October 31, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian reveal how some of today’s trillion-dollar giants—like Nvidia—quietly grew from obscurity to dominance, and how your diversified portfolio might have benefited all along. From Nvidia's 9-cent stock price in 2002 to its $200+ valuation today, this is a masterclass in patient investing and the power of diversification.
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Episode Transcript
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Speaker 1 (00:06):
Tonight, the billion dollar giants that started as nobody's but
could already be hiding in your investment portfolio. This is
simply money presented by all Worth Financial on Bob's sponsller
along with Brian James. Sometimes the biggest opportunities lie dormant, quiet, unnoticed,
like a seed beneath the soil, Brian, and then suddenly
(00:29):
they explode into something massive.
Speaker 2 (00:31):
Right now, we're going.
Speaker 1 (00:33):
To prove to you why your portfolio probably has all
the fuel it needs if planned properly.
Speaker 3 (00:40):
So let's start with company that has hit the headlines
an awful lot lately, and I'll bet it's older than
people think.
Speaker 2 (00:46):
So Nvidia. When did you first hear this company?
Speaker 1 (00:49):
Bob?
Speaker 3 (00:49):
Was it on January twenty second, nineteen ninety nine?
Speaker 2 (00:52):
It was not, No, I kind of knew.
Speaker 1 (00:55):
That, but anyway, I was focused on beyond meat back then.
Speaker 3 (00:58):
Yeah, yeah, and pets dot com making burgers out of
tree bark. But anyway, So January twenty second, nineteen ninety nine,
that's the day that then Vidia joined the Nasdaq, and
lots of people thought it was spelled wrong. That was
six years after it start in nineteen ninety three, came
into that index at twelve bucks a share by two
thousand and one, and video joined the S and P
(01:19):
five hundred.
Speaker 2 (01:20):
And by the way, at this time, they weren't.
Speaker 3 (01:22):
Obviously there was no AI, there was no you know,
there were there was no crypto, But where it existed
was in the domain of computer nerds and video gamers.
And I can say that because I was one they made.
They made video game cards for computers and graphic design,
those kinds of things, and those are the tools that
are behind the crypto run bitcoin mining, those kinds of
things as well as AI. So that's why it's become
(01:43):
so big so recently. So here's a fun fact though,
way back then, you know, there's only five hundred companies
in the S and P five hundred, bob, right, so
if you're gonna put one in, you gotta pull one out.
What company did in video replace here's a fun one Enron,
Remember that. Remember Enrod basically made up there accounting of
the entire time and would mess with rate payers in
(02:04):
California and Texas and elsewhere just to squeeze out profits. Well,
that was a fun company to have disappear from the
S and P five hundred. But anyway, and Vidia replaced it,
and that became the poster child of why having too
much of your portfolio and one single stock can lead
to disaster. Enron obviously became a much bigger disaster after that,
but leaving the S and P five hundred, what that
(02:24):
literally means is that lots of index funds have to
dump your stock, So you're gonna take a hit if
you're no longer part of the cool kid crowd.
Speaker 2 (02:32):
So a little more history on Nvidia.
Speaker 3 (02:34):
By the end of two thousand and two, and Vidia
stock price was about nine cents a share. If you
owned the S and P five hundred at that time,
you did own it, you probably had never heard of it.
Then fast forward to two thousand and seven when Forbes
named in Vidia it's Company of the Year. This is
when this is really when things started to kind of
go forward for him, and that was due to the
accomplished the accomplishments they had during that period. And it
was still at that time only seventy eight cents a share,
(02:56):
and still pretty much people had never heard of it.
Speaker 1 (03:00):
Well, if you haven't figured it out already, the moral
to the story here tonight is diversification. Have a good
diversified portfolio, broadly diversified between companies and industries, because you
never know when some of these companies are going to
rear their head and really start to take off, you know.
And we're talking about Navidia because everyone is now paying
(03:20):
attention and knows what it is. So when did Navidia
start to gain traction? Twenty sixteen, the stock jumped to
two dollars and sixty three cents a share. The next
year it catapulled it up to four dollars and seventy
eight cents a share. And we bet most people still
hadn't heard of Navidia back in twenty sixteen, but this
(03:40):
is when it really started to rocket higher. And again,
you don't have to know about Navidia or any of
these stocks. If you have a broadly diversified portfolio or
just an SMP index fund, you're already participating without even
knowing it. Take us to take us forward to late
two thousand and two, Brian.
Speaker 3 (03:59):
Yeah, So in late twenty twenty two, that's when AI
really became a thing, when chat GPT got released and
everybody started to pay attention to it. So that lit
a fire under demand for these data center products that
they have. That's where they store all these video cards. Right,
They're not shipping them out to individual computers anymore. They're
putting them in data centers, and that's where all of
the AI thinking is happening. Those had already been doing well,
(04:20):
but all of a sudden just exploded exponentially. That is
probably around the time that the average person who was
not already into technology began.
Speaker 2 (04:28):
To understand what this company was.
Speaker 3 (04:29):
By the end of twenty twenty three, that stock price
was around fifty bucks a share, and the last year
one hundred and thirty four dollars a year, and today, Bob,
it's right.
Speaker 2 (04:36):
Around two hundred dollars a share.
Speaker 3 (04:38):
Remember nine cents nine cents of share is what it
was worth back in the at the end of two
thousand and two. So if you were an investor back then,
you're doing okay well.
Speaker 1 (04:47):
In Navidio just became the first company ever to reach
five trillion that's trillion with the t in market value.
So imagine this if you want to feel really depressed
here on Halloween before you go trick or tree eating.
If you had invested five hundred dollars into video stock
when it was just nine cents a share. At the
end of two thousand and two, you would have one
(05:09):
point one two million dollars for a five hundred dollars investment.
Speaker 2 (05:14):
But that's the problem.
Speaker 1 (05:15):
Most people did not do this because it's really hard
to predict the future.
Speaker 2 (05:20):
And here's problem number two.
Speaker 1 (05:22):
Many people out there might be itching to just pile
into the stock right now at close to two hundred
dollars a share, many already have in the last two years.
We hear about this all the time because it's dominating
the headlines. But you know, the caution here is to
make sure you're not buying or putting too much money
into yesterday's winners because things have a way of correcting
(05:44):
and you just don't want to put you hear it
all the time, too many eggs in one proverbial basket.
Speaker 3 (05:50):
Yeah, there's plenty of stocks out there right now, Bob,
worth nine cents of share. Some of them are going
to become the next Nvidia of twenty forty. Yeah, most
of them are going to go Most of them are
going to go out of this exactly the reason they're
worth nine cents of share.
Speaker 2 (06:02):
So you're still playing the lottery, all.
Speaker 1 (06:04):
Right, You're listening to simply Money presented by all Worth Financial.
I'm Bob sponseller along with Brian James, an example of
a sure thing that absolutely plummeted. You know you mentioned
it earlier, Brian Enron. You know, I remember when everybody
wanted to own Enron, you know, in the late nineteen nineties.
You know, it was it was untouchable, nothing could go wrong.
(06:28):
Everybody wanted to own it. It was just printing earnings
and the stock was just going crazy. Walk us through again,
you're grat at explaining history. Lessons remind us of what
happened to Enron.
Speaker 2 (06:41):
So Enron.
Speaker 3 (06:42):
Enron was famous for just being really, really good at
turning any energy trading into profits. You know, that's a
thing that has existed for a long time, but Enron
just took it to another level.
Speaker 2 (06:51):
But that was the story before the story.
Speaker 3 (06:53):
The real story was in two thousand and one, it
finally was revealed that they had basically made up their
balance sheets billions of dollars worth of debt and falsified profits.
They had lots of off book types of investments out there.
The stock dropped from ninety dollars to under one dollar,
and the company went bankrupt. And let's you know, pour
one out for Arthur Anderson, the accounting firm that was
(07:15):
okay with all this and became no longer one of
the big four back then. That's why you don't hear
that name anymore, because they turned a blind eye to
literally did not do their jobs. I don't think of
an accounting firm could do it, could not do its
job anymore than Arthur Anderson didn't do its job. But anyway,
great stories, glossy numbers, that doesn't equal great investments. The
transparency and the real actual earnings matter. Don't hide things.
(07:37):
It's gonna come out, all right.
Speaker 2 (07:40):
And then let's talk about GE.
Speaker 1 (07:41):
I mean, let's face a lot of people that listen
to the show are very familiar with GE. You know,
a lot of them probably worked there. It was the
can't miss blue chip, you know, forever for decades, GE
was the definition of a quote unquote safe investment. It
was in everything, power, finances, appliance, led by the legendary.
Speaker 2 (08:01):
Leader Jack Welsh.
Speaker 1 (08:02):
At its peak in two thousand, it was worth over
six hundred billion dollars. Brian and I can remember back
then talking to actual clients that were saying to me, Bob,
why are we getting involved in appliances and finances and
why don't they just leave this thing alone and let
us make jet engines and lo and behold over extension,
bad acquisitions. And the two thousand and eight financial crisis
(08:26):
brought GE literally to its knees. The stock fell from
sixty dollars a share to under seven dollars a share,
wiping out billions of dollars in wealth.
Speaker 2 (08:37):
You know, even diversified.
Speaker 1 (08:38):
Giants can collapse if there's if they're too complex to manage.
And you know, going back to my engineer friends, they
were right if they had just left this thing alone.
Fast forward to today, the most profitable part of GE
and now that they've split this thing off into pieces,
good old ge Aviation right here in Cincinnati.
Speaker 2 (08:59):
It's that's been a fun turn.
Speaker 1 (09:01):
This is why you shouldn't listen to the NBA nerds.
You should listen to people that actually make stuff.
Speaker 3 (09:06):
These are the Yeah, these are the one of the
great stories here recently because ge Aviation obviously has been
on a heck of a run lately.
Speaker 2 (09:14):
Reporting just record earnings very very recently.
Speaker 3 (09:16):
But I do remember, like we said, we got a
lot of people just down the hill from us here
down and even to a lot of clients that worked
there or did work there, and rode this thing all
the way through. GE was actually I think the rock
bottom point for GE was in June of twenty eighteen
when they were removed from the Dow Jones. Right, we
just got done talking about people getting their companies getting
removed from the S and P five hundred. That's five
(09:37):
hundred companies. The Dow Jones is thirty and if you
get removed from that, that's what that's the oldest index
we have out there, and GE got taken out of
it back in twenty eighteen.
Speaker 2 (09:45):
Yeah.
Speaker 1 (09:45):
But Brian, the real rock bottom was during that financial crisis.
I mean, I can remember Warren Buffett coming along and
making the deal of the century, writing a huge check
to GE to get preferred stock. I think it was
yielded like eighteen percent interest. If he hadn't come along
with cash in hand, they might have been in deep,
(10:07):
deep trouble. I remember that day like it was yesterday.
Speaker 2 (10:11):
This is why Warren Buffett is.
Speaker 1 (10:14):
The guy always steps up, always has cash on hand
to buy at the right time. And boy, that was
a great investment. And really honestly help help keep a
great company, you know, in business.
Speaker 2 (10:26):
Yeah, and they've gone back to their roots.
Speaker 3 (10:27):
So I remember before all of this fell apart, I
remember referring to General Electric as its own mutual fund
because it was so it was the first fight holding
in itself. They had so many different things they were in.
But that obviously, you know, the pile got too big
and kind of collapsed on itself. So the answer has
been to split it into four companies. There's healthcare, Finance, Aviation,
and then the core appliances business left over here in Cincinnati.
(10:50):
We of course talked about ge Aviation. That's our beloved
jet engine plant there in Evendale, and so that has
been the answer to it. Took a long time to
get there, but we're in a much better.
Speaker 2 (10:59):
Position with right now. Here's the Allworth advice. Don't just
chase the winners.
Speaker 1 (11:05):
Own them before anyone even knows their name. And the
best way to do that is just a good old
diversified index fund or direct index portfolio. Coming up next,
why talking about money is so taboo? Plus Travis Kelsey's
surprise new investment that hits close to home and the
(11:25):
college coaches making seven hundred and fifty thousand dollars a
month not to show up at work every day. You're
listening to Simply Money, presented by Allworth Financial on fifty
five KRC, the talk station. You're listening to the Halloween
edition of Simply Money, presented by Allworth Financial on Bob
(11:47):
Sponseller along with Brian James straight Ahead.
Speaker 2 (11:50):
At six forty three, The hidden force that could.
Speaker 1 (11:52):
Steer your portfolio in a completely wrong direction. Did you
know most Americans would rather disc us politics or religion
then open up about their own personal finances. I find
this a little bit surprising, Brian. But give us give
us some new data that's come across our desk from
a couple surveys out there.
Speaker 3 (12:13):
Yeah, well this is this one's not too surprising to me.
This is, you know, being raised in the Midwest. These
are not things that we discuss, are they?
Speaker 2 (12:19):
So?
Speaker 3 (12:20):
Latest financial taboos? Surveys stuff we don't want to talk about.
Bank great dot Com found that about six and ten
US adults said they're not comfortable talking about their bank
account balance with family or close friends, But by contrast,
only about two and ten are uncomfortable discussing political views
or religion. I'd love to compare that with maybe ten
years ago when we were all a little bit quieter
(12:40):
about our politics. But everything's gotten so much louder these days.
But moneytops even politics and religion in the don't talk
about it category. And what's more, about half of these
folks said they would be they'd be uncomfortable discussing their
credit card debt or their salary. I think this is evidence, Bob,
of people just being you know, a kind of ashamed
or scared to death about both of those topics. I
don't make enough and I know a lot of people money,
(13:01):
and I don't want to talk about that with anybody
because I don't know the way out well.
Speaker 1 (13:04):
And the other thing this makes me think of as
a topic we talked about earlier this week, I mean
this this whole long term planning conundrum for our older
folks out there. I think generationally and understandably so, people
don't want to talk about finances, and they really don't
want to talk about the prospect of losing their independence,
(13:27):
and that causes some of these needed discussions to get
shut down. You know, they don't talk to their kids
about it, and family discussions are not happening proactively enough
to do some real good planning as it relates to
long term care issues, and Brian, you and I see
it all the time. Unfortunately, what ends up, you know,
(13:50):
spearheading that discussion is a fall or a healthcare issue
or something you know that really sparks an emergency or
crisis type situation.
Speaker 2 (14:00):
And so, you know, I think we have.
Speaker 1 (14:01):
To learn from these studies and try to in a responsible,
respectful way, you know, talk about.
Speaker 2 (14:07):
Things a little bit more than we likely do. Yeah. Absolutely,
I think it's important.
Speaker 3 (14:12):
And just in with regard to my own family, that's
something I decided a while ago, is just to let
everybody understand why, why do we why are we able
to live the way that we do, how we made
the decisions that we've made, you know, And I think
it's very important good, bad, are indifferent for younger people
to understand exactly how the puzzle pieces came together.
Speaker 2 (14:29):
To create the situation that currently exists.
Speaker 3 (14:31):
Give him some background, be comfortable with it, find a
way to have that discussion with the family.
Speaker 2 (14:35):
I think it's very important.
Speaker 1 (14:36):
All right, let's talk about King's Island for a second,
and in particular, let's give a nod to University of
Cincinnati grad Travis Kelcey because he now owns part of
King's Island. Brian, I think this is a cool story.
Speaker 2 (14:49):
It really, It kind of is.
Speaker 3 (14:50):
So Travis Kelcey, now, he's of course from the Cleveland area,
so I don't think he's thinking of King's Island first.
He's probably much more thinking of Cedar Point up there,
and he grew up riding those great roller coasters up there.
But he joined a group that's investing in six Flags, right,
So six Flags is what now owns all of these places.
It used to be, you know, six Flags used to
be the exotic amusement park that we never went to
because there wasn't one anywhere near Cincinnati. But now it's
(15:12):
the one company owns all this stuff, forty two locations
now across the United States, Mexico, and Canada, and another
one coming to South Saudi Arabia in twenty twenty six.
So why are we talking six Flags and not Cedar
Fair anymore? Well, six Flags merged with Cedar Fair and
so that includes King's Island and Cedar Point, and so
this group that Travis is a part of now owns
an economic interest of about nine percent, or about two
(15:33):
hundred million dollars worth of it, which makes that group
the one of the largest shareholders of a two point
two billion dollar corporation. And so when he was asked
about this, he said, well, I'm a lifelong, lifelong six
Flags fan and grow grew up going to these parks
with family and friends, and so the chance to make
six Flags special for the next generation is one I
couldn't pass up. So that it'll be neat to see
what this new energy injected into that world is going
(15:56):
to do for us.
Speaker 2 (15:57):
Hey, by the way, do.
Speaker 1 (15:58):
You think his fiance had anything to do with that decision?
And is that a precursor to maybe a future concert
coming to King's Island?
Speaker 3 (16:06):
You know, Taylor Swift at Timberwolf, which is still there.
By the way, I'm not sure it's got the capacity
to hold on to that. But hey, by the way,
I wanted to say, I'm a fifty one year old
man and I rode the Beast a couple of weeks
ago and it was as awesome as it was. Yeah,
and when I was in high school, get out there,
ride it at night. They have improved it and it
doesn't feel like you've gotten hit in the head by
(16:27):
the two by four anymore, it's not nearly as beat
you up as it used to be. The racer, on
the other hand, not so much the racer. The racer
is probably starting to I don't know. I gotta think
there's a couple of pieces of wood that are starting
to rot on the loose screws, and I'm sure they.
Speaker 2 (16:41):
Keep up with it. All a fun ride, though, all right.
Speaker 1 (16:44):
Imagine a world where you are so bad at your
job that your employer will pay you to go away
and then keep paying you for years. Welcome to the
world of college football. Penn State is going to pay
fired coach James Franklin fifty million dollars over the next
six years. If Franklin does take another job, his compensation
(17:04):
at the new job may reduce what Penn State owes him.
And then you've got former UC coach Brian Kelvy. He
just got canned from LSU and they owe him fifty
four million dollars. Brian, let's break that down for those
scoring at home, that's seven hundred and fifty thousand dollars
a month. That's twenty four thousand, six hundred and forty
(17:26):
one dollars a day or a little over one thousand
dollars an hour just to sit in your recliner.
Speaker 2 (17:33):
Not a bad gig if you can get it.
Speaker 3 (17:35):
So there you go, kids, Your recipe for financial success
is be a little bit good as a football coach
until you get that big contract and then suck at it.
And that is the best bang for your buck you'll
ever gear You'll get for putting time into the day
getting paid to no longer do your job.
Speaker 1 (17:53):
All right, every Sunday you'll find our all Worth Advice
in the Cincinnati Inquirer. Here's a preview question of that article. Brian,
this one, this is right in your wheelhouse. Ha from Springfield,
Springfield Township says he's eager to start investing his four
oh one k in crypto in private assets, but he
(18:14):
wanted to get your take first.
Speaker 3 (18:17):
Well, this is this isn't surprising to hear it all,
because you know, we've been talking about this all year.
It seems like there's been a lot of movements a
foot to allow four one ks to open up to
permit some different types of investments rather than the more
traditional stock bond type of mutual funds that are that
are readily available in there.
Speaker 2 (18:33):
So I don't think this is a terrible idea.
Speaker 3 (18:36):
I'm the last person who's going to say we need
to restrict things and keep it, you know, and keep
it all locked down.
Speaker 2 (18:41):
But on the other hand, when I.
Speaker 3 (18:42):
Look at the entities that are interested in making this possible, really,
this has nothing to do with our let's put individual
investors in a better stronger position. This has everything to
do with these individual investors have twelve trillion dollars tied
up in four oh one ks, and we who own
crypto and private and private type companies would really like
to get be able to tap into that. And we
being the you know, the companies and organizations that want
(19:04):
to make this happen. So the rules are looser. Now,
be careful, folks, Just understand what you're getting into. These
are not buy and hold type investments. Crypto is gonna
bounce a lot, and this is your four oh and k,
it's your nest egg. Private assets are gonna tie They're
not necessarily bad, but they're gonna tie you. They don't
have liquidity, You're gonna run into a quarterly lockups and
just harder to get in and out of. So just
know what you're getting into.
Speaker 2 (19:25):
Coming up next.
Speaker 1 (19:25):
Why reinforcing what you already believe could wreck your financial future.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC, the talk station. You're listening to
Simply Money presented by all Worth Financial. I'm Bob Sponseller
along with Brian James. One of the most dangerous things
(19:49):
in investing isn't inflation, taxes, or even market downturns. It's
your own brain, specifically the way it filters information to
match what you already believe. It's known in the behavioral
finance world as confirmation bias, and boy, this is a
big one that I want to make sure we dive
(20:09):
deep into and tackle tonight.
Speaker 3 (20:10):
Brian, Bob, tell me if you've run across anybody like
this lately. They're absolutely convinced that the market is coming down.
It's at an all time high and it just can't
go any higher. It's coming down. They got this information
from from articles online. Every article they read is worse
than the last one they read, and it's just kind
of backing up on them.
Speaker 2 (20:27):
What they don't realize, however, though, is Google.
Speaker 3 (20:29):
And social media is doing this on purpose, because all
they care about, all those companies care about, is making
sure your eyes stay glued to that screen. So if
this guy's interested in bad news about the market, then
absolutely we're going to serve it up on a platterform
because that'll keep him here looking at these ads. And
that's how we all make money, we being Google and
social media and so forth. That is confirmation bias. They
(20:49):
know that you are seeking out opinions and you'll be
happy to read more things that you already agree with,
or they're going to shove it in your face.
Speaker 2 (20:55):
Well, and this is one of the benefits.
Speaker 1 (20:57):
You know, you and I have both been doing this
a long time, so we've got many clients. And I
don't know about you, Brian, but you know I'm going
to talk about politics here for a minute, because depending
on who the occupant is in the White House and
who's controlling Congress and all that, I can almost predict,
you know, from each side of the aisle, the four
(21:18):
or five clients that are going to be constantly in
my ear telling me how and why the entire global
economy is going to collapse because so and so is
in the White House and they're purposely ruining the country.
Speaker 2 (21:31):
Do you have do you have those.
Speaker 1 (21:32):
Little handful of clients that you know come out of
the woodwork depending on who's occupying the White House at
any given time.
Speaker 3 (21:40):
Okay, I'm gonna I'm gonna hit you with the phrase here, Bob,
I rehearsed this on the way and know we're gonna
talk about this political passion has no place in prudent planning.
Speaker 2 (21:48):
Wow, that's a lot of peace. I'm not even going
to try to repeat that. Thank you, thank you. I
rehearsed like I said. Anyway.
Speaker 3 (21:53):
Uh No, Yeah, clients all the time, we all and
it's not you. There's nothing wrong with this thought process.
We're simply looking for that mechanical button or the lever
that we can say if this, then that, if so
and so is in office and in control and I
don't like them, then that means I should do this
black and white process, meaning liquidate everything or go to
gold or whatever. We have this all the time, but
in reality, the history shows that the market could absolutely
(22:15):
care less who's in office. It goes up no matter
who's in office, because that's how the economy works. There
are always more and more people buying more and more things.
And again I'm talking about the longer term, not the
short term swings, which we can't control or predict. But
the economy will function underneath presidents and leadership of any stripe.
And there is ample history going back through all the
way back through the Great Depression and including the most
(22:37):
recent administrations that it just doesn't matter who's in charge.
That causes short term swings, and heaven knows, we've seen
enough of those, But in the longer term, generally speaking,
things go up. Just don't let the short term whack
the dog.
Speaker 1 (22:49):
Yeah, I've already made kind of the cardinal rule mistake
here mentioning politics, so I'm going to use another one
here at the risk of angering even more and more people.
And that's talking about the importance of having both spouses
in a room when we do planning and we talk
about risk tolerance and all that. Because Brian, I don't
know about you, I find almost always the people that
(23:11):
are coming to me with this deep embedded confirmation bias,
almost one hundred percent of the time, it's men. It's men.
Men in their egos are our egos. We want to
be right, we want to predict the future, we want
to protect our family, all that stuff, and we come
in thinking we already know how it's all going to work,
(23:32):
depending on who's in the White House or what have you,
And we start consuming media sources to just confirm that
bias where I find that the women are way more
level headed, even keeled, and that can oftentimes balance out
a good financial planning review. By making sure both spouses
(23:53):
are in the room, we're hearing from both spouses and
we're kicking around this confirmation bias, you know, identifying the
elephant in the room and hopefully hunting it down and
killing it so we can move on with more productive conversations.
Speaker 3 (24:07):
If this then that if this happens, then I know
I'm going to do that that way, I'm forcing it
to be predictable, and I'm forcing myself to pretend, and
I'm going to put that in caps, pretend that I
have control over this, because that's how as a man
like you said, as a man, I want to I
want to fix things. I want to tackle it, take
it on, take the bull by the horns, and fix
the problem.
Speaker 2 (24:25):
But no, it doesn't work that way.
Speaker 3 (24:26):
As a matter of fact, that assumption can get us
into a lot of trouble that confirmation bias comes back
to haunt us in terms of forcing us to think
that we have way more control than we do.
Speaker 1 (24:35):
You're listening to simply Money presented by all Worth Financial.
I'm Bob Sponzeller along with Brian James and Brian. It
seems to, at least to me, the more money people have,
the more costly a mistake can be if we allow
this confirmation bias to really take hold on major decisions.
Speaker 2 (24:53):
Do you find the same thing?
Speaker 1 (24:54):
Yeah?
Speaker 2 (24:55):
Absolutely.
Speaker 3 (24:55):
And the thing to remember too, A lot of people,
when they've built a good, solid nest egg market decline
of one percent can look like a massive amount of money.
If I have ten thousand dollars and I lose one percent,
well I just lost one hundred dollars. That's not obviously
a huge amount of money. But if I have five
million in the market takes one percent away, that's fifty
thousand dollars. But it's the same one percent, and it's
(25:16):
affected by the same streams of the market no matter
how big the investment is. So the idea there is
pay attention to the percent. It's not the dollar amount
I just had the conversation, and not the other day
with a client who has really worked up over a
one percent loss.
Speaker 1 (25:29):
Yeah, I mean people don't like looking for dissenting views
or anything that goes against that bias. And I think
to talk about you know, we've talked about what not
to do. Let's spend a little time talking about what
to do. And I think you got to get different
ideas from different people, people that are intelligent, people that
are well read, people that could check their emotions at
the door, and that helps, you know, kind of filter
(25:52):
out some of that strong bias. And this is where
I want to give kudos to our chief investment officer
here at all Worth and Andy Stout, because he is
wonderful at this and every so often, I don't know, Brian,
every three or four months, if a headline comes across
or something happens where I'm starting to.
Speaker 2 (26:07):
Get a little worked up.
Speaker 1 (26:08):
It's always I enjoy having a little dose of reality
fed to me by Andy because he'll pull out the
inflation scorecard, He'll pull out all the data that's actually
is making the markets move in one way or the
one way or another. And when you actually look at
the reasons behind why markets move and how they move,
and when they move. It has literally nothing to do
(26:32):
usually with what we see in the headlines or these
articles that we want to consume just to confirm our
own embedded biases.
Speaker 2 (26:40):
Yeah, I would agree with that.
Speaker 3 (26:41):
It's a great tool that we have to be able
to rely on our own teams internally.
Speaker 1 (26:45):
Of course, again, it's important to get a second opinion,
and this is where a fiduciary advisor can provide enormous value.
And we are not here, or a good advisor is
not here to agree with everything that you're thinking, with
your fears or hype or articles that you've read. We
are here to challenge those assumptions and protect you from
(27:07):
blind spots that you might have. Here's the all Worth
Advice confirmation. Bias isn't just a mental quirk. It's a
financial risk and the more wealth you have, the more
damage it can do if you don't identify and address it.
All Right, your neighbor just bought Navidia. Should you jump in?
We'll talk about a powerful factor that could pull you
(27:28):
away from your financial plan. Next, you're listening to Simply Money,
presented by all Worth Financial on fifty five KRC.
Speaker 2 (27:35):
The talk station.
Speaker 1 (27:41):
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob Spondseller along with Brian James. Do you have
a financial question you'd like for us to answer. There's
a red button you can click while you're listening to
the show right there on the iHeart app. Simply record
your question and it'll.
Speaker 2 (27:56):
Come straight to us. All right, Brian, Let's be honest.
None of us like to feel left out, especially when
it comes to money. And when your coworker brags about their.
Speaker 1 (28:06):
Bitcoin gains or your neighbor says they doubled their portfolio
in six months, it triggers an emotion in us that
we want to identify.
Speaker 2 (28:15):
That fear of missing out or.
Speaker 3 (28:18):
Fomoho fomo fomo fomo fomo can cause a lot of
problems in terms of making terrible financial and otherwise decisions.
So the world of investing that you'll feel some pressure
just from you know, the people you're golfing with, or people.
Speaker 1 (28:33):
At a cocktail party.
Speaker 3 (28:34):
Everybody's talking about, you know, something that you weren't aware
of or you didn't do, and it may or may
not be a good idea. But but what your brain
kicks into is have I missed out on an opportunity.
Is there something out there that I should do, that
I should be doing right now, and how can I
fix that problem? Well, so, maybe there's people out there
that you know, you know, you know, somebody's got a
solid retirement plan. They got everything, they need, a couple
(28:54):
million in assets, but they read this one article about
AI and all of a sudden, they've pivoted their you know,
a good chunk of their portfolio toward towards the big
names and AI good idea, bad idea? I say not
so much because they did that with their heart, with
their emotions, not with their logical brain of does this
help my plan? Do I need this kind of growth?
Or am I just in the casino playing with playing
with poker chips?
Speaker 2 (29:15):
All right, well, let's.
Speaker 1 (29:15):
Get down to brass tacks here. I mean, how many
of your clients come to you with this kind of stuff? Hey,
I love the plan, Brian, everything's fine. But let's I
think people get bored. Sometimes they get bored with their
plan because it works so well, so they just create
this fomo emotion again, back to needing to do something
or wanting to do something, or introducing some juice to
(29:36):
the whole situation. Do you have clients that come to
you with that and how do you deal with it?
Speaker 3 (29:41):
Yeah, I'm going to go to other way on you, Bob.
I'm going to go with myself on that one. We
feel this too as advisors, we run into it too.
So I was actually with my family was considering an investment,
and I talked to another advisor here at Allworth who
had some experience with it, and his answer was, why
do you want a more complicated life?
Speaker 2 (29:56):
And that put me on my heels.
Speaker 3 (29:58):
Because this was a private equity type thing with some
moving parts two and all that, and I hadn't even
thought about that. I was just interested in the you know,
it's just a portion of my portfolio and so on
and so forth. But there's moving parts to any decision
like that that you make. So it is always valuable
to tea just take a breath and figure out what
the big picture is if I'm gonna throw And let
me be clear, I have absolutely no problem with people
wanting to play with the stock market.
Speaker 2 (30:19):
Go ahead, knock yourself out.
Speaker 3 (30:20):
Just don't do it with the notion that I'm gonna
double my money next week and all my problems will
be solved. Do it with the idea that this is
an interesting thing and I like the story behind this
investment and I want to participate in it, and that's fine.
Just don't hang your entire financial future on.
Speaker 1 (30:33):
Yeah, And I'll tell you how I handle this, because
if somebody comes at me and at me and at
me long enough, I just tell them, hey, fine, let's
split the Let's split your portfolio into two pieces. And
I've done it this way for over thirty years. We
got your serious money. This is the money you can't
afford to lose and it's got to take care of
you for the rest of your life. And then there's
(30:54):
play money. And as long as they're willing to talk
about I'm like, hey have that, let's slice off a
piece of play money. I'm not going to manage the
play money for you. You go do it the serious goes.
Show me how good you are. Look at all your charts,
day traded, you know, buy AI stocks to your heart,
heart's desire, gold, whatever you want to do, go, get
(31:17):
in and out of all of it.
Speaker 2 (31:18):
Get back to me in six months and let me
know how you're doing.
Speaker 1 (31:21):
Because it can oftentimes if people actually have to go
out and do this and have the time and the
inclination and study all the details and execute on what
they think can.
Speaker 2 (31:32):
Be very easy to do.
Speaker 1 (31:34):
I like to give them six months to a year
to actually go out and do it and then come
back to me and let me know how it's going.
Speaker 3 (31:40):
Yeah, the serious money permits the existence of the play money,
and so you have to think about it in terms of,
you know, if I want to throw a very small
amount of you know of into something take a flyer.
Speaker 2 (31:50):
As usually the word word that people use.
Speaker 3 (31:52):
That's perfectly fine, but it shouldn't be treated as something
that's going to change your life. If you're willing to
bet half or more of your portfolio on some crazy
bet than and I'm going to go ahead and say that,
you're going to create financial problems for yourself down the road.
On the other hand, if you're willing to invest a
small amount, then even if it doubles triples, it's not
going to change your life anyway. So just remind yourself
of how important this really will be to you.
Speaker 1 (32:12):
You're listening to Simply Money, presented by all Worth Financial
on Bob's sponsorer along with Brian James. Brian, let's get
into how that fomo or fear of missing out emotion
starts to rear its ugly head.
Speaker 2 (32:24):
What causes people to feel that? Yeah, well, what causes
it is exactly that. It's the fear.
Speaker 3 (32:28):
It's a you know, somebody's doing something, somebody has found
an opportunity that I'm aware of, but I'm not executing on.
Am I missing out? That's where it comes from. But
the very first thing that happens is it causes you
to abandon your overall plan if you had a solid
financial plan, which you mentioned it earlier about a solid
financial plan can be boring.
Speaker 2 (32:44):
Let's call it. Call it what it is.
Speaker 3 (32:46):
Right, I've built my machine. It's in good, solid, running shape.
Now what you know, think of a if you're a
person who's into repairing cars, the most boring thing is
a couple of cars in the garage who that are
running just fine. I want a project. I want to
buy something and beat it up and fix it and
so forth. But that again, that's okay with with a
tiny amount of the portfolio. But you're going to be
you're forcing yourself to do things that you don't have
(33:06):
control over.
Speaker 1 (33:07):
Yeah, that's the key point here, The key point. I
want to drive home is make sure we separate play
money from serious money and make sure that we do
not do anything that's going to violate the viability of
that serious money, meaning your long term financial plan. And
as long as people are willing to do that, things
(33:28):
tend to work out fine. And if they want to
carve off that piece and get speculative, we just carve
that out of the financial plan so you can we
can always demonstrate for our clients the viability of that
financial plan factoring just the serious money piece.
Speaker 2 (33:43):
So take three steps here.
Speaker 3 (33:44):
First, ask yourself, does this fit the plan that I've
already put in place or am I just reacting to
that fear of missing out. Second, one, look at those
goals again. Maybe if you've built a solid financial plan,
make sure the goals still match what you want because
things change over time. What are you really trying to achieve?
And number three, talk to your or a trusted accomplice
or somebody else that knows the situation and just get
(34:05):
an opinion from an arms length away.
Speaker 2 (34:08):
Here's the all worth advice.
Speaker 1 (34:09):
Chasing heat can often result in getting burned. A good
financial plan keeps you cool. Next, the most valuable part
of financial advice. You're listening to Simply Money presented by
all Worth Financial on fifty five KRC the talk station.
(34:31):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James. Here's the truth.
When people think about financial advice, they think about investment picks,
stat tax strategies, state planning, and all those things are important,
but maybe the most valuable thing your advisor should be
doing behavioral coaching.
Speaker 2 (34:53):
Brian, why do we know this?
Speaker 3 (34:54):
Well, morning Star, which is a big investment research firm
out there, has done some research and they've shown through
those studies that good behavior, which means sticking with that
plan and avoiding the urge to try to time the market,
that can add one and a half percent to two
percent in returns annually. And that is that is not magic,
that's guidance. That's somebody standing in arm's length away looking
at your situation. And again, this can be a professional advisor,
(35:17):
it can just be somebody who bounce ideas off of
and so forth, but just somebody to kind of act
as checks and balances to your own decision making skills.
That literally results in real dollars because somebody can pull
in the reins on you if you're about to make
about to make a bad decision.
Speaker 2 (35:30):
Yeah.
Speaker 1 (35:30):
I bring this up all the time, especially when people
are kind of fee avoiding, kind of wanting to talk
about the advisory fees and why do we charge this
and what do they get out of it? I think
the default provision most people are A lot of people
could come to us with as well. If I'm going
to pay an advisory fee of one one and a
half percent, what have you? My investment returns better be better,
(35:53):
you know, in excess of that every single year, or
you aren't doing anything. And all these studies have shown
people completely forget about the behavioral impact of being left
to your own devices and making these decisions on your own,
to say nothing of the tax alpha and the other
benefits that come with good financial planning. It's this behavioral
(36:17):
coaching and taking people by the hand and helping them
not make mistakes from which they can't recover that really
have the value here at the end of the day.
Speaker 3 (36:28):
Yeah, and again there's nothing wrong with being a do
it yourself as well, but you're going to run into
these same things, same situations, even if you're making your
decisions on your own, which again is a perfectly acceptable
way to go. I like to think of it in
terms of reminding people that, hey, when the market goes down,
that is not a failure. It's a failure if you
lost a lot more than the market, because you probably
(36:48):
weren't invested in a very diversified manner to begin with. However,
just viewing the normal ups and downs of a market
as up as good, down as bad as a failure.
I would compare that to you know what, if it's raining.
You know, if it's rain outside today, maybe we should
just break up these windows. Think of the money we'll
save on heating if we just don't have any windows
anymore because it's raining today. Therefore the sun will never
(37:08):
come out again. That's not the way to think about it.
A brief period of you know, bumpiness, volatility, or losses
is to be expected and dealt with, not to be
attempted to be avoided.
Speaker 1 (37:18):
That's the trap that a lot of people fall into. Now,
what we're trying to do here is paint a picture
of why you would want to work with a good,
solid fiduciary advisor. And this isn't meant to be a
commercial for all Worth. I mean, we do this kind
of planning, but other people do it as well. The
key is to find a good fiduciary advisor who can
tell who won't just sit there and tell you what
(37:38):
you want to hear, but oftentimes tell you what you
need to hear, because at the end of the game,
at the end of the day, job one here, at
least in my mind, is to make sure all of
our clients have above a ninety percent probability of meeting
all their long term financial goals and not running out
of money in spite of what may come down and
(37:59):
often will come down the road.
Speaker 2 (38:01):
Here's the all Worth advice.
Speaker 1 (38:02):
A great advisor won't just manage your money, they'll protect
you from yourself.
Speaker 2 (38:08):
Thanks for listening.
Speaker 1 (38:09):
You've been listening to Simply Money, presented by all Worth
Financial on
Speaker 2 (38:12):
Fifty five KRC, the talk station
Tonight, the billion dollar giants that started as nobody's but
could already be hiding in your investment portfolio. This is
simply money presented by all Worth Financial on Bob's sponsller
along with Brian James. Sometimes the biggest opportunities lie dormant, quiet, unnoticed,
like a seed beneath the soil, Brian, and then suddenly
(00:29):
they explode into something massive.
Speaker 2 (00:31):
Right now, we're going.
Speaker 1 (00:33):
To prove to you why your portfolio probably has all
the fuel it needs if planned properly.
Speaker 3 (00:40):
So let's start with company that has hit the headlines
an awful lot lately, and I'll bet it's older than
people think.
Speaker 2 (00:46):
So Nvidia. When did you first hear this company?
Speaker 1 (00:49):
Bob?
Speaker 3 (00:49):
Was it on January twenty second, nineteen ninety nine?
Speaker 2 (00:52):
It was not, No, I kind of knew.
Speaker 1 (00:55):
That, but anyway, I was focused on beyond meat back then.
Speaker 3 (00:58):
Yeah, yeah, and pets dot com making burgers out of
tree bark. But anyway, So January twenty second, nineteen ninety nine,
that's the day that then Vidia joined the Nasdaq, and
lots of people thought it was spelled wrong. That was
six years after it start in nineteen ninety three, came
into that index at twelve bucks a share by two
thousand and one, and video joined the S and P
(01:19):
five hundred.
Speaker 2 (01:20):
And by the way, at this time, they weren't.
Speaker 3 (01:22):
Obviously there was no AI, there was no you know,
there were there was no crypto, But where it existed
was in the domain of computer nerds and video gamers.
And I can say that because I was one they made.
They made video game cards for computers and graphic design,
those kinds of things, and those are the tools that
are behind the crypto run bitcoin mining, those kinds of
things as well as AI. So that's why it's become
(01:43):
so big so recently. So here's a fun fact though,
way back then, you know, there's only five hundred companies
in the S and P five hundred, bob, right, so
if you're gonna put one in, you gotta pull one out.
What company did in video replace here's a fun one Enron,
Remember that. Remember Enrod basically made up there accounting of
the entire time and would mess with rate payers in
(02:04):
California and Texas and elsewhere just to squeeze out profits. Well,
that was a fun company to have disappear from the
S and P five hundred. But anyway, and Vidia replaced it,
and that became the poster child of why having too
much of your portfolio and one single stock can lead
to disaster. Enron obviously became a much bigger disaster after that,
but leaving the S and P five hundred, what that
(02:24):
literally means is that lots of index funds have to
dump your stock, So you're gonna take a hit if
you're no longer part of the cool kid crowd.
Speaker 2 (02:32):
So a little more history on Nvidia.
Speaker 3 (02:34):
By the end of two thousand and two, and Vidia
stock price was about nine cents a share. If you
owned the S and P five hundred at that time,
you did own it, you probably had never heard of it.
Then fast forward to two thousand and seven when Forbes
named in Vidia it's Company of the Year. This is
when this is really when things started to kind of
go forward for him, and that was due to the
accomplished the accomplishments they had during that period. And it
was still at that time only seventy eight cents a share,
(02:56):
and still pretty much people had never heard of it.
Speaker 1 (03:00):
Well, if you haven't figured it out already, the moral
to the story here tonight is diversification. Have a good
diversified portfolio, broadly diversified between companies and industries, because you
never know when some of these companies are going to
rear their head and really start to take off, you know.
And we're talking about Navidia because everyone is now paying
(03:20):
attention and knows what it is. So when did Navidia
start to gain traction? Twenty sixteen, the stock jumped to
two dollars and sixty three cents a share. The next
year it catapulled it up to four dollars and seventy
eight cents a share. And we bet most people still
hadn't heard of Navidia back in twenty sixteen, but this
(03:40):
is when it really started to rocket higher. And again,
you don't have to know about Navidia or any of
these stocks. If you have a broadly diversified portfolio or
just an SMP index fund, you're already participating without even
knowing it. Take us to take us forward to late
two thousand and two, Brian.
Speaker 3 (03:59):
Yeah, So in late twenty twenty two, that's when AI
really became a thing, when chat GPT got released and
everybody started to pay attention to it. So that lit
a fire under demand for these data center products that
they have. That's where they store all these video cards. Right,
They're not shipping them out to individual computers anymore. They're
putting them in data centers, and that's where all of
the AI thinking is happening. Those had already been doing well,
(04:20):
but all of a sudden just exploded exponentially. That is
probably around the time that the average person who was
not already into technology began.
Speaker 2 (04:28):
To understand what this company was.
Speaker 3 (04:29):
By the end of twenty twenty three, that stock price
was around fifty bucks a share, and the last year
one hundred and thirty four dollars a year, and today, Bob,
it's right.
Speaker 2 (04:36):
Around two hundred dollars a share.
Speaker 3 (04:38):
Remember nine cents nine cents of share is what it
was worth back in the at the end of two
thousand and two. So if you were an investor back then,
you're doing okay well.
Speaker 1 (04:47):
In Navidio just became the first company ever to reach
five trillion that's trillion with the t in market value.
So imagine this if you want to feel really depressed
here on Halloween before you go trick or tree eating.
If you had invested five hundred dollars into video stock
when it was just nine cents a share. At the
end of two thousand and two, you would have one
(05:09):
point one two million dollars for a five hundred dollars investment.
Speaker 2 (05:14):
But that's the problem.
Speaker 1 (05:15):
Most people did not do this because it's really hard
to predict the future.
Speaker 2 (05:20):
And here's problem number two.
Speaker 1 (05:22):
Many people out there might be itching to just pile
into the stock right now at close to two hundred
dollars a share, many already have in the last two years.
We hear about this all the time because it's dominating
the headlines. But you know, the caution here is to
make sure you're not buying or putting too much money
into yesterday's winners because things have a way of correcting
(05:44):
and you just don't want to put you hear it
all the time, too many eggs in one proverbial basket.
Speaker 3 (05:50):
Yeah, there's plenty of stocks out there right now, Bob,
worth nine cents of share. Some of them are going
to become the next Nvidia of twenty forty. Yeah, most
of them are going to go Most of them are
going to go out of this exactly the reason they're
worth nine cents of share.
Speaker 2 (06:02):
So you're still playing the lottery, all.
Speaker 1 (06:04):
Right, You're listening to simply Money presented by all Worth Financial.
I'm Bob sponseller along with Brian James, an example of
a sure thing that absolutely plummeted. You know you mentioned
it earlier, Brian Enron. You know, I remember when everybody
wanted to own Enron, you know, in the late nineteen nineties.
You know, it was it was untouchable, nothing could go wrong.
(06:28):
Everybody wanted to own it. It was just printing earnings
and the stock was just going crazy. Walk us through again,
you're grat at explaining history. Lessons remind us of what
happened to Enron.
Speaker 2 (06:41):
So Enron.
Speaker 3 (06:42):
Enron was famous for just being really, really good at
turning any energy trading into profits. You know, that's a
thing that has existed for a long time, but Enron
just took it to another level.
Speaker 2 (06:51):
But that was the story before the story.
Speaker 3 (06:53):
The real story was in two thousand and one, it
finally was revealed that they had basically made up their
balance sheets billions of dollars worth of debt and falsified profits.
They had lots of off book types of investments out there.
The stock dropped from ninety dollars to under one dollar,
and the company went bankrupt. And let's you know, pour
one out for Arthur Anderson, the accounting firm that was
(07:15):
okay with all this and became no longer one of
the big four back then. That's why you don't hear
that name anymore, because they turned a blind eye to
literally did not do their jobs. I don't think of
an accounting firm could do it, could not do its
job anymore than Arthur Anderson didn't do its job. But anyway,
great stories, glossy numbers, that doesn't equal great investments. The
transparency and the real actual earnings matter. Don't hide things.
(07:37):
It's gonna come out, all right.
Speaker 2 (07:40):
And then let's talk about GE.
Speaker 1 (07:41):
I mean, let's face a lot of people that listen
to the show are very familiar with GE. You know,
a lot of them probably worked there. It was the
can't miss blue chip, you know, forever for decades, GE
was the definition of a quote unquote safe investment. It
was in everything, power, finances, appliance, led by the legendary.
Speaker 2 (08:01):
Leader Jack Welsh.
Speaker 1 (08:02):
At its peak in two thousand, it was worth over
six hundred billion dollars. Brian and I can remember back
then talking to actual clients that were saying to me, Bob,
why are we getting involved in appliances and finances and
why don't they just leave this thing alone and let
us make jet engines and lo and behold over extension,
bad acquisitions. And the two thousand and eight financial crisis
(08:26):
brought GE literally to its knees. The stock fell from
sixty dollars a share to under seven dollars a share,
wiping out billions of dollars in wealth.
Speaker 2 (08:37):
You know, even diversified.
Speaker 1 (08:38):
Giants can collapse if there's if they're too complex to manage.
And you know, going back to my engineer friends, they
were right if they had just left this thing alone.
Fast forward to today, the most profitable part of GE
and now that they've split this thing off into pieces,
good old ge Aviation right here in Cincinnati.
Speaker 2 (08:59):
It's that's been a fun turn.
Speaker 1 (09:01):
This is why you shouldn't listen to the NBA nerds.
You should listen to people that actually make stuff.
Speaker 3 (09:06):
These are the Yeah, these are the one of the
great stories here recently because ge Aviation obviously has been
on a heck of a run lately.
Speaker 2 (09:14):
Reporting just record earnings very very recently.
Speaker 3 (09:16):
But I do remember, like we said, we got a
lot of people just down the hill from us here
down and even to a lot of clients that worked
there or did work there, and rode this thing all
the way through. GE was actually I think the rock
bottom point for GE was in June of twenty eighteen
when they were removed from the Dow Jones. Right, we
just got done talking about people getting their companies getting
removed from the S and P five hundred. That's five
(09:37):
hundred companies. The Dow Jones is thirty and if you
get removed from that, that's what that's the oldest index
we have out there, and GE got taken out of
it back in twenty eighteen.
Speaker 2 (09:45):
Yeah.
Speaker 1 (09:45):
But Brian, the real rock bottom was during that financial crisis.
I mean, I can remember Warren Buffett coming along and
making the deal of the century, writing a huge check
to GE to get preferred stock. I think it was
yielded like eighteen percent interest. If he hadn't come along
with cash in hand, they might have been in deep,
(10:07):
deep trouble. I remember that day like it was yesterday.
Speaker 2 (10:11):
This is why Warren Buffett is.
Speaker 1 (10:14):
The guy always steps up, always has cash on hand
to buy at the right time. And boy, that was
a great investment. And really honestly help help keep a
great company, you know, in business.
Speaker 2 (10:26):
Yeah, and they've gone back to their roots.
Speaker 3 (10:27):
So I remember before all of this fell apart, I
remember referring to General Electric as its own mutual fund
because it was so it was the first fight holding
in itself. They had so many different things they were in.
But that obviously, you know, the pile got too big
and kind of collapsed on itself. So the answer has
been to split it into four companies. There's healthcare, Finance, Aviation,
and then the core appliances business left over here in Cincinnati.
(10:50):
We of course talked about ge Aviation. That's our beloved
jet engine plant there in Evendale, and so that has
been the answer to it. Took a long time to
get there, but we're in a much better.
Speaker 2 (10:59):
Position with right now. Here's the Allworth advice. Don't just
chase the winners.
Speaker 1 (11:05):
Own them before anyone even knows their name. And the
best way to do that is just a good old
diversified index fund or direct index portfolio. Coming up next,
why talking about money is so taboo? Plus Travis Kelsey's
surprise new investment that hits close to home and the
(11:25):
college coaches making seven hundred and fifty thousand dollars a
month not to show up at work every day. You're
listening to Simply Money, presented by Allworth Financial on fifty
five KRC, the talk station. You're listening to the Halloween
edition of Simply Money, presented by Allworth Financial on Bob
(11:47):
Sponseller along with Brian James straight Ahead.
Speaker 2 (11:50):
At six forty three, The hidden force that could.
Speaker 1 (11:52):
Steer your portfolio in a completely wrong direction. Did you
know most Americans would rather disc us politics or religion
then open up about their own personal finances. I find
this a little bit surprising, Brian. But give us give
us some new data that's come across our desk from
a couple surveys out there.
Speaker 3 (12:13):
Yeah, well this is this one's not too surprising to me.
This is, you know, being raised in the Midwest. These
are not things that we discuss, are they?
Speaker 2 (12:19):
So?
Speaker 3 (12:20):
Latest financial taboos? Surveys stuff we don't want to talk about.
Bank great dot Com found that about six and ten
US adults said they're not comfortable talking about their bank
account balance with family or close friends, But by contrast,
only about two and ten are uncomfortable discussing political views
or religion. I'd love to compare that with maybe ten
years ago when we were all a little bit quieter
(12:40):
about our politics. But everything's gotten so much louder these days.
But moneytops even politics and religion in the don't talk
about it category. And what's more, about half of these
folks said they would be they'd be uncomfortable discussing their
credit card debt or their salary. I think this is evidence, Bob,
of people just being you know, a kind of ashamed
or scared to death about both of those topics. I
don't make enough and I know a lot of people money,
(13:01):
and I don't want to talk about that with anybody
because I don't know the way out well.
Speaker 1 (13:04):
And the other thing this makes me think of as
a topic we talked about earlier this week, I mean
this this whole long term planning conundrum for our older
folks out there. I think generationally and understandably so, people
don't want to talk about finances, and they really don't
want to talk about the prospect of losing their independence,
(13:27):
and that causes some of these needed discussions to get
shut down. You know, they don't talk to their kids
about it, and family discussions are not happening proactively enough
to do some real good planning as it relates to
long term care issues, and Brian, you and I see
it all the time. Unfortunately, what ends up, you know,
(13:50):
spearheading that discussion is a fall or a healthcare issue
or something you know that really sparks an emergency or
crisis type situation.
Speaker 2 (14:00):
And so, you know, I think we have.
Speaker 1 (14:01):
To learn from these studies and try to in a responsible,
respectful way, you know, talk about.
Speaker 2 (14:07):
Things a little bit more than we likely do. Yeah. Absolutely,
I think it's important.
Speaker 3 (14:12):
And just in with regard to my own family, that's
something I decided a while ago, is just to let
everybody understand why, why do we why are we able
to live the way that we do, how we made
the decisions that we've made, you know, And I think
it's very important good, bad, are indifferent for younger people
to understand exactly how the puzzle pieces came together.
Speaker 2 (14:29):
To create the situation that currently exists.
Speaker 3 (14:31):
Give him some background, be comfortable with it, find a
way to have that discussion with the family.
Speaker 2 (14:35):
I think it's very important.
Speaker 1 (14:36):
All right, let's talk about King's Island for a second,
and in particular, let's give a nod to University of
Cincinnati grad Travis Kelcey because he now owns part of
King's Island. Brian, I think this is a cool story.
Speaker 2 (14:49):
It really, It kind of is.
Speaker 3 (14:50):
So Travis Kelcey, now, he's of course from the Cleveland area,
so I don't think he's thinking of King's Island first.
He's probably much more thinking of Cedar Point up there,
and he grew up riding those great roller coasters up there.
But he joined a group that's investing in six Flags, right,
So six Flags is what now owns all of these places.
It used to be, you know, six Flags used to
be the exotic amusement park that we never went to
because there wasn't one anywhere near Cincinnati. But now it's
(15:12):
the one company owns all this stuff, forty two locations
now across the United States, Mexico, and Canada, and another
one coming to South Saudi Arabia in twenty twenty six.
So why are we talking six Flags and not Cedar
Fair anymore? Well, six Flags merged with Cedar Fair and
so that includes King's Island and Cedar Point, and so
this group that Travis is a part of now owns
an economic interest of about nine percent, or about two
(15:33):
hundred million dollars worth of it, which makes that group
the one of the largest shareholders of a two point
two billion dollar corporation. And so when he was asked
about this, he said, well, I'm a lifelong, lifelong six
Flags fan and grow grew up going to these parks
with family and friends, and so the chance to make
six Flags special for the next generation is one I
couldn't pass up. So that it'll be neat to see
what this new energy injected into that world is going
(15:56):
to do for us.
Speaker 2 (15:57):
Hey, by the way, do.
Speaker 1 (15:58):
You think his fiance had anything to do with that decision?
And is that a precursor to maybe a future concert
coming to King's Island?
Speaker 3 (16:06):
You know, Taylor Swift at Timberwolf, which is still there.
By the way, I'm not sure it's got the capacity
to hold on to that. But hey, by the way,
I wanted to say, I'm a fifty one year old
man and I rode the Beast a couple of weeks
ago and it was as awesome as it was. Yeah,
and when I was in high school, get out there,
ride it at night. They have improved it and it
doesn't feel like you've gotten hit in the head by
(16:27):
the two by four anymore, it's not nearly as beat
you up as it used to be. The racer, on
the other hand, not so much the racer. The racer
is probably starting to I don't know. I gotta think
there's a couple of pieces of wood that are starting
to rot on the loose screws, and I'm sure they.
Speaker 2 (16:41):
Keep up with it. All a fun ride, though, all right.
Speaker 1 (16:44):
Imagine a world where you are so bad at your
job that your employer will pay you to go away
and then keep paying you for years. Welcome to the
world of college football. Penn State is going to pay
fired coach James Franklin fifty million dollars over the next
six years. If Franklin does take another job, his compensation
(17:04):
at the new job may reduce what Penn State owes him.
And then you've got former UC coach Brian Kelvy. He
just got canned from LSU and they owe him fifty
four million dollars. Brian, let's break that down for those
scoring at home, that's seven hundred and fifty thousand dollars
a month. That's twenty four thousand, six hundred and forty
(17:26):
one dollars a day or a little over one thousand
dollars an hour just to sit in your recliner.
Speaker 2 (17:33):
Not a bad gig if you can get it.
Speaker 3 (17:35):
So there you go, kids, Your recipe for financial success
is be a little bit good as a football coach
until you get that big contract and then suck at it.
And that is the best bang for your buck you'll
ever gear You'll get for putting time into the day
getting paid to no longer do your job.
Speaker 1 (17:53):
All right, every Sunday you'll find our all Worth Advice
in the Cincinnati Inquirer. Here's a preview question of that article. Brian,
this one, this is right in your wheelhouse. Ha from Springfield,
Springfield Township says he's eager to start investing his four
oh one k in crypto in private assets, but he
(18:14):
wanted to get your take first.
Speaker 3 (18:17):
Well, this is this isn't surprising to hear it all,
because you know, we've been talking about this all year.
It seems like there's been a lot of movements a
foot to allow four one ks to open up to
permit some different types of investments rather than the more
traditional stock bond type of mutual funds that are that
are readily available in there.
Speaker 2 (18:33):
So I don't think this is a terrible idea.
Speaker 3 (18:36):
I'm the last person who's going to say we need
to restrict things and keep it, you know, and keep
it all locked down.
Speaker 2 (18:41):
But on the other hand, when I.
Speaker 3 (18:42):
Look at the entities that are interested in making this possible, really,
this has nothing to do with our let's put individual
investors in a better stronger position. This has everything to
do with these individual investors have twelve trillion dollars tied
up in four oh one ks, and we who own
crypto and private and private type companies would really like
to get be able to tap into that. And we
being the you know, the companies and organizations that want
(19:04):
to make this happen. So the rules are looser. Now,
be careful, folks, Just understand what you're getting into. These
are not buy and hold type investments. Crypto is gonna
bounce a lot, and this is your four oh and k,
it's your nest egg. Private assets are gonna tie They're
not necessarily bad, but they're gonna tie you. They don't
have liquidity, You're gonna run into a quarterly lockups and
just harder to get in and out of. So just
know what you're getting into.
Speaker 2 (19:25):
Coming up next.
Speaker 1 (19:25):
Why reinforcing what you already believe could wreck your financial future.
You're listening to Simply Money presented by all Worth Financial
on fifty five KRC, the talk station. You're listening to
Simply Money presented by all Worth Financial. I'm Bob Sponseller
along with Brian James. One of the most dangerous things
(19:49):
in investing isn't inflation, taxes, or even market downturns. It's
your own brain, specifically the way it filters information to
match what you already believe. It's known in the behavioral
finance world as confirmation bias, and boy, this is a
big one that I want to make sure we dive
(20:09):
deep into and tackle tonight.
Speaker 3 (20:10):
Brian, Bob, tell me if you've run across anybody like
this lately. They're absolutely convinced that the market is coming down.
It's at an all time high and it just can't
go any higher. It's coming down. They got this information
from from articles online. Every article they read is worse
than the last one they read, and it's just kind
of backing up on them.
Speaker 2 (20:27):
What they don't realize, however, though, is Google.
Speaker 3 (20:29):
And social media is doing this on purpose, because all
they care about, all those companies care about, is making
sure your eyes stay glued to that screen. So if
this guy's interested in bad news about the market, then
absolutely we're going to serve it up on a platterform
because that'll keep him here looking at these ads. And
that's how we all make money, we being Google and
social media and so forth. That is confirmation bias. They
(20:49):
know that you are seeking out opinions and you'll be
happy to read more things that you already agree with,
or they're going to shove it in your face.
Speaker 2 (20:55):
Well, and this is one of the benefits.
Speaker 1 (20:57):
You know, you and I have both been doing this
a long time, so we've got many clients. And I
don't know about you, Brian, but you know I'm going
to talk about politics here for a minute, because depending
on who the occupant is in the White House and
who's controlling Congress and all that, I can almost predict,
you know, from each side of the aisle, the four
(21:18):
or five clients that are going to be constantly in
my ear telling me how and why the entire global
economy is going to collapse because so and so is
in the White House and they're purposely ruining the country.
Speaker 2 (21:31):
Do you have do you have those.
Speaker 1 (21:32):
Little handful of clients that you know come out of
the woodwork depending on who's occupying the White House at
any given time.
Speaker 3 (21:40):
Okay, I'm gonna I'm gonna hit you with the phrase here, Bob,
I rehearsed this on the way and know we're gonna
talk about this political passion has no place in prudent planning.
Speaker 2 (21:48):
Wow, that's a lot of peace. I'm not even going
to try to repeat that. Thank you, thank you. I
rehearsed like I said. Anyway.
Speaker 3 (21:53):
Uh No, Yeah, clients all the time, we all and
it's not you. There's nothing wrong with this thought process.
We're simply looking for that mechanical button or the lever
that we can say if this, then that, if so
and so is in office and in control and I
don't like them, then that means I should do this
black and white process, meaning liquidate everything or go to
gold or whatever. We have this all the time, but
in reality, the history shows that the market could absolutely
(22:15):
care less who's in office. It goes up no matter
who's in office, because that's how the economy works. There
are always more and more people buying more and more things.
And again I'm talking about the longer term, not the
short term swings, which we can't control or predict. But
the economy will function underneath presidents and leadership of any stripe.
And there is ample history going back through all the
way back through the Great Depression and including the most
(22:37):
recent administrations that it just doesn't matter who's in charge.
That causes short term swings, and heaven knows, we've seen
enough of those, But in the longer term, generally speaking,
things go up. Just don't let the short term whack
the dog.
Speaker 1 (22:49):
Yeah, I've already made kind of the cardinal rule mistake
here mentioning politics, so I'm going to use another one
here at the risk of angering even more and more people.
And that's talking about the importance of having both spouses
in a room when we do planning and we talk
about risk tolerance and all that. Because Brian, I don't
know about you, I find almost always the people that
(23:11):
are coming to me with this deep embedded confirmation bias,
almost one hundred percent of the time, it's men. It's men.
Men in their egos are our egos. We want to
be right, we want to predict the future, we want
to protect our family, all that stuff, and we come
in thinking we already know how it's all going to work,
(23:32):
depending on who's in the White House or what have you,
And we start consuming media sources to just confirm that
bias where I find that the women are way more
level headed, even keeled, and that can oftentimes balance out
a good financial planning review. By making sure both spouses
(23:53):
are in the room, we're hearing from both spouses and
we're kicking around this confirmation bias, you know, identifying the
elephant in the room and hopefully hunting it down and
killing it so we can move on with more productive conversations.
Speaker 3 (24:07):
If this then that if this happens, then I know
I'm going to do that that way, I'm forcing it
to be predictable, and I'm forcing myself to pretend, and
I'm going to put that in caps, pretend that I
have control over this, because that's how as a man
like you said, as a man, I want to I
want to fix things. I want to tackle it, take
it on, take the bull by the horns, and fix
the problem.
Speaker 2 (24:25):
But no, it doesn't work that way.
Speaker 3 (24:26):
As a matter of fact, that assumption can get us
into a lot of trouble that confirmation bias comes back
to haunt us in terms of forcing us to think
that we have way more control than we do.
Speaker 1 (24:35):
You're listening to simply Money presented by all Worth Financial.
I'm Bob Sponzeller along with Brian James and Brian. It
seems to, at least to me, the more money people have,
the more costly a mistake can be if we allow
this confirmation bias to really take hold on major decisions.
Speaker 2 (24:53):
Do you find the same thing?
Speaker 1 (24:54):
Yeah?
Speaker 2 (24:55):
Absolutely.
Speaker 3 (24:55):
And the thing to remember too, A lot of people,
when they've built a good, solid nest egg market decline
of one percent can look like a massive amount of money.
If I have ten thousand dollars and I lose one percent,
well I just lost one hundred dollars. That's not obviously
a huge amount of money. But if I have five
million in the market takes one percent away, that's fifty
thousand dollars. But it's the same one percent, and it's
(25:16):
affected by the same streams of the market no matter
how big the investment is. So the idea there is
pay attention to the percent. It's not the dollar amount
I just had the conversation, and not the other day
with a client who has really worked up over a
one percent loss.
Speaker 1 (25:29):
Yeah, I mean people don't like looking for dissenting views
or anything that goes against that bias. And I think
to talk about you know, we've talked about what not
to do. Let's spend a little time talking about what
to do. And I think you got to get different
ideas from different people, people that are intelligent, people that
are well read, people that could check their emotions at
the door, and that helps, you know, kind of filter
(25:52):
out some of that strong bias. And this is where
I want to give kudos to our chief investment officer
here at all Worth and Andy Stout, because he is
wonderful at this and every so often, I don't know, Brian,
every three or four months, if a headline comes across
or something happens where I'm starting to.
Speaker 2 (26:07):
Get a little worked up.
Speaker 1 (26:08):
It's always I enjoy having a little dose of reality
fed to me by Andy because he'll pull out the
inflation scorecard, He'll pull out all the data that's actually
is making the markets move in one way or the
one way or another. And when you actually look at
the reasons behind why markets move and how they move,
and when they move. It has literally nothing to do
(26:32):
usually with what we see in the headlines or these
articles that we want to consume just to confirm our
own embedded biases.
Speaker 2 (26:40):
Yeah, I would agree with that.
Speaker 3 (26:41):
It's a great tool that we have to be able
to rely on our own teams internally.
Speaker 1 (26:45):
Of course, again, it's important to get a second opinion,
and this is where a fiduciary advisor can provide enormous value.
And we are not here, or a good advisor is
not here to agree with everything that you're thinking, with
your fears or hype or articles that you've read. We
are here to challenge those assumptions and protect you from
(27:07):
blind spots that you might have. Here's the all Worth
Advice confirmation. Bias isn't just a mental quirk. It's a
financial risk and the more wealth you have, the more
damage it can do if you don't identify and address it.
All Right, your neighbor just bought Navidia. Should you jump in?
We'll talk about a powerful factor that could pull you
(27:28):
away from your financial plan. Next, you're listening to Simply Money,
presented by all Worth Financial on fifty five KRC.
Speaker 2 (27:35):
The talk station.
Speaker 1 (27:41):
You're listening to Simply Money, presented by all Worth Financial.
I'm Bob Spondseller along with Brian James. Do you have
a financial question you'd like for us to answer. There's
a red button you can click while you're listening to
the show right there on the iHeart app. Simply record
your question and it'll.
Speaker 2 (27:56):
Come straight to us. All right, Brian, Let's be honest.
None of us like to feel left out, especially when
it comes to money. And when your coworker brags about their.
Speaker 1 (28:06):
Bitcoin gains or your neighbor says they doubled their portfolio
in six months, it triggers an emotion in us that
we want to identify.
Speaker 2 (28:15):
That fear of missing out or.
Speaker 3 (28:18):
Fomoho fomo fomo fomo fomo can cause a lot of
problems in terms of making terrible financial and otherwise decisions.
So the world of investing that you'll feel some pressure
just from you know, the people you're golfing with, or people.
Speaker 1 (28:33):
At a cocktail party.
Speaker 3 (28:34):
Everybody's talking about, you know, something that you weren't aware
of or you didn't do, and it may or may
not be a good idea. But but what your brain
kicks into is have I missed out on an opportunity.
Is there something out there that I should do, that
I should be doing right now, and how can I
fix that problem? Well, so, maybe there's people out there
that you know, you know, you know, somebody's got a
solid retirement plan. They got everything, they need, a couple
(28:54):
million in assets, but they read this one article about
AI and all of a sudden, they've pivoted their you know,
a good chunk of their portfolio toward towards the big
names and AI good idea, bad idea? I say not
so much because they did that with their heart, with
their emotions, not with their logical brain of does this
help my plan? Do I need this kind of growth?
Or am I just in the casino playing with playing
with poker chips?
Speaker 2 (29:15):
All right, well, let's.
Speaker 1 (29:15):
Get down to brass tacks here. I mean, how many
of your clients come to you with this kind of stuff? Hey,
I love the plan, Brian, everything's fine. But let's I
think people get bored. Sometimes they get bored with their
plan because it works so well, so they just create
this fomo emotion again, back to needing to do something
or wanting to do something, or introducing some juice to
(29:36):
the whole situation. Do you have clients that come to
you with that and how do you deal with it?
Speaker 3 (29:41):
Yeah, I'm going to go to other way on you, Bob.
I'm going to go with myself on that one. We
feel this too as advisors, we run into it too.
So I was actually with my family was considering an investment,
and I talked to another advisor here at Allworth who
had some experience with it, and his answer was, why
do you want a more complicated life?
Speaker 2 (29:56):
And that put me on my heels.
Speaker 3 (29:58):
Because this was a private equity type thing with some
moving parts two and all that, and I hadn't even
thought about that. I was just interested in the you know,
it's just a portion of my portfolio and so on
and so forth. But there's moving parts to any decision
like that that you make. So it is always valuable
to tea just take a breath and figure out what
the big picture is if I'm gonna throw And let
me be clear, I have absolutely no problem with people
wanting to play with the stock market.
Speaker 2 (30:19):
Go ahead, knock yourself out.
Speaker 3 (30:20):
Just don't do it with the notion that I'm gonna
double my money next week and all my problems will
be solved. Do it with the idea that this is
an interesting thing and I like the story behind this
investment and I want to participate in it, and that's fine.
Just don't hang your entire financial future on.
Speaker 1 (30:33):
Yeah, And I'll tell you how I handle this, because
if somebody comes at me and at me and at
me long enough, I just tell them, hey, fine, let's
split the Let's split your portfolio into two pieces. And
I've done it this way for over thirty years. We
got your serious money. This is the money you can't
afford to lose and it's got to take care of
you for the rest of your life. And then there's
(30:54):
play money. And as long as they're willing to talk
about I'm like, hey have that, let's slice off a
piece of play money. I'm not going to manage the
play money for you. You go do it the serious goes.
Show me how good you are. Look at all your charts,
day traded, you know, buy AI stocks to your heart,
heart's desire, gold, whatever you want to do, go, get
(31:17):
in and out of all of it.
Speaker 2 (31:18):
Get back to me in six months and let me
know how you're doing.
Speaker 1 (31:21):
Because it can oftentimes if people actually have to go
out and do this and have the time and the
inclination and study all the details and execute on what
they think can.
Speaker 2 (31:32):
Be very easy to do.
Speaker 1 (31:34):
I like to give them six months to a year
to actually go out and do it and then come
back to me and let me know how it's going.
Speaker 3 (31:40):
Yeah, the serious money permits the existence of the play money,
and so you have to think about it in terms of,
you know, if I want to throw a very small
amount of you know of into something take a flyer.
Speaker 2 (31:50):
As usually the word word that people use.
Speaker 3 (31:52):
That's perfectly fine, but it shouldn't be treated as something
that's going to change your life. If you're willing to
bet half or more of your portfolio on some crazy
bet than and I'm going to go ahead and say that,
you're going to create financial problems for yourself down the road.
On the other hand, if you're willing to invest a
small amount, then even if it doubles triples, it's not
going to change your life anyway. So just remind yourself
of how important this really will be to you.
Speaker 1 (32:12):
You're listening to Simply Money, presented by all Worth Financial
on Bob's sponsorer along with Brian James. Brian, let's get
into how that fomo or fear of missing out emotion
starts to rear its ugly head.
Speaker 2 (32:24):
What causes people to feel that? Yeah, well, what causes
it is exactly that. It's the fear.
Speaker 3 (32:28):
It's a you know, somebody's doing something, somebody has found
an opportunity that I'm aware of, but I'm not executing on.
Am I missing out? That's where it comes from. But
the very first thing that happens is it causes you
to abandon your overall plan if you had a solid
financial plan, which you mentioned it earlier about a solid
financial plan can be boring.
Speaker 2 (32:44):
Let's call it. Call it what it is.
Speaker 3 (32:46):
Right, I've built my machine. It's in good, solid, running shape.
Now what you know, think of a if you're a
person who's into repairing cars, the most boring thing is
a couple of cars in the garage who that are
running just fine. I want a project. I want to
buy something and beat it up and fix it and
so forth. But that again, that's okay with with a
tiny amount of the portfolio. But you're going to be
you're forcing yourself to do things that you don't have
(33:06):
control over.
Speaker 1 (33:07):
Yeah, that's the key point here, The key point. I
want to drive home is make sure we separate play
money from serious money and make sure that we do
not do anything that's going to violate the viability of
that serious money, meaning your long term financial plan. And
as long as people are willing to do that, things
(33:28):
tend to work out fine. And if they want to
carve off that piece and get speculative, we just carve
that out of the financial plan so you can we
can always demonstrate for our clients the viability of that
financial plan factoring just the serious money piece.
Speaker 2 (33:43):
So take three steps here.
Speaker 3 (33:44):
First, ask yourself, does this fit the plan that I've
already put in place or am I just reacting to
that fear of missing out. Second, one, look at those
goals again. Maybe if you've built a solid financial plan,
make sure the goals still match what you want because
things change over time. What are you really trying to achieve?
And number three, talk to your or a trusted accomplice
or somebody else that knows the situation and just get
(34:05):
an opinion from an arms length away.
Speaker 2 (34:08):
Here's the all worth advice.
Speaker 1 (34:09):
Chasing heat can often result in getting burned. A good
financial plan keeps you cool. Next, the most valuable part
of financial advice. You're listening to Simply Money presented by
all Worth Financial on fifty five KRC the talk station.
(34:31):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Brian James. Here's the truth.
When people think about financial advice, they think about investment picks,
stat tax strategies, state planning, and all those things are important,
but maybe the most valuable thing your advisor should be
doing behavioral coaching.
Speaker 2 (34:53):
Brian, why do we know this?
Speaker 3 (34:54):
Well, morning Star, which is a big investment research firm
out there, has done some research and they've shown through
those studies that good behavior, which means sticking with that
plan and avoiding the urge to try to time the market,
that can add one and a half percent to two
percent in returns annually. And that is that is not magic,
that's guidance. That's somebody standing in arm's length away looking
at your situation. And again, this can be a professional advisor,
(35:17):
it can just be somebody who bounce ideas off of
and so forth, but just somebody to kind of act
as checks and balances to your own decision making skills.
That literally results in real dollars because somebody can pull
in the reins on you if you're about to make
about to make a bad decision.
Speaker 2 (35:30):
Yeah.
Speaker 1 (35:30):
I bring this up all the time, especially when people
are kind of fee avoiding, kind of wanting to talk
about the advisory fees and why do we charge this
and what do they get out of it? I think
the default provision most people are A lot of people
could come to us with as well. If I'm going
to pay an advisory fee of one one and a
half percent, what have you? My investment returns better be better,
(35:53):
you know, in excess of that every single year, or
you aren't doing anything. And all these studies have shown
people completely forget about the behavioral impact of being left
to your own devices and making these decisions on your own,
to say nothing of the tax alpha and the other
benefits that come with good financial planning. It's this behavioral
(36:17):
coaching and taking people by the hand and helping them
not make mistakes from which they can't recover that really
have the value here at the end of the day.
Speaker 3 (36:28):
Yeah, and again there's nothing wrong with being a do
it yourself as well, but you're going to run into
these same things, same situations, even if you're making your
decisions on your own, which again is a perfectly acceptable
way to go. I like to think of it in
terms of reminding people that, hey, when the market goes down,
that is not a failure. It's a failure if you
lost a lot more than the market, because you probably
(36:48):
weren't invested in a very diversified manner to begin with. However,
just viewing the normal ups and downs of a market
as up as good, down as bad as a failure.
I would compare that to you know what, if it's raining.
You know, if it's rain outside today, maybe we should
just break up these windows. Think of the money we'll
save on heating if we just don't have any windows
anymore because it's raining today. Therefore the sun will never
(37:08):
come out again. That's not the way to think about it.
A brief period of you know, bumpiness, volatility, or losses
is to be expected and dealt with, not to be
attempted to be avoided.
Speaker 1 (37:18):
That's the trap that a lot of people fall into. Now,
what we're trying to do here is paint a picture
of why you would want to work with a good,
solid fiduciary advisor. And this isn't meant to be a
commercial for all Worth. I mean, we do this kind
of planning, but other people do it as well. The
key is to find a good fiduciary advisor who can
tell who won't just sit there and tell you what
(37:38):
you want to hear, but oftentimes tell you what you
need to hear, because at the end of the game,
at the end of the day, job one here, at
least in my mind, is to make sure all of
our clients have above a ninety percent probability of meeting
all their long term financial goals and not running out
of money in spite of what may come down and
(37:59):
often will come down the road.
Speaker 2 (38:01):
Here's the all Worth advice.
Speaker 1 (38:02):
A great advisor won't just manage your money, they'll protect
you from yourself.
Speaker 2 (38:08):
Thanks for listening.
Speaker 1 (38:09):
You've been listening to Simply Money, presented by all Worth
Financial on
Speaker 2 (38:12):
Fifty five KRC, the talk station
Simply Money News
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