December 21, 2025 • 40 mins
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Episode Transcript
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Speaker 1 (00:00):
Talks with Terry Sandbold and Blake Sandbold and guys. I
always love these types of shows. Terry, tell everybody what
we got on tap today?
Speaker 2 (00:08):
Well, our show tea show theme for today is year Interview,
What happened, what it means and what comes next? Yeah,
so a market updates day. When the world happened yesterday,
what did it mean to you? Yeah? And what the
world is coming next? Yes, exactly. So we're going to
(00:28):
talk about all those things today, which are very big
topics of course, but a lot of things to think
about as we go and finish off the end of
the year. Here, we'll talk about what has been taking place.
Of course, I would say there was a few things
happening in the world this year to be simple, right,
and twenty twenty six and beyond, I think there's going
(00:50):
to be many, many things taking place. How it will
affect you, How will affect your financial future. That's what
we're going to talk about today. Okay, so many things. Blake,
would you have anything specifically you want to jump into
right there?
Speaker 3 (01:03):
Yeah, you know, I would just say We've got a
lot today. I mean, we're going to go through financial
market themes this year, economic updates, UH market update, and I.
Speaker 4 (01:12):
Know a lot of a lot of people like that.
Speaker 3 (01:13):
We uh, We'll spend a lot of time going through
some sectors themes that we make sense, and still focusing
on the long term.
Speaker 4 (01:20):
And you know, I think that that is such a.
Speaker 3 (01:22):
Thing right now where everyone does get focused so much
on day to day news points, and you know, I
think thinking about long term fundamental change that are happening
is incredibly important because there's there's a lot going on
right now, and you know, I think a lot of
the different UH spending that the Trump administration is looking at,
you know, realignments of geopolitical powers, negotiations, et cetera. There's
(01:47):
a lot of important themes out there to really focus on.
And you know, I'll give a key additional economic point
as a as an example with this. You know, everyone
focuses so much month to month on what the current
jobs report looks like, and you know, I think a
far more important factor is to say, what is the
(02:08):
actual wage growth for one hundred and sixty million people
in the US. Not you know, are we plus or
minus five ten thousand jobs hired on a monthly basis,
So you know, it is looking at the collective narrative together.
So we'll go through a lot of that today, but
maybe we should kick it off talking about some of
the important themes for this year and what's happened. You know,
(02:31):
obviously inflation and interest rate policy has been a key
theme and discussion for a lot of people. You know,
we we finally after a long hiatus, are back in
interest rate cutting mode and have had three three rate cuts,
you know, to pretty much to close out the year.
You know, everyone's gonna be focused on who the FED
(02:52):
pick officially is and what that may mean for direction
next year. But you know, what what inflation actually looks like,
and we'll talk about this a little bit later in
the show is incredibly important right now. And you know,
we had just talked about it before we started. US
Core CPI inflation east of the slowest growth since twenty
(03:15):
twenty one, So it's it is one of those things
where I think there's such a missing narrative out there
behind what inflation actually is. And you know, I think
there's been a lot of discussion around inflation is cooling,
and it's still that mindset of people saying, well, but
my prices aren't going down. That's that's not really what
(03:35):
we're looking at. You know, this buy and large is
a new price level. You know, a deflationary environment for
prices actually going backwards generally is not good. And but
you know, I think slow, lower, stable inflation. I mean,
that's that's really what you want for an economy. Additional
themes this year tariffs. Boy, was that probably a discussion
(04:00):
for a lot of people this year and still will be.
Speaker 1 (04:02):
Can you kind of you know, that word comes in
and out of play in the news right for a
consumer like me? And where are we with it? I
know there's been some court challenges and things like that, like,
can you kind of give us a little bit of
an update?
Speaker 3 (04:16):
Yeah, you know, that is the largest overhang right now,
is it is? You know, I think for a lack
of a better term, at that being litigated at the
Supreme court level and for them discussing around legality around
you know, should they be able to proceed as they
had been set out or or was it appropriate? And
(04:36):
for how Trump unrolled them initially, and you know it's
kind of interesting. So there's a site called polymarket, you know,
where people can go online and bet on nearly anything
and not endorsing this in any way, but it's something
from you know, a research standpoint, you can look for
and say, where is sentiment standing out there on things?
(04:56):
And you know, the current betting odds are essentially a
twenty seven percent probability that they stay in effect, that
the court rules that he could have done it. So
different take on that is, you know, that type of
betty market is largely saying the ruling is going to
go against Trump and the Trump administration. So you know
that that's kind of where I think mindset is starting
(05:19):
to settle for a lot of people. But the question
from there I think will end up being Okay, so
say it can't have happened that way, what does that
mean for things? The market's only expecting two percent probability
that funds get returned from that, So essentially, you know,
I think a take on that is the market is
thinking it gets overturned that way, but likely there's a
(05:42):
different way that they get implemented and Okay.
Speaker 2 (05:45):
It's kind of like it's been done, but don't do
it again type thing.
Speaker 3 (05:48):
It might be that, you know, it might be that,
and you know, I don't know if a rhetoric will
end up being wealth is negotiated, Treasury Secretary, Commerce Secretary,
maybe that's a deemed a val channel.
Speaker 4 (06:00):
Uh, you know, is it attacks or not.
Speaker 3 (06:02):
I think all of those are going to be questions
that are we'll have to see exactly where things settled out.
But the reality is it's it's likely still going to
be an overhang for a number of months, and you know,
I think it's going to take some time for things
he had finalized there. So the the biggest thing that
we're going to be watching is you hope that that
(06:23):
doesn't materially delay companies spending in the US. And you know,
that was part of their you know, incentive essentially as
you looked at they're very incentivized from one big beautiful
bill to have large capital expenditures come through this year,
very very incentivized and next year still but part of
that equation is essentially saying, well, because of tariffs, it's
(06:44):
also additional help and making it marginally more effective to
go here. So what you don't want to see from
an economic standpoint is that spending slow materially next year.
Speaker 4 (06:55):
So we'll be watching that.
Speaker 3 (06:58):
You know, I think it's it's tough to say, but
we're just going to have to keep a close eye
on economic figures to see what's happening there.
Speaker 2 (07:05):
It would be pretty difficult to unravel that too, because
you have agreements from our side, you have agreements from
other countries already, right, and money has exchanged, like you're
talking about Blake on some of those agreements already, So
they don't want to unravel it either. If they're okay
with everything there and some of the tariff balancing, I
guess I would I would just generically call it is
(07:27):
some of the You know, there's certain instances where like
India was charging us up to ninety percent on some
products on cars, and so a fifty thousand dollars car
here would cost ninety five thousand dollars there, so to speak.
So it puts us out of the market in comparison
on price, just to use a simple example. But I
think trying to get it more in a fair and
equal tariff balance. If the US is competing against other
(07:52):
countries to sell our products, to build our products, et cetera,
we have a very big opportunity there By balancing that,
we're going to get more and more business, which will
help our economy as well. So yeah, I hope they
don't try to unravel that at all, because at this
point it's I think it will be very much for
the betterment of the United States to keep keep the
(08:14):
negotiations in place, I guess is one way to phrase it.
Speaker 1 (08:17):
I just always found it interesting in this argument because
it's it's a deeper topic for some people who don't
work in that realm.
Speaker 2 (08:24):
I'll just say, well, it's not everybody's holiday topic either.
Speaker 3 (08:27):
Right, But again, I still don't understand what I but.
Speaker 1 (08:33):
But the thing is though that about it is I
just don't know how anybody could be upset or it
could be at all political to just try to make
it more fair for our own team. You know, that
was what I looked at the whole entire year. It
is like, let's fix this.
Speaker 3 (08:47):
You know what I do think that's the unfortunate part
about how it gets politicized is you know, let's let's
take everything away and say what is actually being incentivized here.
You know, it is domestic growth, It is uh, you know,
controlling your own destiny to an extent. And you know,
I think the large part too, if you think about
(09:07):
large capital expenditures coming that you know, in nearly all
instances leads to productivity growth, and productivity growth essentially means
higher wages, lower inflation. So that's essentially how it translates
over time. So you know, if this works out the
right way, I mean there there could be a sustained
period of positive real wage growth and that's that's the
(09:30):
goal that you want from a lot of this. We'll
see where things settle out. But again it's important to
be data focused.
Speaker 2 (09:38):
Yeah, so interesting, fair and equal. Sounds like a good statement,
doesn't it to me?
Speaker 1 (09:42):
But a well balanced Yes. Do we have a money
Taxmailer of the week this week, gentleman?
Speaker 3 (09:48):
We do, and it is our most recent market commentary,
So we'll give some again in depth thoughts around what
we see is happening in the economy, key factors around that,
as well as market sectors and themes that we're looking
for into twenty twenty six.
Speaker 1 (10:04):
All right, and how do we get that?
Speaker 3 (10:05):
Blake easy as given us a call at nine five
two five four four, two eight three seven. Are going
online to SANDOLDFG dot.
Speaker 1 (10:13):
Com, Old and Blake sampled and we're doing Terry a
year in review. And I absolutely love these shows. I
learned so much every time.
Speaker 2 (10:26):
Yeah, we're stepping back to look at the big financial
themes of the year, what actually mattered, how markets are
digesting it today, and how we how we're thinking about
next year and beyond. So many things to think about.
And there's a lot of activity this year in twenty
twenty five, there's gonna be a lot of activity in
twenty twenty six, a lot of things going on. And
(10:46):
if you're new to our show, Money Talks, we've been
doing our show now almost twenty three years.
Speaker 4 (10:52):
Wow.
Speaker 2 (10:53):
So one thing that we have always wanted to do
on this show is to inform people about what is
going on how to control of your financial future. Having
the information first does matter on how to make the
decision second. So we've been in the business since nineteen
eighty six helping people all across the country in the
areas of wealth management, retirement planning, and cost effective insurances
(11:15):
are the three big topics, but it all blends together
into a holistic plan. But if you're looking for somebody
to help you with your financial future, you can give
us a call at nine five two five four four
two eight three seven or right right in Minnetaka, Minnesota.
If you're listening to a different state, but give us
a call for a no cost financial review, second opinion,
(11:37):
or better yet, how to get ready for twenty twenty
six and beyond. So again our number is nine to
five to two five four four two eight three seven.
So we're talking about what happened, what it means, and
what comes next. So many things ahead here and you
need to be proactive with your financial future, not just reactive.
So that's how we take on helping you as you
(11:58):
go forward. And we you know, it's the time of
the year where maybe your financial plan and financial future
is maybe not at the very top with the holidays
and family, but right after that we're going to hold
you accountable to take care of twenty twenty six cookies.
Right now, you can enjoy the holiday season, but we're
(12:19):
just trying to let you know we are here to
help you as you go into twenty twenty six and beyond.
So a lot of things to talk about today. Right
before the break, we were talking a little bit about
inflation and tariffs. Real good holiday topics, as you know,
but they're very very important pieces for everybody's financial future.
And Blake, if you'd like to take it off from there,
that'd be great.
Speaker 4 (12:39):
Yeah.
Speaker 3 (12:40):
I mean, you know, next key theme that I think
was really important for this year is economic resilience versus
recession fears. And really that was a key theme that
we had coming into twenty twenty five that hopefully is
a number of our listeners and I know our clients recall.
It was really our view that the economy is doing
(13:00):
and will do better than most had expected it to
this year, and largely you saw that. I mean, the
economy is still chugging along. Fourth quarter data is going
to be a little bit choppy, just just with government
shut down.
Speaker 4 (13:11):
For a period of time, kind of a hole in it, a.
Speaker 3 (13:14):
Little hole in it, little hole in some economic data,
permanent hole there. But you know, I think a lot
of signs that we're seeing as some of that spending
is starting to recelerate right again. So hopefully we see
that continuing the first quarter next year and just have
a little bit of a bounce back on that that
That really is our expectation as we stand today. And
(13:36):
you know, there were a lot of concerns around recession
type fears. You know, we were already in a recession
or not, and what did things look like and it
doesn't look like that. And you know, as we look
at different ism numbers for manufacturers and service type side,
there's parts on that that look like they are starting
to accelerate into next year. And you can look at
(13:59):
essentially their inflation surveys as well, and both on the
services as well as the good side, you're seeing their
inflation come down. So you know, I think that does
lead us again to say some of the key initial
inflation pressures that we had are peaking and in the
rearver mirror hopefully so could be some better economic news
(14:20):
for next year.
Speaker 1 (14:21):
Was that a question that you all, Terry and Blake
got from customers throughout the year was around recession and
and and that that, you know, consumer sentiment that we
hear about where people things aren't bad, but people aren't
feeling it. Did you get a lot of that in
your meetings?
Speaker 3 (14:36):
Yeah, you know, I think that was a common question
for a lot of people. I'm saying, you know, with
with where broad based consumer sentiment is, you know, why
are things so dire right now? And it's it's so
interesting though, and you know we've talked about this this year.
If you looked at consumer sentiment broken out by political party.
(14:57):
They told two very different stories, and you know, again
it just shows how politicized things are at this stage.
You know, Republicans largely felt things were moving okay from
an economic standpoints. Democrats, on the other hand, we were
very concerned about some of the economic data. And you know,
(15:19):
that's where we think it's good to take a step back.
I mean, sentiment is really helpful, and that's that's something
that we always spend a lot of time looking at
and thinking where how is the average person psyche and everything,
but still be focused on what the true.
Speaker 4 (15:32):
Data is saying.
Speaker 3 (15:33):
And the true data was saying, well, they're still spending.
So you know, things aren't aren't necessarily that dire. There's
there's always going to be risks out there and things
that you try to avoid in the markets and economy.
But it's it's important again not to just focus on
one data point, but focus on the underlying, overall all narrative.
Speaker 2 (15:55):
And that's when the proactive money management comes in a
lot of times too, looking at what sectors of the
market are doing much better than others. And there were
some home runs by certain parts of the certain sectors
of the market. There were some that were flat this year,
you know. So it's really our job to help people
fine tune their portfolio. And if you just put it
all across the board and everything, you'll do okay long term.
(16:18):
But that's not our goal is to do okay, you know.
So it's really looking at how how you can look
at different sides of the market. What is growing, where
are opportunities, how to interest rates affect what types of
the market to go into as well, whether it's small,
mid or large cap type of categories. Interest rates are
going to be coming down now with interest rate cuts projected,
(16:42):
so that may affect things like money markets and CD
rates and some of those will start to slide. So
there needs to be other options for your short term
money or fixed income side, and sometimes in generic, in
a generic way to look at it, the bond market
might accelerate a little bit. So we're always looking for
other opportunities, whether it's in the market out of the market.
It yeah, and I mean, you know, we have certain
(17:04):
areas that have really taken off that are doing ten
to fifteen percent last month, just in one month. But
if you're not actively working with an advisor and looking
at what to do next. It's hard to find that
hard to know that, and if you react to it
too late, you kind of bought it at the high
instead about when the opportunity was there. So that's how
we earn our job, to earn your business, I guess
(17:25):
is the bottom line. We're not here to sell you products.
We're here to earn your business by providing the right
guidance and the right I mean, it's the money management
side is a vast generic couple words there, but it's
really how you make the most of it. And I mean,
you can do the passive type of approach, you can
(17:45):
do a more proactive approach. And in today's world, the
market change is faster and faster than ever before. So
we think it's good to have an advisor team. We'd
like to nominate ourselves to be your advisor team or
be one of many to be in because you're really
trying to set up a team to help you for
the rest of your financial future. It's a pretty big decision.
(18:07):
So as you go into retirement and beyond, do you
want to be your own full time money manager for
your financial future If you get older and you're just
not able to do that on your own hard to
start over in your seventies or eighties or nineties and
try to find somebody to help you at that point.
You definitely can, and we're here to help you there too.
(18:29):
But your retirement planning and your financial planning doesn't stop
once you hit sixty five. You may have twenty five
more years to go or more. So make sure that
you're surrounding yourself with a financial team, an attorney firm
for legal advice, a CPA firm for tax advice, and
make sure that you're going to win your financial game
when you play that. So that's what we're here for.
Speaker 3 (18:51):
Absolutely. I mean, that's that's the key goal of this.
And you know something, we love being productive out there.
You know, it's a very differentiated approach we feel on
how we look at markets, and it is always trying
to be forward looking on things. You know, it's not
just here's what's happened, it's where do we actually think
things can go from here?
Speaker 1 (19:08):
Absolutely, and Blake, before we take our quick break here
for some news. You are very proactive in doing commentary
and you you send it out every month and that
is our money Taxmailer of the week this week.
Speaker 3 (19:20):
That is so we've got our most recent market update
and thoughts goes through key economic points and factors that
we think are important to look at right now, as
well as a couple sectors and subgroups that we're we're
looking at to kick off twenty twenty six, I suppose.
So if you're like our GOATPI, give us a call
nine to five two five four four two eight three
seven or online at SAANDBOLDFG dot com.
Speaker 1 (19:46):
And Blake Sandbold and we're doing a year in review.
I love today's show title what Happened, what it means
and what comes next?
Speaker 2 (19:55):
And we could paraphrase that and put different words in
there that would be a little bit more aggressive than that,
though we're not going to do that today. So in
this segment of the show, I thought we would want
to talk about current market thoughts, where we're at, where
we think things are going, you know, opportunities and risks
that are out there, and talk about the philosophy we
have at Sandbold Financial Group. There's many ways to build
(20:17):
your financial future. There's many ways to build your financial portfolio,
and that's where we think it takes a sit down
meeting or a conversation to go through analyzing risk versus return.
Taking a look at all the different things we're talking
about today, because believe it or not, Blake and I
talk about these every day. You don't have to talk
(20:39):
about it every single day, but we do. And that's
why we're here and why we're in the business, so
to speak, to help as many people as we can
to build your financial futures. So some of the areas,
you know, stock market valuation and leadership, there's a lot
of things to look at there, Blake, if you want
to jump into that a little bit.
Speaker 4 (20:59):
Yeah, you know, it is remarkable. You look this year.
Speaker 3 (21:04):
For the first part of the year, there was a
lot of concentration again in leadership, and you know, you
really saw a lot of the large tech AI type
stuff leading, but there are a lot of other things throughout.
And you know, you have the essentially the top ten
companies in the SMP five hundred at about forty percent
of the market weight, and so it's very, very heavily
(21:25):
concentrated there.
Speaker 4 (21:27):
And you know, the key thing that we're looking at
right now is when does that.
Speaker 3 (21:30):
Regime change happen. And we think we're starting to actually
see some of that right now. And what I mean
by that is breath has actually been improving quite dramatically recently,
and especially in light of the most recent FED cut.
And what you're seeing is there's actual other sub sectors, subgroups,
different parts of the market that are starting to lead.
(21:52):
And usually what you look for in an interest rate
cutting environments is typically the smaller companies, small and mid
size style can actually have better leadership during that environment.
And you think about it for smaller businesses, which you
know a lot of times how this is classified maybe
five or six billion dollars in market cap and less,
(22:14):
and a lot of their financing is more on variable.
Speaker 4 (22:17):
Rate type loans.
Speaker 3 (22:18):
So as you see some of that interest rates come down,
you know, that's a direct benefit to them and overall
economic activity, you know, if we're betting that some of
this infrastructure build out could happen, small companies could.
Speaker 4 (22:32):
Be beneficiaries of that.
Speaker 3 (22:33):
So I think there is a little bit of a
call that we could see a regime change going into
twenty twenty six. And what you've seen over the last
two years has really been a large initial hype cycle
and capex cycle with AI where it's a lot of
that initial infrastructure built out focus on the semiconductor companies.
(22:54):
And what I think we start to see forward from
here is that it's not just on that stage of
the hype cycle. It starts to transition to what types
of companies can actually implement AI systems and dramatically benefit
from that. And so I think the next you know,
if you think about a supply chain, the next verticals
are going to really be a key focus for twenty
(23:16):
twenty six and twenty twenty seven. And that's actually you know,
a screener that we do on some of our portfolios
is to find out who is which companies are actively
saying that they're implementing certain technologies. Oh interesting, And I
think there's there's other areas there. You know, as you
think about next year again, as rates coming down, we're
still betting the consumers doing okay, There's going to be
(23:38):
potential opportunities in housing related stocks, and you know, not
necessarily solely builders, which I think there can be some
opportunities and actually going forward, but actual material type construction
companies or appliance type companies. So I think there are
more opportunities as we look in at twenty twenty and
(24:00):
that's really what has us excited and from an active
money management standpoint, it might be again a year where
it's saying what's worked the last two three years may
not have the.
Speaker 4 (24:10):
Largest leadership going forward.
Speaker 3 (24:12):
So it's going to be be a time to really
analyze our portfolio and know what you own, why you
own it. And I think in different mindsets.
Speaker 2 (24:20):
It might broaden out a little bit more, is what
you're saying, too, right, So I think so kind of
looking at some of those areas that we're underperforming with
high interest rates will be interesting, and it could be
ones that we're a little bit more thought of as
traditional type investing, not all tech so to speak, you know,
(24:40):
that type of thing like Blake was saying, materials, industrials,
those types of things, infrastructure to our good areas, and
you know, as we go forward, probably defense and aerospace
is going to continue to grow going forward as well well.
Speaker 1 (24:56):
With the shift that well, the monumental shift in er
policy between the previous administration and the current do you
see that there's going to be a lot of acceleration
in the sectors that facilitate the not only the production
of the energy, but the moving around of it so
to speak.
Speaker 3 (25:13):
Yeah, I think the moving around of it is probably
the largest opportunity right now, really, and I say that
from the standpoint that oil is so low. Oil is
very very cheap right now on a relative basis. I mean,
you've got oil in the fifty dollars type range. So
I think for a new production coming online, you know,
(25:35):
it's you may not see as much of that, but
there's definitely still stuff that's focused on overall economic activity,
output and distribution.
Speaker 4 (25:43):
Of that I think is going to be vital. You know.
Speaker 3 (25:46):
I do think from the AI standpoint, there is going
to be additional buildouts of other types of energy. You know,
we're seeing somewhat of a resurgence and coal related companies.
You know, long term, I think nuclear type stuff is
very interesting, but that's going to take some time to
have that build out done. But absolutely I think focusing
(26:06):
on what a future energy grid may look like and
kind of the overall through put and distribution of that,
that's a.
Speaker 4 (26:14):
Very key theme for us right now.
Speaker 2 (26:16):
Very cool, Yes, I mean it kind of leads into
where do you invest what type of things do you
invest in? The other thing is risk level? How from
one to ten. If one is low risk, ten is
high risk. You know that type of thing, What number
are you where do you feel comfortable? And us on
our side of the table are building portfolios to match up
with that as well. So trying to get the most
(26:38):
out of the risk level is a very important piece
that we manage through on a day to day basis.
But yeah, diversification and risk management comes into play for
everybody that sits down in front of us.
Speaker 3 (26:51):
Right, you know what is I think risk from a
couple of different standpoints. You know, what is your personal
risk tolerance? Emotionally how much can you can you handle
on that? And you know at risk capacity, so financially
how much can you handle on that? And you know
again as an example, this is a chart that we
put together showing from November two thousand to November twenty
(27:13):
twenty five. You think about the impacts that emotion's going
to have on a portfolio, there's such a knee jerk
reaction to say, well, when things are bad, I want
to pull out, and you know, more often than not,
right after that is usually when you see a best day.
Speaker 2 (27:28):
In the markets, returns coming back.
Speaker 3 (27:30):
So as we looked at over that twenty five year
time horizon, the S and P five hundred returned an
eight point seventy five percent annual return. If you pulled
out just ten days over that entire twenty five time
frame that were the ten best days, your return drops
in half to four point twenty six percent.
Speaker 2 (27:47):
Unbelievable.
Speaker 3 (27:48):
Best twenty days again over twenty five year timeframee two
point three four percent, thirty days point seven nine percent,
best forty days your negative point five to nine percent.
Best fifty days your negative one point eight seven percent.
So if you miss the best fifty days over a
twenty five year timeframe just by pulling out of the
market at the wrong time, you have a negative return
(28:10):
on the S and P. Five hundred. It's absolutely staggering
to think about that. And you know, that's where we
say it is important to be diversified, be proactive, understand
what you hold, why you hold it, and make sure
that you have a portfolio where if there is unexpected volatility.
Speaker 4 (28:28):
That you can go through it.
Speaker 3 (28:29):
And you know, we we on our side being proactive
try to navigate some of that. But it is important
to be diversified. And you know, a case in point
just like.
Speaker 1 (28:41):
That, that's just that is such an amazing visual. I mean,
you have it here laid out on a chart, and
so that temptation and you've even talked about this territory,
about the temptation of getting too emotional rather than acting
pick up the phone and call.
Speaker 2 (28:55):
You, right. I know. We can spot maybe a handful
of a case over many many years where a person
called in and they wanted to move all their money
out of the market, okay, and it's like, well, we
were not really recommending it. Here's here's why, here's why.
And then they're like, oh, I still want to do it,
and it's like, okay, but we're going to note that
(29:19):
we're not recommending to do that on many of those occasions.
And there haven't been very many of those times. I
can only think over twenty five years, maybe three or
four times that's happened, okay, but on almost every one
of them should have listened to you, Terry. So it
comes back in our next review and it's like, yeah,
(29:39):
I was emotional. I was making a decision strictly on
emotions and not on the analytics, like he said, we
should look at it, you know, that type of thing,
and it it reminds me of years ago, way back
in nineteen eighty seven, my second year in the business,
and the market went down five hundred and twelve points
in one day, which was about twenty three percent. It
(30:02):
was October nineteenth of nineteen eighty seven, and they interviewed
somebody local from Minnesota that day. I won't use the name,
but they said, you've lost tens of millions of dollars
in the market today. What are you going to do
about it? And the person being interviewed it was on
Ted Copple's Nightline show way back when, and he said,
I'm going to buy more tomorrow. And Ted Copple looked
(30:25):
at him, like, why would you ever do that? And
he says, that is the fastest way to get all
that money back. Not everybody had money to put in
the next day, but yeah, ideally that that is actually
the big benefit of having an opportunity to verse fight
and being able to do things like that as well.
Speaker 1 (30:41):
Absolutely, we need to take just a quick break here
on money Talks. We've got more in just a moment,
sand Bold and we are talking about the year, what happened,
what does it mean, and what's next?
Speaker 4 (30:57):
Blake, what happened and what's next?
Speaker 3 (31:00):
I think that's probably top of mind for a lot
of people, and you know, in general, this has been
a good year. I mean for for equity investors, bond investors.
Twenty twenty five has shaped up to be a nice
year for portfolios. And you know, I think as you
look into twenty twenty six, there are a number of
risk factors out there. There's always going to be a
new risk factor, but you know, I think some key
(31:21):
ones policy changes, you know, what is going to happen
at federal level, what could happen at Supreme Court type level.
You know, those are risks out there. Will inflation be
persistent or not. And again, a lot of our data
right now is showing inflation pressers receding, and you know
there's still is some out there, but you know, we
(31:43):
think it probably stays in that two to three percent
type range. So we'll see on that elections. We're already
going to be gearing up for midterms, so that's going
to be on the horizon soon.
Speaker 2 (31:54):
We take about ten minutes off and then it's time a.
Speaker 3 (31:56):
New way to start seeing, so we'll see exactly what
that means and where things shape up. You know, more
often than not, you do see a slight reversal during
the midterms, so you know it is Republican controlled across
the board. More often than not that changes, and you
know that's from a market standpoint. We've said this in
(32:19):
all political environments, the market usually likes gridlock. So we'll
see exactly what happens on things as that gets us
into twenty twenty seven.
Speaker 4 (32:30):
But you know, I think.
Speaker 3 (32:33):
Another key factor for twenty twenty six is the technical
outlook and themes, and this is something that we've talked
about for a while. You look at the second year
of a presidential cycle usually is a tougher year for markets,
and you know you've got that when there are higher
valuations in some of the tech type areas, so you
know that that may create some choppiness I think in
(32:55):
general throughout the year, but we're really focused on saying
if there is choppiness with with that, the underlying narrative
is still a pretty strong economy that there's probably going
to be opportunities to look for when there are choppy
periods in twenty twenty six. So I think that's going
to be a really key theme for the year, is
to stay focused on the big picture and starting to
(33:17):
look at other areas that we think are still very undervalued, underappreciated,
and under owned by many investors.
Speaker 2 (33:24):
Well, if what you two.
Speaker 1 (33:25):
Were talking about in our first segment today, guys about
wage potential, wage growth, I mean of what's been put
in place terry that could you know, make that happen?
How would that affect what Blake was just laying out?
Speaker 2 (33:37):
Well, I mean one, yeah, one thing, if wages are
increasing and productivity is increasing and inflation stays minimal, the
wages and all of that will catch up and inflation
will not feel like it's inflation. This is one way
to praise it. Yeah, So you know, we had this
increase up to as high as nine percent on inflation,
and now it's it's leveling way. Like Blake was saying
(34:01):
in earlier, the deflation is not probably going to happen
because you'd have to have a big cut in prices.
It might be that that might be the new normal,
and then we have a very minimal increase on top
of those, hopefully for a long period of time, and
then the economy and the wages and people's livelihoods increase
dollar wise, so it somebody eliminates it on paper, see
(34:24):
what I'm saying there. So it's kind of the way
to look at that. I think that's what's going to
happen in regards to that. But people need to have
confidence in their future and be motivated to be productive
as well, and things I feel will do quite well.
But when you're out there and you're going into election time,
it's like, look at the data a little bit too.
(34:47):
Just don't vote strictly on emotions, because what is going
to help you long term. You may be surprised how
you vote if you look at it that way.
Speaker 1 (34:56):
I did a double take when I bought eggs the
other day because they were two ninety nine and I
remember a while back I went and I reached for
the eggs and they were seven fifty yeah at the time,
and so I'm like, I don't know, this is a
big sale today. But that was a huge one. I mean,
where everybody that was one of the big flash points.
Speaker 3 (35:15):
Blake right, Well it was, and you know that that
had some unique underlying economic stuff where there were from
a supply demand side, there was massive supply of chickens
taken off the table, that's right. So that does seem
like it's you know, hopefully getting to a better stage
on that right. Well, it's you know, it's the tricky part,
(35:36):
you know, with very cyclical stuff like that, and you
know it's it's got the broad economic move, but it's
also got its own, you know, microeconomic type move in
its own space. So but all this being saying, you know,
I I do think there are gonna be opportunities for
next year. I mean, we we've talked about small cap
companies look interesting. Uh, there are actually more foreign opportunities
(35:59):
that look interesting doing to us.
Speaker 4 (36:01):
Some of the.
Speaker 3 (36:01):
Emerging markets have actually been doing quite well. Best performing
region in the world this year. Latin American stocks kind
of kind of interesting on that, followed by Europe, followed
by broad based emerging, followed by Asia Pacific, followed by
the US. Really, so we we were you know, it
was a strong year for US stocks, but uh, you know,
(36:23):
I think that surprises people that that actually was not
where the largest leadership came this year.
Speaker 2 (36:29):
Yeah. So when we sat down and did a review
with clients and we you know, we'll go through you
do have knowledge in a Latin America piece here, I said,
I bet you, I bet you were. I want to
hear why we're why we have that in your portfolio
and it's you know, so we go through that and
I said, after we tell them what the return was,
(36:51):
they were like, oh, no, I know why you haven't
a portfolio. No, no more further questions. No. But I
mean that's that's important part about this. So the world
has changed, and you know, investing in one country is
maybe the way to go one year or two and
then going in a different direction the next year maybe
(37:12):
the productive way to approach that.
Speaker 3 (37:13):
Yeah, I think that's going to be something similar where
it is rotating through countries and regions as well.
Speaker 4 (37:20):
You know, you do see it so much. There is
such a.
Speaker 3 (37:22):
Large US bias for investors, meaning that you solely want
to own US type stuff. And you know, the reality
is that's that's paid off in general over the last
fifteen years. You know that that was the right thing
to do over that timeframe, and we were incredibly overweight
US as well during that environment. But again because that's
what the data was leading us to say. You know,
(37:45):
we've had areas of Japan, India, China mixed in at
different points along there that we've rotated through. But we
say all that, you know, next year, the year after
might be a year to consider some of that again
that there are other spots out there that are doing
better than they used to. And you know, you think
about Europe from the standpoints of everything that's happened on
(38:06):
a geopolitical basis, they've really had to spend more money
and focus on some domestic type growth, so it is
kind of you know, from that standpoint, can revitalize some
of their companies in different ways. So we'll see where
it pans out, but there are going to be key
themes to look at for next year.
Speaker 2 (38:25):
And one thing to keep in mind investors, you can
control your asset allocation, you can control your tax strategies,
you can control your retirement and legacy planning, but it
does take some work on your part and our part
to help you with that. And also in regards to
financial success, it's built over time. It's not just a
prediction and hope it comes true. So planning meets planning
(38:49):
beats forecasting as well. So I mean, the thing is
the markets will always give us uncertainty, but a sound
financial plan will provide more clarity for you and your
findinancial future. So if you'd like to review your financial
strategy or learn how we approach investing and planning. At
Sandvill Financial Group, we encourage you to reach out and
(39:10):
start on twenty twenty six as soon as you can.
I know, we're just a few days away and it's
really going to be up to you. Maybe it's one
of your New Year's resolutions. I am going to take
control of my financial future, meaning you so very very
important to do. The next step is to take that
next step and give us a call. We'd be glad
(39:30):
to help you build twenty twenty six and beyond to
be the best year ever for you.
Speaker 1 (39:35):
So well, and before we go, Terry, A great way
to get started is to call and request our Money
Talks mailer.
Speaker 2 (39:41):
Of the week absolutely and as it's our market commentary,
our monthly market update, and give us a call at
nine five two five four four two eight three seven
that's nine five two five four four two eight three
seven or request it online at Sandvill lef G and
early happy New Year,
Talks with Terry Sandbold and Blake Sandbold and guys. I
always love these types of shows. Terry, tell everybody what
we got on tap today?
Speaker 2 (00:08):
Well, our show tea show theme for today is year Interview,
What happened, what it means and what comes next? Yeah,
so a market updates day. When the world happened yesterday,
what did it mean to you? Yeah? And what the
world is coming next? Yes, exactly. So we're going to
(00:28):
talk about all those things today, which are very big
topics of course, but a lot of things to think
about as we go and finish off the end of
the year. Here, we'll talk about what has been taking place.
Of course, I would say there was a few things
happening in the world this year to be simple, right,
and twenty twenty six and beyond, I think there's going
(00:50):
to be many, many things taking place. How it will
affect you, How will affect your financial future. That's what
we're going to talk about today. Okay, so many things. Blake,
would you have anything specifically you want to jump into
right there?
Speaker 3 (01:03):
Yeah, you know, I would just say We've got a
lot today. I mean, we're going to go through financial
market themes this year, economic updates, UH market update, and I.
Speaker 4 (01:12):
Know a lot of a lot of people like that.
Speaker 3 (01:13):
We uh, We'll spend a lot of time going through
some sectors themes that we make sense, and still focusing
on the long term.
Speaker 4 (01:20):
And you know, I think that that is such a.
Speaker 3 (01:22):
Thing right now where everyone does get focused so much
on day to day news points, and you know, I
think thinking about long term fundamental change that are happening
is incredibly important because there's there's a lot going on
right now, and you know, I think a lot of
the different UH spending that the Trump administration is looking at,
you know, realignments of geopolitical powers, negotiations, et cetera. There's
(01:47):
a lot of important themes out there to really focus on.
And you know, I'll give a key additional economic point
as a as an example with this. You know, everyone
focuses so much month to month on what the current
jobs report looks like, and you know, I think a
far more important factor is to say, what is the
(02:08):
actual wage growth for one hundred and sixty million people
in the US. Not you know, are we plus or
minus five ten thousand jobs hired on a monthly basis,
So you know, it is looking at the collective narrative together.
So we'll go through a lot of that today, but
maybe we should kick it off talking about some of
the important themes for this year and what's happened. You know,
(02:31):
obviously inflation and interest rate policy has been a key
theme and discussion for a lot of people. You know,
we we finally after a long hiatus, are back in
interest rate cutting mode and have had three three rate cuts,
you know, to pretty much to close out the year.
You know, everyone's gonna be focused on who the FED
(02:52):
pick officially is and what that may mean for direction
next year. But you know, what what inflation actually looks like,
and we'll talk about this a little bit later in
the show is incredibly important right now. And you know,
we had just talked about it before we started. US
Core CPI inflation east of the slowest growth since twenty
(03:15):
twenty one, So it's it is one of those things
where I think there's such a missing narrative out there
behind what inflation actually is. And you know, I think
there's been a lot of discussion around inflation is cooling,
and it's still that mindset of people saying, well, but
my prices aren't going down. That's that's not really what
(03:35):
we're looking at. You know, this buy and large is
a new price level. You know, a deflationary environment for
prices actually going backwards generally is not good. And but
you know, I think slow, lower, stable inflation. I mean,
that's that's really what you want for an economy. Additional
themes this year tariffs. Boy, was that probably a discussion
(04:00):
for a lot of people this year and still will be.
Speaker 1 (04:02):
Can you kind of you know, that word comes in
and out of play in the news right for a
consumer like me? And where are we with it? I
know there's been some court challenges and things like that, like,
can you kind of give us a little bit of
an update?
Speaker 3 (04:16):
Yeah, you know, that is the largest overhang right now,
is it is? You know, I think for a lack
of a better term, at that being litigated at the
Supreme court level and for them discussing around legality around
you know, should they be able to proceed as they
had been set out or or was it appropriate? And
(04:36):
for how Trump unrolled them initially, and you know it's
kind of interesting. So there's a site called polymarket, you know,
where people can go online and bet on nearly anything
and not endorsing this in any way, but it's something
from you know, a research standpoint, you can look for
and say, where is sentiment standing out there on things?
(04:56):
And you know, the current betting odds are essentially a
twenty seven percent probability that they stay in effect, that
the court rules that he could have done it. So
different take on that is, you know, that type of
betty market is largely saying the ruling is going to
go against Trump and the Trump administration. So you know
that that's kind of where I think mindset is starting
(05:19):
to settle for a lot of people. But the question
from there I think will end up being Okay, so
say it can't have happened that way, what does that
mean for things? The market's only expecting two percent probability
that funds get returned from that, So essentially, you know,
I think a take on that is the market is
thinking it gets overturned that way, but likely there's a
(05:42):
different way that they get implemented and Okay.
Speaker 2 (05:45):
It's kind of like it's been done, but don't do
it again type thing.
Speaker 3 (05:48):
It might be that, you know, it might be that,
and you know, I don't know if a rhetoric will
end up being wealth is negotiated, Treasury Secretary, Commerce Secretary,
maybe that's a deemed a val channel.
Speaker 4 (06:00):
Uh, you know, is it attacks or not.
Speaker 3 (06:02):
I think all of those are going to be questions
that are we'll have to see exactly where things settled out.
But the reality is it's it's likely still going to
be an overhang for a number of months, and you know,
I think it's going to take some time for things
he had finalized there. So the the biggest thing that
we're going to be watching is you hope that that
(06:23):
doesn't materially delay companies spending in the US. And you know,
that was part of their you know, incentive essentially as
you looked at they're very incentivized from one big beautiful
bill to have large capital expenditures come through this year,
very very incentivized and next year still but part of
that equation is essentially saying, well, because of tariffs, it's
(06:44):
also additional help and making it marginally more effective to
go here. So what you don't want to see from
an economic standpoint is that spending slow materially next year.
Speaker 4 (06:55):
So we'll be watching that.
Speaker 3 (06:58):
You know, I think it's it's tough to say, but
we're just going to have to keep a close eye
on economic figures to see what's happening there.
Speaker 2 (07:05):
It would be pretty difficult to unravel that too, because
you have agreements from our side, you have agreements from
other countries already, right, and money has exchanged, like you're
talking about Blake on some of those agreements already, So
they don't want to unravel it either. If they're okay
with everything there and some of the tariff balancing, I
guess I would I would just generically call it is
(07:27):
some of the You know, there's certain instances where like
India was charging us up to ninety percent on some
products on cars, and so a fifty thousand dollars car
here would cost ninety five thousand dollars there, so to speak.
So it puts us out of the market in comparison
on price, just to use a simple example. But I
think trying to get it more in a fair and
equal tariff balance. If the US is competing against other
(07:52):
countries to sell our products, to build our products, et cetera,
we have a very big opportunity there By balancing that,
we're going to get more and more business, which will
help our economy as well. So yeah, I hope they
don't try to unravel that at all, because at this
point it's I think it will be very much for
the betterment of the United States to keep keep the
(08:14):
negotiations in place, I guess is one way to phrase it.
Speaker 1 (08:17):
I just always found it interesting in this argument because
it's it's a deeper topic for some people who don't
work in that realm.
Speaker 2 (08:24):
I'll just say, well, it's not everybody's holiday topic either.
Speaker 3 (08:27):
Right, But again, I still don't understand what I but.
Speaker 1 (08:33):
But the thing is though that about it is I
just don't know how anybody could be upset or it
could be at all political to just try to make
it more fair for our own team. You know, that
was what I looked at the whole entire year. It
is like, let's fix this.
Speaker 3 (08:47):
You know what I do think that's the unfortunate part
about how it gets politicized is you know, let's let's
take everything away and say what is actually being incentivized here.
You know, it is domestic growth, It is uh, you know,
controlling your own destiny to an extent. And you know,
I think the large part too, if you think about
(09:07):
large capital expenditures coming that you know, in nearly all
instances leads to productivity growth, and productivity growth essentially means
higher wages, lower inflation. So that's essentially how it translates
over time. So you know, if this works out the
right way, I mean there there could be a sustained
period of positive real wage growth and that's that's the
(09:30):
goal that you want from a lot of this. We'll
see where things settle out. But again it's important to
be data focused.
Speaker 2 (09:38):
Yeah, so interesting, fair and equal. Sounds like a good statement,
doesn't it to me?
Speaker 1 (09:42):
But a well balanced Yes. Do we have a money
Taxmailer of the week this week, gentleman?
Speaker 3 (09:48):
We do, and it is our most recent market commentary,
So we'll give some again in depth thoughts around what
we see is happening in the economy, key factors around that,
as well as market sectors and themes that we're looking
for into twenty twenty six.
Speaker 1 (10:04):
All right, and how do we get that?
Speaker 3 (10:05):
Blake easy as given us a call at nine five
two five four four, two eight three seven. Are going
online to SANDOLDFG dot.
Speaker 1 (10:13):
Com, Old and Blake sampled and we're doing Terry a
year in review. And I absolutely love these shows. I
learned so much every time.
Speaker 2 (10:26):
Yeah, we're stepping back to look at the big financial
themes of the year, what actually mattered, how markets are
digesting it today, and how we how we're thinking about
next year and beyond. So many things to think about.
And there's a lot of activity this year in twenty
twenty five, there's gonna be a lot of activity in
twenty twenty six, a lot of things going on. And
(10:46):
if you're new to our show, Money Talks, we've been
doing our show now almost twenty three years.
Speaker 4 (10:52):
Wow.
Speaker 2 (10:53):
So one thing that we have always wanted to do
on this show is to inform people about what is
going on how to control of your financial future. Having
the information first does matter on how to make the
decision second. So we've been in the business since nineteen
eighty six helping people all across the country in the
areas of wealth management, retirement planning, and cost effective insurances
(11:15):
are the three big topics, but it all blends together
into a holistic plan. But if you're looking for somebody
to help you with your financial future, you can give
us a call at nine five two five four four
two eight three seven or right right in Minnetaka, Minnesota.
If you're listening to a different state, but give us
a call for a no cost financial review, second opinion,
(11:37):
or better yet, how to get ready for twenty twenty
six and beyond. So again our number is nine to
five to two five four four two eight three seven.
So we're talking about what happened, what it means, and
what comes next. So many things ahead here and you
need to be proactive with your financial future, not just reactive.
So that's how we take on helping you as you
(11:58):
go forward. And we you know, it's the time of
the year where maybe your financial plan and financial future
is maybe not at the very top with the holidays
and family, but right after that we're going to hold
you accountable to take care of twenty twenty six cookies.
Right now, you can enjoy the holiday season, but we're
(12:19):
just trying to let you know we are here to
help you as you go into twenty twenty six and beyond.
So a lot of things to talk about today. Right
before the break, we were talking a little bit about
inflation and tariffs. Real good holiday topics, as you know,
but they're very very important pieces for everybody's financial future.
And Blake, if you'd like to take it off from there,
that'd be great.
Speaker 4 (12:39):
Yeah.
Speaker 3 (12:40):
I mean, you know, next key theme that I think
was really important for this year is economic resilience versus
recession fears. And really that was a key theme that
we had coming into twenty twenty five that hopefully is
a number of our listeners and I know our clients recall.
It was really our view that the economy is doing
(13:00):
and will do better than most had expected it to
this year, and largely you saw that. I mean, the
economy is still chugging along. Fourth quarter data is going
to be a little bit choppy, just just with government
shut down.
Speaker 4 (13:11):
For a period of time, kind of a hole in it, a.
Speaker 3 (13:14):
Little hole in it, little hole in some economic data,
permanent hole there. But you know, I think a lot
of signs that we're seeing as some of that spending
is starting to recelerate right again. So hopefully we see
that continuing the first quarter next year and just have
a little bit of a bounce back on that that
That really is our expectation as we stand today. And
(13:36):
you know, there were a lot of concerns around recession
type fears. You know, we were already in a recession
or not, and what did things look like and it
doesn't look like that. And you know, as we look
at different ism numbers for manufacturers and service type side,
there's parts on that that look like they are starting
to accelerate into next year. And you can look at
(13:59):
essentially their inflation surveys as well, and both on the
services as well as the good side, you're seeing their
inflation come down. So you know, I think that does
lead us again to say some of the key initial
inflation pressures that we had are peaking and in the
rearver mirror hopefully so could be some better economic news
(14:20):
for next year.
Speaker 1 (14:21):
Was that a question that you all, Terry and Blake
got from customers throughout the year was around recession and
and and that that, you know, consumer sentiment that we
hear about where people things aren't bad, but people aren't
feeling it. Did you get a lot of that in
your meetings?
Speaker 3 (14:36):
Yeah, you know, I think that was a common question
for a lot of people. I'm saying, you know, with
with where broad based consumer sentiment is, you know, why
are things so dire right now? And it's it's so
interesting though, and you know we've talked about this this year.
If you looked at consumer sentiment broken out by political party.
(14:57):
They told two very different stories, and you know, again
it just shows how politicized things are at this stage.
You know, Republicans largely felt things were moving okay from
an economic standpoints. Democrats, on the other hand, we were
very concerned about some of the economic data. And you know,
(15:19):
that's where we think it's good to take a step back.
I mean, sentiment is really helpful, and that's that's something
that we always spend a lot of time looking at
and thinking where how is the average person psyche and everything,
but still be focused on what the true.
Speaker 4 (15:32):
Data is saying.
Speaker 3 (15:33):
And the true data was saying, well, they're still spending.
So you know, things aren't aren't necessarily that dire. There's
there's always going to be risks out there and things
that you try to avoid in the markets and economy.
But it's it's important again not to just focus on
one data point, but focus on the underlying, overall all narrative.
Speaker 2 (15:55):
And that's when the proactive money management comes in a
lot of times too, looking at what sectors of the
market are doing much better than others. And there were
some home runs by certain parts of the certain sectors
of the market. There were some that were flat this year,
you know. So it's really our job to help people
fine tune their portfolio. And if you just put it
all across the board and everything, you'll do okay long term.
(16:18):
But that's not our goal is to do okay, you know.
So it's really looking at how how you can look
at different sides of the market. What is growing, where
are opportunities, how to interest rates affect what types of
the market to go into as well, whether it's small,
mid or large cap type of categories. Interest rates are
going to be coming down now with interest rate cuts projected,
(16:42):
so that may affect things like money markets and CD
rates and some of those will start to slide. So
there needs to be other options for your short term
money or fixed income side, and sometimes in generic, in
a generic way to look at it, the bond market
might accelerate a little bit. So we're always looking for
other opportunities, whether it's in the market out of the market.
It yeah, and I mean, you know, we have certain
(17:04):
areas that have really taken off that are doing ten
to fifteen percent last month, just in one month. But
if you're not actively working with an advisor and looking
at what to do next. It's hard to find that
hard to know that, and if you react to it
too late, you kind of bought it at the high
instead about when the opportunity was there. So that's how
we earn our job, to earn your business, I guess
(17:25):
is the bottom line. We're not here to sell you products.
We're here to earn your business by providing the right
guidance and the right I mean, it's the money management
side is a vast generic couple words there, but it's
really how you make the most of it. And I mean,
you can do the passive type of approach, you can
(17:45):
do a more proactive approach. And in today's world, the
market change is faster and faster than ever before. So
we think it's good to have an advisor team. We'd
like to nominate ourselves to be your advisor team or
be one of many to be in because you're really
trying to set up a team to help you for
the rest of your financial future. It's a pretty big decision.
(18:07):
So as you go into retirement and beyond, do you
want to be your own full time money manager for
your financial future If you get older and you're just
not able to do that on your own hard to
start over in your seventies or eighties or nineties and
try to find somebody to help you at that point.
You definitely can, and we're here to help you there too.
(18:29):
But your retirement planning and your financial planning doesn't stop
once you hit sixty five. You may have twenty five
more years to go or more. So make sure that
you're surrounding yourself with a financial team, an attorney firm
for legal advice, a CPA firm for tax advice, and
make sure that you're going to win your financial game
when you play that. So that's what we're here for.
Speaker 3 (18:51):
Absolutely. I mean, that's that's the key goal of this.
And you know something, we love being productive out there.
You know, it's a very differentiated approach we feel on
how we look at markets, and it is always trying
to be forward looking on things. You know, it's not
just here's what's happened, it's where do we actually think
things can go from here?
Speaker 1 (19:08):
Absolutely, and Blake, before we take our quick break here
for some news. You are very proactive in doing commentary
and you you send it out every month and that
is our money Taxmailer of the week this week.
Speaker 3 (19:20):
That is so we've got our most recent market update
and thoughts goes through key economic points and factors that
we think are important to look at right now, as
well as a couple sectors and subgroups that we're we're
looking at to kick off twenty twenty six, I suppose.
So if you're like our GOATPI, give us a call
nine to five two five four four two eight three
seven or online at SAANDBOLDFG dot com.
Speaker 1 (19:46):
And Blake Sandbold and we're doing a year in review.
I love today's show title what Happened, what it means
and what comes next?
Speaker 2 (19:55):
And we could paraphrase that and put different words in
there that would be a little bit more aggressive than that,
though we're not going to do that today. So in
this segment of the show, I thought we would want
to talk about current market thoughts, where we're at, where
we think things are going, you know, opportunities and risks
that are out there, and talk about the philosophy we
have at Sandbold Financial Group. There's many ways to build
(20:17):
your financial future. There's many ways to build your financial portfolio,
and that's where we think it takes a sit down
meeting or a conversation to go through analyzing risk versus return.
Taking a look at all the different things we're talking
about today, because believe it or not, Blake and I
talk about these every day. You don't have to talk
(20:39):
about it every single day, but we do. And that's
why we're here and why we're in the business, so
to speak, to help as many people as we can
to build your financial futures. So some of the areas,
you know, stock market valuation and leadership, there's a lot
of things to look at there, Blake, if you want
to jump into that a little bit.
Speaker 4 (20:59):
Yeah, you know, it is remarkable. You look this year.
Speaker 3 (21:04):
For the first part of the year, there was a
lot of concentration again in leadership, and you know, you
really saw a lot of the large tech AI type
stuff leading, but there are a lot of other things throughout.
And you know, you have the essentially the top ten
companies in the SMP five hundred at about forty percent
of the market weight, and so it's very, very heavily
(21:25):
concentrated there.
Speaker 4 (21:27):
And you know, the key thing that we're looking at
right now is when does that.
Speaker 3 (21:30):
Regime change happen. And we think we're starting to actually
see some of that right now. And what I mean
by that is breath has actually been improving quite dramatically recently,
and especially in light of the most recent FED cut.
And what you're seeing is there's actual other sub sectors, subgroups,
different parts of the market that are starting to lead.
(21:52):
And usually what you look for in an interest rate
cutting environments is typically the smaller companies, small and mid
size style can actually have better leadership during that environment.
And you think about it for smaller businesses, which you
know a lot of times how this is classified maybe
five or six billion dollars in market cap and less,
(22:14):
and a lot of their financing is more on variable.
Speaker 4 (22:17):
Rate type loans.
Speaker 3 (22:18):
So as you see some of that interest rates come down,
you know, that's a direct benefit to them and overall
economic activity, you know, if we're betting that some of
this infrastructure build out could happen, small companies could.
Speaker 4 (22:32):
Be beneficiaries of that.
Speaker 3 (22:33):
So I think there is a little bit of a
call that we could see a regime change going into
twenty twenty six. And what you've seen over the last
two years has really been a large initial hype cycle
and capex cycle with AI where it's a lot of
that initial infrastructure built out focus on the semiconductor companies.
(22:54):
And what I think we start to see forward from
here is that it's not just on that stage of
the hype cycle. It starts to transition to what types
of companies can actually implement AI systems and dramatically benefit
from that. And so I think the next you know,
if you think about a supply chain, the next verticals
are going to really be a key focus for twenty
(23:16):
twenty six and twenty twenty seven. And that's actually you know,
a screener that we do on some of our portfolios
is to find out who is which companies are actively
saying that they're implementing certain technologies. Oh interesting, And I
think there's there's other areas there. You know, as you
think about next year again, as rates coming down, we're
still betting the consumers doing okay, There's going to be
(23:38):
potential opportunities in housing related stocks, and you know, not
necessarily solely builders, which I think there can be some
opportunities and actually going forward, but actual material type construction
companies or appliance type companies. So I think there are
more opportunities as we look in at twenty twenty and
(24:00):
that's really what has us excited and from an active
money management standpoint, it might be again a year where
it's saying what's worked the last two three years may
not have the.
Speaker 4 (24:10):
Largest leadership going forward.
Speaker 3 (24:12):
So it's going to be be a time to really
analyze our portfolio and know what you own, why you
own it. And I think in different mindsets.
Speaker 2 (24:20):
It might broaden out a little bit more, is what
you're saying, too, right, So I think so kind of
looking at some of those areas that we're underperforming with
high interest rates will be interesting, and it could be
ones that we're a little bit more thought of as
traditional type investing, not all tech so to speak, you know,
(24:40):
that type of thing like Blake was saying, materials, industrials,
those types of things, infrastructure to our good areas, and
you know, as we go forward, probably defense and aerospace
is going to continue to grow going forward as well well.
Speaker 1 (24:56):
With the shift that well, the monumental shift in er
policy between the previous administration and the current do you
see that there's going to be a lot of acceleration
in the sectors that facilitate the not only the production
of the energy, but the moving around of it so
to speak.
Speaker 3 (25:13):
Yeah, I think the moving around of it is probably
the largest opportunity right now, really, and I say that
from the standpoint that oil is so low. Oil is
very very cheap right now on a relative basis. I mean,
you've got oil in the fifty dollars type range. So
I think for a new production coming online, you know,
(25:35):
it's you may not see as much of that, but
there's definitely still stuff that's focused on overall economic activity,
output and distribution.
Speaker 4 (25:43):
Of that I think is going to be vital. You know.
Speaker 3 (25:46):
I do think from the AI standpoint, there is going
to be additional buildouts of other types of energy. You know,
we're seeing somewhat of a resurgence and coal related companies.
You know, long term, I think nuclear type stuff is
very interesting, but that's going to take some time to
have that build out done. But absolutely I think focusing
(26:06):
on what a future energy grid may look like and
kind of the overall through put and distribution of that,
that's a.
Speaker 4 (26:14):
Very key theme for us right now.
Speaker 2 (26:16):
Very cool, Yes, I mean it kind of leads into
where do you invest what type of things do you
invest in? The other thing is risk level? How from
one to ten. If one is low risk, ten is
high risk. You know that type of thing, What number
are you where do you feel comfortable? And us on
our side of the table are building portfolios to match up
with that as well. So trying to get the most
(26:38):
out of the risk level is a very important piece
that we manage through on a day to day basis.
But yeah, diversification and risk management comes into play for
everybody that sits down in front of us.
Speaker 3 (26:51):
Right, you know what is I think risk from a
couple of different standpoints. You know, what is your personal
risk tolerance? Emotionally how much can you can you handle
on that? And you know at risk capacity, so financially
how much can you handle on that? And you know
again as an example, this is a chart that we
put together showing from November two thousand to November twenty
(27:13):
twenty five. You think about the impacts that emotion's going
to have on a portfolio, there's such a knee jerk
reaction to say, well, when things are bad, I want
to pull out, and you know, more often than not,
right after that is usually when you see a best day.
Speaker 2 (27:28):
In the markets, returns coming back.
Speaker 3 (27:30):
So as we looked at over that twenty five year
time horizon, the S and P five hundred returned an
eight point seventy five percent annual return. If you pulled
out just ten days over that entire twenty five time
frame that were the ten best days, your return drops
in half to four point twenty six percent.
Speaker 2 (27:47):
Unbelievable.
Speaker 3 (27:48):
Best twenty days again over twenty five year timeframee two
point three four percent, thirty days point seven nine percent,
best forty days your negative point five to nine percent.
Best fifty days your negative one point eight seven percent.
So if you miss the best fifty days over a
twenty five year timeframe just by pulling out of the
market at the wrong time, you have a negative return
(28:10):
on the S and P. Five hundred. It's absolutely staggering
to think about that. And you know, that's where we
say it is important to be diversified, be proactive, understand
what you hold, why you hold it, and make sure
that you have a portfolio where if there is unexpected volatility.
Speaker 4 (28:28):
That you can go through it.
Speaker 3 (28:29):
And you know, we we on our side being proactive
try to navigate some of that. But it is important
to be diversified. And you know, a case in point
just like.
Speaker 1 (28:41):
That, that's just that is such an amazing visual. I mean,
you have it here laid out on a chart, and
so that temptation and you've even talked about this territory,
about the temptation of getting too emotional rather than acting
pick up the phone and call.
Speaker 2 (28:55):
You, right. I know. We can spot maybe a handful
of a case over many many years where a person
called in and they wanted to move all their money
out of the market, okay, and it's like, well, we
were not really recommending it. Here's here's why, here's why.
And then they're like, oh, I still want to do it,
and it's like, okay, but we're going to note that
(29:19):
we're not recommending to do that on many of those occasions.
And there haven't been very many of those times. I
can only think over twenty five years, maybe three or
four times that's happened, okay, but on almost every one
of them should have listened to you, Terry. So it
comes back in our next review and it's like, yeah,
(29:39):
I was emotional. I was making a decision strictly on
emotions and not on the analytics, like he said, we
should look at it, you know, that type of thing,
and it it reminds me of years ago, way back
in nineteen eighty seven, my second year in the business,
and the market went down five hundred and twelve points
in one day, which was about twenty three percent. It
(30:02):
was October nineteenth of nineteen eighty seven, and they interviewed
somebody local from Minnesota that day. I won't use the name,
but they said, you've lost tens of millions of dollars
in the market today. What are you going to do
about it? And the person being interviewed it was on
Ted Copple's Nightline show way back when, and he said,
I'm going to buy more tomorrow. And Ted Copple looked
(30:25):
at him, like, why would you ever do that? And
he says, that is the fastest way to get all
that money back. Not everybody had money to put in
the next day, but yeah, ideally that that is actually
the big benefit of having an opportunity to verse fight
and being able to do things like that as well.
Speaker 1 (30:41):
Absolutely, we need to take just a quick break here
on money Talks. We've got more in just a moment,
sand Bold and we are talking about the year, what happened,
what does it mean, and what's next?
Speaker 4 (30:57):
Blake, what happened and what's next?
Speaker 3 (31:00):
I think that's probably top of mind for a lot
of people, and you know, in general, this has been
a good year. I mean for for equity investors, bond investors.
Twenty twenty five has shaped up to be a nice
year for portfolios. And you know, I think as you
look into twenty twenty six, there are a number of
risk factors out there. There's always going to be a
new risk factor, but you know, I think some key
(31:21):
ones policy changes, you know, what is going to happen
at federal level, what could happen at Supreme Court type level.
You know, those are risks out there. Will inflation be
persistent or not. And again, a lot of our data
right now is showing inflation pressers receding, and you know
there's still is some out there, but you know, we
(31:43):
think it probably stays in that two to three percent
type range. So we'll see on that elections. We're already
going to be gearing up for midterms, so that's going
to be on the horizon soon.
Speaker 2 (31:54):
We take about ten minutes off and then it's time a.
Speaker 3 (31:56):
New way to start seeing, so we'll see exactly what
that means and where things shape up. You know, more
often than not, you do see a slight reversal during
the midterms, so you know it is Republican controlled across
the board. More often than not that changes, and you
know that's from a market standpoint. We've said this in
(32:19):
all political environments, the market usually likes gridlock. So we'll
see exactly what happens on things as that gets us
into twenty twenty seven.
Speaker 4 (32:30):
But you know, I think.
Speaker 3 (32:33):
Another key factor for twenty twenty six is the technical
outlook and themes, and this is something that we've talked
about for a while. You look at the second year
of a presidential cycle usually is a tougher year for markets,
and you know you've got that when there are higher
valuations in some of the tech type areas, so you
know that that may create some choppiness I think in
(32:55):
general throughout the year, but we're really focused on saying
if there is choppiness with with that, the underlying narrative
is still a pretty strong economy that there's probably going
to be opportunities to look for when there are choppy
periods in twenty twenty six. So I think that's going
to be a really key theme for the year, is
to stay focused on the big picture and starting to
(33:17):
look at other areas that we think are still very undervalued, underappreciated,
and under owned by many investors.
Speaker 2 (33:24):
Well, if what you two.
Speaker 1 (33:25):
Were talking about in our first segment today, guys about
wage potential, wage growth, I mean of what's been put
in place terry that could you know, make that happen?
How would that affect what Blake was just laying out?
Speaker 2 (33:37):
Well, I mean one, yeah, one thing, if wages are
increasing and productivity is increasing and inflation stays minimal, the
wages and all of that will catch up and inflation
will not feel like it's inflation. This is one way
to praise it. Yeah, So you know, we had this
increase up to as high as nine percent on inflation,
and now it's it's leveling way. Like Blake was saying
(34:01):
in earlier, the deflation is not probably going to happen
because you'd have to have a big cut in prices.
It might be that that might be the new normal,
and then we have a very minimal increase on top
of those, hopefully for a long period of time, and
then the economy and the wages and people's livelihoods increase
dollar wise, so it somebody eliminates it on paper, see
(34:24):
what I'm saying there. So it's kind of the way
to look at that. I think that's what's going to
happen in regards to that. But people need to have
confidence in their future and be motivated to be productive
as well, and things I feel will do quite well.
But when you're out there and you're going into election time,
it's like, look at the data a little bit too.
(34:47):
Just don't vote strictly on emotions, because what is going
to help you long term. You may be surprised how
you vote if you look at it that way.
Speaker 1 (34:56):
I did a double take when I bought eggs the
other day because they were two ninety nine and I
remember a while back I went and I reached for
the eggs and they were seven fifty yeah at the time,
and so I'm like, I don't know, this is a
big sale today. But that was a huge one. I mean,
where everybody that was one of the big flash points.
Speaker 3 (35:15):
Blake right, Well it was, and you know that that
had some unique underlying economic stuff where there were from
a supply demand side, there was massive supply of chickens
taken off the table, that's right. So that does seem
like it's you know, hopefully getting to a better stage
on that right. Well, it's you know, it's the tricky part,
(35:36):
you know, with very cyclical stuff like that, and you
know it's it's got the broad economic move, but it's
also got its own, you know, microeconomic type move in
its own space. So but all this being saying, you know,
I I do think there are gonna be opportunities for
next year. I mean, we we've talked about small cap
companies look interesting. Uh, there are actually more foreign opportunities
(35:59):
that look interesting doing to us.
Speaker 4 (36:01):
Some of the.
Speaker 3 (36:01):
Emerging markets have actually been doing quite well. Best performing
region in the world this year. Latin American stocks kind
of kind of interesting on that, followed by Europe, followed
by broad based emerging, followed by Asia Pacific, followed by
the US. Really, so we we were you know, it
was a strong year for US stocks, but uh, you know,
(36:23):
I think that surprises people that that actually was not
where the largest leadership came this year.
Speaker 2 (36:29):
Yeah. So when we sat down and did a review
with clients and we you know, we'll go through you
do have knowledge in a Latin America piece here, I said,
I bet you, I bet you were. I want to
hear why we're why we have that in your portfolio
and it's you know, so we go through that and
I said, after we tell them what the return was,
(36:51):
they were like, oh, no, I know why you haven't
a portfolio. No, no more further questions. No. But I
mean that's that's important part about this. So the world
has changed, and you know, investing in one country is
maybe the way to go one year or two and
then going in a different direction the next year maybe
(37:12):
the productive way to approach that.
Speaker 3 (37:13):
Yeah, I think that's going to be something similar where
it is rotating through countries and regions as well.
Speaker 4 (37:20):
You know, you do see it so much. There is
such a.
Speaker 3 (37:22):
Large US bias for investors, meaning that you solely want
to own US type stuff. And you know, the reality
is that's that's paid off in general over the last
fifteen years. You know that that was the right thing
to do over that timeframe, and we were incredibly overweight
US as well during that environment. But again because that's
what the data was leading us to say. You know,
(37:45):
we've had areas of Japan, India, China mixed in at
different points along there that we've rotated through. But we
say all that, you know, next year, the year after
might be a year to consider some of that again
that there are other spots out there that are doing
better than they used to. And you know, you think
about Europe from the standpoints of everything that's happened on
(38:06):
a geopolitical basis, they've really had to spend more money
and focus on some domestic type growth, so it is
kind of you know, from that standpoint, can revitalize some
of their companies in different ways. So we'll see where
it pans out, but there are going to be key
themes to look at for next year.
Speaker 2 (38:25):
And one thing to keep in mind investors, you can
control your asset allocation, you can control your tax strategies,
you can control your retirement and legacy planning, but it
does take some work on your part and our part
to help you with that. And also in regards to
financial success, it's built over time. It's not just a
prediction and hope it comes true. So planning meets planning
(38:49):
beats forecasting as well. So I mean, the thing is
the markets will always give us uncertainty, but a sound
financial plan will provide more clarity for you and your
findinancial future. So if you'd like to review your financial
strategy or learn how we approach investing and planning. At
Sandvill Financial Group, we encourage you to reach out and
(39:10):
start on twenty twenty six as soon as you can.
I know, we're just a few days away and it's
really going to be up to you. Maybe it's one
of your New Year's resolutions. I am going to take
control of my financial future, meaning you so very very
important to do. The next step is to take that
next step and give us a call. We'd be glad
(39:30):
to help you build twenty twenty six and beyond to
be the best year ever for you.
Speaker 1 (39:35):
So well, and before we go, Terry, A great way
to get started is to call and request our Money
Talks mailer.
Speaker 2 (39:41):
Of the week absolutely and as it's our market commentary,
our monthly market update, and give us a call at
nine five two five four four two eight three seven
that's nine five two five four four two eight three
seven or request it online at Sandvill lef G and
early happy New Year,
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