The Fagan Financial Report

July 13th, 2025. 

Episode Transcript

Speaker 1 (00:00):
Good morning, and welcome to the Capitol District's Money and
Investment Program. You're listening to the Fagan Financial Report. I'm
Dennis Fagan, sitting here with my son Aaron, as I
have been for thirty some years and you have been
for by the past eleven fourteen years.

Speaker 2 (00:14):
Yeah, I've been here at the beginning of fourteen years.

Speaker 1 (00:16):
He's giving us coffee. Uncle Chris and I. Yeah, you know,
running errands.

Speaker 2 (00:20):
Fantasy football, fantasy basketball, fantasy baseball.

Speaker 1 (00:23):
Uncle Chris was big into the I'm not going to
say fantasy fantasies, but he was big into you know, baseball,
fantasy baseball, fantasy football.

Speaker 2 (00:33):
He kept us on chantasy baseball. Really, he was quite
the fantasy baseball guy.

Speaker 1 (00:38):
The Keynolts is almost like he's like Uncle Christen.

Speaker 2 (00:41):
So yeah, it's like, yeah, you know, it's not a
reincarnation of Uncle Chris, Buddy, he is. He's a lot
like he is a lot like Uncle Chris.

Speaker 1 (00:49):
Knows his stuff sports, he knows his stuff.

Speaker 2 (00:51):
Yeah he does.

Speaker 1 (00:52):
And they just passed.

Speaker 2 (00:53):
They enjoyed a little bit more too.

Speaker 1 (00:55):
It keeps us on our toes.

Speaker 2 (00:56):
Yeah, with the Mats, Yankees, Giants. So he'll come walcome
watch more sports now.

Speaker 1 (01:03):
Yeah, me too. He'll come walk in through the dark.
What about that play? I'm like, I've never seen it.

Speaker 2 (01:08):
Not much sports going on right now though.

Speaker 1 (01:10):
No. I got the All Star Game coming up.

Speaker 2 (01:12):
We're going to the Mets game next Saturday. Wait, me too,
are bringing Jude my Son to his first Mets game.

Speaker 1 (01:17):
That'll be exciting.

Speaker 2 (01:18):
Lifelong commitment to misery that we've included him in on.
That will start soon.

Speaker 1 (01:24):
Nineteen eighty six was our last World Series championship. Darling's
in the booth right now with Gary Cohen and the
and also Keith r. Nandez was on that team.

Speaker 2 (01:35):
Darryl Strawberry fun team, the white good fun team to
hang out with.

Speaker 1 (01:40):
Yeah, Lenny Dykster was on that team. I believe, Uh,
Darryl Strawberry.

Speaker 2 (01:47):
Yeah, I wasn't born yet, No, you weren't. Eighty nine.
Who you are? The Giants one?

Speaker 1 (01:53):
I think of the other outfielders know the shortstop and
he's Howard Johnson I think was back then, Oh Joe.

Speaker 2 (02:04):
Glory days.

Speaker 1 (02:05):
Those were the glory days. But you know, we'll see
what happens. You know, we're one and a half games out.
It's Friday morning. Friday morning at just about eight o'clock
step by the Orioles, just a doubleheader. We won. We
won the first game, we came back and won. So
we'll see where it goes. A lot of talk, you know,
the kind of the dog days of summer. The market
closed at a record high yesterday. Yeah, the S and P,
the US Total Market Index, and then n AS that

(02:27):
composite all closed their record highs on Thursday. Big coins
back a little bit. Big Coins at all time highs.

Speaker 2 (02:33):
When it was at one eighteen five when we started
the show. So I think that's up from about one
thirteen at the close of the day on Thursday. So,
you know, a lot of times when things break out,
there's no you know, there's no technical analysis anymore, and
it goes the you know, the bottoms and the tops,
the barriers, teacups, blah blah blah. So you know, you

(02:55):
can you see a push higher. So maybe a little
bit of a fomo trade, but you know, Mark, it's
hanging in there. Market's doing good. Economies hanging in their
economy is doing good. So uh, it's it's been it's
been a nice summer from a stock market point of
view so far.

Speaker 1 (03:10):
Right, yes, and are we on the are we in
the air right now? We're on the air right now.
So I will say that President Trump's style is not
my style. President I have I have a hard time
liking him. But he's made some good moves lately, you
know what I mean. He's you know, and we'll see

(03:30):
how long. We'll see if it lasts. The stock market
thinks the things he's doing is good. I think deregulation,
focusing on that is good, you know.

Speaker 2 (03:39):
I think, yeah, I think we we swing. We swing
so wide, and I think we swung too wide with
regulation after two thousand and eight. So and I think
it's a I think some deregulation is healthy for the economy.

Speaker 1 (03:53):
And that's what the market brought into. Uh, that's why
he was part of the reason why I was what
to that. And I think immigration and so so we'll see.
You know, he focused too much on the tariffs earlier.
Now I think he's you know, you know, backpedaling a
little bit on the tariffs. He you know, he blusters.
You know, we hike a lot. So I watched these
hiking videos and you know, I was watching a video

(04:15):
of a guy going by in his canoe. Uh, and
there was a bear there with the bear cubs and
and and the mother bear would be like, he make
big logan noise puff literally puff puff puff, and he
takes some steps towards the canoe. The guy that I'm
glad I'm in the canoe. But I think Trump's you know,
the the initial tariff was like, oh my gosh, this
this means business. And it does mean business. But I

(04:37):
think a lot of his you know, tactical things. It's like,
you know, strategizing negotiation. We'll see, we'll see where it
plays out. The problem is other countries are negotiating as well,
so you know, and they've got constituents that they've got
to protect, right, you know.

Speaker 2 (04:52):
And ye I think we saw recently, you know, tourist
and slock him apollow asset management. My computers down, so
I don't have it in front of me. But he
came out with the chart this week about how you know,
I think we've gone from about twelve twelve percent of
trade with China. You know, we've been about twelve percent
down to nine since the beginning of the year. So
you know, they're you're seeing China, you know, trade a

(05:13):
little bit more with you know, obviously Russia, but Europe
as well South America. So you're seeing, you know, you're
seeing some I guess geo geoeconomies, global economies shift a
little bit, and you're seeing a shifting of global economies.
I think, I think that I agree with you. I
think some things that we've seen recently could be good
for the American economy. What makes me a little bit

(05:38):
not nervous, but I think whenever you open the door
to to new things happening, whether it be deregulation, whether
it be terroriffs, you know they're unforeseen, things can happen.
So I think, you know, I'm still very confident in
the US economy. You know, the jobs are strong, the
economy is strong, inflation is tamed. But I think when

(05:59):
we will for the door from for a black Swan
event or something like that to happen, I think you
should always be cautious. And I think, you know, I
think you should just always be cautious and investing to
begin with. You know, I think, you know, at a
time like this, when when you see all time highs,
when you see bitcoin go to one thirteen to one
eighteen in a day, you know you're seeing we're seeing
more trades on our side from clients and and riskier assets,

(06:20):
and you know those usually tend those tend to be
signs of where where you where you should start to
be a little bit more cautious.

Speaker 1 (06:27):
Yeah, over exuberant. Yeah, you know, but we said in
the last three or four weeks. You know, it's it's surprised.
I'd be surprised if the market breaks out from here,
but I'd also be surprised if it goes down a
lot from here. You know, it seems to be in
in in decent shape and that and you know you
go from there. Now, just segueing into that, we talk

(06:48):
about the US economy. Uh, we'll spend the first time
if Jamie Diamond had some things to talk about about tariffs.
We will get into Nvidia, a little bit more, a
bitcoin and a few other things, the US government taking
a stake in the rare materials company MP Materials, and
we'll go from there. But I do want to start
off with just a few minutes ago, Jamie Diamond has

(07:10):
a blunt message for Europe. You're losing. And he was
in Ireland on Thursday, which you know now it's Friday morning,
as I mentioned, talking about europe competitiveness, and he says
you're losing, He said of the European competitiveness with the

(07:30):
US and Asia in comments reported by the Financial Times,
Europe has gone from ninety percent US GDP. So you know,
oursp GDP is thirty trillion or whatever. They were ninety
percent of that. Now they're sixty five percent of US
GDP over ten or fifteen years. So our GDP has
grown substantially more than Europe' has grown. As We've got

(07:51):
this huge, strong market and our companies are big and successful,
have huge kinds of scale that are global. You have that,
but less and less, Diamond said on and I think
that shouldn't come as a shock to our listeners here,
nor to the to the his audience in Europe. And

(08:11):
and again just referring back to President Trump, I think
he's trying to continue to, you know, accentuate the success
of American companies around the world. But I think he's
also trying to prevent going in the European direction, which
has really hurt their competitiveness around the world with a
lot of regulation where they where they focus on, you know,

(08:35):
they don't focus on the competitives, of their competitiveness, of
their technological leaders around the world. They focus more on
you know, the consumer first and then the companies, whereas
we tend to focus on, uh, you know, maintaining the
competitiveness of our companies and sometimes at the expense of
you know, the American consumer. So I think Trumps trying
to bring bring Yes, he's trying to bring manufacturing home,

(08:58):
but he's also trying to, you know, make sure that
we maintain the competitive that I think that's gonna be
a hard to balance.

Speaker 2 (09:04):
Right And I think, you know, you're just kind of
thinking off the top of my head, you know that
that is the best case scenario, right is you know,
we we don't decrease innovation, we continue to innovate, but
at the same time bring jobs back home. You know,
I think it'll it's it's hard to do that, especially
with you know, not having inflation come to the table.
But you know, I think that's it's it's kind of

(09:25):
a hefty project he's taking on, you know, But quite candidly,
you know, there's times that I'm like, this could work
from a purely you know, economic standpoint, it.

Speaker 1 (09:37):
Could well, you know, I think two months ago, I
was worried about our relationships with our allies, and I
still am. I'm very worried about that over the intermediate term.

Speaker 2 (09:48):
And long term really too. You know what happens ten
to fifteen years from now.

Speaker 1 (09:53):
A mercantilistic type of approach then advocates our responsibility to
the rest of the world. Then it also sets everyone
up on their own when with and without those geopolitical ties,
you know, then there's you mentioned early, like a black
swan of it, and you leave more room for you know, uh,

(10:16):
I guess you know, friction be it military and otherwise
between between countries because the ties aren't there, you know,
tires that have come out of World War two. So
so so that's the risk. But right now the market's
ignoring that risk. It's ignoring the budget. You know, the
the new tax packages just went through and it's somewhat

(10:36):
uh you know, increases the deficit. It's it's ignoring that,
uh so, and it's ignoring uh, it's ignoring tariffs.

Speaker 2 (10:45):
Yeah, you know what we talk about the stock market,
and it is a forward looking mechanism, right forward looking
six months to nine months usually. But I think we
you know, I think you have to continue to be
data dependent and the data right now looks pretty good.

Speaker 1 (11:02):
Well, and say what you want right if you know,
you know, and I look, you know, say what you want.
The market is being pretty rational, you know. And this
is not to get into our performance, although I'd love to,
because it's been a really good year. But I think
where we've done a good job is tempering enthusiasm and

(11:23):
also keeping an eye out for keeping the foundational the
foundation of our our thesis. And correct me if I'm wrong,
because you do a lot of our training. But together
we formulate policy and now with Doug passing that text
test to'll have input in that as advisor, but for
now it's okay. We also look so so I think

(11:47):
that foundation. Our largest holdings are Microsoft, Alphabet, Nvidia, pallenteer
Apple companies like that. So those are some of our
larger holdings and that's they have served us well over
the years and over the over the last decade and
a half. But we always have our eyes and ears
open for other areas. So I think it's it's some

(12:11):
of the trades we've seen lately there like three M
seems to be breaking out. Uh Bitcoin, Yeah, it's up.
But it's it's when you look at there there, and
I know you haven't problems with your computer, but when
you look at their u they're there, they're they're the
technical analysis of the bigcoin.

Speaker 2 (12:28):
It's very rational, and you're seeing a lot of you know,
you're seeing a lot of les set rational. You know,
I think that you don't want to take too much.
You know, I wouldn't take charts too seriously, but you
know I would take all time highs too seriously. I
would take a lot of these, you would take it seriously.
I would take fundamental analysis pretty seriously too. And you know,
you look at a lot of these large tech, large

(12:50):
cap tech companies and they're still in very good shape fundamentally.
You know, they're not that expensive, you know historically and
they're historically expensive over the last one hundred years. Maybe
of the top ten companies, but you know, the top
ten companies forty years ago, where the gees of the
world that just had a completely different business model, didn't
have the sales growth, the margins, you know, revenue growth

(13:11):
that we have right.

Speaker 1 (13:11):
Now, revenue per employee.

Speaker 2 (13:13):
Yeah, yeah, yeah. So I think that when it's easy
to be like, okay, you know, large cap tech has
done good. What's next? But you know, if you actually
pop up those large cap tech companies on your screen
and block out their name and just look at their fundamentals,
you're like, Okay, these actually still look pretty good. You know,
I think what's completely different now than let's say twenty thirty,

(13:37):
forty fifty years ago, is you know, the fact that
large cap tech companies have their foot in the door
in the past and in the future. You know, you're
trying to look for the you know, next ten next,
you know, next biggest companies, next biggest companies in the world,
and then you look at, hey, what sectors do you
think are going to be continue to grow and continue
to grow and all and some of these companies have

(13:57):
have have revenue in those you know, new sectors, whether
it be cloud, whether it be you know, artificial intelligence
and and and and and they're already uh getting revenue
from from these sectors. So I think you have to, yeah,
take it day by day, week by week, month by month,
continue to evaluate these companies. You know, I have no
problem with trimming companies, but you know, if I still

(14:20):
think they really weren't a place in your portfolio.

Speaker 1 (14:25):
But but that's you know, that's where the rest of
the world comes in. That's where this this the teriff
policies could backfire. On one hand, you know, there's always
two hands, and that's what they say why economists have
two hands, because they always say, one hand, this on
the other hand, that and this is this is not
about the economy. But that is what they always people
always say about economists. But that's where that the risk

(14:48):
to the to the technology comes in. On one hand,
you're saying, you list all the good things about uh,
the technology, techno technology companies. You also back that up
with what Jamie diamond and said in Ireland about European
GDP going from ninety percent of US GDP to is
sixty five percent? I think, is it over in front
of in front of me anymore? And then you have

(15:09):
the other side, which is, okay, we don't want to
blow our relationships with all these other countries. Now if
President Trump is you know, putting the screws to these
other countries, they're basically saying to Canada, look, here's your
tariffs that go into effect on August first. Now someone
might say, well, look, you know, it's just a strategy.
You know, it's just a play and negotiating tactic, and
it very well may be. But President Trump is saying

(15:31):
thirty five percent tariffs on August first, and if you retaliate,
they'll go higher. And I think that leaves that puts
other countries into a corner. And I'm not sure that
that is going to be beneficial. And we just said
it earlier for our companies in the intermediate, long term.
And then I went on to say, but we're ignoring
that right now. You know, you're much ignoring it.

Speaker 2 (15:52):
You know, just kind of thinking off the top of
my head right now, and we you know, discussed it
a little bit off air. But you know, but I
also think that the news and investors, especially at the
beginning of this, almost ignored the fact that we're seventy
percent service based economy now. So we're focused on these tariffs,
focused on these tariffs, and I think I think, yes,
they are important. You know, I do not agree with

(16:14):
high tariffs, tariffs on other countries. But you know, the
last time we had tariffs like this were you know,
let's say, with a Spoon Hauly Act, we were such
more of a manufacturing economy. You know, are the companies
that lead this S and P five hundred. You know,
top ten companies are forty percent of the S and
P forty percent of the SMP. Most of these are
service based companies. They're kind of just flying under the

(16:34):
radar right now from a tariff standpoint. So, you know,
I think you have to the tear the stock market
is not the economy, and I think that you're seeing
that divergence a little bit right now and that yeah,
oh no, you know, tariffs. Tariffs could cause inflation, They
could cause a lot of you know, bad things. You know,
maybe some geopolitical tensions. But a lot of these large companies,

(16:55):
you know, outside of Apple, Apple makes a lot of
revenue in China and also has a lot more hardware
kind of flying under the radar and you know, still
doing very well they are.

Speaker 1 (17:04):
Yeah, and then I think you'll probably see that in
two or three weeks with their quarterly earnings. You know,
one of the things too when you mentioned China, but
you know, Apple has kind of been the crosshairs of
the Trump administration. H During the previous Trump administration from
sixteen to twenty, Apple relocated a lot of its production
from China, to Vietnam. Now the Trump administration, levied, I

(17:24):
believe it was. I think I think it's forty twenty
five or forty five percent tariff on Vietnam. And what
they're trying to do is to get at Vietnam. But
more importantly they're trying to get it China transshipping through Vietnam.
So if we have high tariffs against China, China would
ship through Vietnam. I think that's what's what you're also
seeing with President Trump's tariffs on Brazil, because China would

(17:48):
ship to the US via Brazil to avoid some tariffs
as well. So President Trump is going about that in very.

Speaker 2 (17:56):
I disagree with this, you know, I disagree with the tactic.
You know, in May, you know I'm throwing that. But
with the twenty five percent tear for more. He told
Tim Cook that you know, I don't want to be
I don't want you building in India. And you know,
I personally don't think that tarffing specific companies is company
companies is the smartest thing to do. You know, you

(18:17):
can't pick and choose what companies do well and what
companies don't do well. Right, It's it's just not right.

Speaker 1 (18:22):
Market the market.

Speaker 2 (18:24):
Say what you want about this administration, but that that's
that that breeds corruption, right, you know, picking and choosing
what industries and what companies you especially what companies can
do well and what companies can't do well well.

Speaker 1 (18:35):
We talked a little bit about that earlier. We can
we can move on to that, but he didn't want to. Well,
it's a whole different thing on Jamie Diamond about the
market's tariff complacency. But the Defense Department is taking a
substantial stake in MP Materials. This is, according to Barns,
the worst's largest rare minerals materials mining company, to hasten
the building of the domestic rare with magnet supply chain

(18:58):
and cut its US dependency in China. Ampy Materials was
up fifty one percent on Thursday. A lot of when
when you talk about rare earth, you talk about defense
technological systems, you talk about.

Speaker 2 (19:14):
Navigation system that automobiles fer jazz zones, you know, so
a lot of different components.

Speaker 1 (19:22):
China, China the global leader in mining and processing rare
Earth's mind about two hundred and seventy thousand metric tons
of the three hundred and ninety thousand metric tons of
rare earth oxides. We did not wrat rare earth mind
in the US because it's a relatively dirty process. But

(19:42):
so China basically controls that market. Uh so two seventy
out of three to ninety eight. Yeah, you know, they
say about eighty five set of global refining capacity.

Speaker 2 (19:53):
Like, what do we even have any capeit?

Speaker 1 (19:56):
Right? I don't know.

Speaker 2 (19:57):
I don't know much about the rare earth mineral, the
mining industry, the mining of it, So I don't know,
you know, even buying. Do we have the capacity to
to rEFInd these rare earth minerals.

Speaker 1 (20:13):
Well, well, we're gonna have to get there, because that's
that's China's trump card. Really, when you think about it,
they're gonna be like, all right, we're gonna we're gonna
stop sending rare to you. They've got to be careful though,
I mean everyone, you know, countries rely on the US
for a lot of a lot of critical components to
their economy. Namely, they are are consumer, and I think

(20:34):
they've got no nobody wants to you know, uh anger
the US consumer. And so I think cutting off rare
earth to the US would be the China's long term detriment.
But if you play too hard ball with them, uh,
you may leave them no choice. But I think that
is why to prevent that, to reduce the impact of

(20:56):
something like that is why why this happened. You know,
when I you and I went back and forth a
little bit off the air on this earlier today, that
that when what you were saying earlier does make sense.
It does breed corruption and inefficiencies with the with the
government taking stakes in publicly traded US companies.

Speaker 2 (21:16):
You saw the same thing with US steel, the government
buying fifty one percent or they were the ability to
buy uh more and more of US steel, right, So
that is something you know, Yeah, I don't. I don't
agree with the government government intervention in private companies. That's uh,
that's usually not the most capitalistic.

Speaker 1 (21:37):
Yeah, you know so, but they've got to, you know,
the government's gotta get these get this industry off off
the match.

Speaker 2 (21:46):
Yes, like you know, and I I agree with that.
You know, I agree with the fact that, you know,
the less reliant on China we can be, the better.
It's the way of doing it. But is there any
other way to do it too? That's kind of you know,
how it's like, yeah, so I don't know.

Speaker 1 (22:03):
And I think we used to do it in conjunction
with our allies. And I think that's the other thing
too that I'm you know that that regular listeners listeners
to the show know that, you know, I'm concerned about
the relationship we have with our allies. What else we
got out of it? So I guess finally, let's close
out the first hour with bitcoin. We do own a
piece of bitcoin or in ethereum for our clients.

Speaker 2 (22:27):
It's usually a conversation that we have with the client,
brought upon by the client.

Speaker 1 (22:32):
But is that ending is the conversation because we have
discretionary authority with our clients. Is is bitcoin and crypto
mooney moving more into the mainstream where we're not having
it regardless of whether we speak with our client. Well,
put it this way. Usually a client would call and
say what do you think about crypto? And then we
get into conversation. I could reach out to the client.

Speaker 2 (22:54):
And say that, yeah, so I'm just using I'm not
on my phone. I know you get but I'm looking
for something that I saw. But would go on, you know,
we can talk about this a little bit after the
break too. But Dan Niles was, Yeah, we only have
a minute left, but you know, we could talk a
little bit more about bitcoin after the break. You know,
if it, if it, if it warnts a place in

(23:14):
someone's portfolio now that it's at all time highs and uh,
you know what we think of the future. And Trump
just said they're gonna launch a cryptocurrency ETF So you know,
crypto is you know, kind of the front and center
of attention right now. And it's interesting on Friday, you
seeing you know, the market back off on news of

(23:34):
tariffs on Canada, but bitcoin's moving higher, so you know,
you're waiting for that divergence between risky equities and and bitcoin.
So that's kind of what I've I've been waiting for anyway.

Speaker 1 (23:46):
Is that, But just about doing the first half right now.
We'll talk a little bit about Apple when we come back.
Investing a lump sum at all time highs, Ben Carlson.
But right now, it's ten thirty on the station depend
upon for News, whether and information. News to K ten
and one of three one w g Y, Good morning,
and welcome back to the second half five of the
Capitol District's Money and Investment program. You're listening to the
Fagan Financial Report. Aaron Fagan and Dennis Fagan sitting here

(24:09):
as we do every Sunday morning. Right now, it's actually
Friday morning recording this. So don't I'm sitting here getting
ready for the show. You're ready, I'm like, don't answer,
and they know you start with the three two one
to start the time three two yeah? Yeah, yeah. It's
like I'm like, all right, I'm scrambling, I got my phone,
trying to get my phone up so I can time

(24:30):
the twenty four minutes and fifty seconds.

Speaker 2 (24:33):
Yeah, you're right on time, but four seconds are you right? Right?

Speaker 1 (24:37):
So it's like the three too. I'm like, oh my gosh,
I feel like I'm going to be have to jump
off a bridge or something like that. You know, you're
you are a task master.

Speaker 2 (24:47):
I love the show. It's nice when it's over sometimes.

Speaker 1 (24:50):
Definitely, you know, yeah, gotta get ready for it. So
come as we go into the second half of the year. Yeah,
motor So I don't know, I don't know. They probably
wonder what's going on. We are right along Route seven
out a bit in Brunswick, across from the Walmart. We
have our open building, own parking lot easy to get to.

(25:12):
So if you want directionally very easy to get to,
come over the College City Bridge and keep going about
three or four miles. As Uncle Chris would say, bring
on coffee if you're going stop it chocolate. Yeah. Yeah,
But you know, we've been in business since nineteen so
it'll be nineteen eighty nine, so this will be thirty
six years in August. August is something I'll take I'll

(25:33):
take a look at that. So thirty six years. Been
doing the radio show since the early nineties, and you know,
we portfolio managers, retirement planning, sol security planning. It all
kind of goes together. At the You basically put all
of the information into a funnel. Personal information, maybe a
little bit of if there's a health issue that we
won't want to know that just for planning purposes.

Speaker 2 (25:55):
Cash flow, yeah, taxes.

Speaker 1 (25:57):
Put d put all that into a fun and depending
upon you got a kind of four different areas of
concern really one is your investments, two is your state,
you know, three is your health, four is taxes, you know,
and then you could subgroups would be you know, you know, uh,
the sources of income and retirement. You know, what's the

(26:20):
best way asset allocation. You know, it's all, but you know,
and then differ at different points in your life, different
areas should be stressed.

Speaker 2 (26:27):
Yeah, and you know, I was kind of talking about
this with you know, a prospective client and a friend
really who works in you know, kind of the same industry,
a little bit different. But I think when you do
financial planning and if let's say, like you're a novice
of financial planning and or you think it's or you
take some interest in it and you do it yourself.

(26:48):
And I think a lot of other planners do this,
especially if they run a big firm and you know
they have they have very few buckets when every situation
is different. So I think a lot of times people
get lumped into a specific bucket just based on, you know,
two of those four things that you mentioned, when you

(27:09):
really need to take into account all of those things.
You know, just because your X age doesn't mean you
should have ex allocation. You know, what about your cash flow?
What about your health, what about your longevity, what about
other sorts of income you have? Things like that, your
propensity to spend, your propensity for risk, things like that,
So you know, I that's you know, I don't know.
That's kind of just what I was thinking off the

(27:31):
top of my mind.

Speaker 1 (27:31):
Well, the other thing too is like gonna and I
don't know like I think that when you when you
talk about different buckets, even if there are four buckets
for everybody, you know, those buckets are you know, it
is probably not going to come out right. They're your buckets.
They are buckets that have to be you know, personalized.

(27:55):
They are buckets that have to be you know, kind
of help you migrate through your life. And their buckets
that maybe the waiting is different over time. Just because you're,
like you were saying, you're you're sixty two, doesn't mean
you have X percent in this bucket, you know, or
whatever the investment bucket. And let's say your health changes,
well then different you should you should address accentuate a

(28:19):
different part of of of your financial plan, maybe the
estate part, maybe the long term care part, and and
you know that that should all be on the radar
of your advisor, but different things come to the front burner.
The other thing, too, is from from our perspective, you know,
we can't keep track of those changes, you know, without

(28:41):
some input from the client. Really, you know, so if
you're a client and you're listening to this. Please, you know,
if you haven't met with us in a while, and
meet with us, you know, we send out you know,
we send out two pieces of information a week. You know,
one is our snapshot that goes out Sunday morning. The
second is a chart talk that goes out Wednesday. Both
kind of pertain to the financial markets and your investments.

(29:02):
You know. Certainly we meet with our clients, so we
have we have their financial situation. But you know, if
it's been a while, you know, if we haven't reached
out to you feel, you know, reach out to us.
You know, if you're in that window of retirement fifty
five to sixty five and you're or fifty to sixty five,
whatever the case may be, and you haven't retired, you know,
come on in. You know, we'll put together a financial

(29:25):
projection for your retirement projection that takes all these issues
into consideration. Anyway, let's move on to beyond the news
from MFS. A couple of things came came. A couple
of things were on here that I thought was interesting.
Oh oh, I want to tell you though, I harvested
all my garlic last night.

Speaker 2 (29:41):
I picked three zucchini last night.

Speaker 1 (29:43):
You're right, they almost grow overnight.

Speaker 2 (29:46):
It's insane, you know. I got back, we went up
to camp and got back Sunday. I looked at the zucchini.
They were not ready to harvest, and last night harvested.
If you want a zucchini, I have, I do. I
got over zucchini last year. You were over like zucchini plans.
There was a nuclear war, there would still be zucchini.

(30:07):
We'd all be zucchini.

Speaker 1 (30:09):
Now I had. I have like it's called a zephyr squash.
Did you see them up a camp? They're yellow.

Speaker 2 (30:16):
I didn't thought it was a banana.

Speaker 1 (30:18):
I brought it. There was a They're mostly yellow with
green at the bottom. But they have a pretty pretty
definitive line where they where they don't just kind of
blend into green. They have almost like a line where
the yellow turns the green. But I Nick came over
last night just to hang. You know. We had a
couple of beers or whatever, and you took three home,
which was kind of from like take them home. I know,
and some time, but I but I harvested. I have this.

(30:41):
I will show you. I took a picture of it.
It's got I have it hanging in the garage. I
didn't have I didn't have great luck with it. I
didn't plant it deep enough the garland.

Speaker 2 (30:50):
How many how many?

Speaker 1 (30:52):
I probably got twenty twenty heads bulbs, probably ten ten
to fifteen that I'm kind of not proud of, but thought, okay,
that's okay, But some of them are still small. But
I watched the video last night after or before they
harvested them, and it talked about planting them, you know,
taking care of them, and then harvesting them and obviously

(31:14):
curing them at the end. But I think I didn't
plant them deep enough. So next year I'm gonna plant
them deep and give them their own bed. But anyways,
what are you gonna do with them? Like, I mean,
you must you can keep them whole year, So you
gotta let them cure or dry out for a while,
and that can take anywhere from two to four weeks.

Speaker 2 (31:28):
So it's regular grog, it's not spring garlic. No, you
can't use the bulbs right now.

Speaker 1 (31:33):
No, well you can, but you really should let them
kind of kind of dry out a little bit, right
you know. Anyways, Can I have a few, Yeah, I
can have a little trade. You know, the crappy ones.
Thank you, Jude Nazme can have the good ones, the
big bulbs.

Speaker 2 (31:46):
He's like, are they they garlic? It's in there, but
he thinks everything smells like garlic. Right now, he sounds
like garley. Do you smell like garlic?

Speaker 1 (31:55):
All right? So four percent the magic number the first
six months of twenty twenty five. So the S and
P five hundred and the Bloomberg Aggregate Bond INDEXS both
gained over four percent since nineteen ninety. In the four
other years when the stocks and bonds have gained four
percent in the first half, they traded higher in the
second half, all four times, with median gains of twelve

(32:16):
point six percent and four point five percent, respectively. Certainly
four four times is not any type of statistic branching
out a little bit from that, I'm not that surprised
that that happened. Certainly, the stock market up four percent
is not of any surprise to anybody. Maybe some technicians

(32:37):
or strategists might have thought it would go down, but
stock market goes up nine or ten percent over the
course of the average year. So to have it up
four and it actually through yesterday, it was up six point.

Speaker 2 (32:46):
Markets up four percent though, right, you know what it's saying.

Speaker 1 (32:49):
Yeah, so you got to figure if the yield on
the Bloomberg Aggregate bond Index, which includes the income. All right,
So if you were to think, if you were to
say that the average income is four percent, that means
you had stock market bond market appreciation of two percent

(33:12):
and uh and uh income of two percent. So uh am,
I I'm not that surprised interest rates have settled down
a little bit. I'm not that surprise interest rates did
settle down. I think after the president you know talk
the tough talk on tariffs earlier in the year. I
think that that that surprised the market, you know, and

(33:35):
and interest rates you know, did turn up a little bit.
And indeed, as we sit here now, the tenure at
the close of last year was at four fifty seven.
It closed Thursday at four thirty five. So the ten
year is actually the the uh, the the return has

(33:55):
been five percent just on the drop in interest rates.
So his interest rates go down, the value of bonds
go up. So so yeah, that I guess my question
to you is are you are you surprised that it
was that? No? No, I don't think it's that big
news that no.

Speaker 2 (34:10):
Yeah, yeah, you know, I think if you asked me
this last year, I would I would have been a
little surprised. I think it could have been a little
bit higher. But you know, I'm actually surprised that it's
so high. With keeping rates steady, what do you mean,
you know, with with Powell, you know, not cutting, I
think he could have seen some capital gains. But I
think that's just kind of this is just kind of

(34:31):
a sign of you know, I don't know.

Speaker 1 (34:36):
I think it's a normalistation. Yeah, I think, uh. I
think if I would refer back to something we somebody
who we started to talk about in the first half
and will continue a little bit this half, Jamie Diamond,
uh stock race to record highs blah blah blah.

Speaker 2 (34:55):
That this is the best place to be still, is
that what you're.

Speaker 1 (34:59):
Yeah, he's just a pride. He says that the market
is too complacent in regarding tariffs, and I agree with that, and.

Speaker 2 (35:08):
As you know, I agree with it, but but it
is I agree with it. But I don't think this
is something that you know, you know, it's it's actionable.
When it's actionable, we haven't seen any data yet for
it to be action. And I know you you know,
and I know as investing you should probably be proactive.
But if things went like people thought they were going

(35:29):
to go in regards of this, they would have been
selling things in January this year, or May, or February
May when we started, or April when we started talking
about these tariffs to begin with. So you know, I
would be cautious about drawing too many conclusions because, uh,
it's July and we're still not seeing a crazy bump
in inflation. And again, we get numbers month by month

(35:53):
that come out, so I think until we see some
numbers that are really concerning, I wouldn't be too concerned.

Speaker 1 (35:58):
Well, the funny thing about the you know, you're right,
I mean, you should be proactive and skate to where
the puck is going, not to where the puck is,
but I don't think. I don't think anybody knows where
the puck is going. Yeah, And I think for lack
of a better course of action, I think the average
investor is saying, right now, things are pretty good, you know,

(36:19):
And because of that, you know, as you said, inflation
is not rearing, it's it's it's it's ugly head to
any great extent, and there is a concern I think
Judge Jamie Diamond, who's you know. The article also goes
on to say he's wrong about a lot of things,
despite being the CEO of the most the largest bank
in the US and very bright person and someone who
I admire greatly and I know you do as well.

(36:39):
He you know, he makes these statements about a hurricane
coming and economy and this and that and and so
making that.

Speaker 2 (36:46):
I mean, we talked about this probably last summer though
as well. You know, So I don't know what the
market is up since last summer, but I would say,
you know, double dig returns are fifteen percent on the market,
so you know, you make a wrong call at the
wrong time, and eventually, if your calls right, that's great.
But what if the market's ten percent higher and it
pulls back twelve percent, you know, and it just works.

Speaker 1 (37:05):
I don't know, Like, why don't I pilot? I don't.
I don't pay the pilot to make calls. I pay
the pilot to get me where I want to be.
In the safest manner, people pay us to get us,
get them where they want to be, get get a
level of return, commence it with the risks they're taking
in as a prudent manner as possible. And that's what
we do as fiduciaries. And I think when you when

(37:26):
you make wholesale changes to portfolios, and we say this
over and over again, man, you're just asking for trouble
because you've got to be right over and over and
over again if that's you, if that's your investment strategy
or investment policy. And we we have CNBC on every day, man,
you know, eventually you look like a fool, and then
they take you off there and they put somebody else
on who's now looking brilliant, and then they look like.

Speaker 2 (37:45):
A fool, you know, and then you kind of always
well watching. And you know, you asked that question at
the end of the first half about bitcoin, and like,
you know, yeah, we do have some people with bitcoin.
It's usual. It's not a mutual, agreed upon decision. We
do have discretionary authority. But most people that own bitcoin
in their portfolios know they're going to own bitcoin. Or
we've had the conversation of bitcoin, and you know, I
think you asked, does it does bitcoin warn to look here?

(38:08):
And you know, I do think, you know, one to
two percent more in the look. But you know, Dan
Niles was on He's a manager on CNBC and he said,
you know, uh so you know this is paraphrasing a
little bit, but he says, you hear people talk about
how much you would have made if Amazon and Amazon
if you held on the whole time, but they don't
talk about the ninety percent draw downs.

Speaker 1 (38:29):
You know.

Speaker 2 (38:29):
He says, my job is to not lose money. And
I agree with that in some aspects to a certain extent,
but I disagree with that and to a certain extent.
You know, our job is to you know, build a
portfolio for someone that can withstand the ninety five percent
drawdowns that Amazon as. I'm not saying they're going to
have that again, but the drawdowns that that just comes

(38:49):
with investing in the market, right, So you know, although
I do agree that, you know, yeah, maybe a one
two three percent allocation to bitcoin is going to be
something that's going to be more and more common in
people's portfolio. Going out that far in the risk spectrum
is hard when you know a lot of our clients,
we know we got them to the that that retirement
finish line you know, and now it's about getting them

(39:12):
to make sure.

Speaker 1 (39:15):
Yeah, but you know when I so, you know, I
don't know, I do. I would disagree with Dan Niles that,
you know, I think investing investing in anything but CDs
implies losing money. So you know, I think your goal
is to not lose your client's money. I you know,
I think over an extended period, I think there's got
to be a period of time where you where you

(39:38):
say that that's the goal, you know, But what is
not to lose money? You know? But I don't think,
you know, I think, you know, my my goal is
to hitch our horse to the to the to the
stock market when we're taking equity risk and to the
bond market we're taking bond risk, add a little incremental
performance relative to the underlying indices, and accept the shorter

(40:00):
term volatility, knowing that the market is risky and volatile
over the short term but historically neither over there over
the longer term. And and that's what that's what I
think you've got to do. I think, you know, I
think when you look back at Amazon and people say, well,
you know, well Amazon, it did go from one hundred
to five back in two thousand and two thousand and
one and around there maybe those two that two year period,

(40:23):
but that that's a company that survived. I mean, the
landscape is littered with companies that didn't survive that period.
They went from three hundred to zero CMG. I look
at plug power, you know, it's going from fifteen hundred
to under a dollar. You know, that was a darling
back a long time ago. And I think what you
have to avoid, in my opinion, is too much speculation

(40:43):
and companies like that, and even a company like Amazon
back then, you know, is it was very very speculative.
So yes, maybe you're sitting on a good chunk of
money in Amazon now and feeling all feeling all you know, smart.
But uh but but that that should just to beend
that that should that piece of spec that was speculative
at that time, So you should have should have had

(41:06):
speculative dollars there the fact that it worked out, all right,
it worked out for you. But I think if you
look at a portfolio that had Amazon in it in
two thousand, it also had six or seven other companies
that did not make it thrilled you know, yeah, right,
So anyways, the other thing too on the beyond the
news that I wanted to mention is growth pummels value.
The S and P fi've punted growth index gain nearly

(41:27):
nineteen percent in Q two versus a gain of just
two point five percent for the S and P i've
hunted fair value index. The sixteen point three percentage points
about performance for growth versus value in Q two was
the widest for any quarter since at least nineteen ninety five. Now,
I would imagine that.

Speaker 2 (41:43):
It ended on March thirtieth, right, the market bottom down
April ninth, right, So I think, you know, it's a
it's an easily skewed statistic with you know, I guess
the underlying theme if you look at like JP Morgan
Active Value though for the year, it's actually having a
pretty good year. Values actually having a pretty good year.

(42:04):
You have, my computer's not working, but Java is probably
up six percent this year, which is pretty good. You know,
Growth obviously is probably up a little bit more. But
you know, I think that's still a pretty good performance.
I would agree, I think, you know, you know, even
even on the other uh another note, you know, Semis

(42:26):
are up fifty seven point five percent from their close
their April eighth closing low through July second. It's the
largest gain in that period, uh since two thousand. So
you did see quite the rally off of the bottom
for especially growth stocks.

Speaker 1 (42:42):
JP Morgan active value up six point one three percent
and JP Morgan active growth up six point four eight
percent year to date. So and the S and P
five hundred three yesterday is up six point seven eight percent.

Speaker 2 (42:54):
So you're starting to see a little bit of a
divergence with the you know, mag seven you're probably probably
come out with the new acronym in the near future.
But you know, you're seeing some companies do do do
better than others. Now. You know, Apple's not having a
great year. You know, Google's kind of hovering. Microsoft that
is having a pretty good year. I think, maybe not

(43:14):
a pretty good year, but it's had a pretty good
Microsoft's three months. What's Microsoft up here to date? Well,
like you need me, I do need you today usually just.

Speaker 1 (43:23):
Kind of like Microsoft's have nineteen point four three percent
year to date.

Speaker 2 (43:28):
Had a really good last quarter. What's Google doing your
to date?

Speaker 1 (43:35):
What's is Google? G oo g L down six percent
five point us four The other thing too, that's happened
this year, Yeah, The other thing that's happened, I think
on a year to date basis, is that d g
T the global dow et up it's a nineteen hits
it up yere to date, it's a sixteen point seven

(43:56):
four percent, and.

Speaker 2 (43:57):
We have a good amount of we do have. It's
one of our larg arger ETF holdings. I think it's
fifty two to fifty allocation, fifty two percent North America
and the rest a good chunk in Asia, specifically Japan,
and a good chunk in Europe. So you know, that's
having a really good year. You could see some larger ETFs.

Speaker 1 (44:18):
I think though, But but you know, I think so.
And then you have Boeing. Boeing is also gotten some
you know, some news that was positive pertaining to Boeing
a relative to the crash in India. As sad as
that was, it doesn't look like it was a malfunction
of any component of the of the airline. That's it.

(44:39):
And the reason I bring up Boeing, the reason I
bring up three M I think I think you you
were is just referring back to what you said. I
think the market has starting to broaden out a little
bit still with a concentration in technology, communication services, and
consumer discretionary and I don't see that. I think that's
what you're going to be. That's what you're going to

(44:59):
look got Really.

Speaker 2 (45:01):
Everyone wants to look at the next sector, the next sector,
the next sector. But you know, these companies continue to
do well. You know, I think you need a reason
to buy something, you need a reason to sell something
as well, and maybe some tech companies do. But I
do still think we're in that overriding theme of you
know this, you know, technology, artificial intelligence revolution, whatever it
may be. And you know, these companies are going to

(45:25):
have to give me a reason to sell them.

Speaker 1 (45:29):
Me too, other than just you know this is rarely
does a stock market go down purely on valuation.

Speaker 2 (45:36):
Yeah, and if it does, it's probably a more of
a correction correction minor poll.

Speaker 1 (45:40):
Well, speaking of selling things too, an article from Jeff
Mark So I think it was. I think he works
with Kramer in the investing we're trimming our position in
the middling stock to avoid a cardinal sin of investing
and rather than getting into the specific stock, because that's
not the point of why I brought it up. It says, however,

(46:01):
limiting sales to winners. This is what he says, Limiting
sales to winners is a cardinal is a cardinal sin
of managing a portfolio. And I agree with that. If
you never sell the bad ones in a portfolio, you'll
be stuck waiting for a bunch of underperforming stocks to
improve and risk missing out on better opportunities. And I don't,

(46:23):
you know, I I don't. I don't. I don't have
a problem if I if I had a fault myself,
I would think I limit this. I accentuate more selling
the bad ones rather than the good ones, you know,
to kind of cut your to a certain extent. You know,
every stock gets.

Speaker 2 (46:40):
Different mentally fatigued fatigue to to own.

Speaker 1 (46:45):
You know, like but like Occidental petroleum right now, I'm
just you're I'm tired of it. So that's why you've
got to kind of cut through that that fatigue as
you call it, and focus on the fundamentals and technicals
of it. Right But but I I think you don't
and you don't.

Speaker 2 (47:02):
Want to again, you know, we the same thing, you could.
You know, I was thinking of what stock came to
my mind as a m D. You know, we've been
we've been holders for a m D for a while
and the past year or last year specifically, it was
getting fatiguing watching semiconductors do well, but am D not
to the point where it's like, should we just sell
this thing? And then you know, literally probably a week later,

(47:24):
it really started its upward trend. So, you know, I
don't know, I think it's one of those things when
you're when you're investing in stocks, You got it. You
have to, you know, if you want a stock portfolio,
you have to really know them and you have to
always kind of continue to be, you know, reevaluating them.

Speaker 1 (47:39):
And that's what kind of what we do. You know,
you look at you look at our average portfolio has
a combination of individual securities and mutual fund fund slash ETFs.
And for those that don't know it, and ETF is
very similar to a mutual fund. Mutual fund doesn't trade
during the day. It's closing price is prices is adjusted
at the close versus an ETF which trades during the day,
and you can make capital gains a lot a lot

(48:01):
of a lot better and you get real time trading
so more effectively as far as managing capital gains, so
that that would do that. But but I, but I
think you've got to be when you look when you
when you just sell losers, quite often you're lumped in
emotionally with others that are that hit that same crescendo

(48:23):
at the same time, and you gotta be careful with that.
It was twenty second show pretty Yeah, twenty four, forty
twenty four, fifty.

Speaker 2 (48:30):
Twenty four to fifty. Always trying to come up with
content in the summers a little difficult.

Speaker 1 (48:34):
Yeah, give us a call during the week five one, eight, two,
seven ninety four. Check us out on the web at
Faganasset dot com. Like us on Facebook, give us a
call and a set up of time to get together.
Air have a great day and as May's first birthday Tuesday,
take care. Happy birthdays Me,