Episode Transcript
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Speaker 1 (00:01):
Well, good morning, and welcome to another edition of Let's
Talk Money on eight ten WGY. I'm your host this morning.
I'm John Malay and I'm glad you're able to take
time out of your weekend to join us on this
November Sunday morning. I'm a certified public accountant in the
chief operating officer, chief financial officer and a wealth advisor
(00:21):
at Bouchet Financial Group. Again, I want to thank you
take thank you for taking time out of your Sunday morning.
We've got a little bit of a rainy day. Cool
weather we are certainly in November, falls upon us this morning.
I have a co host and that is Edward Wilhelm.
Ed is a portfolio analyst at the firm, a key
(00:42):
member of our investment committee. That's the group of individuals
who decides what we hold in our portfolio and what
we don't. Good morning, yet, I appreciate you joining me. Yeah, John,
always happy to be here.
Speaker 2 (00:54):
Seems like we're turning into quite the dynamic two over
the last month we've been here quite a bit.
Speaker 1 (01:00):
Yeah, I agree, And I got to tell you I
enjoy having you part of the show. And you're right.
We were hosting last Saturday, I think, and here we
are a little bit over a week later, and what
a difference of market activity. But we'll talk about that,
and that's the beauty of being an investor. Week to week,
(01:21):
you get some pretty dramatic changes sometimes, so we'll talk
about that. So you know, again appreciate everybody tuning in.
We're here to answer any of your questions. As I mentioned,
you know ed a key member of our investment committee,
our portfolio analyst. So certainly if you have any investing questions,
financial planning topics, certainly reach out calls you you could
reach us at eight hundred talk WGY. That's eight hundred
(01:46):
eight two five five nine four nine. So you know,
November here we are. We're chugging along and you know,
we'll talk a little bit more about it. But certainly
now we're in the month two of government shutdown, so
certain the things getting a little a little more heated
up in that front. And it was good to see
(02:06):
some activity this weekend. I know it wasn't totally productive,
but you know, good to see him at the table
at least over the weekend trying to get things done.
And you know, so November only a couple of weeks
away from Thanksgiving, and you know, I will say travel
is a little concerning right now. We had some colleagues
who were away at a conference. SWAB has a big
(02:28):
conference every year. They kind of you rotate from east
coast to west coast. This year it was out in Denver,
so we had two colleagues flying back on Thursday night.
They had some challenges because you know, what's happening with
the reduction of air travel, it's certainly impacting flow of airlines.
And I know, I've got plans to head down to
(02:50):
Charleston next weekend for a little family event, and I
will say I'm looking at flights making sure we're gonna
be okay. So you know, hopefully if you're traveling over
the thanks Giving holiday or our family, hopefully things settle
down and we get you know, we get things back
opened up, back normalized there for sure. So you know,
I know ed last week we talked about the event
(03:14):
the for the American Cancer Society that you were part
of with two other colleagues, and guys did a great job.
I prematurely called it over, but actually I think Monday
was the closing day of the of the fundraising activity
is that right?
Speaker 2 (03:28):
Yep, we had all the all Dinant donations booked and
the national competition wrapped up for the for the month
of October.
Speaker 1 (03:34):
Great. So, I know, you guys put a lot of work.
So you were working with colleagues Vincenzo Testo, Paala La
Pietra and yourself, you know, just some great efforts. So
you got any numbers to share? How'd you guys do? Yeah?
Speaker 2 (03:48):
So this year we ended up raising thirty thousand dollars.
That's you know, the first year our firm has participated.
So we raised thirty thousand dollars and then as a whole,
the Capitol Arraid region raised over half million dollars.
Speaker 1 (04:01):
Wow, half a million dollars.
Speaker 2 (04:02):
Yeah, which is really crazy to think about. You know,
it just shows what a great community we do have
up here. So, you know, national ranking wise, we were
third in the country.
Speaker 1 (04:12):
Wow.
Speaker 2 (04:12):
And you think about competing against you know, like New
York City or Chicago or you know, sometimes they group
entire states like Georgia, who I think was actually first.
It's really impressive. It just shows how much people give
back to the community.
Speaker 1 (04:24):
Yeah, And you know it is interesting because sometimes you
get into conversations with individuals who live in other parts
of the country, and you know they sometimes ask, oh,
how do you deal with the weather, And you know,
I agree. I think the Northeast, particularly the Capital region.
You know, communities are very giving. I know as our
(04:46):
firm were involved on many different fronts, and it's just
I will say a lot of the businesses that I
own that they do believe in giving back in the
communities they work in, and the individuals do as well.
So you know, kudos to you guys, but also kudos
to the whole region. That's that's astounding. You know, third
in the country. That's that's amazing. Perfect. So you know,
again we are here to answer any question, so you
(05:09):
can reach us at eight hundred talk WGY. That's eight
hundred eight two five five nine four nine. So we
did have an interesting week in the markets this week,
and you know, as I alluded to in the intro,
you know, a little complete reversal of what we were
talking about. I think last Saturday when Ed and I
(05:31):
had hosted the show Apple in Amazon earnings recently come out,
markets particularly Nasdaq responded well and we've got a turnaround
this week. All right. Tech docs dragged down the Nasdaq
to it's, you know, really its worst week since President
Trump unveiled his Liberation Day back in April. So tech
(05:52):
drawing down, and you know, we're you know, as I
mentioned here, we are second month of the government shutdown.
It is starting to weigh upon consumers and consumer sentiment,
and we're seeing consumer sentiment decline. I know ed one
of the measures of that consumer sentiment is you know,
(06:13):
University of Michigan does a study and that number is
dropping and you know what do do we call what
it dropped to this this month?
Speaker 2 (06:19):
Yeah, it fell down to fifty point three, you know,
which for listeners arbitrary number. That's the lowest since June
of twenty twenty two. So just think how pessimistic everyone
was at that point. You know, we're kind of right
back there.
Speaker 1 (06:33):
Which is tough to see. And it's you know, consumers,
you know, they're concerned right there. Certainly is the government
shutdowns starts to impact more. And I think individuals who
do get health insurance through the exchanges are starting to
see some cost increases. We're starting to see travel, right
which impacts all of us this time of year. So
(06:54):
certainly that is being felt, and you know, so that
starts to affect the consumer. And you know, it's interesting
with the government shutdown, we've now got a halt of
some key economic data. And you know, we do know
jobs data is on everybody's mind, and particularly on the
Fed's mind. I mean, they made it very clear in
the last meeting as they head into December, labor is
(07:17):
their key concern right now. And because of the government shutdown,
we're not getting some of our normal jobs data. So
now we're getting you know, data from some more commercial sources,
and it's giving mixed signals. You know, ADP data was
this week showing some positive labor data, some other sources
showing negative. So I think the consumer is a little concern,
(07:38):
just you know, not having a clear view right now.
So certainly saw that impact on the market. And you know,
the reality is, and we'll talk about valuations and particularly
valuations of our tech is you know, they are getting
a little exaggerated. And you know, so what we see
is any bit of bad news gets it's exaggerated, right,
(08:01):
and so overreaction and it also creates a situation where hey,
good news, sometimes it's just not enough to move move
the needles because expectations, you know, are so high, and
you know, this was a you know, particularly telling week
for that, right. So the tech week started out promising.
At the beginning of the week, we had Amazon announcing
their thirty eight billion dollar computing deal with Open Eye,
(08:24):
Open Eye Open. AI decided to say that fast and
that's a little difficult, but they you know, so huge investment,
and you know, we saw Amazon stock bounce up because
of that, you know. And and we've talked about the
staggering numbers that are being invested in AI by our
our top teench you know, tech companies, and it is staggering.
(08:46):
So we had an announcement earlier this week. Markets reacted positively.
Speaker 3 (08:50):
Uh.
Speaker 1 (08:51):
And then we had you know, AI Darling Palenteer come
out with some quarterly results that they weren't bad, but
they just didn't impress the street, you know. And so
you know, with that, I think with the drag ont
of the data.
Speaker 3 (09:05):
With the excuse me government shutdown, the lack of data
and uh, you know, we saw the markets overreact and
they did.
Speaker 4 (09:15):
Uh.
Speaker 1 (09:16):
You know, the investors punished some of our biggest winners
this year. Right, So we saw the video go down
seven percent Oracle down nine percent, Pallunteered down by eleven percent.
So without any real fundamental, real bad data, right, it
was just hey, earnings that that didn't wow, and you
(09:38):
know some some labor data that was inconsistent, and so
you know, markets certainly reacted. So overall for the week,
every index down. We had the S and P five
hundred down one point six percent, the nasdack down three percent,
you know, very tech heavy nasdack, the Dow down one
point two percent, and the Russell two thousand down one
(10:01):
point nine percent. So, uh, you know, down week really
really across the board, and you know a lot of
it is as tech goes, the markets go. You know,
we talk about the concentration within our high tech companies
and you know when we look at the S and
P five hundred, uh, you know, add huge concentration with
(10:23):
our tech companies of the S and P five hundred
top ten holdings, Uh, give me some characteristics there. You know,
how much do they make up of the total index?
And you know how much your.
Speaker 2 (10:34):
Tech Yeah, I would say among the top ten holdings,
you know almost entirely tech. The only one you'd exclude
to be Berkshire Hathaway but you know even that is
going to have some finite or tech exposure among those
top ten we're looking at, you know a little above
forty percent of the entire index.
Speaker 1 (10:52):
Wait wise, yeah, so that's so think about that. So uh,
just because of the market concentration of those top tech right,
you know, we think, hey, we got NASDAC right and uh,
you know that's going to be the tech index. But
the reality is, you know, you've got huge tech exposure,
you know, sitting in the S and P five hundred.
So as we as we saw those tech companies take
(11:16):
it on the chin this week, we saw it draw
down not only the NASDAC but also also you know
the S and P five hundred. So overall, not a
good week. And but I will say the fun when
you look at what drove it, uh you know, can
you could argue an overreaction to some inconsistent labor data
(11:37):
and I will say it is inconsistent. We saw some
positive and we saw some negative and then then you know,
slight earnings you know, under expectations, you know, really driving
some market reactions. So you know, I will say, as
we're into this stage right now where we've got some
you know, we throw around the word frothy, right, frothy valuations.
(11:58):
It can be just a little bit of bad news
that can cause some pullbacks and you know, as an
equity investor, you know you've got to be prepared for that.
And you know, I will say, we get a lot
of conversation about bubble. Are we in a bubble? And
we'll talk about that shortly, but you know, regardless of
where we are, what we do know is an equity investor,
(12:19):
you have to be prepared for draw downs and there's
things you can do with your portfolio. I know we
talk a lot about that, but we'll touch on that
again today. So certainly, you know, as as we're seeing
that the investors are really you know, overreacting to little
bits of information, you know, we can see the drawdowns
that's going to have, you know, in the impact on markets.
(12:43):
So again we encourage listeners to call in with questions.
If you have questions on what's going on with the market,
what you should do with your portfolio, reach out to
us at eight hundred talk WGY. That's eight hundred eight
two five five nine four nine. We're going to take
a quick commercial break, so please day tuned and we'll
be right back with let's talk money on eight ten. WGI. Well,
(13:05):
thank you for staying with me through that quick commercial break.
I think with all this hot air now draw it
makes it dry air, and just needed to wet my
whistle there, so I appreciate you giving me the opportunity
to take a quick little break. So, you know, just
wrapping up markets down this week, you know, still you know,
as we look at year to date numbers, you know,
(13:25):
SMP is still up almost fifteen percent, and NASDAK up
nineteen percent, Dow up ten percent, and the Russell two
thousand still up nine percent. So you know, overall, markets
still doing well. And we certainly saw some negative you
know reaction this week. But again is it an equity investor,
and we talk a lot about that. You know, you
got to expect some draw downs and you know, ed
(13:47):
one of the things we're looking at is even with
our you know, this year, some of the draw downs
we've seen with the Magnificent seven, you know, pretty significant,
and you know, comparison, you know, we're looking at chart
comparing draw downs this year you know, compared to twenty
twenty two. So you know, we've got something like Tesla
(14:10):
draw down in twenty twenty two is about seventy three percent.
And what kind of draw down we see in year
to date with Tesla?
Speaker 2 (14:17):
Yeah, so if we just think back to the April
May volatility, Tesla for example, is down almost fifty percent.
Speaker 1 (14:23):
Yeah, and so you know, so here we are in
a in a year where we're Nasdaq up year today,
SMP up year today, we've got you know, almost fifty
percent draw down in one of the big magnificent seven.
And again you could go across the board. You know,
Navidia their max draw down this year thirty seven percent,
(14:43):
Meta thirty four percent. So what we're seeing right is
we're seeing some some major swings. And you know, with
the concentration that those companies make of not only the
NASDAC but also the sm P, right that that's that's
certainly dry markets. So as an equity investor, you got
to be able to stomach that. And this is where
(15:05):
you know, being in the markets, this comes with the
territory of you know, if you're invested, you're gonna have
some volatility. Doesn't mean there aren't things you can do
to protect yourself and things you shouldn't do, but you
got to expect certainly some some volatility. And then we
at this point we have a caller. So we have
one calling from Queensberry. I want appreciate you tuning in
this morning, and what question do you have for us?
Speaker 4 (15:29):
Actually it's Ron r o N. She got the name wrong,
but apologize for that. Rod. That's okay. I don't I
don't have a particular question. I just when I heard
that Ed was on, I just wanted to thank him
once again for putting up with me and bothering him
(15:54):
concerning my daughter's four oh three D and her wroth
I r A. I became a client of Shake earlier
on this past year, and but uh, I wasn't concerned
about my investments. I was more concerned about my daughter's
(16:17):
UH investments. She's she became a teacher back last year
and so she had a roth ira A and she
also had a four three B and uh because there
was limited choices regarding the UH. The the four oh
(16:41):
three b.
Speaker 2 (16:43):
Yeuh. Yeah.
Speaker 4 (16:45):
The Vincenzo is is is the person who I deal with.
He got uh Ed involved and Ed was so kind
enough to research the investment options that my daughter had
and he recommended certain investments, and and then recently I
(17:09):
had gotten a letter regarding my portfolio and concerning some
switching around, and so I reached out to Ed, who
happened to be on vacation at the time, and and
I asked him if that had any impact on my
(17:29):
daughter's portfolio. And he got back to me to be
really fast and basically saying at her age, leave everything alone.
I just wanted to it. This is not a paid
commercial for books. I don't you know. Yeah, I was
with the government and I had a TSP, and I
(17:51):
just basically I was afraid of any kind of risks.
So I kind of missed out on a lot of
the ups and downs. But once I made the change,
I don't even look. Look, I don't even listen to
what the S and P is. I don't care anymore.
You know, you guys are taking care of everything. But
Ed has just been fabulous, And I just wanted everybody
to know that. Uh. You know it once when Steve
(18:14):
says that one once you become a client of Bouchet,
everybody around you becomes a client of Bouchet. Because his
help with my daughter's portfolio, uh, it was very, very,
very you know, helpful and uh, and I appreciate it
so much, so, thank you so much. I appreciate. I
(18:37):
hope you don't you don't mind be bothering you.
Speaker 2 (18:40):
No, we we appreciate the call and you always always
happy to help.
Speaker 1 (18:44):
Ron. I appreciate those. Yeah, Ron, appreciate you for for
listening and calling in and and that's great and uh
uh you know, glad to one, Glad that you're looking
out for your daughter, right and and and that's that's amazing,
and uh, that's not always easy to do sometimes, you know,
our children don't always take our advice.
Speaker 4 (19:06):
Well. Well, as long as I control the purse, strings's okay.
If God has calls me up there, then then she'll
she'll have to deal with herself. But as long as
I know because she that that she could reach out to,
everything is good. And you guys, you guys are great.
I really appreciate and Vinny and and and Katie have
(19:29):
been fantastic as well. So I just wanted to hu
give a shout out and then I'll let you go
on with your.
Speaker 1 (19:36):
Show, all right, right, Hey, Ron, we Ron, I apologize
to forget your name wrong up front, but Ron appreciate
that call. And we will certainly share that the you know,
the the centime of your call with both Vincenzo uh
and Katie Uh. So, who are there two other awesome
colleagues of ours? And you know, I will say, you know,
Ron brings up a great point. And you know, when
(19:58):
we do work with clients, you know, we work with
their children too, whether they're quite frankly, whether they're teenagers
or whether they're adults working. Let's face it. I mean,
I think we all could look at our lives and say, hey,
when I was twenty five or thirty, if I had
access to an investment advisory firm to give me financial
(20:19):
planning advice, give me investment advice, how outstanding? And I
will say, you know Ron's comment about you know our
firm is when you become a client of our firm,
You're right, you have access to the whole firm. You know,
you're not just working with a single advisor, you really
work with the whole team. So if we need to
pull in somebody like Vincenzo's a not only a CFP,
(20:39):
but he's also a CPA, great tax expertise, and Katie,
who's a CFP as well, you know, you just you
really are getting a whole team, and we really do
want to work with the whole family because you know,
think about it. If you if you're when you're starting
your first job, if you're getting advice on how to
allocate your your four oh one K plan, how to
put money, you know, how much should I be investing?
(21:02):
And you get that's set on autopilot at a young age.
You know, wow, what a difference you're making in that
individual's life. So you know, kudos around for you know,
being involved with his daughter's life and helping her in
that regard, because I will tell you, you know, I've got
three children and sometimes they don't want to hear you know,
don't spend that money. You know, don't get that fancy car.
(21:23):
Your car's fine. How much are you putting into your
four o one k? Are you putting money into a
raw right? And and you know, coming from a father,
that can be you know sometimes you know maybe come
across as is you know, that's dad, that's dad, that's dad.
But you have a financial professional. So if you have
(21:44):
Vinnie or you have Ed sitting across from you or
talking to you, and you're in your twenties or thirties
and getting that advice, and that could be great. So
you know, Kudo's and ed awesome job. I know, you
know it's great to hear that. But and again that's
that's really what it's all about. And you know, I
know we're coming up close to our break here, so
we'll hold off getting into the next segment, but really say,
(22:07):
you know, if you can, you know, whether you're talking
we're gonna be heading into Thanksgiving, whether you're talking to
a family member, you know, somebody young in their life
who might be starting their first job, you know, giving
them some advice, Share some of your wisdom, you know,
doesn't you don't have to worry about coming across. Whether
you're a know it all, it's just great, great advice,
(22:28):
and so share it, right, Share some of your successes,
some of the things you might have done wrong. You know,
somebody you know can can benefit from that. So I
would just say, as we head into the holidays, it's
a time where families are around. I know we all
talk to family members, friends all the time. So so
we have another caller on the phone, Paul from Connecticut. Paul,
(22:50):
we appreciate your tuning in this morning, and what question
do you have for us?
Speaker 5 (22:55):
Well, it's more of an observation. I'll make a couple
of points. First, you guys do a great job. And
I listen to the local people and even in Connecticut,
and they ality market in the Connecticut market, and you
guys stand tall. And I'm not a client, okay. And
it's because of your structure and how you have a
complement of people who are CPA's tax people, investment analysts
(23:19):
and so forth, d fps whatever mix of the letters
are so in respect to my observations. And I say
this as a sixty seven year old guy, and I've
called a few times before, and I get kind of
like really into the weeds, but I'll try to keep
it at a high level. There is no doubt that
the United States equity market is overvalued. There's no doubt.
(23:43):
But my main problem is not that it's overvalued, because
if you're in for the Paul Younger people long run.
Speaker 1 (23:51):
I apologize. We are coming up against our break. Can
you stay with us through this through our commercial break?
Speaker 5 (23:57):
Yeah?
Speaker 1 (23:58):
Okay, I want to give I want to hear the
full question and make sure we can answer appropriately. So
if you could stay through the break, that would be awesome.
So here we are coming to halfway through today's show.
We're going to be taking a commercial break, so I
want to thank you for tuning in with us today.
We hope you enjoy the rest of the show. Hope
you're going to rejoin us after the break. Again, we
(24:19):
encourage listeners to call in with questions. You can reach
us at eight hundred Talk WGY. That's eight hundred eight
two five five nine four nine. You are listening to
Let's Talk Money, brought to you by Bouchet Financial Group,
where we help our clients prioritize their health well we
manage their wealth for life. Again, thank you for tuning
(24:40):
in for the first half of the show. Please stay
with us through the break, and Paul, please stay on
the phone with us and we'll answer whatever question you
have after the break. Well, good morning, and thank you
for staying with us through that commercial break. I'm John Malay,
I'm your host for this morning show, and I'm joined
by my colleague Edward Wilhelm, So we appreciate you tuning in.
Just before we were heading in the break, we got
(25:00):
a call from Paul and from Connecticut, and Paul I
apologized for having to cut you off there, but I
wanted to make sure we had a chance to fully talk,
and so I appreciate you staying with us through the break.
Speaker 3 (25:11):
Right.
Speaker 5 (25:12):
So I take strong positions with I believe facts. The
US equity market, measured by the SMP is overvalued for
of the small cap index, and I think it's the
two thousand of those companies don't make money. Warren Buffett
will say things like the US equity market as a
(25:34):
comparison to GDP is overvalue. Now he's an expert, and
I'm not in this business. I'm a CPA. I'm a
corporate finance guy. I'm a sportswriter in Horrbor. I have
a diverse back in horse racing. And the fact is
Buffett is wrong in the respect that he's using an indicator.
And this is my first question if you follow it.
(25:59):
Buffett is say the US equity markets over value, but
he's using indicators that were used when the US equity
market was relatively a closed market in terms of businesses,
and now we have a global footprint, especially with a
good chunk of the Magnificent seven, so their market taps
are part of that US equity measure against our GDP.
(26:24):
But the footprint isn't relevant anymore. It used to be
bordered much differently if you go way back. Obviously it
was manufacturing railroads and so forth. So I'm taking a
position that Warren Buffett it's deadlong yet he's the expert's
ninety four years old. So I want you to answer
that question, is he right or wrong? Relative to my comment?
(26:46):
Second point is, as I call last week, you guys
are active managers of passively flowed in mutual funds through ETFs,
largely not mutual funds per se, and I think you
do a good job. Yeah. So when you look at
my point about Frockey and you mentioned them NAG seven,
(27:06):
you know we have these new cliches right earlier in
the year, and I listened to bloom Bloomberg for hours
per day. They'll use phrases like American exceptionalism that seems
to have gone the wayside. The fact is that those
companies are very speculative now, especially Tesla, going up and
down like a yo yo with day traders as an observation,
(27:29):
and if in fact people money flow into the SMP,
what do guys like you do and teams like you
do relative to their Russell as the example where forty
percent of the companies don't make money. And I know
the whole argument of diversification and so forth, and we're
spreading it all. But some of this stuff is fairly obvious.
(27:51):
So do you cut positions at some point and go
it's just there's a smell test too here? You cut
positions in general because I'm sure that you have individual
strategies for some people, but in general you blanket strategies
based upon risk profiles. If you follow my second question
(28:12):
is doesn't there a smell test come in? I'm an
experienced guy who worked at a big corporation and hung
around nine year old guys who who manage actively manage
mutual funds and corporate America before all the money flows
were passive in these indexes. You followed the second point, Yeah.
Speaker 1 (28:33):
Yeah, absolutely, and uh.
Speaker 5 (28:35):
And I I don't have any further this say, buffet's wrong,
And how do you manage into these passive indexes that
change screwed up to me? It ye, I'll hang up now.
Speaker 1 (28:50):
Bam. That's like a mic drop moment. Paul, so Hey,
I one, I appreciate uh, and I know I've I've
spoken to Paul before. I appreciate him being a listener.
And that's guy I want to meet, you know, CPA
sports writer into horses. So I gotta we gotta grab
coffee sometimes, Paul, I'd like to catch up. So okay,
so lot a lot to unpack there, And you know,
(29:12):
so is Warren Buffett wrong? Listen, I'm not gonna sit
here and say Warren Buffet's wrong? Is every investor right
all the time? No? And you know, I think the
sentiment is, hey, are things different? And and really like
unpacking a lot here, right, like, So you know, Paul
was mentioned small caps and the unprofitableness of a large percentage,
(29:35):
and you know, you know, and I know, you know,
we've talked a lot about small caps. We recently made
a portfolio move and in that and you know, that's
an example where we are seeing the small cap environment change.
You know, it is interesting when you look at the
concentration you know, in the s and p five hundred
(29:56):
and you know, you look at the top fifty and
I'm talking about going back to the sixties, right, you know,
so we're really you know, the same level as we
were back in the sixties. Now it went down, but
you know, we had those mega companies back then. The
problem now is and we are seeing this in the
small cap, right, is those companies those top fifty and
(30:19):
you could say, you know, the top ten, but it's
the top fifty. What's happening is in the small cap
space that we are seeing fundamental changes. We're seeing that
you know one where I'll have you know ed chime in.
You know, we're seeing companies stay non public longer time
because of access to other parts of capital. But we're
(30:41):
also seeing like, you have a profitable small cap company
and guess what, they're being gobbled up by one of
those top technology companies, right, and the government's not showing
any sign of wanting to break up any of these.
I mean, you look at the market cap on the
top ten, it's you know, it's amazing. You know, they're
(31:02):
just massive numbers, and uh, that is changing what we're
seeing in this small cap space. Yeah.
Speaker 2 (31:08):
I mean for those large cap companies, like the moats
are there, they have the capital, you know, financial conditions
are certainly not tight. Like it's it's a prime set
up for them to you know, keep those moats large
and you know, really not prevent new entrants, but that's
a byproduct.
Speaker 1 (31:24):
Of it, right, right, and and so so we are
seeing uh, you know, changes there and so you know,
so does that fundamentally mean Buffet's wrong? You know, I
would say no, I'd say, you know, he he's going
to pick the opportunity to invest in and he's done
a great job. I'm certainly not gonna stand here and
say he's wrong. Doesn't mean to be right on every
(31:44):
move though, because nobody is, you know, and I think
the fundamental you know, second part of the question, you
know is, you know, really gets to like are we
in a bubble? Are we not? And uh, that's asked
a lot, right, I mean, we we know valuations are
gone up, and you know, if we look you know,
(32:07):
if we look at that and compare that to some
of the historical you could you should you could say, hey,
some of the elements are there. You know, the NASDAQ
one hundred, you know, over the last ten years up
over five hundred percent. You know, you could say, hey,
that's similar to in the nineties heading into the dot
com you know, we saw the NASDAK up almost eight
(32:27):
hundred percent. So we're certainly seeing you know, a drive
up of markets, and and you know we always have
that question, is well is it different this time? Right?
And you know, because never is one bubble the same
as the other, right, And so are we in a bubble? Well?
You know, I can't really tell right now, and you
(32:47):
could line up experts and get different responses. But you know,
we are seeing valuations get frothy, right, there's no question
they are. But we're also seeing you know, as Ed said,
we're seeing those top companies with earnings with cash flow.
You know, they're they're they're doing stock buybacks, they're investing
(33:07):
heavily in you know, in AI. And so where are
we in this AI trajectory? Right? Are we at the top?
Are we at the bottom? And so certainly, you know
we can talk a lot more about that. We've got
another caller, you know, John from Saratoga. John, Oh, John
just hung up? Hey John, if you if you do, uh,
(33:29):
call back, We'll get your way back in. Uh So, certainly, John,
appreciate you listening, and if you do have a question,
please call back in. So, you know, just getting back
to the you know, are we in a bubble? Are
we not? You know it it is. We're not gonna
call that right. And again you you could have experts
(33:51):
and say yes we are. No, we're not. Again, do
we see Are we seeing valuations drive up? Absolutely? But
we are seeing as I mentioned, these companies have positive earnings.
They have they have great earners, earnings that are increasing,
They're making significant investments in AI and you know, the
(34:12):
earnings are there so very different than what we saw
in the dot com So we're seeing a run up.
Now does that mean we're in a bubble? Or are
we just you know, in a market that's going to
continue to go up? I mean, where where are we
on this AI trajectory? And you know, and I know
that's a question. We get a lot is you know,
where are we? You know, should I be concerned? Are
(34:33):
we in a bubble? Are we not? Yeah?
Speaker 2 (34:36):
And I you know, I think the best point is
just looking at those you know, maybe it's a short
count just using PE, but those valuations very similar to
two thousand right now. But I think for the most part,
a lot of people are okay paying for these companies
at this sort of strength, you know, similar to two
thousands pricing, uh, you know, just what they're doing and
(34:58):
how expansive they are and all the different, are right.
These companies aren't just siloed into a single area, you know,
similar to what they're doing at dot com bubble like,
they're so broad. You think about an Amazon which has
such a large part of its business just pure consumer discretionary,
but then how much they're also doing on the cloud
computing side. You know that that's also something very different
we're seeing versus the two thousands.
Speaker 1 (35:22):
Excellent and so, you know, so a lot of questions
and I'm sure you know a lot of listeners are
sitting here saying, you know, are we in a bubble?
And you might have feelings about that? Uh, you know,
we'll we'll touch on that a little bit more. So
we're going to take a quick commercial break, so please
stay tuned and we'll be raked back with Let's Talk
Money on eight to ten WGI. Well, thank you for
(35:44):
staying with us through that quick commercial break. And you know,
Edward and I were in the discussion of you know,
the bubble discussion, and this this comes up a lot.
Are we in a bubble? Should we be concerned? And
you know what I would say is, you know, it's
hard to call a bubble right when you're in the
midst of it. What we do know is we've got
valuations increasing. But as we talked about, you've got earnings,
(36:08):
you've got cash flow to support that. And where are
we in this whole AI trajectory. You know, we are
still young. We're early in the stages. I mean, you know,
there's a you know, companies are are making So we
talked you know, we know the infrastructure investments that have
been made and they're continuing right that they're not only
(36:29):
being made in twenty twenty five, but there's huge investments
that have been discussed for twenty twenty six. So the
investment is there, you know. But we're even seeing now companies,
right even our firm firms are figuring out, okay, how
to now use AI. And it's not all about you know,
reducing workforce, which there's gonna be. There's no question there's
(36:49):
gonna be some industries where there's going to be workforce reduction,
but a lot it's going to be just being able
to do more with the resources you have, which I
will tell you hiring individuals is still difficult. And I
know we talk about softening labor market. I'm just going
to tell you from the frontline hiring individuals and you know,
(37:12):
we're currently hiring a few and talking to I talked
to many business owners. It's still very difficult. And uh
so using AI in a way that helps bring value
and makes things more efficient, you know every company is
trying to figure that out. So we're going to see,
no question, bottom line improvements. I think, at a more diversified,
(37:36):
more you know, less concentrated level than than what we've
seen so far. And so, okay, if you think it's
in a we're in a bubble. Right. So so here's
the questions you got to ask, like how long is
this going to continue? I mean, what are your options?
Are you going to pull out, sit in cash, not
do anything and not participate in any increases? Right? I
(37:57):
mean this is the time, ED mean, we're doing this.
Look at our part folio? What do we in? How
can we diversify?
Speaker 2 (38:03):
Yeah, I think you know, the first thing to look
at is do you need cash? When are you going
to need it? It's keeping whatever you need on the sidelines.
I think that's certainly important. And then the next question
is is it time to rebalance? And you know tech
has been on a run. We've certainly seen it, but
you know, if it's becoming a too large portion of
your portfolio. Uh, you know, you need you do need
(38:25):
to scale it back. And that's just a proper function
of being a good investor.
Speaker 1 (38:30):
Right. And and I will say as we just talked about,
we talked about the concentration of tech even in the
S and P five hundred, just because of the size
of those top tech you know, you really have to understand,
you know, what's the underlying investments. You know, if you're
investing in ETFs. Okay, you may say, well, I've got
(38:50):
a broad S and P five hundred, it's it's spread
across five hundred. Well what percent ed is in the
top ten companies of that S and P five hundred. Yeah, so, uh,
you just got to factor that all and really know
how you're invested. Make sure you've got a reasonable asset
allocation in place, right, have an investment plan. And again,
you know, this is where you may need to look
(39:11):
at you know, where you on the age spectrum. If
you're if you're you know, retired, you may want to
look at this differently than if you're thirty five years old.
You know, if I'm thirty five, which I'm not ad
closer to that than I am. Guess what I'm pumping
money in because uh, you know, the longer your horizon,
you know, you want some draw downs, right, draw downs
(39:31):
are opportunities, and you know, so we do, say, have
some dry powder, right, you know, you know, if we
one thing we do know ed whether we're in a
bubble or not. What you know, we talked about the
draw downs of some of the top tech. That's going
to continue. That's not going to change.
Speaker 2 (39:46):
We're going to continue to see volatility. And you know,
depending on what your time horizon is, those buckets of
volatility are really just opportunities, you know, to get in
at a better valuation.
Speaker 1 (39:58):
And so now's the time. You know, if you've got
money sitting in cash, you may want to, you know,
make sure you've got some dry powder. So if we
do see it draw down, it can be you know,
an opportunity to jump in. And again, this is it's
all really you know, I think fundamentally it's all about
a plan. Right. You know, we we know markets, we
(40:20):
know they're going to go up, we know they're going
to go down, right, and and we do know where
at this point where hey, as I mentioned the you know,
the Nasdaq one hundred up five hundred percent over the
last ten years, right, so we know that's not going
to continue forever. Is it going to continue another three years,
another eighteen months, can't tell you for sure, but we
know there's going to be draw down. So just you know,
(40:41):
have a plan, have the right asset allocation. And the
other thing is, and this is reality, right, that there
is a whole psychology of money. And you know, if
you're an individual where the volatility is just tears you apart, right,
the psychology of investing is real, and you know, so
(41:04):
you really do have to have the intestinal fortitude for this.
And you know, if if it really is going to
tear you apart, that you know you may need to
look at your asset allocation right and say, hey, just
because you know it may make sense to you know,
mathematically to do one thing right, you can't take away
the emotional side of it. So if it's really gonna
(41:28):
if you really don't have the risk tolerance for it
or risk appetite, and again I will say, that's where
we come in. And you know, ed plays a bigger
role in it, and all of our advisors do is
you know, we really do take the emotional side out right.
Our job is to give the facts, give advice based
on those facts. But our clients are individuals, right, they
(41:48):
have to make individual decisions most of them, you know,
see the advice we're giving them and take those that advice.
But you know, we're also we have to deal with
the emotional side. So appreciate listeners tuning in again, ed
and I've probably got another five minutes left of the show,
so encourage any listeners to call in with questions. You
(42:10):
can reach us at eight hundred talk WGY. That's eight
hundred eight two five five nine four nine, you know,
just for you know, going off on another subject that's
really more of a you know, I would say maybe
a financial planning conversation, but it's one that's coming up
more and more often. You know, you have individuals who
(42:32):
are sitting on you know, maybe a little bit left
on their mortgage, and but they've still got these great,
great low rates maybe three percent, and the question is
should I should I pay that off? You know, should
I just pay that off? And this is again, this
is where I'm going to go back to the psychology
of investing in money. You know, if you've got a
(42:54):
three percent mortgage. You know, mathematically, I'm going to show
you it makes no sense. You know, with inflation still
at three percent, what you can get investing even in
in you know, treasury money market? Yeah, and treasury is
what's right now? Treasury yields you know still I think
four point nine percent closed out the week.
Speaker 2 (43:14):
Yeah, I know, our money market is paying just shy
a four just.
Speaker 1 (43:17):
Shy for right. Right. So so if you can do
that sitting with no principal risk, right, and then depending
on your tax situation, you may be getting a tax
deduction on that mortgage as well. It makes no sense. Now,
some individuals just are they get to a point, right
they're saying, hey, I'm my balance sheet is very healthy,
(43:38):
I've got my investments are in a good place. I've
got cash reserved in a good place. And I just
hate debt and I just it. It's I just hate it.
And so sometimes, you know, individuals would say, hey, if
it bothers you that much, I'm going to show you
that mathematically it doesn't make sense. But if it's really gonna,
you know, make you feel better, you know, I would
(44:00):
say try to hold off. You know, certainly I could
understand a goal of being Hey, I'm in retirement and
I don't want any debt, but I would just say,
hold you know, hold off, I'm paying that down. You
know that three percent debt is you know, anyone not
looking for a mortgage now wishes they were around at
that time. And I ned ed, I know this is conversation.
(44:21):
Isn't just about mortgages, you know, student debt. It's also
a big topic.
Speaker 2 (44:26):
I'm having similar conversations with, you know, my friends, you know,
maybe a little bit closer right postgrad and twenty twenty two,
but you know, kids come in and asking, hey, what
do what do I do with my student loans? Should
I be paying them off as fast as possible? You know,
some friends, unfortunately they've got some some higher interest rates,
you know, like a eight percent on a loan. That's
something you definitely want to get paid off, you know anything,
(44:48):
you don't think you can make more in markets, especially
for the student loans the younger demographic. But you know,
a lot of them have very low rates on those
student loans. And I've got some friends who no matter
what they they just want to pay them off. They
want to get them off their balance sheet, which is
understandable when it comes down to psychology. It's it's everything
is tailored to the investor, and you know, whatever is
most comfortable at the end of the day.
Speaker 1 (45:09):
Excellent, excellent, and you know, and that's you know, similar
conversations and great, Ed that you pointed out. It's also
you know about we get it from clients sometimes too.
Is should I be reducing what I'm putting into retirement
to put more into kids education? And you know, I
would just say, and I would give similar advice to
(45:33):
people looking to pay off student loans. Is you know,
don't sacrifice your retirement. Make sure you're putting money aside.
So you know, we are coming up at the end
of the show, Ed, really, you know, appreciated you joining
appreciate the dialogue this morning.
Speaker 2 (45:46):
Yeah, always happy to be on the show.
Speaker 1 (45:48):
Excellent And listeners, we appreciate you tuning in today. I
hope you enjoyed this show. I know that, Ed, and
I certainly did. Hope you enjoy the rest of your weekend,
have an amazing week ahead. Be sure to tune in
next weekend for our Saturday show at ten am and
our Sunday at eight am. Also check out our website
(46:08):
Bouchet dot com for great content and information. Also as
the ad ran on the short breaks mentioned you know,
check out our website for the planning event that we're
having this week. So you have been listening to Let's
Talk Money, brought to you by Bouchet Financial Group, where
we help our clients prioritize their health we manage their
(46:30):
wealth for life. Again, thank you for tuning in with
this morning. Hope you enjoy the rest of the weekend
and have a great week ahead. Thank you again.
Well, good morning, and welcome to another edition of Let's
Talk Money on eight ten WGY. I'm your host this morning.
I'm John Malay and I'm glad you're able to take
time out of your weekend to join us on this
November Sunday morning. I'm a certified public accountant in the
chief operating officer, chief financial officer and a wealth advisor
(00:21):
at Bouchet Financial Group. Again, I want to thank you
take thank you for taking time out of your Sunday morning.
We've got a little bit of a rainy day. Cool
weather we are certainly in November, falls upon us this morning.
I have a co host and that is Edward Wilhelm.
Ed is a portfolio analyst at the firm, a key
(00:42):
member of our investment committee. That's the group of individuals
who decides what we hold in our portfolio and what
we don't. Good morning, yet, I appreciate you joining me. Yeah, John,
always happy to be here.
Speaker 2 (00:54):
Seems like we're turning into quite the dynamic two over
the last month we've been here quite a bit.
Speaker 1 (01:00):
Yeah, I agree, And I got to tell you I
enjoy having you part of the show. And you're right.
We were hosting last Saturday, I think, and here we
are a little bit over a week later, and what
a difference of market activity. But we'll talk about that,
and that's the beauty of being an investor. Week to week,
(01:21):
you get some pretty dramatic changes sometimes, so we'll talk
about that. So you know, again appreciate everybody tuning in.
We're here to answer any of your questions. As I mentioned,
you know ed a key member of our investment committee,
our portfolio analyst. So certainly if you have any investing questions,
financial planning topics, certainly reach out calls you you could
reach us at eight hundred talk WGY. That's eight hundred
(01:46):
eight two five five nine four nine. So you know,
November here we are. We're chugging along and you know,
we'll talk a little bit more about it. But certainly
now we're in the month two of government shutdown, so
certain the things getting a little a little more heated
up in that front. And it was good to see
(02:06):
some activity this weekend. I know it wasn't totally productive,
but you know, good to see him at the table
at least over the weekend trying to get things done.
And you know, so November only a couple of weeks
away from Thanksgiving, and you know, I will say travel
is a little concerning right now. We had some colleagues
who were away at a conference. SWAB has a big
(02:28):
conference every year. They kind of you rotate from east
coast to west coast. This year it was out in Denver,
so we had two colleagues flying back on Thursday night.
They had some challenges because you know, what's happening with
the reduction of air travel, it's certainly impacting flow of airlines.
And I know, I've got plans to head down to
(02:50):
Charleston next weekend for a little family event, and I
will say I'm looking at flights making sure we're gonna
be okay. So you know, hopefully if you're traveling over
the thanks Giving holiday or our family, hopefully things settle
down and we get you know, we get things back
opened up, back normalized there for sure. So you know,
I know ed last week we talked about the event
(03:14):
the for the American Cancer Society that you were part
of with two other colleagues, and guys did a great job.
I prematurely called it over, but actually I think Monday
was the closing day of the of the fundraising activity
is that right?
Speaker 2 (03:28):
Yep, we had all the all Dinant donations booked and
the national competition wrapped up for the for the month
of October.
Speaker 1 (03:34):
Great. So, I know, you guys put a lot of work.
So you were working with colleagues Vincenzo Testo, Paala La
Pietra and yourself, you know, just some great efforts. So
you got any numbers to share? How'd you guys do? Yeah?
Speaker 2 (03:48):
So this year we ended up raising thirty thousand dollars.
That's you know, the first year our firm has participated.
So we raised thirty thousand dollars and then as a whole,
the Capitol Arraid region raised over half million dollars.
Speaker 1 (04:01):
Wow, half a million dollars.
Speaker 2 (04:02):
Yeah, which is really crazy to think about. You know,
it just shows what a great community we do have
up here. So, you know, national ranking wise, we were
third in the country.
Speaker 1 (04:12):
Wow.
Speaker 2 (04:12):
And you think about competing against you know, like New
York City or Chicago or you know, sometimes they group
entire states like Georgia, who I think was actually first.
It's really impressive. It just shows how much people give
back to the community.
Speaker 1 (04:24):
Yeah, And you know it is interesting because sometimes you
get into conversations with individuals who live in other parts
of the country, and you know they sometimes ask, oh,
how do you deal with the weather, And you know,
I agree. I think the Northeast, particularly the Capital region.
You know, communities are very giving. I know as our
(04:46):
firm were involved on many different fronts, and it's just
I will say a lot of the businesses that I
own that they do believe in giving back in the
communities they work in, and the individuals do as well.
So you know, kudos to you guys, but also kudos
to the whole region. That's that's astounding. You know, third
in the country. That's that's amazing. Perfect. So you know,
again we are here to answer any question, so you
(05:09):
can reach us at eight hundred talk WGY. That's eight
hundred eight two five five nine four nine. So we
did have an interesting week in the markets this week,
and you know, as I alluded to in the intro,
you know, a little complete reversal of what we were
talking about. I think last Saturday when Ed and I
(05:31):
had hosted the show Apple in Amazon earnings recently come out,
markets particularly Nasdaq responded well and we've got a turnaround
this week. All right. Tech docs dragged down the Nasdaq
to it's, you know, really its worst week since President
Trump unveiled his Liberation Day back in April. So tech
(05:52):
drawing down, and you know, we're you know, as I
mentioned here, we are second month of the government shutdown.
It is starting to weigh upon consumers and consumer sentiment,
and we're seeing consumer sentiment decline. I know ed one
of the measures of that consumer sentiment is you know,
(06:13):
University of Michigan does a study and that number is
dropping and you know what do do we call what
it dropped to this this month?
Speaker 2 (06:19):
Yeah, it fell down to fifty point three, you know,
which for listeners arbitrary number. That's the lowest since June
of twenty twenty two. So just think how pessimistic everyone
was at that point. You know, we're kind of right
back there.
Speaker 1 (06:33):
Which is tough to see. And it's you know, consumers,
you know, they're concerned right there. Certainly is the government
shutdowns starts to impact more. And I think individuals who
do get health insurance through the exchanges are starting to
see some cost increases. We're starting to see travel, right
which impacts all of us this time of year. So
(06:54):
certainly that is being felt, and you know, so that
starts to affect the consumer. And you know, it's interesting
with the government shutdown, we've now got a halt of
some key economic data. And you know, we do know
jobs data is on everybody's mind, and particularly on the
Fed's mind. I mean, they made it very clear in
the last meeting as they head into December, labor is
(07:17):
their key concern right now. And because of the government shutdown,
we're not getting some of our normal jobs data. So
now we're getting you know, data from some more commercial sources,
and it's giving mixed signals. You know, ADP data was
this week showing some positive labor data, some other sources
showing negative. So I think the consumer is a little concern,
(07:38):
just you know, not having a clear view right now.
So certainly saw that impact on the market. And you know,
the reality is, and we'll talk about valuations and particularly
valuations of our tech is you know, they are getting
a little exaggerated. And you know, so what we see
is any bit of bad news gets it's exaggerated, right,
(08:01):
and so overreaction and it also creates a situation where hey,
good news, sometimes it's just not enough to move move
the needles because expectations, you know, are so high, and
you know, this was a you know, particularly telling week
for that, right. So the tech week started out promising.
At the beginning of the week, we had Amazon announcing
their thirty eight billion dollar computing deal with Open Eye,
(08:24):
Open Eye Open. AI decided to say that fast and
that's a little difficult, but they you know, so huge investment,
and you know, we saw Amazon stock bounce up because
of that, you know. And and we've talked about the
staggering numbers that are being invested in AI by our
our top teench you know, tech companies, and it is staggering.
(08:46):
So we had an announcement earlier this week. Markets reacted positively.
Speaker 3 (08:50):
Uh.
Speaker 1 (08:51):
And then we had you know, AI Darling Palenteer come
out with some quarterly results that they weren't bad, but
they just didn't impress the street, you know. And so
you know, with that, I think with the drag ont
of the data.
Speaker 3 (09:05):
With the excuse me government shutdown, the lack of data
and uh, you know, we saw the markets overreact and
they did.
Speaker 4 (09:15):
Uh.
Speaker 1 (09:16):
You know, the investors punished some of our biggest winners
this year. Right, So we saw the video go down
seven percent Oracle down nine percent, Pallunteered down by eleven percent.
So without any real fundamental, real bad data, right, it
was just hey, earnings that that didn't wow, and you
(09:38):
know some some labor data that was inconsistent, and so
you know, markets certainly reacted. So overall for the week,
every index down. We had the S and P five
hundred down one point six percent, the nasdack down three percent,
you know, very tech heavy nasdack, the Dow down one
point two percent, and the Russell two thousand down one
(10:01):
point nine percent. So, uh, you know, down week really
really across the board, and you know a lot of
it is as tech goes, the markets go. You know,
we talk about the concentration within our high tech companies
and you know when we look at the S and
P five hundred, uh, you know, add huge concentration with
(10:23):
our tech companies of the S and P five hundred
top ten holdings, Uh, give me some characteristics there. You know,
how much do they make up of the total index?
And you know how much your.
Speaker 2 (10:34):
Tech Yeah, I would say among the top ten holdings,
you know almost entirely tech. The only one you'd exclude
to be Berkshire Hathaway but you know even that is
going to have some finite or tech exposure among those
top ten we're looking at, you know a little above
forty percent of the entire index.
Speaker 1 (10:52):
Wait wise, yeah, so that's so think about that. So uh,
just because of the market concentration of those top tech right,
you know, we think, hey, we got NASDAC right and uh,
you know that's going to be the tech index. But
the reality is, you know, you've got huge tech exposure,
you know, sitting in the S and P five hundred.
So as we as we saw those tech companies take
(11:16):
it on the chin this week, we saw it draw
down not only the NASDAC but also also you know
the S and P five hundred. So overall, not a
good week. And but I will say the fun when
you look at what drove it, uh you know, can
you could argue an overreaction to some inconsistent labor data
(11:37):
and I will say it is inconsistent. We saw some
positive and we saw some negative and then then you know,
slight earnings you know, under expectations, you know, really driving
some market reactions. So you know, I will say, as
we're into this stage right now where we've got some
you know, we throw around the word frothy, right, frothy valuations.
(11:58):
It can be just a little bit of bad news
that can cause some pullbacks and you know, as an
equity investor, you know you've got to be prepared for that.
And you know, I will say, we get a lot
of conversation about bubble. Are we in a bubble? And
we'll talk about that shortly, but you know, regardless of
where we are, what we do know is an equity investor,
(12:19):
you have to be prepared for draw downs and there's
things you can do with your portfolio. I know we
talk a lot about that, but we'll touch on that
again today. So certainly, you know, as as we're seeing
that the investors are really you know, overreacting to little
bits of information, you know, we can see the drawdowns
that's going to have, you know, in the impact on markets.
(12:43):
So again we encourage listeners to call in with questions.
If you have questions on what's going on with the market,
what you should do with your portfolio, reach out to
us at eight hundred talk WGY. That's eight hundred eight
two five five nine four nine. We're going to take
a quick commercial break, so please day tuned and we'll
be right back with let's talk money on eight ten. WGI. Well,
(13:05):
thank you for staying with me through that quick commercial break.
I think with all this hot air now draw it
makes it dry air, and just needed to wet my
whistle there, so I appreciate you giving me the opportunity
to take a quick little break. So, you know, just
wrapping up markets down this week, you know, still you know,
as we look at year to date numbers, you know,
(13:25):
SMP is still up almost fifteen percent, and NASDAK up
nineteen percent, Dow up ten percent, and the Russell two
thousand still up nine percent. So you know, overall, markets
still doing well. And we certainly saw some negative you
know reaction this week. But again is it an equity investor,
and we talk a lot about that. You know, you
got to expect some draw downs and you know, ed
(13:47):
one of the things we're looking at is even with
our you know, this year, some of the draw downs
we've seen with the Magnificent seven, you know, pretty significant,
and you know, comparison, you know, we're looking at chart
comparing draw downs this year you know, compared to twenty
twenty two. So you know, we've got something like Tesla
(14:10):
draw down in twenty twenty two is about seventy three percent.
And what kind of draw down we see in year
to date with Tesla?
Speaker 2 (14:17):
Yeah, so if we just think back to the April
May volatility, Tesla for example, is down almost fifty percent.
Speaker 1 (14:23):
Yeah, and so you know, so here we are in
a in a year where we're Nasdaq up year today,
SMP up year today, we've got you know, almost fifty
percent draw down in one of the big magnificent seven.
And again you could go across the board. You know,
Navidia their max draw down this year thirty seven percent,
(14:43):
Meta thirty four percent. So what we're seeing right is
we're seeing some some major swings. And you know, with
the concentration that those companies make of not only the
NASDAC but also the sm P, right that that's that's
certainly dry markets. So as an equity investor, you got
to be able to stomach that. And this is where
(15:05):
you know, being in the markets, this comes with the
territory of you know, if you're invested, you're gonna have
some volatility. Doesn't mean there aren't things you can do
to protect yourself and things you shouldn't do, but you
got to expect certainly some some volatility. And then we
at this point we have a caller. So we have
one calling from Queensberry. I want appreciate you tuning in
this morning, and what question do you have for us?
Speaker 4 (15:29):
Actually it's Ron r o N. She got the name wrong,
but apologize for that. Rod. That's okay. I don't I
don't have a particular question. I just when I heard
that Ed was on, I just wanted to thank him
once again for putting up with me and bothering him
(15:54):
concerning my daughter's four oh three D and her wroth
I r A. I became a client of Shake earlier
on this past year, and but uh, I wasn't concerned
about my investments. I was more concerned about my daughter's
(16:17):
UH investments. She's she became a teacher back last year
and so she had a roth ira A and she
also had a four three B and uh because there
was limited choices regarding the UH. The the four oh
(16:41):
three b.
Speaker 2 (16:43):
Yeuh. Yeah.
Speaker 4 (16:45):
The Vincenzo is is is the person who I deal with.
He got uh Ed involved and Ed was so kind
enough to research the investment options that my daughter had
and he recommended certain investments, and and then recently I
(17:09):
had gotten a letter regarding my portfolio and concerning some
switching around, and so I reached out to Ed, who
happened to be on vacation at the time, and and
I asked him if that had any impact on my
(17:29):
daughter's portfolio. And he got back to me to be
really fast and basically saying at her age, leave everything alone.
I just wanted to it. This is not a paid
commercial for books. I don't you know. Yeah, I was
with the government and I had a TSP, and I
(17:51):
just basically I was afraid of any kind of risks.
So I kind of missed out on a lot of
the ups and downs. But once I made the change,
I don't even look. Look, I don't even listen to
what the S and P is. I don't care anymore.
You know, you guys are taking care of everything. But
Ed has just been fabulous, And I just wanted everybody
to know that. Uh. You know it once when Steve
(18:14):
says that one once you become a client of Bouchet,
everybody around you becomes a client of Bouchet. Because his
help with my daughter's portfolio, uh, it was very, very,
very you know, helpful and uh, and I appreciate it
so much, so, thank you so much. I appreciate. I
(18:37):
hope you don't you don't mind be bothering you.
Speaker 2 (18:40):
No, we we appreciate the call and you always always
happy to help.
Speaker 1 (18:44):
Ron. I appreciate those. Yeah, Ron, appreciate you for for
listening and calling in and and that's great and uh
uh you know, glad to one, Glad that you're looking
out for your daughter, right and and and that's that's amazing,
and uh, that's not always easy to do sometimes, you know,
our children don't always take our advice.
Speaker 4 (19:06):
Well. Well, as long as I control the purse, strings's okay.
If God has calls me up there, then then she'll
she'll have to deal with herself. But as long as
I know because she that that she could reach out to,
everything is good. And you guys, you guys are great.
I really appreciate and Vinny and and and Katie have
(19:29):
been fantastic as well. So I just wanted to hu
give a shout out and then I'll let you go
on with your.
Speaker 1 (19:36):
Show, all right, right, Hey, Ron, we Ron, I apologize
to forget your name wrong up front, but Ron appreciate
that call. And we will certainly share that the you know,
the the centime of your call with both Vincenzo uh
and Katie Uh. So, who are there two other awesome
colleagues of ours? And you know, I will say, you know,
Ron brings up a great point. And you know, when
(19:58):
we do work with clients, you know, we work with
their children too, whether they're quite frankly, whether they're teenagers
or whether they're adults working. Let's face it. I mean,
I think we all could look at our lives and say, hey,
when I was twenty five or thirty, if I had
access to an investment advisory firm to give me financial
(20:19):
planning advice, give me investment advice, how outstanding? And I
will say, you know Ron's comment about you know our
firm is when you become a client of our firm,
You're right, you have access to the whole firm. You know,
you're not just working with a single advisor, you really
work with the whole team. So if we need to
pull in somebody like Vincenzo's a not only a CFP,
(20:39):
but he's also a CPA, great tax expertise, and Katie,
who's a CFP as well, you know, you just you
really are getting a whole team, and we really do
want to work with the whole family because you know,
think about it. If you if you're when you're starting
your first job, if you're getting advice on how to
allocate your your four oh one K plan, how to
put money, you know, how much should I be investing?
(21:02):
And you get that's set on autopilot at a young age.
You know, wow, what a difference you're making in that
individual's life. So you know, kudos around for you know,
being involved with his daughter's life and helping her in
that regard, because I will tell you, you know, I've got
three children and sometimes they don't want to hear you know,
don't spend that money. You know, don't get that fancy car.
(21:23):
Your car's fine. How much are you putting into your
four o one k? Are you putting money into a
raw right? And and you know, coming from a father,
that can be you know sometimes you know maybe come
across as is you know, that's dad, that's dad, that's dad.
But you have a financial professional. So if you have
(21:44):
Vinnie or you have Ed sitting across from you or
talking to you, and you're in your twenties or thirties
and getting that advice, and that could be great. So
you know, Kudo's and ed awesome job. I know, you
know it's great to hear that. But and again that's
that's really what it's all about. And you know, I
know we're coming up close to our break here, so
we'll hold off getting into the next segment, but really say,
(22:07):
you know, if you can, you know, whether you're talking
we're gonna be heading into Thanksgiving, whether you're talking to
a family member, you know, somebody young in their life
who might be starting their first job, you know, giving
them some advice, Share some of your wisdom, you know,
doesn't you don't have to worry about coming across. Whether
you're a know it all, it's just great, great advice,
(22:28):
and so share it, right, Share some of your successes,
some of the things you might have done wrong. You know,
somebody you know can can benefit from that. So I
would just say, as we head into the holidays, it's
a time where families are around. I know we all
talk to family members, friends all the time. So so
we have another caller on the phone, Paul from Connecticut. Paul,
(22:50):
we appreciate your tuning in this morning, and what question
do you have for us?
Speaker 5 (22:55):
Well, it's more of an observation. I'll make a couple
of points. First, you guys do a great job. And
I listen to the local people and even in Connecticut,
and they ality market in the Connecticut market, and you
guys stand tall. And I'm not a client, okay. And
it's because of your structure and how you have a
complement of people who are CPA's tax people, investment analysts
(23:19):
and so forth, d fps whatever mix of the letters
are so in respect to my observations. And I say
this as a sixty seven year old guy, and I've
called a few times before, and I get kind of
like really into the weeds, but I'll try to keep
it at a high level. There is no doubt that
the United States equity market is overvalued. There's no doubt.
(23:43):
But my main problem is not that it's overvalued, because
if you're in for the Paul Younger people long run.
Speaker 1 (23:51):
I apologize. We are coming up against our break. Can
you stay with us through this through our commercial break?
Speaker 5 (23:57):
Yeah?
Speaker 1 (23:58):
Okay, I want to give I want to hear the
full question and make sure we can answer appropriately. So
if you could stay through the break, that would be awesome.
So here we are coming to halfway through today's show.
We're going to be taking a commercial break, so I
want to thank you for tuning in with us today.
We hope you enjoy the rest of the show. Hope
you're going to rejoin us after the break. Again, we
(24:19):
encourage listeners to call in with questions. You can reach
us at eight hundred Talk WGY. That's eight hundred eight
two five five nine four nine. You are listening to
Let's Talk Money, brought to you by Bouchet Financial Group,
where we help our clients prioritize their health well we
manage their wealth for life. Again, thank you for tuning
(24:40):
in for the first half of the show. Please stay
with us through the break, and Paul, please stay on
the phone with us and we'll answer whatever question you
have after the break. Well, good morning, and thank you
for staying with us through that commercial break. I'm John Malay,
I'm your host for this morning show, and I'm joined
by my colleague Edward Wilhelm, So we appreciate you tuning in.
Just before we were heading in the break, we got
(25:00):
a call from Paul and from Connecticut, and Paul I
apologized for having to cut you off there, but I
wanted to make sure we had a chance to fully talk,
and so I appreciate you staying with us through the break.
Speaker 3 (25:11):
Right.
Speaker 5 (25:12):
So I take strong positions with I believe facts. The
US equity market, measured by the SMP is overvalued for
of the small cap index, and I think it's the
two thousand of those companies don't make money. Warren Buffett
will say things like the US equity market as a
(25:34):
comparison to GDP is overvalue. Now he's an expert, and
I'm not in this business. I'm a CPA. I'm a
corporate finance guy. I'm a sportswriter in Horrbor. I have
a diverse back in horse racing. And the fact is
Buffett is wrong in the respect that he's using an indicator.
And this is my first question if you follow it.
(25:59):
Buffett is say the US equity markets over value, but
he's using indicators that were used when the US equity
market was relatively a closed market in terms of businesses,
and now we have a global footprint, especially with a
good chunk of the Magnificent seven, so their market taps
are part of that US equity measure against our GDP.
(26:24):
But the footprint isn't relevant anymore. It used to be
bordered much differently if you go way back. Obviously it
was manufacturing railroads and so forth. So I'm taking a
position that Warren Buffett it's deadlong yet he's the expert's
ninety four years old. So I want you to answer
that question, is he right or wrong? Relative to my comment?
(26:46):
Second point is, as I call last week, you guys
are active managers of passively flowed in mutual funds through ETFs,
largely not mutual funds per se, and I think you
do a good job. Yeah. So when you look at
my point about Frockey and you mentioned them NAG seven,
(27:06):
you know we have these new cliches right earlier in
the year, and I listened to bloom Bloomberg for hours
per day. They'll use phrases like American exceptionalism that seems
to have gone the wayside. The fact is that those
companies are very speculative now, especially Tesla, going up and
down like a yo yo with day traders as an observation,
(27:29):
and if in fact people money flow into the SMP,
what do guys like you do and teams like you
do relative to their Russell as the example where forty
percent of the companies don't make money. And I know
the whole argument of diversification and so forth, and we're
spreading it all. But some of this stuff is fairly obvious.
(27:51):
So do you cut positions at some point and go
it's just there's a smell test too here? You cut
positions in general because I'm sure that you have individual
strategies for some people, but in general you blanket strategies
based upon risk profiles. If you follow my second question
(28:12):
is doesn't there a smell test come in? I'm an
experienced guy who worked at a big corporation and hung
around nine year old guys who who manage actively manage
mutual funds and corporate America before all the money flows
were passive in these indexes. You followed the second point, Yeah.
Speaker 1 (28:33):
Yeah, absolutely, and uh.
Speaker 5 (28:35):
And I I don't have any further this say, buffet's wrong,
And how do you manage into these passive indexes that
change screwed up to me? It ye, I'll hang up now.
Speaker 1 (28:50):
Bam. That's like a mic drop moment. Paul, so Hey,
I one, I appreciate uh, and I know I've I've
spoken to Paul before. I appreciate him being a listener.
And that's guy I want to meet, you know, CPA
sports writer into horses. So I gotta we gotta grab
coffee sometimes, Paul, I'd like to catch up. So okay,
so lot a lot to unpack there, And you know,
(29:12):
so is Warren Buffett wrong? Listen, I'm not gonna sit
here and say Warren Buffet's wrong? Is every investor right
all the time? No? And you know, I think the
sentiment is, hey, are things different? And and really like
unpacking a lot here, right, like, So you know, Paul
was mentioned small caps and the unprofitableness of a large percentage,
(29:35):
and you know, you know, and I know, you know,
we've talked a lot about small caps. We recently made
a portfolio move and in that and you know, that's
an example where we are seeing the small cap environment change.
You know, it is interesting when you look at the
concentration you know, in the s and p five hundred
(29:56):
and you know, you look at the top fifty and
I'm talking about going back to the sixties, right, you know,
so we're really you know, the same level as we
were back in the sixties. Now it went down, but
you know, we had those mega companies back then. The
problem now is and we are seeing this in the
small cap, right, is those companies those top fifty and
(30:19):
you could say, you know, the top ten, but it's
the top fifty. What's happening is in the small cap
space that we are seeing fundamental changes. We're seeing that
you know one where I'll have you know ed chime in.
You know, we're seeing companies stay non public longer time
because of access to other parts of capital. But we're
(30:41):
also seeing like, you have a profitable small cap company
and guess what, they're being gobbled up by one of
those top technology companies, right, and the government's not showing
any sign of wanting to break up any of these.
I mean, you look at the market cap on the
top ten, it's you know, it's amazing. You know, they're
(31:02):
just massive numbers, and uh, that is changing what we're
seeing in this small cap space. Yeah.
Speaker 2 (31:08):
I mean for those large cap companies, like the moats
are there, they have the capital, you know, financial conditions
are certainly not tight. Like it's it's a prime set
up for them to you know, keep those moats large
and you know, really not prevent new entrants, but that's
a byproduct.
Speaker 1 (31:24):
Of it, right, right, and and so so we are
seeing uh, you know, changes there and so you know,
so does that fundamentally mean Buffet's wrong? You know, I
would say no, I'd say, you know, he he's going
to pick the opportunity to invest in and he's done
a great job. I'm certainly not gonna stand here and
say he's wrong. Doesn't mean to be right on every
(31:44):
move though, because nobody is, you know, and I think
the fundamental you know, second part of the question, you
know is, you know, really gets to like are we
in a bubble? Are we not? And uh, that's asked
a lot, right, I mean, we we know valuations are
gone up, and you know, if we look you know,
(32:07):
if we look at that and compare that to some
of the historical you could you should you could say, hey,
some of the elements are there. You know, the NASDAQ
one hundred, you know, over the last ten years up
over five hundred percent. You know, you could say, hey,
that's similar to in the nineties heading into the dot
com you know, we saw the NASDAK up almost eight
(32:27):
hundred percent. So we're certainly seeing you know, a drive
up of markets, and and you know we always have
that question, is well is it different this time? Right?
And you know, because never is one bubble the same
as the other, right, And so are we in a bubble? Well?
You know, I can't really tell right now, and you
(32:47):
could line up experts and get different responses. But you know,
we are seeing valuations get frothy, right, there's no question
they are. But we're also seeing you know, as Ed said,
we're seeing those top companies with earnings with cash flow.
You know, they're they're they're doing stock buybacks, they're investing
(33:07):
heavily in you know, in AI. And so where are
we in this AI trajectory? Right? Are we at the top?
Are we at the bottom? And so certainly, you know
we can talk a lot more about that. We've got
another caller, you know, John from Saratoga. John, Oh, John
just hung up? Hey John, if you if you do, uh,
(33:29):
call back, We'll get your way back in. Uh So, certainly, John,
appreciate you listening, and if you do have a question,
please call back in. So, you know, just getting back
to the you know, are we in a bubble? Are
we not? You know it it is. We're not gonna
call that right. And again you you could have experts
(33:51):
and say yes we are. No, we're not. Again, do
we see Are we seeing valuations drive up? Absolutely? But
we are seeing as I mentioned, these companies have positive earnings.
They have they have great earners, earnings that are increasing,
They're making significant investments in AI and you know, the
(34:12):
earnings are there so very different than what we saw
in the dot com So we're seeing a run up.
Now does that mean we're in a bubble? Or are
we just you know, in a market that's going to
continue to go up? I mean, where where are we
on this AI trajectory? And you know, and I know
that's a question. We get a lot is you know,
where are we? You know, should I be concerned? Are
(34:33):
we in a bubble? Are we not? Yeah?
Speaker 2 (34:36):
And I you know, I think the best point is
just looking at those you know, maybe it's a short
count just using PE, but those valuations very similar to
two thousand right now. But I think for the most part,
a lot of people are okay paying for these companies
at this sort of strength, you know, similar to two
thousands pricing, uh, you know, just what they're doing and
(34:58):
how expansive they are and all the different, are right.
These companies aren't just siloed into a single area, you know,
similar to what they're doing at dot com bubble like,
they're so broad. You think about an Amazon which has
such a large part of its business just pure consumer discretionary,
but then how much they're also doing on the cloud
computing side. You know that that's also something very different
we're seeing versus the two thousands.
Speaker 1 (35:22):
Excellent and so, you know, so a lot of questions
and I'm sure you know a lot of listeners are
sitting here saying, you know, are we in a bubble?
And you might have feelings about that? Uh, you know,
we'll we'll touch on that a little bit more. So
we're going to take a quick commercial break, so please
stay tuned and we'll be raked back with Let's Talk
Money on eight to ten WGI. Well, thank you for
(35:44):
staying with us through that quick commercial break. And you know,
Edward and I were in the discussion of you know,
the bubble discussion, and this this comes up a lot.
Are we in a bubble? Should we be concerned? And
you know what I would say is, you know, it's
hard to call a bubble right when you're in the
midst of it. What we do know is we've got
valuations increasing. But as we talked about, you've got earnings,
(36:08):
you've got cash flow to support that. And where are
we in this whole AI trajectory. You know, we are
still young. We're early in the stages. I mean, you know,
there's a you know, companies are are making So we
talked you know, we know the infrastructure investments that have
been made and they're continuing right that they're not only
(36:29):
being made in twenty twenty five, but there's huge investments
that have been discussed for twenty twenty six. So the
investment is there, you know. But we're even seeing now companies,
right even our firm firms are figuring out, okay, how
to now use AI. And it's not all about you know,
reducing workforce, which there's gonna be. There's no question there's
(36:49):
gonna be some industries where there's going to be workforce reduction,
but a lot it's going to be just being able
to do more with the resources you have, which I
will tell you hiring individuals is still difficult. And I
know we talk about softening labor market. I'm just going
to tell you from the frontline hiring individuals and you know,
(37:12):
we're currently hiring a few and talking to I talked
to many business owners. It's still very difficult. And uh
so using AI in a way that helps bring value
and makes things more efficient, you know every company is
trying to figure that out. So we're going to see,
no question, bottom line improvements. I think, at a more diversified,
(37:36):
more you know, less concentrated level than than what we've
seen so far. And so, okay, if you think it's
in a we're in a bubble. Right. So so here's
the questions you got to ask, like how long is
this going to continue? I mean, what are your options?
Are you going to pull out, sit in cash, not
do anything and not participate in any increases? Right? I
(37:57):
mean this is the time, ED mean, we're doing this.
Look at our part folio? What do we in? How
can we diversify?
Speaker 2 (38:03):
Yeah, I think you know, the first thing to look
at is do you need cash? When are you going
to need it? It's keeping whatever you need on the sidelines.
I think that's certainly important. And then the next question
is is it time to rebalance? And you know tech
has been on a run. We've certainly seen it, but
you know, if it's becoming a too large portion of
your portfolio. Uh, you know, you need you do need
(38:25):
to scale it back. And that's just a proper function
of being a good investor.
Speaker 1 (38:30):
Right. And and I will say as we just talked about,
we talked about the concentration of tech even in the
S and P five hundred, just because of the size
of those top tech you know, you really have to understand,
you know, what's the underlying investments. You know, if you're
investing in ETFs. Okay, you may say, well, I've got
(38:50):
a broad S and P five hundred, it's it's spread
across five hundred. Well what percent ed is in the
top ten companies of that S and P five hundred. Yeah, so, uh,
you just got to factor that all and really know
how you're invested. Make sure you've got a reasonable asset
allocation in place, right, have an investment plan. And again,
you know, this is where you may need to look
(39:11):
at you know, where you on the age spectrum. If
you're if you're you know, retired, you may want to
look at this differently than if you're thirty five years old.
You know, if I'm thirty five, which I'm not ad
closer to that than I am. Guess what I'm pumping
money in because uh, you know, the longer your horizon,
you know, you want some draw downs, right, draw downs
(39:31):
are opportunities, and you know, so we do, say, have
some dry powder, right, you know, you know, if we
one thing we do know ed whether we're in a
bubble or not. What you know, we talked about the
draw downs of some of the top tech. That's going
to continue. That's not going to change.
Speaker 2 (39:46):
We're going to continue to see volatility. And you know,
depending on what your time horizon is, those buckets of
volatility are really just opportunities, you know, to get in
at a better valuation.
Speaker 1 (39:58):
And so now's the time. You know, if you've got
money sitting in cash, you may want to, you know,
make sure you've got some dry powder. So if we
do see it draw down, it can be you know,
an opportunity to jump in. And again, this is it's
all really you know, I think fundamentally it's all about
a plan. Right. You know, we we know markets, we
(40:20):
know they're going to go up, we know they're going
to go down, right, and and we do know where
at this point where hey, as I mentioned the you know,
the Nasdaq one hundred up five hundred percent over the
last ten years, right, so we know that's not going
to continue forever. Is it going to continue another three years,
another eighteen months, can't tell you for sure, but we
know there's going to be draw down. So just you know,
(40:41):
have a plan, have the right asset allocation. And the
other thing is, and this is reality, right, that there
is a whole psychology of money. And you know, if
you're an individual where the volatility is just tears you apart, right,
the psychology of investing is real, and you know, so
(41:04):
you really do have to have the intestinal fortitude for this.
And you know, if if it really is going to
tear you apart, that you know you may need to
look at your asset allocation right and say, hey, just
because you know it may make sense to you know,
mathematically to do one thing right, you can't take away
the emotional side of it. So if it's really gonna
(41:28):
if you really don't have the risk tolerance for it
or risk appetite, and again I will say, that's where
we come in. And you know, ed plays a bigger
role in it, and all of our advisors do is
you know, we really do take the emotional side out right.
Our job is to give the facts, give advice based
on those facts. But our clients are individuals, right, they
(41:48):
have to make individual decisions most of them, you know,
see the advice we're giving them and take those that advice.
But you know, we're also we have to deal with
the emotional side. So appreciate listeners tuning in again, ed
and I've probably got another five minutes left of the show,
so encourage any listeners to call in with questions. You
(42:10):
can reach us at eight hundred talk WGY. That's eight
hundred eight two five five nine four nine, you know,
just for you know, going off on another subject that's
really more of a you know, I would say maybe
a financial planning conversation, but it's one that's coming up
more and more often. You know, you have individuals who
(42:32):
are sitting on you know, maybe a little bit left
on their mortgage, and but they've still got these great,
great low rates maybe three percent, and the question is
should I should I pay that off? You know, should
I just pay that off? And this is again, this
is where I'm going to go back to the psychology
of investing in money. You know, if you've got a
(42:54):
three percent mortgage. You know, mathematically, I'm going to show
you it makes no sense. You know, with inflation still
at three percent, what you can get investing even in
in you know, treasury money market? Yeah, and treasury is
what's right now? Treasury yields you know still I think
four point nine percent closed out the week.
Speaker 2 (43:14):
Yeah, I know, our money market is paying just shy
a four just.
Speaker 1 (43:17):
Shy for right. Right. So so if you can do
that sitting with no principal risk, right, and then depending
on your tax situation, you may be getting a tax
deduction on that mortgage as well. It makes no sense. Now,
some individuals just are they get to a point, right
they're saying, hey, I'm my balance sheet is very healthy,
(43:38):
I've got my investments are in a good place. I've
got cash reserved in a good place. And I just
hate debt and I just it. It's I just hate it.
And so sometimes, you know, individuals would say, hey, if
it bothers you that much, I'm going to show you
that mathematically it doesn't make sense. But if it's really gonna,
you know, make you feel better, you know, I would
(44:00):
say try to hold off. You know, certainly I could
understand a goal of being Hey, I'm in retirement and
I don't want any debt, but I would just say,
hold you know, hold off, I'm paying that down. You
know that three percent debt is you know, anyone not
looking for a mortgage now wishes they were around at
that time. And I ned ed, I know this is conversation.
(44:21):
Isn't just about mortgages, you know, student debt. It's also
a big topic.
Speaker 2 (44:26):
I'm having similar conversations with, you know, my friends, you know,
maybe a little bit closer right postgrad and twenty twenty two,
but you know, kids come in and asking, hey, what
do what do I do with my student loans? Should
I be paying them off as fast as possible? You know,
some friends, unfortunately they've got some some higher interest rates,
you know, like a eight percent on a loan. That's
something you definitely want to get paid off, you know anything,
(44:48):
you don't think you can make more in markets, especially
for the student loans the younger demographic. But you know,
a lot of them have very low rates on those
student loans. And I've got some friends who no matter
what they they just want to pay them off. They
want to get them off their balance sheet, which is
understandable when it comes down to psychology. It's it's everything
is tailored to the investor, and you know, whatever is
most comfortable at the end of the day.
Speaker 1 (45:09):
Excellent, excellent, and you know, and that's you know, similar
conversations and great, Ed that you pointed out. It's also
you know about we get it from clients sometimes too.
Is should I be reducing what I'm putting into retirement
to put more into kids education? And you know, I
would just say, and I would give similar advice to
(45:33):
people looking to pay off student loans. Is you know,
don't sacrifice your retirement. Make sure you're putting money aside.
So you know, we are coming up at the end
of the show, Ed, really, you know, appreciated you joining
appreciate the dialogue this morning.
Speaker 2 (45:46):
Yeah, always happy to be on the show.
Speaker 1 (45:48):
Excellent And listeners, we appreciate you tuning in today. I
hope you enjoyed this show. I know that, Ed, and
I certainly did. Hope you enjoy the rest of your weekend,
have an amazing week ahead. Be sure to tune in
next weekend for our Saturday show at ten am and
our Sunday at eight am. Also check out our website
(46:08):
Bouchet dot com for great content and information. Also as
the ad ran on the short breaks mentioned you know,
check out our website for the planning event that we're
having this week. So you have been listening to Let's
Talk Money, brought to you by Bouchet Financial Group, where
we help our clients prioritize their health we manage their
(46:30):
wealth for life. Again, thank you for tuning in with
this morning. Hope you enjoy the rest of the weekend
and have a great week ahead. Thank you again.
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