Let's Talk Money

August 4th, 2024

Episode Transcript

Speaker 1 (00:05):
I found a lot.

Speaker 2 (00:09):
For me, daland just die right in follow Molly. I
found a girl beautiful land suite.

Speaker 3 (00:28):
I never felt Jack. I love this song.

Speaker 1 (00:31):
I hate to have your tone it down. It's a
great song. Good morning everybody, Sunday, August fourth, and I
am Stephen Bouchet. I had such fun with you yesterday
that I came back today and I can't begin to
tell you how good it felt yesterday. So if you
have any questions, any questions whatsoever, the phone lines are open.

(00:56):
Zach Harris, my longtime producer, and I are here. We
would love to talk to you. Get your pointed in
the right direction. The phone lines are one eight hundred
talk WGY one eight hundred eight two five five nine
four nine one eight hundred eight two five fifty nine

(01:16):
forty nine. Any questions whatsoever, folks, give me a call. So, Zach,
I know you were worried yesterday about the weather because
you had your daughter's birthday party. But boy, it turned
out to be a beautiful afternoon.

Speaker 3 (01:28):
It was a miracle. It turned out so beautiful.

Speaker 1 (01:31):
Yeah, she turned five, right, five years old, but she's
acting like she's fifteen already. Yeah, Well, be careful, be
careful there, Zach. They grow up fast. You know, yesterday
we had a great show, a lot of callers, good questions,
a lot of questions about fees, underlying fees and mutual funds.

(01:54):
I know these exchange traded funds, and I always loved
talking about fees because it's a fiduciary. We disclose everything.
We're really transparent one hundred percent out there for our clients,
and we don't mind talking about fees. I know a
lot of people when they're selling investments don't really like
to talk about fees beause once they start talking about

(02:16):
fees and maybe their clients realize that they're paying a
whole lot of money in fees. Listen, folks, if the
SMP over time is up ten percent and over the
last ninety years, it's been just about ten percent. Over
the last fifteen years, as they shared yesterday, the average
return year in, year out spend fourteen percent fourteen percent.

(02:40):
So whether you own the SMP over the last fifteen
years getting fourteen percent year in, year out with a
passive investment, if you're buying a mutual fund, or if
you're buying especially a variable annoity where the fees are
much higher, and mutual funds wrapped with an annuity wrapper

(03:01):
around it. That means that those investments have to outperform
the S and P by whatever those fees were. So
yesterday was really enlightening. Some good, good callers with good questions,
and hopefully it helped the listening audience understand a little
bit more about why they should ask a whole lot
of questions when they're sitting down with their advisor, or

(03:24):
if they're interviewing a new advisor, they should really, you know,
have that advisor disclose everything. There's one reason why I'm
very proud that percent my money is invested like my
clients is because very few people can say that I
wanted to have my money managed in a different way
other than the same way as my clients had their

(03:45):
money managed. I truly believe in our portfolios. So when
you're interviewing an advisor, look them in the eye here
or sheet and make sure that you're getting the right answer,
make sure they're being honest with you, make sure they
disclose all the fees. So good show yesterday, really good show.
It was good to be on. Got some nice text messages,

(04:07):
getting some nice text messages this morning, some people that
are on the road that listened every week, So I
truly appreciate you tuning in. My colleagues did a superb job.
Why I had a little sabbatical, so I wasn't wasn't
with you for three or four months. But but my

(04:30):
colleagues did a great job.

Speaker 3 (04:32):
Great job.

Speaker 1 (04:33):
One eight, eight, two, five, five, nine four nine.

Speaker 3 (04:36):
Zach.

Speaker 1 (04:37):
Let me take a quick fifteen second break. Thank you
Zach for letting me take that quick break. So it
was a week where you know, you know, basically we
gave some back this week. The markets weren't too kind.
We had some earnings that came out. We had to
fed that it came out on Wednesday, their big announcement Thursday.

(05:03):
You know, we just had a lousy day in the market's.
Friday was even worse because of the jobs report. So
the SMP for the week was down just just over
two percent. NASDAK was down about three point three five percent.
QQQ was down about three point zero six percent. The
big loser for the week was small caps, and I

(05:26):
say that because we worry about small caps. We need
small caps to really take part in the rally. So
it's not just a magnificent seven. Those those mostly technology stocks,
so small caps. If you look at the SMP small
caps six hundred and decks down about five point five percent.
Russell two thousand was down almost seven percent, folks. So

(05:49):
if you were in those small caps, we gave some
back this week and hopefully we gain gain't it back,
no pun intended, But to date, the S and P
is up about twelve percent, Nan Snack up about twelve percent,
QQQ is up almost ten percent. Russell two thousand is
up almost four percent, just over four percent. So those

(06:14):
small mid caps are lagging were you know, for this
market to go places, we need that part of the
market segment to be really part of the of the rally.
But they're so sensitive to the economy that when when
we get bad news on the economy, you're going to

(06:36):
see small and mid caps not do so well.

Speaker 3 (06:38):
So, you know, we had some earnings this week.

Speaker 1 (06:40):
Microsoft came out and basically they reported that their main
cloud computing business, you know, missed expectations, causing the stock
to tumble during after hours trading on Tuesday. And Microsoft,
you know, it's a great company, but gave a little
bit back. And then Amazon, which is one of our

(07:02):
top Holdings, and I'm going to put it right out there.
Amazon had a bad, bad, bad week. Amazon projected weaker
than expected revenue growth, said it would continue to ratchet
up spending to meet anticipate the demand for AI artificial
intelligence services. It seems like everything is going the AI route.

(07:25):
The total sales was up about ten percent from a
year earlier one hundred and forty eight billion dollars billion
with a B, so that's a lot of that's that's
a nice jump in sales. But the you know, revenue
from the cloud computing unit grew by about nineteen percent,

(07:45):
higher than expected, which was good news. Shares of Amazon,
up more than twenty percent so far this year, fell
about seven percent after market trading on Thursday and Friday,
down about eight percent for the week, it was down
about eight percent. You know, basically, what what got to
Amazon was they're projecting that things aren't going to be

(08:09):
is good to them over the next quarter. And if so,
the bar has been you know set, it's a low bar,
and that means that if Amazon comes in and absolutely
actually has a better than expected quarter, you'll see you'll
see Amazon do well. So maybe this is a low
point for Amazon that gave back a lot. It was,

(08:31):
you know, trading pretty high and now it's it's down
pretty good. And then you had Apple. Apple's earnings lifted
the stock. And you know, Apple still worried about sales
in China, what will happen with the iPhone sixteen when
it comes out once again, uncertainty around artificial intelligence features

(08:53):
and timing. I mean, there's just so much that these
technology companies are up against. And for the week, you know,
if you look at these Magnificent seven stocks for the week,
you had the number one performer was Meta, which is Facebook,
up almost five percent. You had Apple up just shy

(09:15):
at one percent, but everybody else was down negative territory
now the S and P was down just over two percent.
So you had you know, Tesla down about ten to
eleven percent. You had Amazon down about eight point four percent.
You know, Microsoft, Google, and the Video they were all down.

(09:38):
So it wasn't a good week for the Magnificent seven.
And that plays into Nasdaq being down because they make
up such a big part of Nasdaq. When you buy Nasdaq,
you really, I tell you what you're buying mostly is
this Magnificent seven. You know the makeup of Nasdaq. When

(09:59):
you look at just how much of NASDAC is made
up of these top holdings you got in NASDAC along,
Apple makes up almost nine percent, Microsoft just over eight
and a half percent, in the video just about seven
and a quarter percent, Amazon five percent, Meta just about

(10:21):
five percent, Tesla just Shive three percent, and about six
percent for Google. So when you look at all those
magnificent seven companies, you know, as you can see, the
big part of it, the top ten of NANSDAC is
fifty percent. Just ten of the one hundred holdings represents

(10:43):
fifty percent of NASDAC, and the Magnificent seven is seven
of those top ten holdings. So there you have it, folks,
you know, earnings weight on the market. And then you know,
the big news on the market was Friday's jobs report
less than expected. We had about one hundred and fourteen
thousand jobs added last month according to the Labor Department,

(11:08):
missing expectations. Expectations was going to be about one hundred
and eighty five thousand jobs. You had unemployment go from
four point one percent to four point three percent, and
that's its highest level in almost three years. But a
lot of a lot of that is because more people
were out there looking for work, what we call the
labor participation rate. So you had more people out there

(11:32):
looking for work, which means that the unemployment rate gets
kind of skewed and it really doesn't show a true picture.
And that's one reason why the unemployment rate bumped up
to four point three percent. Yet average hourly earnings came
down a little bit from last month, which isn't good news.
We like it when workers are making more money. One

(11:54):
eight hundred eight two five five nine four nine. One
eight hundred eighty two five fifty nine forty nine. If
you have any questions, folks, give me a call. I
would love love to talk to you, get your pointed
in the right direction. Any questions pertaining to your financial future.
Phone mines are open. One eight hundighty two five fifty

(12:16):
nine forty nine. So, as I said, the stock market yesterday,
you know, stocks fell sharply. Intel had just a you know,
the worst day in fifty years. You had to go
back to nineteen seventy four for Intel to have as
bad as a day as it had yesterday. Intel was
down about twenty six percent just on Friday alone night yesterday, yesterday,

(12:39):
the markets were closed stock knocked off more than thirty
billion dollars of market value. That's a lot of money
that Intel lost, and one day Intel's just can't keep up.
Once again, with the artificial intelligence arena, you know, if
you're not in that marketplace, folks AI is here to stay,

(13:00):
and if you haven't played around with it or used it,
you really should dabble in it because it's it's not
going anywhere. It's like AOL was back in the nineties.
I think that's when AOL was discovered. You know, people
you know, just didn't know what to think of it.
In AOL consumed our lives and now you know, you
never hear about AOL. I'm not so sure that's going

(13:22):
to be the case with artificial intelligence. I think artificial
intelligence is here to stay.

Speaker 3 (13:28):
You know.

Speaker 1 (13:28):
The big difference is when when you put something, when
you ask a question in artificial intelligence, you're actually going
to get uh an answer, Whereas when you answer when
you ask a question in Google, what you're going to
get is a bunch of kind of links that take

(13:49):
you to different sites. That's that's the big difference. Someday
you'll see Google. When you put something in Google, it'll
be all AI, you know the feedback that you get.
But artificial intelligence, as I said, I play around with it,
and it's really interesting. You get some good information. You
got to be careful obviously garbage and garbage. I don't

(14:11):
make sure that the information, you don't make sure that
you you verify it. But for the most part, I've
been pretty impressed with artificial intelligence. And this is what
you know, companies like Intel, Amazon, Microsoft, Apple, you know,
it's all all artificial intelligence. And obviously the video is

(14:31):
the King, the King of the Mountain. The video is
number one in the artificial intelligence arena. If you were
lucky not to own the video early on, you made
some good money, some really good money. I'm not so
sure the video won't continue to do well. Some people
feel that when a share price gets so high that

(14:54):
it can't go any higher, and I said, well, that's
really crazy, because if it's a good company, good business,
good management, the share price can continue to go higher.
So if you own a company like Navidia, and someday
you may see you know, maybe just maybe you'll see
Intel come out of the Dow. Maybe Navidia will go
into the Dow now that they had their stocks split

(15:15):
and the share price isn't so expensive. A lot of
companies don't make it to the Dow unless their share
price is affordable because it's a price weighted index, whereas
the S and P five hundred index is a market
cap weighted index. So the price share price means a
lot for stocks to be included in the Dow. One

(15:39):
eighty two, five five nine, four nine, any questions, give
me a call. Treasure yields down to about three point
eight percent, well below you know that that that those
those days of five percent five point one, five point
two for the ten year treasury, and I talked a
lot about it back then. I said load up on

(16:01):
them because I felt that they were good yields, And
in hindsight, I'm not sure we're going to see five percent,
not any time too soon anyway, especially if the Fed
starts cutting rates. So you have US ten year treasury
yields down to three point eight percent. The volatility index

(16:24):
closed at its highest level of the year, all because
of this Job's report and the uncertainty on the economy
and investors taking some chips out of riskier assets putting
them in more risk free assets like government bonds. Or
gold or utilities was out of the eleven sectors that
make up the S and P five hundred indecks, utilities

(16:47):
was one of the only ones that was in the green,
utilities and telecommunications. All remaining nine sectors were in the red.
They were down for the week, so utilities did well.
Utilities pay a good dividend. A lot of investors go
there as a safe haven when they're kind of fearful

(17:08):
of the market. But you know, listen, stocks go up,
stocks go down. I said it yesterday, I'll say it
again today. If you go back and look at the statistics,
the average swing in the stock market year in year
out is about fourteen percent high to low, peak to
trough fourteen percent. That's the average year in year out.

(17:31):
So for the stock market to have swings, don't get
nervous over it. It comes with the territory of investing. It's
actually it's normal for the stock market to do that.
The stock market can't just go straight to the moon.
You know, that was a Jackie Gleeson segment. You'd have

(17:51):
to watch the reruns of Jackie Gleeson if you want
to go straight to the moon. But the stock market
just isn't going to go straight up. It's going to
have some good days and you're going to give some
back on other days. You never know what day, what week,
what month is going to be a bad time for
the stock market. But over time, stocks is an asset

(18:13):
class has been your best performing asset class. And I
try to teach investors that when there's volatility, do not
do not you know, have a knee jerk reaction, do
not panic. It comes with the territory of investing. And
if you have a well thought oh portfolio, then let

(18:34):
that volatility ride itself out.

Speaker 3 (18:36):
Stocks go up.

Speaker 1 (18:37):
I guarantee if stocks go down, and stocks have always
gone on to make new all time highs no matter
how many corrections or bear markets, no matter how many
recessions we feel, the stock market weathers it all and
over time comes back and makes new all time highs.

(18:58):
And this is why the people that make the most
money when investing are those that are willing to take risk,
especially those that are willing to kind of close their
eyes during the bad days, weeks, months, or sometimes you
get a bad year, and they don't they don't get
bothered by it. They just kind of make believe they
don't own stocks. That's the best thing you can do

(19:20):
with regards to the stock market. Right now as we
sit here, out of the three major indexes the dial,
the SMP in NANSDAC NANZDAC right now is in a
ten percent correction territory. It's down ten percent from the
high just a couple months ago. So NAZDAK is formally
in a correction. When you're down ten percent, If it's

(19:43):
down twenty percent, it's what we referred to as a
bear market. But we're down ten percent from its high.
You have, the SMP is down just under six percent
from its high. The Dow is down just under four
percent from its high. So nas that is really we
considered our aggressive pass up holding. We own a lot

(20:07):
of NANSDAC. We own as much Nansdac in the portfolios
as we do the broad stock market index. We like NANSDAC,
We like the companies in there, and Nanzdac today is
different than NANZDAC at the turn of the century. A
lot of those companies at the turn of the century
are nowhere to be found. Well, the companies that make
up NANSDAC I just went over. You know, seven of

(20:28):
the top ten. You know, these companies aren't going anywhere.
They're good, strong businesses, and especially a company like the
Video that's leading the charge in the artificial intelligence area,
all these other companies are looking to catch up. They
need to get into that game because it is the
future and you're going to see a lot of money invested.

(20:50):
Artificial intelligence is here to stay. Don't don't run away
from it. It's it's here to stay. So you're going
to have some volatility. But over time, stocks is an
asset class. You know, if you look you know, the
last as I said, fifteen years, SMP is up fourteen

(21:12):
percent year in year out. If you look at NASDAC
up eighteen almost nineteen percent year in year out, So
you're taking on more risk. When you have a bad year,
it's going to be worse than the SMP. The broad
stock market indecks.

Speaker 3 (21:28):
So you have the SMP.

Speaker 1 (21:29):
Over the last fifteen years up fourteen percent, NASTAC up
nineteen percent. And then for the conservative part of your portfolio,
if you look at the I Shares Core US Aggregate
Bond ETF, that's really like the SMP of bonds, that
is the index for bonds. It's up about three point
twenty six percent year in year out. So with risk,

(21:53):
you know comes reward. You're invested in the stock market
the SMP up fourteen percent a year year in year out,
or bonds up three percent a year. Sometimes it's willing
to take on risk. And when you get a week
like this week or a day like Friday, what you
can't do is panic. You can't sell out. You can't

(22:15):
think the world is coming to the end. The world
is not coming to an end. The world is going
to be here for quite some time, I'm pretty sure.
And during that time the stock market will recover from
all corrections and bear markets. The US economy comes out

(22:35):
of every recession that we've been in. So when you
see bad news on the horizon, what you can't do
is just throw the towel in and say I can't
on stocks, they're too risky, because over time, stocks is
really where you want to be. Folks, you're listening to
Let's Talk Money, brought to you by Bouchet and Andrew,
where we help our clients prioritize their health while we

(22:58):
manage their wealth for life. The phone lines are open
one eight hundred eighty two five five nine four nine.
We're gonna take a quick break for the news. Call in,
Zach will put you up one eight hundred eighty two
five fifty nine forty nine. See in a couple of
quick minutes. I found a lot for me.

Speaker 2 (23:30):
Dn'd just die right in for Low Molly. I found
a girl well.

Speaker 1 (23:39):
I mentioned how I loved that song so much at
the top of the hour. Zach played it again at
the bottom of the hour, and I do love that song.
It's a great song.

Speaker 3 (23:48):
Folks.

Speaker 1 (23:48):
Thank you for tuning in today, thank you for holding
through the news. Thank you for just you know, being
there weekend week out listening to the show. I'm hoping
that we give you good information, information that you can use,
information that will help you be better prepared, especially for retirement.
That's what most people are shooting for is to save

(24:11):
up enough money to be able to retire. You work
hard for decades, decades and decades and decades, and if
you're not prepared to retire unless you feel you can
live on Social Security And the average social Security check
is about fifteen thousand dollars a year. So if that's
enough for you, then you're doing just fine. You don't
need to save money through the years, and it's hard

(24:34):
to save money, especially with the price of gas, food
utilities being so high. We're paying more for stuff now
than ever before, and that's taking a lot of money
out of one's paycheck. So it's really hard to save money.
But somehow, some way, hopefully you find a way. I

(24:58):
always like to, you know, the tongue in cheeks say,
make believe tomorrow you go in to work and you
get a pink slip and you're all done with your job.
You're going to be devastated, devastated, and then you get
a phone call later on in the day and they say, hey,
we can hire you back, but only ninety percent of
what we were paying you. More than likely you're going

(25:20):
to take that job. And it's just a quirky way
of getting you to realize. The only difference is if
that were the scenario and you would take that job
back at ninety percent of the paycheck that you were getting,
then tomorrow go into your business office and say, hey,
I want to put ten percent into my four to

(25:42):
oh one K plan or four H three B or
whatever pension plan you have at work. That's really what
you have to do. Force yourself I promise you you
will be swearing at me, cursing, You will be saying,
I don't know what I'm talking about for the next
few pages. Piece, you're going to have less money coming out.

(26:03):
But that ten percent that you put away, it's not
really ten percent.

Speaker 3 (26:07):
Piece.

Speaker 1 (26:07):
You're not being taxed on it. You get a tax
break for putting that money in your pension plan. That's
not a bad deal. Uncle Sam is willing to help
underwrite your savings, and your company more than likely is
giving you a match. And if they are giving you
a match, you absolutely want to take advantage of that.
That's free money, folks get into the boss's pocket. That's

(26:31):
free money. So ten percent, if you're not putting more
than likely, if you're not putting ten to fifteen percent
away into your pension plan, you won't have the quality
of retirement that you dreamt about that you always want it.
That's how expensive it is to retire.

Speaker 3 (26:51):
And as I.

Speaker 1 (26:51):
Said, if the average Social Security check is fifteen thousand,
if you're married, there's thirty thousand coming into the household,
but fifty or seventy five thousand to live on. That difference,
either you're going to continue to work hope that you're
healthy enough to work, hopefully get a job at an
older or more mature age. Or you've got to have

(27:15):
money in your savings plan, your pension savings and so
forth to supplement the difference of what you need. So
if you're not putting ten to fifteen percent away, you're
not putting enough. And that's real important for you to
kind of just think about. If I can get you
to think about anything today, it's put some money into

(27:37):
your pension plan. Make sure you're at least taking advantage
of whatever the company matches. Usually it's up to six
percent or something where the company will match you a
certain percentage. Each company is different, but absolutely take advantage
of that free money and then have that money invested appropriately.
If you're younger, you know you want to be more

(27:59):
growth oriented, you want it more invested in stocks than
bonds or any other type. Acid class stocks is okay
over time. As I said before the news break, there's
nothing wrong with owning stocks. Even even with days like
Friday where the stock market gets just claberate. It's okay
to own stocks long term. One eight hundred eighty two

(28:23):
five five nine four nine one eight hundred eighty two
five fifty nine forty nine. If you have any questions,
give me a call. So this past week was an
interesting week. You know, the Federal Reserve held great steady,
and I'll talk about that in a few minutes. They
they they signaled a possible cut in September. You had

(28:45):
technology companies that just got you know, clobberd. The sell
off in technology companies in the video, Intel, Amazon, you know,
just you know, taking it pretty bad. This past week,
take anology was not the place to be. But I
still am a big believer. It's our number one sector

(29:06):
in our portfolios. We own more technology than we own anything.
And a good way of owning technology is to buy
the Nanstac one hundred composite. QQQ is the symbol. You
had US unemployment rose to four point three percent. The
number of jobs were lower than expected, one hundred and
fourteen thousand compared to one hundred and eighty five thousand expected.

(29:29):
You had Japan that raised rates. So for the week,
the Dow fell about two point one percent, SMP two
point oh six percent, Nanstac three point four percent. Now
in a correction territory. That's how the week went. The
other thing that happened this week. Obviously, you had just
Delta alone canceled five thousand flights because of the software

(29:52):
update from crowd site Strip. That really really created havoc
throughout all of our lives somehow, Someway, I think everybody
got affected by that, and it was just a software update.
It wasn't anything that was out of the ordinary other
than a software update that just did not go well.

(30:12):
I'm pretty sure whoever was in charge of that may
not be working at crowd and Strike anymore. Delta feels
it lost about five hundred million dollars in lost business. Obviously,
if you were a Delta customer flying Delta, and I
like Delta. Delta is a good airline, I fly it often.
But if you were flying Delta last week, more than

(30:34):
likely you you had delays or canceled flights, and that's
a little upsetting. The other thing that happened this week
you had the US Treasury basically our debt in this
country is now thirty five trillion dollars thirty five trillion
with a T. That's a lot of money, folks. It's

(30:57):
as much money as we've ever been in debt. Ever,
it's a record debt for us, and I'm hoping that someday, somehow,
some way, people in Washington, at some point will wrap
their arms around the financial stability of our country.

Speaker 3 (31:14):
Pieauce.

Speaker 1 (31:14):
It's not good, not we can't continue to be spending
the kind of money that we spend. If we bring
in so much in revenue and we're out spending that,
we're adding debt onto to you know, the books. That's
that's just not good. It's no different than your household.
If you earn fifty thousand dollars a year and you're
spending sixty, that means you're borrowing ten out of the

(31:37):
equity of your home, or putting it on credit cards
or you know, you know, a loan shark down on
the streets. I somehow, some way, you're spending more than
you're making. And that doesn't last long. You're really going
to have some pretty pretty tough times or go bankrupt
or something. It's just not going to work out. Unfortunately,

(31:59):
in this great bunch of hours, we can print money.
So as we go further in debt, we just continue
to print money, which creates, you know, inflation and affects
the value of the dollar and everything else. So thirty
five trillion dollars is an eye opening number. One eight
hundred eighty two five five nine four nine one eight

(32:22):
hundred eighty two, five fifty nine forty nine. So the
jobs report that was the big news on Friday, and
basically now listen, the FED just met on Wednesday. Jerome Powell,
the Fed Reserve Chair, and the Federal Open Market Committee
came out and said that they are leaving interest rates alone,

(32:45):
maybe in September. More than likely in September, there'll be
a cut. It'll only be a point twenty five percent cut.
They don't have any any any anticipation of a point
five h half a percent rate cut. Well, that was
on Wednesday. I can almost guarantee you that their minds said.

(33:09):
If they had that jobs report before they met on Wednesday,
it would have been a different message coming out from
the Fed. I am sure of it. That message would
have been so much different. Now, more than likely, we
are absolutely going to get a rate cut in September,

(33:30):
and a lot of people feel that maybe a half
a percent along with another half a percent in November.
Right now. You know, the Fed did this to us
a couple of years ago, and I hate to beat
up on them. I beat upon them enough, but they
admitted to their faults. They're only human, right, But they're
being paid to, you know, really be ahead of the game.

(33:53):
And a couple of years ago, when they said inflation
was transitory, that it wasn't real, well, listn't, folks. They
were living in la la land. Because you and I
were paying more at the gas pump, we were paying
more in the supermarket, we were paying more for our
heating bills. We knew that inflation was real. They felt
that it was just temporary. The White House felt the

(34:15):
same way, and they were late to the game. They
did not start raising interest rates soon enough. Now, when
they did start raising they were aggressive and they brought
inflation from nine point one percent down to the three
percent neighborhood range. Their target is two percent. But now
it looks as though they may have waited too long

(34:38):
to cut rates. There are some that feel that the
Fed should have been cutting already. You need to be
ahead of the game. You need to you know, what
did Wayne Gretzky say, go where the puck is gone?
You know, you got to kind of anticipate where the
economy is headed. And right now there's a lot of

(35:01):
people that are fearful that maybe just maybe, I hate
to use the R word, just maybe we're.

Speaker 3 (35:09):
Our soft landing may not be all that soft.

Speaker 1 (35:12):
Maybe, just maybe we're going to be headed into a recession.
I hope that's not the case. I'm hoping that they
can turn things around. You know. Jerome Powell, his quote
about a larger half point cut wasn't in his words,
not mine. Something we're thinking about right now, is what
he said on Wednesday. I guarantee you their thinking about

(35:34):
it just two three days later. Absolutely, they have to
be thinking about it. The labor market is cooling down.
The number of jobs over the last few months is blatant.
The revised jobs forecast for the previous two months was
a net loss of another twenty nine thousand jobs. So

(35:55):
you have not as many people going to work now.
With that being said in defense of the jobs report,
and not that we want to rush time by us,
but August jobs report will be a better indicator because
we had Mother Nature. Remember the hurricane in Texas and
how many people were without electricity, how many people couldn't

(36:18):
go to work, especially in the hospitality industry. They were out,
they were filing for unemployment. Well that's built into this
job's report on Friday that week number. So you have,
you know, not as many people getting jobs. You had
a lot of people that were out of work because

(36:38):
of mother nature. And that's why you have to, you know,
be patient and see what August brings us. But I
still think we're in for a cut in September. Whether
it's a point twenty five or a point five zero
percent cut, we're in for a cut in December. And
that cut is is going to be crucial to make

(37:03):
sure that we don't go into a recession. We don't
have a hard land and we keep it as a
soft landing Zach, let me take a quick fifteen second break, folks,
don't go anywhere. One eight hundred eighty two five five
nine four nine. Give us a call. Any questions that
you have. Hello, folks, thanks for letting me take that

(37:33):
quick break. The phone lines are open. Give me a
call so I don't have to take a break. To
what the whistle is? They say, one eight hundred eighty
two five five nine four nine, Any questions whatsoever? One
eight hundred eighty two five fifty nine forty nine.

Speaker 3 (37:50):
So there you have it. That's my take on the
jobs report is.

Speaker 1 (37:56):
As bad as it was, maybe maybe August will show
that it wasn't as bad as we think it is
because of mother nature and we had that temporary, you know,
blip on the radar screen.

Speaker 3 (38:10):
Although jobs have been.

Speaker 1 (38:11):
Weaker over the last few months, so there is a trend,
and the trend isn't as rosy as it isn't as
optimistic as it's been. But July's week number, you know,
there may be a reason for that. So we'll see
when when we when we get August numbers the first
Friday at September, when we get that report, we'll see

(38:33):
if if August shows that things have turned around. But
I do think you were in for a cut in September,
and a cut is good for the stock market. A
cut means that interest rates go down. A cup means
that mortgage rates come down. A cup means that people
that are saving money and savings accounting bonds, they're not
going to get as much interest. As I said in

(38:54):
the first half of the show, the ten year treasure,
you know, three point eight percent, and not too long
ago it was five percent and more so, if you
were lucky enough to buy one of those US ten
year treasury notes. While back getting five percent, you're guaranteed
five percent for the next ten years, and that bond

(39:17):
is worth a lot of money to you right now.
Not only are you getting five percent, but if you
were to sell that bond, you'd be paid a premium
for it, because right now, if you buy a new
ten year bond, you're getting three point eight percent. Nowhere
near is profitable is the five percent that you could
have bought. And that's why you can't mess around when

(39:39):
it comes to your savings. That's why I always say,
ladder a bond portfolio or a CD portfolio, don't try
to guess. I said often on the show for the
past several months. Actually I haven't been on for three
or four months, so the months before that, I was

(40:00):
teaching investors to ladder a portfolio. Don't get sucked in
with short term interest rates being higher than long term
interest rates. You know, people would always say, well, why,
you know, why should I buy a tenure bond when
I can make more money buying a six month bond. Well,

(40:20):
the reason is because when that's six months or moe
year bond comes due, where will interest rates be and
right now. If you you know, if you buy a
six month bond today, you're going to get about four
point eight percent. If you buy a ten year bond,
you're going to get three point eight percent. The problem
is when that six month bonb comes due, where will

(40:42):
interest rates be? If interest rates are still in the
three percent range, well, you're going to be renewing at
a lower rate. So you want a ladder a portfolio.
A one year or a two year, a five year,
or a seven year or ten year, and when each
one of those come due, you just buy a new bond.
Take the thinking out of the equation that I can

(41:03):
assure you. For those that buy individual bonds or CDs,
that is the best way to ladder a portfolio. Fixed
income portfolio the best way to ladder of portfolio. Now,
some people buy stocks with divinants, and dividends are a
beautiful thing. If you look over the last ninety years,

(41:24):
the average return in the stock market was ten percent,
and I think three percent of that was made up
because of dividends. Dividends is a beautiful thing. Right now,
the smp I think is yielding just under two percent
dividend yield. So even when you buy the S and
P five hundred index. You're getting some dividends. There's nothing

(41:45):
wrong with dividends. It's a beautiful thing. They get paid dividends. Now,
some people buy stocks based just on the dividends. And
at the beginning of the year, if you looked at Walgreens,
you were getting at the beginning of the year, you
were getting a seven point three.

Speaker 3 (42:03):
Five percent dividend.

Speaker 1 (42:06):
Now that's pretty rich, right, Even when the US ten
year treasury was yielding five percent, you could buy Walgreens
to get seven point three five percent dividend yield. Today
the dividend yield is about eight and a half percent.
Sounds great, right, But if you buy stocks just because

(42:26):
of dividends, guess what your total return? And this is
what is important, folks. You can't when you buy an investment,
you can't buy it just for the dividend. You have
to look at the total return. Will that investment make
money or lose money? So, if you bought Walgreens at
the beginning of the year for that seven percent dividend,

(42:48):
today it's down fifty five percent. The SMP's up twelve
percent year today Walgreens is down fifty five percent. If
you bought a company like Cisco a percent dividend yield
at the beginning of the year, today it's down six percent.
If you bought McDonald's for a two point twenty five
percent dividend yield, sounds good, but the total return year

(43:13):
to date is.

Speaker 3 (43:13):
Down almost ten percent.

Speaker 1 (43:16):
You get the picture. Walmart's same thing, down fifty five percent.
These are great companies. These are companies that are in
the Dow, but they're they're they're losing money. So when
you put together a portfolio, it's not all just about dividends,
or if you're buying bond funds, it's not about getting
the highest interest that you can get. Because if go

(43:40):
back to that ten year treasure note, I feel it's
the safest paper in the world. So if that is
yielding three point eight percent, let's just round it off
to four percent. If that's yielding four percent and you're
getting paid more than four percent, that means you're taking
on some risk. Now it's up to you to decide
where is that risk coming from?

Speaker 3 (43:59):
Is a credit QUI what's that risk?

Speaker 1 (44:02):
So if I can teach you anything today, don't buy
a stock or a fixed income investment just because of
dibdend or interest yields. You got to read more into it.
You gotta be careful. If the S and P is
up twelve percent, I don't care that Walgreens was yielding
seven percent. You're down fifty five percent in value. There's

(44:23):
a local bank that used to always tell the same thing, Oh,
we got a great dividend, but they would lose money
year in, year out. You don't want to lose money.
Total return is what you're being paid in dividend or
interest and whether or not that holding is going to
make money or lose money. That's what total return is about.

(44:45):
So you got to be real careful when structuring a
portfolio and putting a portfolio together. I love dividends, but
we would not recommend that you go out and buy
the highest yielding dibdend that you can not, as as
confirmed by the price of Walmart being down fifty five
percent even today, you know wal or not Walmart Walgreens,

(45:10):
although Walmart's down as well. Walmart is down fifty five
percent as well. The dividend isn't as high, but Walgreens,
you know today the dividend yield is almost nine percent.

Speaker 3 (45:23):
But where's I said it yesterday.

Speaker 1 (45:26):
I've been in some drug stores lately and you know,
the shelves are bare.

Speaker 3 (45:31):
There's nothing.

Speaker 1 (45:34):
You can't get anything, no wonder companies like Amazon and
home delivery services from Walmart and Target and so forth.
Y're just thriving because you go in you can't. You know,
you go into these stores, there's nothing on the shelves. Now,
shame on us, right this country is allowed all the
looting and everything, so these stores have to do.

Speaker 3 (45:56):
What they have to do.

Speaker 1 (45:57):
Folks, we're coming up to the end of the show,
and I think it's coming up quicker than I think
you're listening to. Let's Talk Money, brought to you by
Bouchet Financial Group, where we help our clients prioritize their
health while we manage their wealth for life, something that
we're very proud of. As you know, when you have

(46:18):
your health, you have everything. When you have your loved one,
you're really pretty fortunate. And if financially you can make
it happen, then folks, don't take it, don't mess around,
because that means that you're in a good place. If
you have your health, you have your loved one, and

(46:38):
financially you can you can retire and do things that
you want to do. Don't mess around, take advantage of
that and make the best of it. I truly appreciate
you tuning in this weekend. It was good to be
back with you. Come back next Saturday at ten, Sunday
at eight. Have a great day, folks,