Simply Money

Episode Transcript

Speaker 1 (00:05):
Tonight the roller coaster ride for investors this year and
our take on what you need to know and also
what you do about it. You're listening to Simply Money,
presented by all Worth Financial Ammi Wagner along with Bob Sponseller.

Speaker 2 (00:18):
The Federal Reserve right our nation.

Speaker 1 (00:19):
Central Bank met last week and as we already discussed,
kept rates the same.

Speaker 2 (00:23):
No surprise there.

Speaker 1 (00:24):
But for the first time since that meeting, we have
a brilliant chief investment officer, Andy Stout in to give
us his expert opinion on the dot plot they released afterwards.
Any let's talk about first of all, why this is
important to investors, right the dot plot, and I'd love
to get your take on where the Federal Reserve landed.

Speaker 3 (00:43):
Well, the Federal Reserve left rates unchanged, which was a
shocking surprise to absolutely no one. So really the big
question is what were their projections going to be for
interest rates for the remainder of this year and the
upcoming calendar years. And that's where the dot plot comes in.
And what the dotlow shows is where each FED member
and that includes, by the way, voting and non voting members,

(01:04):
and there's nineteen of them. That shows where each FED
member thinks interest rates should be at the end of
upcoming calendar years. Now, unfortunately, we don't know whose dot
plot is who, and because of this anonymity of what
we tend to focus on is the median dot. And
if we look back at decembers dot plot, it showed
two quarter point rate cuts this year and that's what

(01:25):
this one showed as well, So no change there. However,
it's the distribution of those dots that changed. And when
you look at that distribution, there's been a i'll call
it a hawkish shift up. That means there are more
FED members thinking that there should be one or zero
cuts this year. Specifically, there are now eight FED members

(01:47):
that fall into that camp, and if you go back
to December, there were just four in that camp. So
definitely a shift.

Speaker 4 (01:54):
So andy, why did the market if that's how you're
interpreting the data, why did the market close up rather
sharply after the FED announcement last week?

Speaker 3 (02:05):
Well, it was going to be a coin flip anyway,
whether it's going to be one or two cuts in
that dot plot, So just the fact that it did
come in two was a relief, even though it was
a hawkish too, if you will. So from that perspective,
still a pretty positive for the market, and that's what
it really kind of gravitated toward for the remainder of

(02:27):
that session, and we saw a little bit of follow
through for the rest of the week. Now, of course,
there's no guarantee that will continue, but there was certainly
some other interesting information from the Federal Reserve meeting that
came out of that.

Speaker 1 (02:40):
You know, Andy, while we talk about the dot plot,
right which is just kind of where they're projecting we're
going to be over the next year when it comes
to interest rates, it's just a projection.

Speaker 2 (02:50):
They're taking in a lot.

Speaker 1 (02:51):
Of information, and as we've seen, you can rip up
those dot plots sometimes time after time because it's not necessarily.

Speaker 2 (02:57):
Where we land. They're taking in a lot of data.
I know you are too.

Speaker 3 (03:03):
What are you.

Speaker 1 (03:03):
Seeing out there that you think is good or bad
or that we should be.

Speaker 2 (03:08):
Paying attention to.

Speaker 3 (03:10):
Well, the big one right now is really inflation, and
that's what the Federal Reserve is paying close attention to
because in their meeting, not only are they releasing their
interest rate projections, but they're also releasing where they think
inflation might be and this is where it was probably
the biggest change. This is core inflation, which excludes food
and energy prices, and they often don't look at that,

(03:31):
or they look at it, but they tend to focus
on the core because those food and energy prices are
pretty volatile and they're often affected by some non fed
related events like bird flu and you know, egg prices.
Right now, when you look at their interest rate or
their inflation projections, that increase from two point five percent
to two point eight percent this year. That's a pretty
big increase. And what the chair pal said in his

(03:54):
post meeting press conference is that the committee member has
already seen the impact of tariffs on the economy and
they take that into or they have taken that into
consideration with their projections. So watching inflation and how things
are going to be progressing for the remainder of the year,
that's going to be one of the biggest things going.
And clearly that's going to tie back to the administration. Now, fortunately,

(04:16):
the economy is still growing and we're still in decent shape, but.

Speaker 5 (04:19):
They also revised economic you know GDP economic growth downward
a bit as well, right, So that's moving in the
opposite direction from the standpoint of cutting rates than inflation assumptions.

Speaker 3 (04:31):
Right, Yeah, absolutely, so when you look at the economic growth,
that number, by the way, is what's called real, which
means it's adjusted for inflation, So as inflation goes up,
you know, that can bite into the real GDP number.
And more specifically, we saw that go or get revised
from two point one percent to one point seven percent
for this year, which to your point, Bob, it's a

(04:51):
pretty big number and when you think about it from
that perspective, it's something you got to watch to see
if that trend continues.

Speaker 1 (04:57):
You're listening to Simply Money, presented by all Worth Financial
Ami Wagner along with Bob Sponseller. We are joined by
Andy Stout, our chief investment officer, as we are every Monday,
with his expert kind of analysis on what's going on
in the markets. You know, Andy, we've been talking about
the Fed today and it is not really the Fed's
job to figure out.

Speaker 2 (05:15):
What the administration is going to be.

Speaker 1 (05:17):
Doing moving forward, but certainly tariffs are the elephant in the.

Speaker 2 (05:21):
Room here, right what's going to happen with this.

Speaker 1 (05:24):
We've kind of been a little bit all over the
place with this this year. Would love to get your
take on tariffs, how that's affecting the markets, and also
kind of your historical perspective on is it even something
the Federal Reserve should be thinking about or taking into
account when they're looking at what they're going to do,
what their next move is.

Speaker 3 (05:46):
Well, they have to be taken into the account from
the perspective that it does impact the economy and when
you look at it from that perspective, and what the
Fed's responsible for, which is really stable prices, which is
in other words, to saying another way of saying stable
inflation at two percent, which we're not there, and full employment,
and you can make the argument we're pretty close to

(06:07):
full employment. So the Fed definitely does have to take
that into consideration when they're setting policy because it has
an impact. Now, of course, to your point, we've seen
some volatility around what's going on in the tariff world
where it does seem that the news changes from day

(06:28):
to day. There's news out today about you know, the
President looking to essentially delay some tariffs. So there are
many things that go into effect here and it does
certainly make the job of the Federal Reserve much more challenging.

Speaker 5 (06:45):
Shifting gears a little bit, andy. I mean we're just
a little over, you know, a week away from the
end of the quarter, which means getting into first quarter
earning season.

Speaker 6 (06:54):
Are you seeing anything on the earnings front from quarterly
reports or revisions up or down?

Speaker 5 (07:00):
Are you are you guys seeing anything that causes you
concern or you know, any comment on the upcoming earning season.

Speaker 6 (07:10):
Well, when you.

Speaker 3 (07:10):
Look at the first quarter earnings and you know what
the expectations are overall, I would say, what we're seeing
out there and what we're looking at, we're not seeing
anything too drastic. I mean, there's certainly a lot of it,
especially on the consumer spending front. When you think about
where we are with discretionary spending. You know, what we'll

(07:33):
often start to focus on is how the spending numbers
are for the quarter so far. And last week, you know,
one thing we got an update on was retail sales,
and it was a pretty good number actually, So while
the headline number did disappoint, and the headline means like
total retail sales, by the way, that came in at
point two percent of for a monthly increase, and that

(07:56):
was a lot lower than the expectations However, when you
look at the control group retail sales, which is a
direct input into GDP. Control group, by the way, is
what excludes. It takes total retail sales and excludes building materials,
gas station uh spending, food service, and autos, and it's
a better measure of pure discretionary sending spending. And that's

(08:17):
all a pretty good increase. It's soared one percent just
for the month, and that's sizable, so that buides well
for some of the consumer spending data, and that should
help earnings for companies as we look into this upcoming quarter.

Speaker 5 (08:33):
What you've you and your team have done, uh, correct
me if I'm wrong, Andy, is is probably a month
ago you started shifting some of our portfolios here at
all Worth away from you know, overweight large cap tech
and tore to slight overweight into these value.

Speaker 6 (08:49):
Dividend paying stocks.

Speaker 5 (08:51):
And that's the only sector of the US stock market
that's up here to date, right. So, other than those
slight subtle shifts in allocation of the portfolios, is there
anything out there from an investment allocation standpoint that says, hey,
you should do this, or you should make any drastic changes,
or is this more just steady as you go follow

(09:14):
your long term plan.

Speaker 3 (09:16):
One of the things I think is really key is diversification.
When you look at what's been going on over the
past ten years or so, it's really been all about
a lot of mostly tech companies, and that's really been
where the strength is. But if you look at things
this year so far and middally it's only almost three
months into it, we've seen international stocks posted on positive

(09:39):
returns and that's certainly been helpful to many investors. And
also bonds are up about two and a half percent.
So when you look at these things collectively, you know,
what it shows is that's staying diversified and making sure
your investment mix is aligned with your financial plan. That's,
you know, what we believe to be a good recipe
for long term success.

Speaker 5 (09:58):
And these are sectors of the accom of me. You know, Andy,
that a lot of folks have not even wanted to own,
or talk about, or even consider for the last three
or four years. And now lo and behold, those are
the areas that are leading us so far this year.

Speaker 3 (10:13):
Yeah, that's a great point, Bob, And the real way
to think about this from my perspective is that stocks
like the economy. Things go in cycles, and right now
we've seen a cyclical shift a little bit away from
that technology sector and into other areas. Now there's obviously
no guarantee that will continue. But you know, one thing

(10:35):
that we again would you advise, is that being diversified
allows you to have exposure to multiple areas, so you
always have some of your money and areas that are
doing well.

Speaker 1 (10:48):
You know, Andy, I like that you're talking about the
fact that you should have just been diversified in the
first place, right, so that you are not only took
advantage of the upside from the Magnificent seven over the
past few years, but also then when they're not doing
so great, right, there's there's someone else that's going to
step forward. In this case, it's it's the value stocks
that seem to be doing really well. Any other tweaks
you would say investors need to be making at this

(11:12):
point or is it really get your plan and stay
the course.

Speaker 3 (11:17):
Well, it really just depends on your own situation. I mean,
it's really hard to make some sort of a blanket
statement like that, and I don't think compliance really wants
been talking about portfolio general.

Speaker 2 (11:27):
Sense in a general sense, Yeah.

Speaker 3 (11:30):
And in the general sense, I think it's really about
just understanding what your own needs are. So if you
have concentrated stock, looking for ways to maybe diversify or
reduce that concentrated stock exposure. If you're really worried about
the market moving lower, you know, talk with somebody about
some downside protection strategies. I mean, there are a lot
of ways that advisors can assist, whether it be you know,

(11:53):
concentrated stock, you know, or downside protection or alternative assets,
stock options, things like that, you know, really just making
sure it's tailored to your specific needs.

Speaker 1 (12:04):
Here's the all Worth advice. Well, market turbulence is of
course never pleasant. It is important to know it's a
normal part of the market cycle. So educate yourself right
on what's happening so that you do understand a bit
more importantly, build a financial plan that's geared for up
markets as well as down markets.

Speaker 2 (12:21):
Coming up next, we're diving into.

Speaker 1 (12:22):
A key strategy for making your retirement last longer.

Speaker 2 (12:26):
This is managing your sequence of returns risk. We'll explain
what that is.

Speaker 1 (12:30):
You're listening to Simply Money presented by all Worth Financial
here on fifty five KRC.

Speaker 2 (12:34):
The talk station.

Speaker 1 (12:40):
You're listening to Simply Money, presented by all Worth Financial.
I mean you Wagner along with Bob Sponseller. If you
can't listen to our show every night, we do have
a daily podcast for you.

Speaker 2 (12:48):
You can just search Simply Money.

Speaker 1 (12:49):
It's right there on the iHeart app or wherever you
get your podcasts.

Speaker 2 (12:53):
Coming up next are AI stocks just guaranteed to keep
soaring as technology advances.

Speaker 1 (12:59):
It's one of many topics we're going to get to
in fact or fiction that's coming up at six forty three. Okay,
So last month we told you we're seeing an interesting
trend when it comes to filing taxes this year, and
that is that more Americans, more taxpayers than ever before,
are doing something that my children often do. We're talking

(13:21):
about procrastinating.

Speaker 5 (13:24):
Yeah, we talked about it last month, as you said, Amy,
and really things have not changed in the month of
February and.

Speaker 6 (13:31):
So far in March.

Speaker 5 (13:32):
Either people are holding off on filing and there's you know,
your guess is as good as mine as to why.
Here's a couple of potential reasons. Delays and receiving W
two's ten ninety nine or k.

Speaker 6 (13:46):
Ones and I have seen that.

Speaker 5 (13:48):
Okay, Well, I mean the W two's and ten ninety nine's,
you know, are they have to get them by the
end of January. For IRA's, I am seeing K one's out,
you know, this week. So for folks that have K ones,
a lot of people have had to sit there and
just sit on their hands and wait. But I think

(14:08):
another reason why people are not filing is they're getting
a smaller refund this year due to changes in tax
credits and withholding adjustments and things like that coming out
of the pandemic era tax credits that have now expired.
So my guess, Amy is people now are getting a
smaller refund or maybe even owing taxes that they haven't

(14:32):
owed in the last couple of years. So they're like, hey,
I'm gonna wait. If I got to write a check,
I'm waiting as long as possible.

Speaker 1 (14:38):
Well, let's face it, since January, we have had a
lot of changes in what's coming out of Washington. I
also wonder whether tax payers are like, well, maybe I'm
gonna wait because maybe something will come down the pike
that could be to my advantage.

Speaker 2 (14:51):
Right before I file these taxes.

Speaker 1 (14:53):
I don't know, and maybe some people just like my
kids are just procrastinators, right, They're just waiting until the
last minute. Again, it's not going to impact anything about
how long it's going to.

Speaker 2 (15:03):
Take to get your return back.

Speaker 1 (15:04):
My understanding is this year, on average, it's about two
to three weeks, and that's exactly what we're seeing. So
you know, when you do get around a filing, and
just keep in mind you have less than a month
at this point, you know, if you are getting some
kind of return back, you can expect that in less
than a month. Okay, last week we talked about roth
conversions and kind of the silver lining of hey, if

(15:27):
markets are down, this might be a great strategy for you.

Speaker 2 (15:31):
We're going to now though, talk about shifting some risk.

Speaker 1 (15:33):
Your portfolio could take if you are in early retirement.
So down markets early retirement, not only are you losing
sleep at night, right, not a great place to be,
because what you're actually facing is something in our industry
we call sequence of returns risk.

Speaker 5 (15:51):
Yeah, and sequence of returns just deals with how volatile
is your portfolio or the portion of your portfolio from
which you're going to take regular monthly income. And it's
very important to manage those sequence of returns or volatility,
and that's something that most people don't think about, worry

(16:12):
about plan for while they're working, because volatility is kind
of irrelevant when you're putting money into that four oh
one k or ira every month. But it becomes pretty
critical once you turn that income stick it on and
turn this turn your portfolio into an income producing source
of funds that has to replace your paycheck.

Speaker 1 (16:34):
Well, think about it this way, right, you've been working
all these years to your point, Bob, you're putting money
into those accounts, and then suddenly you retire.

Speaker 2 (16:42):
Part of your strategy.

Speaker 1 (16:43):
For replacing income and retirement is going to be to
pool from investment accounts, and suddenly accounts are down, right,
markets are down, your locking and losses. And then what
happens is in your early years of retirement, right, you're
shrinking your portfolio also locking in those losses. Where on
the flip side, if you're lucky enough to retire into

(17:05):
an upmarket, you may have several years of growth and
so you know, hitting those down years early on your
retirement if you're not careful about strategies, can have a
negative impact on your retirement and the long term. However,
these are conversations I am having with the investors I

(17:27):
am working with as they're getting close to retirement.

Speaker 2 (17:29):
Bob, I talk about this all the time. You know this.

Speaker 1 (17:31):
One of the major strategies we have is, let's increase
our emergency funds. Right, if you're still putting money into
your four to one K the last couple of years
before you retire, put enough in to get that company match,
and then beyond that, put that money that you were
putting in your four to one k into an emergency
fund where we're maybe going to live off of this
if markets go south, so that rather.

Speaker 2 (17:53):
Than pulling money out of your.

Speaker 1 (17:55):
Investments right that you've worked so long for decades to grow,
We're just let that sit. We're going to live off
of your emergency find and then we can turn that's
make it back on when markets rebound, as they inevitably do.

Speaker 5 (18:09):
We and others refer to this as the bucket approach,
and I love this approach. I mean one to three
years and really leaning more toward three years. If you
can have three years worth of your needed or wanted
cash flow in a non volatile or less volatile bucket
of money like treasury bills. I mean, we just had

(18:30):
Andy Stout on talking about that uh less volatile asset classes.
I mean again, ninety percent of the time over every
three year holding period, the stock market is going to
be up. So you're just you're buying yourself those three
years by having a bucket of assets that are not volatile,
not subject to short term volatility in the stock market,

(18:52):
and that can both help you sleep at night emotionally
but economically not have your whole retirement plan fall prey
to this sequence of return risk.

Speaker 1 (19:02):
You know, another thing I think you have to take
into account is you know, in all of your years
when you were working, if you were a pretty aggressive investor, right,
you understand the historical perspective here. You don't freak out
when markets go down. You are going to stay in
the market and take advantage of those upswings when you
get closer to retirement, if you are also going to
live off of those investments, it can make sense in

(19:25):
a lot of cases to dial back at least some
of that stock exposure so that when you are in
retirement you are not dealing with the bottom falling out
because you're one hundred percent in the stock market and
now you're living on that money.

Speaker 5 (19:43):
This is one of the hardest things for people to
do is to lessen their exposure to let's say, growth
stocks after they've gone up a ton, just like it's
very hard for people to buy growth stocks after they've
gone down fifteen percent. And that's the value of having
a good fit you share advisor in your corner to
help you make and implement those tough decisions.

Speaker 1 (20:04):
Here's the all Worth advice when it comes to managing
your retirement portfolio. The order in which you experience gains
and losses can be just as important as the total
returns over time. Coming up next, all Worth Chief Investment
Officer Andy Stout back with us talking about investment solutions
for those focused.

Speaker 2 (20:22):
On having income streams.

Speaker 1 (20:23):
You're listening to Simply Money presented by all Worth Financial
here on fifty five KRC the talk station.

Speaker 2 (20:34):
You're listening to Simply Money presented by all Worth financials.

Speaker 1 (20:37):
Amman Wagner along with Bob s Vonfeller had someone in
my office recently that started a conversation honestly, one I
haven't had many times.

Speaker 2 (20:47):
And this is a family who came.

Speaker 1 (20:50):
In and her entire plan for retirement was around dividend
producing stocks. That was the entire kind of retirement plan.
Joining us tonight is our chief investment officer, Andy Salt.

Speaker 2 (21:04):
Andy, we're going to.

Speaker 1 (21:05):
Talk about how you can kind of use investment solutions
right to produce some income and retirement. But i'd love
to get your take on an entire strategy revolving around
only that.

Speaker 3 (21:20):
There is nothing wrong at all with having diven in
paying stocks as a portion of your portfolio. But what
I would say is that I want to make sure
that it's the right for your needs. So when you
look at the different solutions that are out there, I mean,
you do get exposed to a lot of volatility if
you're just in DIFVN in paying socks. And if you're

(21:40):
comfortable without volatility, that's fine, but there's going to be
times when that volatility may allow you to not sleep
as well at night than you know, versus having something
that might be a little bit more diversified while still
focusing on income. And I think it really is critical
depending on what you're trying to get out of your investments.
If you're trying to get in and only income out

(22:01):
of your investments, and you're comfortable with capital appreciation meaning
stocks going higher, which is whatever he wants, but also
comfortable with the inevitable pullbacks that do come with equity investing.
Then it can make some sense. But everybody's individual solution
is going to be different. I mean, something isn't going
to be There's no one size fits all here. And

(22:24):
if you have an income need, knowing what all of
those different solutions that are out there is really critical
in order for clients to be able to not only
get the income they want, but have that right risk
profile at the same time.

Speaker 1 (22:40):
Andy, I think there's a shift that happens right when
you are in your years where you are accumulating assets,
right you're working, the paycheck is still coming in. Oftentimes
what investors will do is just reinvest those dividends, right
and just kind of continue to let that money grow.
Talk about the shift that we see when we get
into retirement, how some investors might really benefit from then

(23:04):
using those dividends in a different way in order to
produce income. What does that look like kind of from
an investment strategy standpoint.

Speaker 3 (23:13):
Well, I'm going to take a step back here and
say when you make that shift, understandably that you might
need some more income one thing, and this might be
a little counterintuitive that a lot of people overlook is
you do have the ability to create your own dividends
at the same time. And I know we're talking about
income here, but you can create income by selling some positions.

(23:36):
And you might think, oh, no, that means I got
to take gains on these positions, Well pay taxes on them. True,
but you're paying taxes on the income as well. But
there is that shift. So that's one way that anybody
can get some more income. But for the people who
are more comfortable with getting the interest from fixed income
or bonds, or dividends from equities or other types of

(24:00):
investments that just generate income, you know, there are definitely
a lot of solutions out there. And understanding that mentality
that you do make that shift is it's important because
it's really critical that you have a portfolio designed for
what you're trying to get out of it.

Speaker 5 (24:17):
Andy said another way, isn't it, at the end of
the day all about risk adjusted total return? I mean,
that's what we're all going to spend in retirement, risk adjusted,
hopefully tax efficient total return. So you got to have
some growth, you got to have some bonds, and yes,
you got to have some dividending come paying stocks to
make all this work and protect your purchasing power over

(24:40):
ten twenty thirty years.

Speaker 3 (24:41):
Right, Yeah, absolutely, And so when you think about your
risk adjusted return, that's where your income will come from,
regardless of the source of that income. But you know
understanding that, you know, just from like a behavioral finance perspective,
people view things differently, and you think about the you know,

(25:02):
the bird in the hand versus two and the bush analogy.
You know, that's where having strategies dedicated income it's going
to be more receptive for a lot of people. So
making sure you have those solutions and balancing that risk
adjusted return is really imperative.

Speaker 1 (25:19):
Any when we talk about kind of if you are
looking for income in retirement or really at any point
in your.

Speaker 2 (25:25):
Life as an investor, like what your options are.

Speaker 1 (25:29):
Can you can you throw out another option or two
that investors might want to think about or change the
way that they think about.

Speaker 3 (25:35):
Absolutely, I mean we have many options to consider. I mean,
starting on the more complex side of the world, and
we have private investments that do generate income. You think
private alternative assets, you might think, well, I don't have
access to them because they're ill liquid by nature, but
some of those do generate income. So I mean there's
private debt, private real estate, private or infrastructure funds. When

(26:01):
you look at all that to get that's one way
that you can generate income. Also, staying on the more
complex side of the world, where stock options where you
can do covered calls, which is without getting into the weeds,
if you own underlying stock, you can generate some income
off that by selling call options. Other things you can do.
Structured notes are also a little bit more on the

(26:22):
complex side. If you think about the more i'll call
it moderately advanced strategies. That's where you maybe get into
selecting those individual dividend stocks like you mentioned at the
very beginning, we could do or anybody excuse me, should
be able to do and fixed our bond liders like
a one to five, one to tier one to ten
year municipal bond ladder if you're in a higher tax bracket,

(26:44):
corporate bond ladders. There's many strategies. I mean, we can
even go as simple as like CDs or money market funds,
treasuries or another really good income generator, especially in today's
environment where treasury rates are pretty elevated.

Speaker 5 (27:00):
Are you seeing now, with interest rates more stabilized and
possibly going down here incrementally, are you seeing more of
an interest now in a return in interest to these
laddered bond portfolios, either on the taxable side or the
municipal bond side or both.

Speaker 6 (27:18):
Just so we could set up a strategy where.

Speaker 5 (27:20):
You know what your income is going to be if
you hold these thing that's to maturity, and then you
can swap them out as they mature and just you know,
ladder them.

Speaker 3 (27:29):
Yeah, there's a lot of demand for these bond ladders.
What bond ladder is by the way, say it's like
a one to five year bond ladder and you have
a million dollars, Just imagine having two hundred thousand dollars
maturing in your one, two, three, four, and five as
is one year bonds mature, then you buy a new
five year bond and just kind of cycles and so
you know what you're getting. And there's certainly a lot

(27:50):
of demands. So on the municipal bond side, which allows
you to have interest that isn't tacked at the federal
or state level. If you're buying Ohio Imuni bonds or Kentucky,
deputing on whatever state you're in, Kentucky, Indiana, And when
you think about that, that's really good for people in
the higher tax bracket if you're not as focused on

(28:12):
tax free income. Treasuries do make a lot of sense
because if you look at the interst rate differences between
between corporate bonds and treasury bonds, it's probably not I
don't know if it's worth the risk because there's not
much of a difference in interest rate. So treasuries are
a really good option today.

Speaker 1 (28:29):
And you know, Andy, if you were to go all
in on any of these investment strategies right that are
going to produce some kind of income.

Speaker 2 (28:36):
I also want to bring out the point that.

Speaker 1 (28:39):
Diversification is so key here because then you would have
missed out on the ride that we've had in the
markets right over the past couple of years when you
look at the Magnificent seven. So I'm assuming what we
would say here is, hey, you want a good mix, right.
If you're going to go all in on producing income,
you're also going to miss some of the the upswings

(29:00):
that you could take advantage of in the market that
you might see and something like a large growth stock.

Speaker 3 (29:07):
I will always argue for diversification amy one hundred percent
of the time. With that set, I think it really
depends on everybody's you know, individual needs. Some people are
going to have just different risk tolerances and some people
will have different needs from a return perspective, you know,
from a purely academic perspective. Though, one thing Bob mentioned

(29:30):
at the at the onset was your total return and
risk adjusted total return, and that really is critical. But
at the same time, I think we have to acknowledge
that everybody's unique, everybody's different, and making sure you have
the right solution is really critical.

Speaker 1 (29:48):
Great perspective on how you can use right investment solutions
to also create some income for yourself as part of
your overall investment strategy. We always appreciate our chief investment
Officer and out joining us to shine some light.

Speaker 2 (30:02):
On what your options are as an investor.

Speaker 1 (30:04):
You're listening to Simply Money presented by all Worth Financial
here on fifty five KRC the talk station. You're listening
to Simply Money presented by all Worth Financial. I mean
you wag neuralong with Bob Sponsller. Time to play everybody's
favorite retirement fact or fiction let's get straight to it, Bob,

(30:25):
fact or fiction AI stocks, right, they have been.

Speaker 2 (30:28):
All over the headlines. Everyone's talking about them.

Speaker 1 (30:30):
AI stocks guaranteed to keep soaring as of course technology advances.

Speaker 5 (30:36):
Well, obviously that's fiction in the short term and who
knows in the long term, But I'm willing to bet
on the long term. The key is to not use
AI stocks as your emergency fund or save these account because,
as we have seen in recent days, they can and
do move lower in the.

Speaker 6 (30:54):
Short term, and you want to be prepared accordingly.

Speaker 2 (30:58):
All right, I totally agree there, right. I think you know,
there's so many people who can.

Speaker 1 (31:01):
Fear and greed that that greed can drive you to
go all in on something that ultimately we've seen this
year a ton of volatility since twenty twenty five has started.
So I think there's case in point for why you
want to be very diversified own some AI stocks, but
also something outside of those AI stocks as well.

Speaker 2 (31:21):
Factor fiction.

Speaker 1 (31:21):
There's nothing scary about needing to file an extension as
the tax filing deadline approaches.

Speaker 2 (31:27):
Of course, this one is a fact.

Speaker 1 (31:29):
I think even more and more people are starting to
file extensions these days, just to give themselves some flexibility
or maybe they're waiting on a statement to come in.

Speaker 2 (31:40):
So you know, the point here is you.

Speaker 1 (31:43):
Still have to file, you still have to pay what
the estimated what you would owe if you need to owe.

Speaker 2 (31:49):
But there's nothing wrong with filing an extension.

Speaker 6 (31:53):
Yeah, a couple points here. I mean.

Speaker 5 (31:54):
Also, as we've talked about in you know, prior shows,
there is a CPA shortage out there, make no mistake
about it. So these CPAs are busy and a lot
of times their workload can get backed up. But in
terms of filing, filing an extension and what negative things
can happen, as long as you have withheld and paid

(32:14):
ninety percent of what you're ultimately going to owe for
the year, or paid one hundred percent of what you
paid in taxes last year, you're not gonna be needing
to worry about any penalties. So just make sure you're
withholdings are set up appropriately.

Speaker 6 (32:30):
Yep.

Speaker 5 (32:31):
Everybody loves to get this thing done and file by
you know, April. But if you're somebody for whatever reason
that we've already talked about, can't get that done this year,
no reason to panic.

Speaker 1 (32:43):
Factor fiction, a will is the most important document in
an estate plan.

Speaker 6 (32:50):
I'm going to say for most people, that is fiction.
And here's why.

Speaker 5 (32:54):
You know, the vast majority of people's wealth now is
tied up in their four A WAK or retirement plan,
and amy I still run across a lot of people
that are under the mistaken notion that their four to
one ks and iras are going to pass through their will,
and that's just not the case. So the most important

(33:15):
documents to have in place, and I'm not discounting a
will at all, everybody should have one, but make darn
sure your beneficiary designations on your iras and four to
oh one K plans are updated because that is what's
going to dictate where those assets go when you pass away.
And a lot of people don't look at those very closely.

Speaker 1 (33:35):
Yeah, I think there's this thought that, hey, if it's
in my will, what that beneficiary that I had on
my four oh one K.

Speaker 2 (33:41):
Three decades ago? Does that matter? Well, here's an example.

Speaker 1 (33:45):
Your ex wife is that beneficiary and that old four
to one K, Yes, you've updated your will, does matter.

Speaker 2 (33:50):
If that's the beneficiary that still stands when.

Speaker 1 (33:53):
You pass that's exactly who is going to get that
money and it's a good thing you'll no longer be
around because your current, if your current, if you're married,
is not going.

Speaker 2 (34:02):
To be happy about that.

Speaker 3 (34:04):
You know.

Speaker 1 (34:04):
I think when it comes to estate planning, every document
is equally important, right, think about you know, if you
are incapacitated and maybe in your final days, it might
be that advanced healthcare directive.

Speaker 2 (34:18):
Right, it's critically important.

Speaker 1 (34:20):
Or you know, I've taken calls from you know, spouses
whose husbands or wives are in the hospital and not
doing great and.

Speaker 2 (34:29):
We don't have a power of attorney on file for.

Speaker 1 (34:32):
Them, and they're trying to pay bills and figure out things,
and they're missing that critical piece of the estate plan.

Speaker 2 (34:38):
So all of it is critical.

Speaker 1 (34:40):
I understand it's something that's easy to put off, but
I would say, hey, please, it is an act of
love to make sure that all of these documents are
taken care of, are fully updated, just in case something
were to happen to you. Coming up next, speaking of
estate planning, we have a dose of Wagner wisdom for you.
This is when it comes to estate planning, the step

(35:01):
that most families miss, and I'm going to tell you
I think it is the most critical step. You're listening
to Simply Money, presented by all Worth Financial. Here on
fifty five KRC the talk station.

Speaker 2 (35:18):
You're listening to Simply Money. You're presented by all Worth Financial.
I mean me Wagner along with Bob's bonseller.

Speaker 1 (35:23):
It is time for some Wagner wisdom. And this is
something I have been thinking about a lot recently. Bobby
and I have a colleague, Richard Delmonte, who wrote a
book called An Endless Inheritance, and he was kind of
recently speaking to a bunch of US advisors about that.
And listen, when we talk about estate planning, you do

(35:43):
not have to have ten million dollars to be part
of this conversation. But what I find with many of
my clients that I'm working with is there has been
a generational shift between their parents and them. Many times
they have saved, well, they have a few million dollars
in assets that they live really, really frugally, and they're

(36:06):
not going to spend it, and so the conversation becomes,
what are we going to do with this? How can
we be really intentional with it? Well, the point that
our colleague makes in his book is that by the
second generation, right if you have some significant wealth or
even just wealth that you're hoping maybe would be passed
down to the next generation and the one after that,

(36:27):
even if it's just a little bit. The problem is
seventy percent of the time you pass it to your
kids and then it's gone.

Speaker 2 (36:35):
What's happening here? Much of the time, the step that.

Speaker 1 (36:38):
Is missed is that you are not discussing your estate
planning with your children.

Speaker 2 (36:44):
You're giving them zero direction.

Speaker 1 (36:45):
So they're ending up with half a million dollars, five
million dollars, fifty thousand dollars, whatever it is.

Speaker 2 (36:52):
And you're not even sharing.

Speaker 1 (36:53):
Hey, this is what you can be expecting. Right, here's
the potential tax consequences of that. But also, so we've
talked about this, and here's what our hopes and dreams
are for the impact this can have on your life
and your children's life and your grandchildren's lives.

Speaker 2 (37:09):
We're missing, Bob, the communication yea.

Speaker 5 (37:12):
And as I sit and listen to you talk about this,
I always think about communication in two forms. One irrespective
of the digits or commas or amount of dollars we're
passing down, it's very important to pass down the ability
to manage money to our kids, are they equipped to
manage money, no matter how much that is.

Speaker 6 (37:34):
And a lot of people don't ever take that step.

Speaker 5 (37:37):
But assuming you do and you get that box checked,
a lot of people don't want to talk about what
happens when they die because either the kids are uncomfortable
talking about it, or the parents are uncomfortable talking about it,
or both. But in terms of long term financial planning
for the kids, I think it's a great conversation to
have if that first step has been accomplished, because now

(37:59):
everybody body can do appropriate planning, and you know that
you eliminate that seventy percent chance of that money just
evaporating for lack of communication, which leads to poor management.

Speaker 1 (38:12):
Well, and this book highlight's something that you and I
have seen firsthand many times through the years. You can
have children who get along great, and when you are
no longer here, if you have not been really intentional
about telling them what to expect, there is fighting. There's
fighting that happens that you would have never seen coming.
And so when you then are part of the conversation

(38:32):
before you go, there are no surprises, right, there's no fighting,
there's no I should have gotten this and you should
have done this, and we should have handled this differently.
You are telling them what your hopes and dreams are
and I think that's the most important part of estate planning.
You can have all the documents in the world done,
but many people aren't comfortable having this conversation with their
children and they miss this.

Speaker 2 (38:54):
Thanks for listening. We hope you're going to tune in tomorrow.
We're talking about the hidden dangers. Oh, actually we.

Speaker 1 (38:59):
Don't know what we're talking about out because it's an
evergreen uh three two.

Speaker 2 (39:04):
Thanks for listening. We hope you're going to tune in tomorrow.

Speaker 1 (39:06):
You've been listening to Simply Money, presented by all Worth
Financial here in fifty five KRC, the talk station