if anybody has any questions, it's not too late
to sneak a question here. You can reach me at
eight hundred talk w g y that's eight hundred eight
to five five nine four nine.
Speaker 2 (44:28):
So here we are.
Speaker 1 (44:29):
You know, talked a little bit about earning season, and
you know, at this point about a third of the
companies have reported earnings, and you know, my colleague at
Wilhelm provided me a little bit of data. So certainly,
you know, we've got you know, a couple of factors
going on. You know, of the third that reported, you
(44:52):
know about almost just about eighty percent are you know,
beating estimates. So again seeing fair very positive earnings out
of S and P five hundred companies. We're also seeing
you know mag Sevin, you know, putting out some good data.
Speaker 2 (45:09):
You know, Apple, who released.
Speaker 1 (45:11):
Earnings on Thursday, you know, achieved you know, record quarterly
revenue and that was despite declining iPhone sales, and you know,
certainly their stock was rewarded for that. You know, Microsoft
reporting great revenue growth, great earnings, although you know they
are signaling some concerns. And that's what we're seeing is
(45:33):
you know, fourth quarter revenues that are being reported now
we're seeing very positive. We're seeing some caution and a
little bit of drawback of some of the twenty twenty
five expectations for earnings. So you know, I think at
this point, you know again, I think almost you know,
by the end of next week, we'll we'll have probably
(45:55):
just under two thirds of the S and P five
hundred reporting, So this week will be a an important
week of earnings releases. But so far, the other positive
news we're seeing is a broadening, right, so we're seeing
you know, twenty twenty four was a year of heavy
concentration of stock performance in the top companies, right.
Speaker 2 (46:16):
We talked about, you know, the.
Speaker 1 (46:19):
Mags, and it's just how they are driving the markets
and really the need to see it broadening. And so
some of the positive that we're seeing so far where
we are in the earning season so far in this
quarter is we're seeing a broadening of positive earnings, not
only above you know, along the top companies, but we're
(46:40):
seeing it broadening out and so that's positive, positive news.
We don't want to see such concentration risk in the market.
So overall, positive markets and positive news. And as we
look to the week ahead, this will be a very
very important week because there will be so many earnings
released and as we look at you know, other news,
(47:02):
you know, the positive so the things that we've got
behind us are the FED really saying they're gonna hold
rate steady, and inflation news all positive. I think we're
gonna hear more this week about the Trump's tariffs and
who they're gonna apply to exactly in terms of products,
what some of the cars carve outs will be, and
(47:26):
certainly some of that will impact market reactions. But I
think what we're gonna should be seeing in February is really,
you know, really having earnings driving some of.
Speaker 2 (47:38):
The results that we see.
Speaker 1 (47:40):
So we are coming up to the end of the show,
and I want to thank you for tuning in with
me today. I hope you enjoyed the show. I know
that I certainly did. I hope you enjoy the rest
of the weekend and have an amazing week ahead.
Speaker 2 (47:57):
Also, be sure to.
Speaker 1 (47:58):
Be sure to tune into tomorrow morning at aight am
for another great show. Check out our website Bouchet dot
com for great content and information on a variety of
investment topics. Also see our radio shows are also posted there. Well,
you have been listening to Let's Talk Money, brought to
you by Bouchet Financial Group, where we help our clients
(48:22):
prioritize their health while we manage their wealth for life.
Thank you for joining me this morning. Hope you enjoy
the rest of your day.
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