November 6, 2025 • 38 mins
On this episode of Simply Money presented by Allworth Financial, Bob and Brian dive deep into the AI investment craze that’s dominating headlines. Are we too late to cash in? Or is this just the beginning of a new economic era? They break down the hype, the risks, and the smarter way to invest—without trying to pick a winner. Plus, why international investing may deserve another look, a fresh update on the real estate market, and how to break out of financial decision paralysis. Finally, your listener questions on giving, planning, and the fear of running out—even when you have enough.
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Episode Transcript
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Speaker 1 (00:06):
Tonight, the AI boom is here, but is it too
late to invest or? Is this just the beginning? You're
listening to Simply Money, presented by all Worth Financial on
Bob Sponseller along with Brian James. Let's face it, you
can't open a financial newsletter or turn on CNBC these
days without hearing about artificial intelligence. AI is the thing,
(00:28):
it's the story. But the question we're hearing from listeners
is simple.
Speaker 2 (00:32):
What do I do about it?
Speaker 1 (00:34):
Do I buy AI stocks now? Do I ignore the
whole sector? Are they overpriced? Or do I continue to
chase the hype? Brian, I know you love data. We
joke around a lot about data, but let's talk about
let's talk about this AI space because I think there's
a lot of historical context to draw into this discussion.
Speaker 2 (00:56):
Yeah. So, if you look back through market history, Bob,
whenever the market goes on, there's almost always some kind
of catalysts behind it, some interesting story somewhere in the
economic world that is driving things. You know, twenty five
years ago, it was the Internet itself. It was just
the original concept of let's use computers to communicate and
buy stuff and conduct commerce and all that kind of thing,
and then for a while it was real estate. Way
(01:17):
before that, in the seventies, it was oil and gas partnerships, whatever.
There's always something that's attracting attention in capital and so forth.
So right now it's AI, and we're still in the
very beginning stages of this, so there's still a lot
of promise and a ton of guessing going on. Same way,
you know, I think the easiest thing to draw parallel
to is the original dot com boom because we didn't
(01:38):
know which companies were going to make it. There were
just a lot of companies out there with interesting marketing
plans and interesting products and services and so forth in
taking advantage of new technology, and that's where we are
right now. So if you're trying to invest in AI directly,
like you're trying to pick the next Nvidia or the
next open AI that's the company behind JAGPT, you're basically
placing bets on individual horses, not really no of course,
(02:01):
what's going to happen at the end of that race.
So that brings us to the there's three choices everybody has,
right so option one is what we just kind of
hinted at. Pick that winning horse. You're gonna bet on
the Tesla's the videos of the world, and maybe that
up and coming chip company that nobody's heard of yet.
And meanwhile your neighbor is investing in some other thing
that you never ran across, that nobody else else has
heard it yet. That's the most tempting option, Bob. You know,
(02:23):
had you done this early on with an Nvidia or
Apple or Amazon, this is what makes it so tempting.
What to work? Fine, But for every Amazon, there are
web vans and pets, dot Com and MySpace, and most
of these companies just plane don't survive.
Speaker 1 (02:37):
Yeah, I think the way to look at this is,
you know, let's face it, if artificial intelligence really is.
Speaker 2 (02:43):
A thing, and I think it is, I don't. I
think the debate is over at that point.
Speaker 1 (02:47):
At this point, it's going to change things, and probably
in a good way if you like efficiency. So, just
like the Internet, you know you could have early on,
you can invest in the technology hardware or the early
software developers, things like that. But you know, let's face it,
the Internet, there's not a company in existence today, There's
(03:11):
not a home in existence today that doesn't use the Internet.
My point here is that if artificial intelligence is going
to be a thing, and it's already becoming a thing.
It's going to impact efficiency in every corner of the market,
And so you don't have to pick the next hardware supplier.
Speaker 2 (03:31):
You can just.
Speaker 1 (03:32):
Watch companies continue to grow their productivity in their earnings
by adopting a piece of technology like AI or like
the Internet that causes productivity to go up, in profits
to rise. In other words, you can be broadly participating
in the economy and not even have you know the
(03:52):
letters AI behind the name of a company. But make
no mistake, they're benefiting from the adoption of this technology
if they're being smart about things correct.
Speaker 2 (04:03):
And we're picking winners and losers here, right, So at
the end of the day, some companies are going to
be around forever. Right. We can name some of those
companies from the original Internet boom that obviously now are
the core of the Internet. They made it. But then
you've got the others who didn't quite make it. And
the example I would give is, I can go I
can go on Amazon dot com right now, and I
could rent a video or I could buy a book
(04:25):
about the demise of pets dot com. So one of
them is gonna win, and one of them is gonna lose.
How do we find a winner. Is it the company
with the best technology, or is it the company with
the best marketing partnerships or scaling ability? You know, the
ones who turn it into the most successful type of
a business, that kind of thing. So, but picking winners
isn't just about who's smart, it's about who can make
money at it. There's the road to financial success is
(04:47):
littered with smart people who simply couldn't take a great
concept and turn it into a real business. The market
already knows that in Vidia is good. That's not news.
So you're not just betting on their success. You're betting
that they're going to do better than the already sky
high expectations that the market has placed on them because
so many people have piled into these stocks. That is
a much taller order than looking at some you know,
(05:08):
business plan from somebody that's working out of a garage
and hasn't built anything yet.
Speaker 1 (05:12):
Yeah, and at the end of the day, I don't
care what industry you're talking about. It comes down to
how much are you willing to pay for a dollars
worth of earnings or profits. Let's give an example, Let's
compare Tesla right now to Toyota. Tesla stock is priced
around four hundred dollars a share, earnings are around a
(05:33):
dollar fifty per share. Toyota, on the other hand, their's stocks,
you know, priced around two hundred dollars a share, but
their earnings per share is twenty dollars. That means Tesla's
priced earnings ratio is about one hundred while Toyota's is
twelve point. Here is you got to look at value.
And I know the market will pay up for dramatically
(05:55):
growing earnings, but sometimes Brian, and we see this all
the time. If people chase or get too speculative about
assuming that sky high earnings growth is going to continue,
that's where these stocks can really crater and come down
to earth. And so as an investor out there, you
got to be looking at how what amount of risk
(06:15):
are you really willing to take and is it better
to go buy something like a.
Speaker 2 (06:21):
Toyota at twelve times earnings that is.
Speaker 1 (06:23):
Still growing and that that's all that That's what goes
into constructing a risk adjusted, well constructed diversified investment portfolio.
Speaker 2 (06:32):
Yeah, I'm gonna put some more numbers to that too,
because just just kind of help people get to get
an idea of the scale of the demand that there
is for these stocks. So if you're buying Tesla right now,
you're paying four hundred dollars for a buck fifty in earnings.
That's where a price to earnings ratio comes from. But
if you're gonna go to it with Toyota, obviously a
little more traditional, a little more standard type of a
(06:52):
car company, now you're paying two hundred dollars for twenty
dollars in earnings. So it's gonna take. So the mass
says it's going to take about one hundred years to
earn back your Tesla investment if earnings stay the same
versus twelve years with Toyota. If Tesla stays on the
same trajectory of growth that they've had, then then yes
that I mean that it could potentially continue on that
type of a pace. But on the other hand, if
(07:14):
other car companies catch up to that technology, if somebody
else comes up with a better idea, Tesla's got a
lot further to fall than the new companies, the new
entrance to that to that arena that don't quite exist yet.
And I don't mean to pick on Tesla. Maybe maybe
that's right. I mean, maybe that is the valuation that
should have. But as an investor, you got to ask
what is already priced in. Everybody knows that this is
this is unique technology and a very unique charging network
(07:37):
and all this other stuff. They do have a hell
of a head start on other companies. But at the
end of the day, it's a growth stock and it
can have wild swings simply because expection expectations are so
crazy high. And that's what comes along with being you know,
Tesla is not quite a meme stock. It's definitely got
its own you know, it's a more unique situation. But
at the same time it's it's also something that has
(07:58):
had an awful lot of speculative activity around it because
of what it might do, not what it has done.
All right, well, we already talked.
Speaker 1 (08:05):
We talked about option one here, which is trying to
pick the next big winner. Let's talk about option two.
You set out the market entirely. You say, hey, all
this stuff is too crazy, too speculative.
Speaker 2 (08:16):
I don't understand any of it.
Speaker 1 (08:18):
I'm just going to ignore that AI exists, and I'm
going to stay out of it completely. This might feel safe,
especially after the tech bubble in the early two thousands
that let's face it, a lot of investors went through
or cryptocurrency crashes in the short term. But here's the problem.
Your risk missing out on structural growth. And I would
(08:40):
say a generational growth and innovation opportunity, which is AI.
AI could become like the Internet or electricity, meaning it's
ubiquitous everywhere, something so embedded that it's that not investing
in it means just falling behind in terms of return
and growth of your portfolio and your whole retirement plan.
Speaker 2 (09:03):
Yeah, and I think that electricity example is pretty is
really a propos here, because if you think back to that,
I'm sure there were people who sat on the sidelines,
going that electricity stuff, that's dangerous. I don't want that
pulled into my building. I want nothing to do with that.
And those folks kind of obviously missed out on opportunities
to make their businesses more efficient. And I don't bet
(09:23):
there's plenty of stories out there about businesses that went
out that basically failed because they didn't move quickly enough
to take advantages of what electricity could bring. And those
factories that were making things by hand lost quickly, and
I would I have to think that's got to be
almost an overnight thing if you weren't on the cutting
edge of that one hundred and fifty years ago whenever
that was. But at the same time, that's what you're
(09:45):
you're potentially missing out on. So we can't ignore these things.
They are the types of things that drive the markets forward,
and that extends to further than just that sector, just
that little stock. So history shows that we need to
be paying attention, we need to be willing to invest
like that. So with that, maybe we move on to
option three here, Bob Well, option three is the smart choice. Here,
(10:06):
you invest in the whole market again, broadly diversified funds
that give you exposure to all the contenders, all the
industries out there, because again, if artificial intelligence is going
to be a thing, and I think it's going to
be a thing, every sector of the economy is going
to benefit from that. It's going to be a productivity booster.
(10:27):
And so you don't have to worry about picking the
next winner and loser. You just stay invested in the
broad market. You count on ingenuity, innovation, hard work.
Speaker 1 (10:39):
People out there always finding a way to leverage technology
to grow businesses and grow profits. And that's why staying
diversified is usually for most people the best way to go.
Speaker 2 (10:53):
Yeah, that's the way to think about it. At the
end of the day, I think the biggest thing here
is that there is a new technology out there a
lot of companies are going to be looking to take
advantage of. And I always think back to the stories
that we heard from the gold Rush in the middle
of the nineteenth century. Was it the gold diggers that
made all the money, No, it wasn't. It was the
Levi Strauss's of the world who decided to make clothing
(11:13):
that was appropriate to go dig in the dirt all day.
It was wells far ago. Remember the stage coach logo, Well,
that's what it's from because there were businesses out there
making money out in the middle of nowhere and they
needed a way to get those dollars back in safely.
And that's where that stage coach came from, and a
number of other companies. That's what's going to happen here.
It's going to be the companies who have some other
(11:33):
kind of products and service who were using AI to
continue selling that long running product or service in a
much more efficient and much more profitable manner. That's what
history shows when we have new technology, that's where the
advantage is not for the lucky holders of that one
company that survived alongside the nineteen that didn't.
Speaker 1 (11:53):
Well, Brian, to take your gold rush example, which is
a great one, and catapult that all the way forward
to twenty twenty five. I mean, let's face it, we're
going to need a ton of energy to fuel these
servers that you know power AI. So and this is
not a stock recommendation. I'm just saying, look at a
company like ge Vernova. Nobody would have thought going into
(12:15):
twenty twenty four twenty twenty five of ge Vernova as
an AI stock.
Speaker 2 (12:20):
But go look at the performance of that stock.
Speaker 1 (12:22):
Meaning you know, back to your stage coach example, it's
not the people that were digging the gold, it's people
that are supplying the things necessary to harvest gold, to
harvest energy. So there's a lot of beneficiaries all the
time in emerging technologies. Here's the all Worth advice. Don't
gamble on the future, invested it broadly and let the
(12:43):
winners come to you.
Speaker 2 (12:45):
Just how much.
Speaker 1 (12:46):
Should I be investing outside the United States of America.
It's a question. We get a lot. We'll share some
perspective on that coming up next. 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 Laumbob Sponsller along with Brian James. If
(13:10):
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From managing Money as a Team to navigating retirement when
life feels more expensive than ever, We're answering your pressing
(13:34):
financial questions straight ahead.
Speaker 2 (13:36):
At six forty three.
Speaker 1 (13:38):
Most American investors are heavily concentrated in one market, the
United States.
Speaker 2 (13:44):
It's what we know, it's where we.
Speaker 1 (13:46):
Live, and quite frankly, it's worked really really well for
the past decade plus, if not decades. But we should
at least be willing to shift the conversation a little
bit from investing in country to investing in companies. The
global economy does not stop at our borders, and your
portfolio shouldn't either, Brian twenty twenty five. Is you know,
(14:10):
we've got some data backed reasons to kind of revisit
this whole international investing topic because it is valid and
it's something people kind of ignore or forget about over time.
Speaker 2 (14:21):
Well, yeah, there's been a huge focus on reducing the
expense of my investment portfolio, and that's a good thing
to focus on, but it has led a lot of
people down at the bottom of the funnel to conclude
that there's just nothing but the S and P five hundred.
All I need is this S and P five hundred
index fund, and that's all I'll ever need because nothing
happens anywhere else. Well, that's a good core of a portfolio,
(14:42):
because the US does make up a big chunk of
the overall global economy about sixty five percent. Right, sixty
five percent of economic activity occurs right here in the
United States. But that means thirty five percent doesn't. That
is trillions of dollars in value that you're ignoring if
that's not something that you represent in your portfolio. So
let's give an ex Let's say you said I only
want to invest in US car companies because the US
(15:04):
is all that's the only place that there is to
deal with. You'd have at this point, Ford, General Motors
and Tesla. There's a handful of other car companies out
there that have done okay. So that is not a
diversified bet on the auto industry. That's just a slice
of it. You're ignoring Toyota, Honda, Hyundai, BMW, Volkswagen, Ferrari
byd in China. That's a new one on me. But
still it's out there, and there are billions of people
(15:26):
who buy cars that aren't built in the United States.
Jaguar land Rover are now based in India. So if
you simply, if you simply focus so much on that,
you're going to leave an awful lot of economic activity
on the table simply because it doesn't occur within the
boundary of the United States. That does not mean it's
not profitable activity. And the winds will change direction on occasion,
as they have this year.
Speaker 1 (15:47):
Well, Brian, I know you love history. I do as well,
So let's talk about Japan. For example, from nineteen seventy
to nineteen eighty nine, Japanese equities return an average of
twenty two sent per year. People thought Japan at that time,
and I remember this. I remember when the Hondas started
coming out in droves. People thought Japan was going to
(16:10):
absolutely dominate the global economy forever. And then came the
nineteen nineties. US technology took over Microsoft, Intel, eventually Apple, Amazon, Google.
Nobody had even heard of these companies in the late
seventies to early eighties, but the tide certainly did shift.
The point here is no country in and of itself,
(16:32):
is it relates to stocks dominates forever. Yes, the US
has been on a great run, especially post two thousand
and nine, but there have been decades like the nineteen
seventies where the US brian actually underperformed global markets.
Speaker 2 (16:48):
Yeah, that's right, and that's actually happening right now. But
technically in twenty twenty five, the US is underperforming global markets.
International stocks are doing better than US stocks. Now. Everybody's
having a pretty good year, right this is we could
be looking, knock on wood, We could be looking at
the third double digit rate of growth in the United
States here by the end of this year. But international stocks,
(17:08):
both at the big established developed level as well as
emerging markets, are all doing better. And the reason for
This is because you for better or for worse, regardless
of the side you are on the political aisle. And
we're not going to turn this into politics, of course,
But the reason is the United States has chosen to
portray itself drastically differently than it has in the past,
and that is forcing countries and companies who are internationally
(17:30):
based to say, well, if it's going to be harder
to do business there, maybe we're overlooking some opportunities elsewhere
in the world to build business partnerships. And that is
exactly what has happened. The market has recognized that dollars
have flowed into internationally based non US companies at a
faster pace this year than they have US companies. That
doesn't mean that the US market is down. That's not
the case at all. Everybody's having a pretty good year
(17:51):
thus far, again furiously knocking on wood, but international companies
are having a slightly better year. That is why we
have we always have these discussions about make sure you've
got a diverse, fied portfolio so that you're not completely
missing the vote in some other area that maybe didn't
do so great last year, but all of a sudden
has taken the lead this year.
Speaker 1 (18:09):
Yeah, a couple of examples, you know, where international companies
are just as innovative, if not more innovated than their
US counterparts. Samsung, for example, is really pushing the boundaries
in semiconductor chips. Taiwan semiconductor is critical in AI technology,
and let's face it, a lot of European firms lead
(18:30):
the globe here in innovation in green energy technology.
Speaker 2 (18:35):
So there's a lot of innovation going on all over
the world and.
Speaker 1 (18:40):
It's another reason to you know, be open to diversifying
your portfolio. That being said, this is where some some
good i would say managed portfolios, and it's worth paying
somebody to really, you know, kick the tires and look
at some of these companies because when you get into
investing internationally, there's different regulatory environments.
Speaker 2 (19:00):
There's different corporate corporate government governance rules.
Speaker 1 (19:05):
This is where it is helpful a lot of times
to have boots on the ground really looking at this
on a company by company basis, not just saying well,
I'm gonna just throw money at the Japanese market or
at the Taiwan you know, because things are different literally
company by company and region by region.
Speaker 2 (19:24):
So it's important to talk to your fiduciar advisor. Just
make sure you've got the right level of exposure to
offset the other risks you have in your portfolio. That's
the whole point of asset allocation and diversification. But it
all starts with a financial plan. Anyway, Before you worry
about what color bricks you're gonna put on your house,
you need to have a blueprint to begin with. Here's
the all Worth advice.
Speaker 1 (19:42):
Don't invest in countries, invest in great companies wherever they are.
Coming up next, an update on the local real estate market.
Our price is cooling off? Or is the bidding more
Era still alive? And well?
Speaker 2 (19:56):
Our real estate expert is in next to talk about
all of that.
Speaker 1 (19:59):
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 on Bob spun
Seller along with Brian James, and we're joined tonight by
our real estate guru, Michelle Sloan. Michelle, thanks as always
for making time for us tonight. We want to we
(20:21):
want to kick things off tonight just by getting your
perspective on what the current environment is out there. In
the real estate market, the residential real estate market. I mean,
let's face it, rates have come down a little bit.
What have you seen changed since the last time we
talked to you about You know what, where's the market at.
I know, the weather's cooling, everybody's back to school.
Speaker 2 (20:42):
Are things slowing down? Are things speeding up? With these
rates coming down? Give us a good give us.
Speaker 1 (20:47):
A good overall view of the residential real estate market
in Greater Cincinnati.
Speaker 3 (20:53):
Well, I'll tell you what the biggest difference is. We
are seeing a shift in the market to more balanced market.
And what that means is it's no longer strictly a
seller's market in Cincinnati, Ohio. We have had a seller's
market for years actually, and now in some areas of
(21:17):
Cincinnati we're seeing more of a buyer's market. What does
that mean? So it's all about supply and demand, and
you guys are very familiar with that. But you know,
the supply, we've had more buyers than we've had homes
for sale. But now we're balancing out the market. And
so this is a good thing for buyers because there's
(21:39):
opportunities out there. When it's a buyer's market, we have
more homes on the market and maybe fewer buyers. Therefore,
the buyers that are out there are going to have
an opportunity. They may not be able to they may
not have to actually compete against a whole bunch of
other buyers, and so they might be able to get
(22:01):
a home for I'm not going to say the price
is going to be dramatically lower, because we are definitely
seeing the prices are still increasing in the Cincinnati area
as far as the home price median prices are up
five percent year over year, and so we're seeing still
a slight increase. It's not the crazy increases though that
(22:23):
we saw in the past several years, where you know,
the market has increased ten or fifteen percent year over year,
which is just crazy to even think about. So I
would say the biggest change that we're seeing is it's
no longer a seller's market. We have a more balanced market,
and it's leaning a little bit towards a buyer's market.
(22:47):
So days on market, meaning how long a home has
to sit on the market before someone actually gets under
contract and buys that property, is taking longer instead of
just a couple of days, which it has been over
the last few years, we're looking at a forty nine
day average time on market forty five days average time
(23:09):
on market, so that's a huge change.
Speaker 2 (23:12):
So, Michelle, the question I have is, so I am
also married to Michelle. That's why I'm stammering here because
I was going to say her name, and I said
your name, and then I don't know who anybody is
anywhere anyway. Michelle and I aren't going anywhere anytime soon,
but we are sneaking up on empty nest time of life.
So I'm sniffing around a little bit just to see
what things look like. That means, you know, in this
day and age. I've got a few apps going and
(23:33):
just kind of watching different properties. We're not going to
play some bit or anything anytime soon, So anybody listening
to me who knows, leave me alone anyway. But anyway,
so I've got these apps. If your wife.
Speaker 1 (23:43):
Starts, if your wife starts looking around you, you might
be making a transaction here sooner than you think you are.
Speaker 2 (23:49):
Hold on my phone. I'm just trying to how this
really works.
Speaker 3 (23:53):
Now you've started something with the other, Michelle.
Speaker 2 (23:55):
Look out, it's the other way around. I'm the one
feeling Nancy but this isn't having anytime soon. But my
question was, I've got I've got the the app here
of course, all these different apps, And just in the
last two weeks, it seems like all of these houses
that I've sniffed around, right, they're all getting shoved in
my face. I may not even like it, but I
looked at it once. Therefore the app things they love it.
But anyway, all of these are coming up with price reductions,
(24:18):
so it seems like everybody know the sellers are shutting
the sense of this too. But at the same time
this is happening when we've had a cut in interest rates,
I myself have been advising clients who have one of
these six to seven percent mortgages that hey, it might
be time or we'll hire in, that it might be
time to refinance. Soul could rates coming down goose this
back into a seller's market if the buyers come back
and droves.
Speaker 3 (24:39):
Potentially, I think that everybody's just being a little bit
cautious or a lot cautious right now. I don't expect
us to do an immediate switch overnight. So rates have
come down really really slowly, I mean like tenths of
a point we're still hovering around six and a quarter,
you know, depending on the type blan that you get
(25:01):
and depending on your specific financial status and credit and
all of that. So honestly, I don't expect it to
turn into a seller's market again overnight. But here's the thing.
I had four listings in the last thirty days. Two
of them sold within a day in multiple offers. Two
(25:26):
of them are still sitting, and there's no seemingly rhyme
or reason why the two that's sold really really quickly,
although you know, there were great homes, great properties. They
both had swimming pools, which to me leads me to
believe that swimming pools are definitely something that people are
looking for. The other two are they're great homes in
(25:50):
great neighborhoods in great areas, and you know, we have
had to have some price changes, so you know, I
do think that the longer sell are on the market,
the more nervous they get, and they tend to want
to point fingers at the real.
Speaker 2 (26:06):
Estate agent, like what is going on?
Speaker 3 (26:08):
So don't do that. Don't put your finger at me
or at your real estate agent, because trust me, if
there was a buyer out there wanting to purchase your home.
Speaker 2 (26:18):
They would come.
Speaker 3 (26:20):
You know, you put it on the market and they
will come.
Speaker 1 (26:23):
Well, Michelle, in the minute or so we've got left.
I mean, let's face it, houses are like any other commodity.
It's correct me if I'm wrong. It's supply and demand.
You use the word cautious. What is causing people to
be cautious right now? And is this affecting supply more
than demand or demand more than supply, meaning has the
(26:43):
supply gone up while demand has gone down. What's causing
this cautiousness out there?
Speaker 2 (26:49):
Yeah?
Speaker 3 (26:50):
Absolutely. I think that the number of people who have
been stuck in their home for a long time, They're like,
it's time for me to make a move, and some
people people just miss the bubble. This fall has been very,
very interesting, and timing is everything. If you want to
sell your home, you've got to put it on the market.
(27:10):
For the most part, people have to know that it's available,
and so we just have a lot of buyers who
are exhausted with the process. They don't want to get
into multiple offers. They do see the rates coming down,
but I think everybody's just overwhelmed with the situation in
life right now. And a lot of buyers are saying, yeah,
(27:31):
I'm just going to wait. I'm going to sit tight
for a while. So I think there are fewer buyers
out there and a few more sellers that are ready
to make a move.
Speaker 2 (27:40):
Interesting.
Speaker 1 (27:41):
You're listening to Simply Money isented 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 Sponsller
along with Brian James. Do you have a financial question
you'd like for us to answer? There there's a red
button you can click while you're listening to the show.
(28:03):
If you're listening to the show from the iHeart app,
simply record your question and it will come straight to us.
All right, Brian Paul and Fort Mitchell says, we have
more than we'll ever spend, but I still can't shake
the fear of running out. Is that just how people
are wired? Or does it mean our plans not clear enough?
Speaker 2 (28:23):
I love when we get questions from the forts, because
I feel like I'm talking to our soldiers on the
front lines of northern Kentucky again, protecting us from the
hordes of Florence. Kentucky. Paul and Fort Mitchell. So what
you just did, was you just the question used to ask,
just basically gave Bob and I job security for a
good long time. There's a lot of people out there
in this situation. I know I've got enough, but I
(28:43):
still have this fear that it's not. I don't. I
just can't kind of can't see the future. And yes,
that is very much how people are wired. Paul. That
voice in the back of your head that's telling you
you don't have enough is the same voice that told
you to save all of that beginning from the from
the very beginning of your career. So we'll go ahead
and assume you've got a four in case, some kind
of retirement plan. You made a choice at some point
to start to carve out money away from yourself. You
(29:06):
can spend this week and stick it in a savings plan.
You did that. I don't know. I've no idea how
old Paul is. Let's say it's thirty years ago. Who knows,
But you did that, and now all of a sudden
you've got options. What you're running into is the bigger
mountain behind the initial fear of not having enough money.
Oh my gosh, we do have enough. Money. But now
how does it all work? And so the answer to
(29:28):
this is, put together financial plan, run some actual numbers,
figure out what it is that you spend, what does
it cost your household to stay afloat for a month,
and then string that out for thirty thirty five years,
whatever the life expectancy is. And then on top of
that add your other goals. You know, you might have
a mortgage in the mix, maybe for a few more years,
maybe you're helping parents, kids, and so forth. The answer
is just simply do the math, run a plan based
(29:49):
on a hunky doory scenario, and then do it again.
But take away twenty five percent of your financial networth.
That is the fear that most people have, which is okay,
I'm okay now, but what if a two thousand and
eight comes in sneaks up on me. Will I be okay? Then,
exhil Paul, congratulate yourself for doing what you've done, But
now look forward, stop looking in the past, and look
forward and run some projections for yourself. All right, Moving
(30:11):
on to Emily and Levin, and Emily says she's finally
on a spot where they can afford to be generous,
so they want to start sharing their wealth that they've built,
but it starts to feel harder than saving ever did.
So how do you decide when you've given enough? You know,
when have you done your duty versus when are you
sacrificing too much? Bob?
Speaker 1 (30:27):
Well, Emily, it's hard to tell from your question whether
you're talking about giving to adult children, let's say, or grandchildren.
Speaker 2 (30:34):
Or giving to charity or all the above.
Speaker 1 (30:37):
So you know, there's a numbers part of this answer,
which is have a good financial plan and kind of
know where the boundaries are in terms of how much
can you afford to give without putting your long term
retirement you know, plan in jeopardly, in jeopardy, in jeopardy.
But then I think what you're kind of implying here
is maybe we've already done that, but it's really hard
(30:58):
to cut loose to some of that money, you know,
as it relates to charities. This is the best advice
I can give you. I think giving to charity is
a lot like anything else we do with our money.
We're going to tend to follow our passion in our heart,
whether that's taking a cruise or buying a new car,
or giving to some kind of charity that we've become
(31:20):
attached to. So the best advice I can give you
is from the New Testament, Second Corinthians ninety seven says
each of you should give what you have decided in
your heart to give, not reluctantly or under compulsion, for
God loves a cheerful giver. In other words, don't do
any giving under pressure. Make sure you have peace, and
(31:42):
I would say some excitement and passionate passion about it.
And then that's where you know, you know you and
your husband are heading in the right direction. You should
derive some joy from giving money to others, and I
hope that helps, all right.
Speaker 2 (31:55):
I want to tackle on an extra bullet to that
because I just had a conversation yesterday that I think
along with this. So a lot of people are, of
course passionate about tithing, which is pretty easy to do.
You know, ten percent of my income is easy to
easy to calculate when I've got two w two checks.
But I think what happens is a lot of times
people will kind of write that number in stone and
(32:15):
say that it must be that dollar amount forever, or
we're somehow not fulfilling our obligations spiritually. But nowhere in
the Bible does it say you should give x percent
of your IRA distributions and x percent of your rental
real estate income, or when you take this much out
of savings, that chunk should always go. The Bible doesn't
quite get that specific. So just be conscious that it's
(32:36):
okay to reduce your If you are a tither, it's
okay to reduce your contributions because your income has lowered
because you retired. Congratulations. Maybe your income doesn't need to
be what it used to be, But we don't have
to marry ourselves to the number we gave in the
past just because it was the number. Have a reason,
like Bob just said, figure out mathematically what it is
you can afford, first of all, and then make sure
(32:57):
you're comfortable with it. And it does not have to
be what you get before you retired. A lot of
people get get screwed up by that.
Speaker 1 (33:03):
Yep, good stuff, all right, Greg and Anderson Brian says,
we're close to retirement, but our life feels busier than ever.
Our parents are aging, grandkids are growing, careers are winding down.
How do you plan when everything's changing at once? Boy,
I can relate to some of this question, Brian.
Speaker 2 (33:24):
So we all spent time at one point as a
young person trying to build wealth and just trying to
get started an adult life and so forth. And the
so I can tell that Greg did a good job
of that, because all of a sudden he's getting hit
in the face with all of these questions. And these
are just that all the normal things that everybody goes to.
It does all happen at once, you know. And I'm
not going to say life is quiet in the first
(33:45):
several decades. That is not the case at all. However,
it's usually financially relatively quiet. The answers are fairly simple.
I always tell young people you got three things to do.
Save your money aggressively, invest aggressively, don't panic when the
market wobbles, and don't make a mess of your credit.
If you do those three things for thirty years, you're
gonna have all these questions that Greg has. So congratulations, Greg,
(34:06):
you got what you wanted. The answer is, first of all,
exhale always, and remember you're not the only one going
through this. There are plenty of people around you who
are who are seeing all these things. The good thing
is when we get ourselves hung up over the math,
the financial math behind all of this. It's just math.
You can get it all down on a piece of
paper or a spreadsheet or a financial planning tool, and
then you can make that question go away from a
(34:27):
standpoint of you've kind of got it down in concrete.
You've got it somewhere you can play with it. Then
you can focus on all the things you highlighted. Greg
are more emotional in nature. So once you have the
math out of the way and you understand it, you
have a tool that you can flex as things change,
then you can focus on those more difficult psychological and
emotional questions that you just highlighted. But again, first thing,
Greg Exhale. Coming up next.
Speaker 1 (34:50):
Brian has his bottom line on how to avoid analysis paralysis.
Speaker 2 (34:55):
You're listening to Simply Money?
Speaker 1 (34:56):
Is that about all Worth Financial on fifty five KRC
the talk station. You're listening to Simple Money because I
by all Worth Financial. I'm Bob sponseller along with Brian James.
Brian has some words of wisdom for us tonight about
how to avoid analysis paralysis.
Speaker 2 (35:15):
Well, Bob, I thought of this the other day because
I had a few conversations or conversations with clients. And
then you and I were talking on an earlier show
about the idea that the market is at a peak
and what does that mean, and we kind of highlighted
the fact that the market is usually at a peak,
so it doesn't really mean much of anything. Just means that,
you know, we've got more money than we've ever had,
but it doesn't necessarily change what you need to do.
(35:36):
So what happens, though, is a lot of times this
causes people to get that. You know, we've all heard
this phrase paralysis by analysis, in other words, overthinking, looking
for so many different options and researching everything to death
that I never bothered to do anything. So now tell
me this sounds like you. You ever spent hours comparing
credit cards or researching that perfect investment, only to wind
up going, you know what, I don't see the answer.
(35:57):
I'm going to look at this again tomorrow, and tomorrow,
same thing happens, and eventually you just quit looking at it.
So I have a couple of clients, Bob that went
to cash in two thousand and eight, panicked, unfortunately, and
sat that way until twenty twenty one. This was not
with us. They didn't They came around came to our
doorstep well into that whole situation, but the whole, the
(36:19):
entire time, they spent ten fifteen years looking for the
perfect investment that would never take them through a two
thousand and eight type thing again, and that is just
not a possibility. But they set themselves back. And so
what happens is, obviously this is a psychological issue happening
here called loss a version. I don't want to lose money.
That's a bad thing. I can't That is a negative permanently,
(36:40):
it's a mistake. If something goes wrong, we've made a mistake,
not the you know, not realizing that that's just life.
Sometimes it rains, and sometimes we make picnic plans on
the wrong day. It just happens. But it doesn't mean
there isn't going to be another day out there. So
the research shows that a lot of Americans can delay
these financial decisions for months or even years because they
feel overwhelmed. And in twenty twenty five, with going up
(37:00):
and lots of scary headlines and so forth, and the
market being on in year three of a really really
strong bull market, that gets a lot of people concerned
about what do I do? What do I do? Today.
The answer a lot oftentimes is nothing. Do you ever
see this kind of thing in your daily routine?
Speaker 1 (37:15):
Yeah? And I think this, you know, speaks to the
value of having a good fiduciary financial advisor. Forget about
products and strategies and all that a lot of times.
And Brian, we joke around a lot about this on
the show, but it is vitally important to study history
and study data and actually have some good historical data
(37:36):
to go through that is constructed in such a way
where people can understand it. And that's where I know
you do a great job of this in educating your clients.
Speaker 2 (37:47):
I think once people.
Speaker 1 (37:48):
Get armed with good information and a lot of the
best information out there, you never hear about in the
financial media because they're just talking about what's going to
go up or down over the next you know, thirty
six hours. So to have a good advisor, step back
and look at some good historical data. I have found
armed with data, people can get a little release here
(38:09):
and be willing to get off that analysis paralysis train.
Speaker 2 (38:13):
Yeah. So three quick steps here. Set a deadline, give
yourself a week, a month, or whatever. But set that
hard deadline. Narrow your options down to two or three
and embrace imperfection. You're not going to nail it. You'll
never have perfect information like Bob just said, but know
that you will have made the decision with the most
information you can and therefore the most educated manner. Thanks
for listening tonight.
Speaker 1 (38:33):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC, the talk station
Tonight, the AI boom is here, but is it too
late to invest or? Is this just the beginning? You're
listening to Simply Money, presented by all Worth Financial on
Bob Sponseller along with Brian James. Let's face it, you
can't open a financial newsletter or turn on CNBC these
days without hearing about artificial intelligence. AI is the thing,
(00:28):
it's the story. But the question we're hearing from listeners
is simple.
Speaker 2 (00:32):
What do I do about it?
Speaker 1 (00:34):
Do I buy AI stocks now? Do I ignore the
whole sector? Are they overpriced? Or do I continue to
chase the hype? Brian, I know you love data. We
joke around a lot about data, but let's talk about
let's talk about this AI space because I think there's
a lot of historical context to draw into this discussion.
Speaker 2 (00:56):
Yeah. So, if you look back through market history, Bob,
whenever the market goes on, there's almost always some kind
of catalysts behind it, some interesting story somewhere in the
economic world that is driving things. You know, twenty five
years ago, it was the Internet itself. It was just
the original concept of let's use computers to communicate and
buy stuff and conduct commerce and all that kind of thing,
and then for a while it was real estate. Way
(01:17):
before that, in the seventies, it was oil and gas partnerships, whatever.
There's always something that's attracting attention in capital and so forth.
So right now it's AI, and we're still in the
very beginning stages of this, so there's still a lot
of promise and a ton of guessing going on. Same way,
you know, I think the easiest thing to draw parallel
to is the original dot com boom because we didn't
(01:38):
know which companies were going to make it. There were
just a lot of companies out there with interesting marketing
plans and interesting products and services and so forth in
taking advantage of new technology, and that's where we are
right now. So if you're trying to invest in AI directly,
like you're trying to pick the next Nvidia or the
next open AI that's the company behind JAGPT, you're basically
placing bets on individual horses, not really no of course,
(02:01):
what's going to happen at the end of that race.
So that brings us to the there's three choices everybody has,
right so option one is what we just kind of
hinted at. Pick that winning horse. You're gonna bet on
the Tesla's the videos of the world, and maybe that
up and coming chip company that nobody's heard of yet.
And meanwhile your neighbor is investing in some other thing
that you never ran across, that nobody else else has
heard it yet. That's the most tempting option, Bob. You know,
(02:23):
had you done this early on with an Nvidia or
Apple or Amazon, this is what makes it so tempting.
What to work? Fine, But for every Amazon, there are
web vans and pets, dot Com and MySpace, and most
of these companies just plane don't survive.
Speaker 1 (02:37):
Yeah, I think the way to look at this is,
you know, let's face it, if artificial intelligence really is.
Speaker 2 (02:43):
A thing, and I think it is, I don't. I
think the debate is over at that point.
Speaker 1 (02:47):
At this point, it's going to change things, and probably
in a good way if you like efficiency. So, just
like the Internet, you know you could have early on,
you can invest in the technology hardware or the early
software developers, things like that. But you know, let's face it,
the Internet, there's not a company in existence today, There's
(03:11):
not a home in existence today that doesn't use the Internet.
My point here is that if artificial intelligence is going
to be a thing, and it's already becoming a thing.
It's going to impact efficiency in every corner of the market,
And so you don't have to pick the next hardware supplier.
Speaker 2 (03:31):
You can just.
Speaker 1 (03:32):
Watch companies continue to grow their productivity in their earnings
by adopting a piece of technology like AI or like
the Internet that causes productivity to go up, in profits
to rise. In other words, you can be broadly participating
in the economy and not even have you know the
(03:52):
letters AI behind the name of a company. But make
no mistake, they're benefiting from the adoption of this technology
if they're being smart about things correct.
Speaker 2 (04:03):
And we're picking winners and losers here, right, So at
the end of the day, some companies are going to
be around forever. Right. We can name some of those
companies from the original Internet boom that obviously now are
the core of the Internet. They made it. But then
you've got the others who didn't quite make it. And
the example I would give is, I can go I
can go on Amazon dot com right now, and I
could rent a video or I could buy a book
(04:25):
about the demise of pets dot com. So one of
them is gonna win, and one of them is gonna lose.
How do we find a winner. Is it the company
with the best technology, or is it the company with
the best marketing partnerships or scaling ability? You know, the
ones who turn it into the most successful type of
a business, that kind of thing. So, but picking winners
isn't just about who's smart, it's about who can make
money at it. There's the road to financial success is
(04:47):
littered with smart people who simply couldn't take a great
concept and turn it into a real business. The market
already knows that in Vidia is good. That's not news.
So you're not just betting on their success. You're betting
that they're going to do better than the already sky
high expectations that the market has placed on them because
so many people have piled into these stocks. That is
a much taller order than looking at some you know,
(05:08):
business plan from somebody that's working out of a garage
and hasn't built anything yet.
Speaker 1 (05:12):
Yeah, and at the end of the day, I don't
care what industry you're talking about. It comes down to
how much are you willing to pay for a dollars
worth of earnings or profits. Let's give an example, Let's
compare Tesla right now to Toyota. Tesla stock is priced
around four hundred dollars a share, earnings are around a
(05:33):
dollar fifty per share. Toyota, on the other hand, their's stocks,
you know, priced around two hundred dollars a share, but
their earnings per share is twenty dollars. That means Tesla's
priced earnings ratio is about one hundred while Toyota's is
twelve point. Here is you got to look at value.
And I know the market will pay up for dramatically
(05:55):
growing earnings, but sometimes Brian, and we see this all
the time. If people chase or get too speculative about
assuming that sky high earnings growth is going to continue,
that's where these stocks can really crater and come down
to earth. And so as an investor out there, you
got to be looking at how what amount of risk
(06:15):
are you really willing to take and is it better
to go buy something like a.
Speaker 2 (06:21):
Toyota at twelve times earnings that is.
Speaker 1 (06:23):
Still growing and that that's all that That's what goes
into constructing a risk adjusted, well constructed diversified investment portfolio.
Speaker 2 (06:32):
Yeah, I'm gonna put some more numbers to that too,
because just just kind of help people get to get
an idea of the scale of the demand that there
is for these stocks. So if you're buying Tesla right now,
you're paying four hundred dollars for a buck fifty in earnings.
That's where a price to earnings ratio comes from. But
if you're gonna go to it with Toyota, obviously a
little more traditional, a little more standard type of a
(06:52):
car company, now you're paying two hundred dollars for twenty
dollars in earnings. So it's gonna take. So the mass
says it's going to take about one hundred years to
earn back your Tesla investment if earnings stay the same
versus twelve years with Toyota. If Tesla stays on the
same trajectory of growth that they've had, then then yes
that I mean that it could potentially continue on that
type of a pace. But on the other hand, if
(07:14):
other car companies catch up to that technology, if somebody
else comes up with a better idea, Tesla's got a
lot further to fall than the new companies, the new
entrance to that to that arena that don't quite exist yet.
And I don't mean to pick on Tesla. Maybe maybe
that's right. I mean, maybe that is the valuation that
should have. But as an investor, you got to ask
what is already priced in. Everybody knows that this is
this is unique technology and a very unique charging network
(07:37):
and all this other stuff. They do have a hell
of a head start on other companies. But at the
end of the day, it's a growth stock and it
can have wild swings simply because expection expectations are so
crazy high. And that's what comes along with being you know,
Tesla is not quite a meme stock. It's definitely got
its own you know, it's a more unique situation. But
at the same time it's it's also something that has
(07:58):
had an awful lot of speculative activity around it because
of what it might do, not what it has done.
All right, well, we already talked.
Speaker 1 (08:05):
We talked about option one here, which is trying to
pick the next big winner. Let's talk about option two.
You set out the market entirely. You say, hey, all
this stuff is too crazy, too speculative.
Speaker 2 (08:16):
I don't understand any of it.
Speaker 1 (08:18):
I'm just going to ignore that AI exists, and I'm
going to stay out of it completely. This might feel safe,
especially after the tech bubble in the early two thousands
that let's face it, a lot of investors went through
or cryptocurrency crashes in the short term. But here's the problem.
Your risk missing out on structural growth. And I would
(08:40):
say a generational growth and innovation opportunity, which is AI.
AI could become like the Internet or electricity, meaning it's
ubiquitous everywhere, something so embedded that it's that not investing
in it means just falling behind in terms of return
and growth of your portfolio and your whole retirement plan.
Speaker 2 (09:03):
Yeah, and I think that electricity example is pretty is
really a propos here, because if you think back to that,
I'm sure there were people who sat on the sidelines,
going that electricity stuff, that's dangerous. I don't want that
pulled into my building. I want nothing to do with that.
And those folks kind of obviously missed out on opportunities
to make their businesses more efficient. And I don't bet
(09:23):
there's plenty of stories out there about businesses that went
out that basically failed because they didn't move quickly enough
to take advantages of what electricity could bring. And those
factories that were making things by hand lost quickly, and
I would I have to think that's got to be
almost an overnight thing if you weren't on the cutting
edge of that one hundred and fifty years ago whenever
that was. But at the same time, that's what you're
(09:45):
you're potentially missing out on. So we can't ignore these things.
They are the types of things that drive the markets forward,
and that extends to further than just that sector, just
that little stock. So history shows that we need to
be paying attention, we need to be willing to invest
like that. So with that, maybe we move on to
option three here, Bob Well, option three is the smart choice. Here,
(10:06):
you invest in the whole market again, broadly diversified funds
that give you exposure to all the contenders, all the
industries out there, because again, if artificial intelligence is going
to be a thing, and I think it's going to
be a thing, every sector of the economy is going
to benefit from that. It's going to be a productivity booster.
(10:27):
And so you don't have to worry about picking the
next winner and loser. You just stay invested in the
broad market. You count on ingenuity, innovation, hard work.
Speaker 1 (10:39):
People out there always finding a way to leverage technology
to grow businesses and grow profits. And that's why staying
diversified is usually for most people the best way to go.
Speaker 2 (10:53):
Yeah, that's the way to think about it. At the
end of the day, I think the biggest thing here
is that there is a new technology out there a
lot of companies are going to be looking to take
advantage of. And I always think back to the stories
that we heard from the gold Rush in the middle
of the nineteenth century. Was it the gold diggers that
made all the money, No, it wasn't. It was the
Levi Strauss's of the world who decided to make clothing
(11:13):
that was appropriate to go dig in the dirt all day.
It was wells far ago. Remember the stage coach logo, Well,
that's what it's from because there were businesses out there
making money out in the middle of nowhere and they
needed a way to get those dollars back in safely.
And that's where that stage coach came from, and a
number of other companies. That's what's going to happen here.
It's going to be the companies who have some other
(11:33):
kind of products and service who were using AI to
continue selling that long running product or service in a
much more efficient and much more profitable manner. That's what
history shows when we have new technology, that's where the
advantage is not for the lucky holders of that one
company that survived alongside the nineteen that didn't.
Speaker 1 (11:53):
Well, Brian, to take your gold rush example, which is
a great one, and catapult that all the way forward
to twenty twenty five. I mean, let's face it, we're
going to need a ton of energy to fuel these
servers that you know power AI. So and this is
not a stock recommendation. I'm just saying, look at a
company like ge Vernova. Nobody would have thought going into
(12:15):
twenty twenty four twenty twenty five of ge Vernova as
an AI stock.
Speaker 2 (12:20):
But go look at the performance of that stock.
Speaker 1 (12:22):
Meaning you know, back to your stage coach example, it's
not the people that were digging the gold, it's people
that are supplying the things necessary to harvest gold, to
harvest energy. So there's a lot of beneficiaries all the
time in emerging technologies. Here's the all Worth advice. Don't
gamble on the future, invested it broadly and let the
(12:43):
winners come to you.
Speaker 2 (12:45):
Just how much.
Speaker 1 (12:46):
Should I be investing outside the United States of America.
It's a question. We get a lot. We'll share some
perspective on that coming up next. 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 Laumbob Sponsller along with Brian James. If
(13:10):
you can't listen to Simply Money live every night, subscribe
and get our daily podcast. And if you think your
friends or your family could use some financial advice, let
them know about us as well. Just search Simply Money
on the iHeart app or wherever you find your podcast.
From managing Money as a Team to navigating retirement when
life feels more expensive than ever, We're answering your pressing
(13:34):
financial questions straight ahead.
Speaker 2 (13:36):
At six forty three.
Speaker 1 (13:38):
Most American investors are heavily concentrated in one market, the
United States.
Speaker 2 (13:44):
It's what we know, it's where we.
Speaker 1 (13:46):
Live, and quite frankly, it's worked really really well for
the past decade plus, if not decades. But we should
at least be willing to shift the conversation a little
bit from investing in country to investing in companies. The
global economy does not stop at our borders, and your
portfolio shouldn't either, Brian twenty twenty five. Is you know,
(14:10):
we've got some data backed reasons to kind of revisit
this whole international investing topic because it is valid and
it's something people kind of ignore or forget about over time.
Speaker 2 (14:21):
Well, yeah, there's been a huge focus on reducing the
expense of my investment portfolio, and that's a good thing
to focus on, but it has led a lot of
people down at the bottom of the funnel to conclude
that there's just nothing but the S and P five hundred.
All I need is this S and P five hundred
index fund, and that's all I'll ever need because nothing
happens anywhere else. Well, that's a good core of a portfolio,
(14:42):
because the US does make up a big chunk of
the overall global economy about sixty five percent. Right, sixty
five percent of economic activity occurs right here in the
United States. But that means thirty five percent doesn't. That
is trillions of dollars in value that you're ignoring if
that's not something that you represent in your portfolio. So
let's give an ex Let's say you said I only
want to invest in US car companies because the US
(15:04):
is all that's the only place that there is to
deal with. You'd have at this point, Ford, General Motors
and Tesla. There's a handful of other car companies out
there that have done okay. So that is not a
diversified bet on the auto industry. That's just a slice
of it. You're ignoring Toyota, Honda, Hyundai, BMW, Volkswagen, Ferrari
byd in China. That's a new one on me. But
still it's out there, and there are billions of people
(15:26):
who buy cars that aren't built in the United States.
Jaguar land Rover are now based in India. So if
you simply, if you simply focus so much on that,
you're going to leave an awful lot of economic activity
on the table simply because it doesn't occur within the
boundary of the United States. That does not mean it's
not profitable activity. And the winds will change direction on occasion,
as they have this year.
Speaker 1 (15:47):
Well, Brian, I know you love history. I do as well,
So let's talk about Japan. For example, from nineteen seventy
to nineteen eighty nine, Japanese equities return an average of
twenty two sent per year. People thought Japan at that time,
and I remember this. I remember when the Hondas started
coming out in droves. People thought Japan was going to
(16:10):
absolutely dominate the global economy forever. And then came the
nineteen nineties. US technology took over Microsoft, Intel, eventually Apple, Amazon, Google.
Nobody had even heard of these companies in the late
seventies to early eighties, but the tide certainly did shift.
The point here is no country in and of itself,
(16:32):
is it relates to stocks dominates forever. Yes, the US
has been on a great run, especially post two thousand
and nine, but there have been decades like the nineteen
seventies where the US brian actually underperformed global markets.
Speaker 2 (16:48):
Yeah, that's right, and that's actually happening right now. But
technically in twenty twenty five, the US is underperforming global markets.
International stocks are doing better than US stocks. Now. Everybody's
having a pretty good year, right this is we could
be looking, knock on wood, We could be looking at
the third double digit rate of growth in the United
States here by the end of this year. But international stocks,
(17:08):
both at the big established developed level as well as
emerging markets, are all doing better. And the reason for
This is because you for better or for worse, regardless
of the side you are on the political aisle. And
we're not going to turn this into politics, of course,
But the reason is the United States has chosen to
portray itself drastically differently than it has in the past,
and that is forcing countries and companies who are internationally
(17:30):
based to say, well, if it's going to be harder
to do business there, maybe we're overlooking some opportunities elsewhere
in the world to build business partnerships. And that is
exactly what has happened. The market has recognized that dollars
have flowed into internationally based non US companies at a
faster pace this year than they have US companies. That
doesn't mean that the US market is down. That's not
the case at all. Everybody's having a pretty good year
(17:51):
thus far, again furiously knocking on wood, but international companies
are having a slightly better year. That is why we
have we always have these discussions about make sure you've
got a diverse, fied portfolio so that you're not completely
missing the vote in some other area that maybe didn't
do so great last year, but all of a sudden
has taken the lead this year.
Speaker 1 (18:09):
Yeah, a couple of examples, you know, where international companies
are just as innovative, if not more innovated than their
US counterparts. Samsung, for example, is really pushing the boundaries
in semiconductor chips. Taiwan semiconductor is critical in AI technology,
and let's face it, a lot of European firms lead
(18:30):
the globe here in innovation in green energy technology.
Speaker 2 (18:35):
So there's a lot of innovation going on all over
the world and.
Speaker 1 (18:40):
It's another reason to you know, be open to diversifying
your portfolio. That being said, this is where some some
good i would say managed portfolios, and it's worth paying
somebody to really, you know, kick the tires and look
at some of these companies because when you get into
investing internationally, there's different regulatory environments.
Speaker 2 (19:00):
There's different corporate corporate government governance rules.
Speaker 1 (19:05):
This is where it is helpful a lot of times
to have boots on the ground really looking at this
on a company by company basis, not just saying well,
I'm gonna just throw money at the Japanese market or
at the Taiwan you know, because things are different literally
company by company and region by region.
Speaker 2 (19:24):
So it's important to talk to your fiduciar advisor. Just
make sure you've got the right level of exposure to
offset the other risks you have in your portfolio. That's
the whole point of asset allocation and diversification. But it
all starts with a financial plan. Anyway, Before you worry
about what color bricks you're gonna put on your house,
you need to have a blueprint to begin with. Here's
the all Worth advice.
Speaker 1 (19:42):
Don't invest in countries, invest in great companies wherever they are.
Coming up next, an update on the local real estate market.
Our price is cooling off? Or is the bidding more
Era still alive? And well?
Speaker 2 (19:56):
Our real estate expert is in next to talk about
all of that.
Speaker 1 (19:59):
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 on Bob spun
Seller along with Brian James, and we're joined tonight by
our real estate guru, Michelle Sloan. Michelle, thanks as always
for making time for us tonight. We want to we
(20:21):
want to kick things off tonight just by getting your
perspective on what the current environment is out there. In
the real estate market, the residential real estate market. I mean,
let's face it, rates have come down a little bit.
What have you seen changed since the last time we
talked to you about You know what, where's the market at.
I know, the weather's cooling, everybody's back to school.
Speaker 2 (20:42):
Are things slowing down? Are things speeding up? With these
rates coming down? Give us a good give us.
Speaker 1 (20:47):
A good overall view of the residential real estate market
in Greater Cincinnati.
Speaker 3 (20:53):
Well, I'll tell you what the biggest difference is. We
are seeing a shift in the market to more balanced market.
And what that means is it's no longer strictly a
seller's market in Cincinnati, Ohio. We have had a seller's
market for years actually, and now in some areas of
(21:17):
Cincinnati we're seeing more of a buyer's market. What does
that mean? So it's all about supply and demand, and
you guys are very familiar with that. But you know,
the supply, we've had more buyers than we've had homes
for sale. But now we're balancing out the market. And
so this is a good thing for buyers because there's
(21:39):
opportunities out there. When it's a buyer's market, we have
more homes on the market and maybe fewer buyers. Therefore,
the buyers that are out there are going to have
an opportunity. They may not be able to they may
not have to actually compete against a whole bunch of
other buyers, and so they might be able to get
(22:01):
a home for I'm not going to say the price
is going to be dramatically lower, because we are definitely
seeing the prices are still increasing in the Cincinnati area
as far as the home price median prices are up
five percent year over year, and so we're seeing still
a slight increase. It's not the crazy increases though that
(22:23):
we saw in the past several years, where you know,
the market has increased ten or fifteen percent year over year,
which is just crazy to even think about. So I
would say the biggest change that we're seeing is it's
no longer a seller's market. We have a more balanced market,
and it's leaning a little bit towards a buyer's market.
(22:47):
So days on market, meaning how long a home has
to sit on the market before someone actually gets under
contract and buys that property, is taking longer instead of
just a couple of days, which it has been over
the last few years, we're looking at a forty nine
day average time on market forty five days average time
(23:09):
on market, so that's a huge change.
Speaker 2 (23:12):
So, Michelle, the question I have is, so I am
also married to Michelle. That's why I'm stammering here because
I was going to say her name, and I said
your name, and then I don't know who anybody is
anywhere anyway. Michelle and I aren't going anywhere anytime soon,
but we are sneaking up on empty nest time of life.
So I'm sniffing around a little bit just to see
what things look like. That means, you know, in this
day and age. I've got a few apps going and
(23:33):
just kind of watching different properties. We're not going to
play some bit or anything anytime soon, So anybody listening
to me who knows, leave me alone anyway. But anyway,
so I've got these apps. If your wife.
Speaker 1 (23:43):
Starts, if your wife starts looking around you, you might
be making a transaction here sooner than you think you are.
Speaker 2 (23:49):
Hold on my phone. I'm just trying to how this
really works.
Speaker 3 (23:53):
Now you've started something with the other, Michelle.
Speaker 2 (23:55):
Look out, it's the other way around. I'm the one
feeling Nancy but this isn't having anytime soon. But my
question was, I've got I've got the the app here
of course, all these different apps, And just in the
last two weeks, it seems like all of these houses
that I've sniffed around, right, they're all getting shoved in
my face. I may not even like it, but I
looked at it once. Therefore the app things they love it.
But anyway, all of these are coming up with price reductions,
(24:18):
so it seems like everybody know the sellers are shutting
the sense of this too. But at the same time
this is happening when we've had a cut in interest rates,
I myself have been advising clients who have one of
these six to seven percent mortgages that hey, it might
be time or we'll hire in, that it might be
time to refinance. Soul could rates coming down goose this
back into a seller's market if the buyers come back
and droves.
Speaker 3 (24:39):
Potentially, I think that everybody's just being a little bit
cautious or a lot cautious right now. I don't expect
us to do an immediate switch overnight. So rates have
come down really really slowly, I mean like tenths of
a point we're still hovering around six and a quarter,
you know, depending on the type blan that you get
(25:01):
and depending on your specific financial status and credit and
all of that. So honestly, I don't expect it to
turn into a seller's market again overnight. But here's the thing.
I had four listings in the last thirty days. Two
of them sold within a day in multiple offers. Two
(25:26):
of them are still sitting, and there's no seemingly rhyme
or reason why the two that's sold really really quickly,
although you know, there were great homes, great properties. They
both had swimming pools, which to me leads me to
believe that swimming pools are definitely something that people are
looking for. The other two are they're great homes in
(25:50):
great neighborhoods in great areas, and you know, we have
had to have some price changes, so you know, I
do think that the longer sell are on the market,
the more nervous they get, and they tend to want
to point fingers at the real.
Speaker 2 (26:06):
Estate agent, like what is going on?
Speaker 3 (26:08):
So don't do that. Don't put your finger at me
or at your real estate agent, because trust me, if
there was a buyer out there wanting to purchase your home.
Speaker 2 (26:18):
They would come.
Speaker 3 (26:20):
You know, you put it on the market and they
will come.
Speaker 1 (26:23):
Well, Michelle, in the minute or so we've got left.
I mean, let's face it, houses are like any other commodity.
It's correct me if I'm wrong. It's supply and demand.
You use the word cautious. What is causing people to
be cautious right now? And is this affecting supply more
than demand or demand more than supply, meaning has the
(26:43):
supply gone up while demand has gone down. What's causing
this cautiousness out there?
Speaker 2 (26:49):
Yeah?
Speaker 3 (26:50):
Absolutely. I think that the number of people who have
been stuck in their home for a long time, They're like,
it's time for me to make a move, and some
people people just miss the bubble. This fall has been very,
very interesting, and timing is everything. If you want to
sell your home, you've got to put it on the market.
(27:10):
For the most part, people have to know that it's available,
and so we just have a lot of buyers who
are exhausted with the process. They don't want to get
into multiple offers. They do see the rates coming down,
but I think everybody's just overwhelmed with the situation in
life right now. And a lot of buyers are saying, yeah,
(27:31):
I'm just going to wait. I'm going to sit tight
for a while. So I think there are fewer buyers
out there and a few more sellers that are ready
to make a move.
Speaker 2 (27:40):
Interesting.
Speaker 1 (27:41):
You're listening to Simply Money isented 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 Sponsller
along with Brian James. Do you have a financial question
you'd like for us to answer? There there's a red
button you can click while you're listening to the show.
(28:03):
If you're listening to the show from the iHeart app,
simply record your question and it will come straight to us.
All right, Brian Paul and Fort Mitchell says, we have
more than we'll ever spend, but I still can't shake
the fear of running out. Is that just how people
are wired? Or does it mean our plans not clear enough?
Speaker 2 (28:23):
I love when we get questions from the forts, because
I feel like I'm talking to our soldiers on the
front lines of northern Kentucky again, protecting us from the
hordes of Florence. Kentucky. Paul and Fort Mitchell. So what
you just did, was you just the question used to ask,
just basically gave Bob and I job security for a
good long time. There's a lot of people out there
in this situation. I know I've got enough, but I
(28:43):
still have this fear that it's not. I don't. I
just can't kind of can't see the future. And yes,
that is very much how people are wired. Paul. That
voice in the back of your head that's telling you
you don't have enough is the same voice that told
you to save all of that beginning from the from
the very beginning of your career. So we'll go ahead
and assume you've got a four in case, some kind
of retirement plan. You made a choice at some point
to start to carve out money away from yourself. You
(29:06):
can spend this week and stick it in a savings plan.
You did that. I don't know. I've no idea how
old Paul is. Let's say it's thirty years ago. Who knows,
But you did that, and now all of a sudden
you've got options. What you're running into is the bigger
mountain behind the initial fear of not having enough money.
Oh my gosh, we do have enough. Money. But now
how does it all work? And so the answer to
(29:28):
this is, put together financial plan, run some actual numbers,
figure out what it is that you spend, what does
it cost your household to stay afloat for a month,
and then string that out for thirty thirty five years,
whatever the life expectancy is. And then on top of
that add your other goals. You know, you might have
a mortgage in the mix, maybe for a few more years,
maybe you're helping parents, kids, and so forth. The answer
is just simply do the math, run a plan based
(29:49):
on a hunky doory scenario, and then do it again.
But take away twenty five percent of your financial networth.
That is the fear that most people have, which is okay,
I'm okay now, but what if a two thousand and
eight comes in sneaks up on me. Will I be okay? Then,
exhil Paul, congratulate yourself for doing what you've done, But
now look forward, stop looking in the past, and look
forward and run some projections for yourself. All right, Moving
(30:11):
on to Emily and Levin, and Emily says she's finally
on a spot where they can afford to be generous,
so they want to start sharing their wealth that they've built,
but it starts to feel harder than saving ever did.
So how do you decide when you've given enough? You know,
when have you done your duty versus when are you
sacrificing too much? Bob?
Speaker 1 (30:27):
Well, Emily, it's hard to tell from your question whether
you're talking about giving to adult children, let's say, or grandchildren.
Speaker 2 (30:34):
Or giving to charity or all the above.
Speaker 1 (30:37):
So you know, there's a numbers part of this answer,
which is have a good financial plan and kind of
know where the boundaries are in terms of how much
can you afford to give without putting your long term
retirement you know, plan in jeopardly, in jeopardy, in jeopardy.
But then I think what you're kind of implying here
is maybe we've already done that, but it's really hard
(30:58):
to cut loose to some of that money, you know,
as it relates to charities. This is the best advice
I can give you. I think giving to charity is
a lot like anything else we do with our money.
We're going to tend to follow our passion in our heart,
whether that's taking a cruise or buying a new car,
or giving to some kind of charity that we've become
(31:20):
attached to. So the best advice I can give you
is from the New Testament, Second Corinthians ninety seven says
each of you should give what you have decided in
your heart to give, not reluctantly or under compulsion, for
God loves a cheerful giver. In other words, don't do
any giving under pressure. Make sure you have peace, and
(31:42):
I would say some excitement and passionate passion about it.
And then that's where you know, you know you and
your husband are heading in the right direction. You should
derive some joy from giving money to others, and I
hope that helps, all right.
Speaker 2 (31:55):
I want to tackle on an extra bullet to that
because I just had a conversation yesterday that I think
along with this. So a lot of people are, of
course passionate about tithing, which is pretty easy to do.
You know, ten percent of my income is easy to
easy to calculate when I've got two w two checks.
But I think what happens is a lot of times
people will kind of write that number in stone and
(32:15):
say that it must be that dollar amount forever, or
we're somehow not fulfilling our obligations spiritually. But nowhere in
the Bible does it say you should give x percent
of your IRA distributions and x percent of your rental
real estate income, or when you take this much out
of savings, that chunk should always go. The Bible doesn't
quite get that specific. So just be conscious that it's
(32:36):
okay to reduce your If you are a tither, it's
okay to reduce your contributions because your income has lowered
because you retired. Congratulations. Maybe your income doesn't need to
be what it used to be, But we don't have
to marry ourselves to the number we gave in the
past just because it was the number. Have a reason,
like Bob just said, figure out mathematically what it is
you can afford, first of all, and then make sure
(32:57):
you're comfortable with it. And it does not have to
be what you get before you retired. A lot of
people get get screwed up by that.
Speaker 1 (33:03):
Yep, good stuff, all right, Greg and Anderson Brian says,
we're close to retirement, but our life feels busier than ever.
Our parents are aging, grandkids are growing, careers are winding down.
How do you plan when everything's changing at once? Boy,
I can relate to some of this question, Brian.
Speaker 2 (33:24):
So we all spent time at one point as a
young person trying to build wealth and just trying to
get started an adult life and so forth. And the
so I can tell that Greg did a good job
of that, because all of a sudden he's getting hit
in the face with all of these questions. And these
are just that all the normal things that everybody goes to.
It does all happen at once, you know. And I'm
not going to say life is quiet in the first
(33:45):
several decades. That is not the case at all. However,
it's usually financially relatively quiet. The answers are fairly simple.
I always tell young people you got three things to do.
Save your money aggressively, invest aggressively, don't panic when the
market wobbles, and don't make a mess of your credit.
If you do those three things for thirty years, you're
gonna have all these questions that Greg has. So congratulations, Greg,
(34:06):
you got what you wanted. The answer is, first of all,
exhale always, and remember you're not the only one going
through this. There are plenty of people around you who
are who are seeing all these things. The good thing
is when we get ourselves hung up over the math,
the financial math behind all of this. It's just math.
You can get it all down on a piece of
paper or a spreadsheet or a financial planning tool, and
then you can make that question go away from a
(34:27):
standpoint of you've kind of got it down in concrete.
You've got it somewhere you can play with it. Then
you can focus on all the things you highlighted. Greg
are more emotional in nature. So once you have the
math out of the way and you understand it, you
have a tool that you can flex as things change,
then you can focus on those more difficult psychological and
emotional questions that you just highlighted. But again, first thing,
Greg Exhale. Coming up next.
Speaker 1 (34:50):
Brian has his bottom line on how to avoid analysis paralysis.
Speaker 2 (34:55):
You're listening to Simply Money?
Speaker 1 (34:56):
Is that about all Worth Financial on fifty five KRC
the talk station. You're listening to Simple Money because I
by all Worth Financial. I'm Bob sponseller along with Brian James.
Brian has some words of wisdom for us tonight about
how to avoid analysis paralysis.
Speaker 2 (35:15):
Well, Bob, I thought of this the other day because
I had a few conversations or conversations with clients. And
then you and I were talking on an earlier show
about the idea that the market is at a peak
and what does that mean, and we kind of highlighted
the fact that the market is usually at a peak,
so it doesn't really mean much of anything. Just means that,
you know, we've got more money than we've ever had,
but it doesn't necessarily change what you need to do.
(35:36):
So what happens, though, is a lot of times this
causes people to get that. You know, we've all heard
this phrase paralysis by analysis, in other words, overthinking, looking
for so many different options and researching everything to death
that I never bothered to do anything. So now tell
me this sounds like you. You ever spent hours comparing
credit cards or researching that perfect investment, only to wind
up going, you know what, I don't see the answer.
(35:57):
I'm going to look at this again tomorrow, and tomorrow,
same thing happens, and eventually you just quit looking at it.
So I have a couple of clients, Bob that went
to cash in two thousand and eight, panicked, unfortunately, and
sat that way until twenty twenty one. This was not
with us. They didn't They came around came to our
doorstep well into that whole situation, but the whole, the
(36:19):
entire time, they spent ten fifteen years looking for the
perfect investment that would never take them through a two
thousand and eight type thing again, and that is just
not a possibility. But they set themselves back. And so
what happens is, obviously this is a psychological issue happening
here called loss a version. I don't want to lose money.
That's a bad thing. I can't That is a negative permanently,
(36:40):
it's a mistake. If something goes wrong, we've made a mistake,
not the you know, not realizing that that's just life.
Sometimes it rains, and sometimes we make picnic plans on
the wrong day. It just happens. But it doesn't mean
there isn't going to be another day out there. So
the research shows that a lot of Americans can delay
these financial decisions for months or even years because they
feel overwhelmed. And in twenty twenty five, with going up
(37:00):
and lots of scary headlines and so forth, and the
market being on in year three of a really really
strong bull market, that gets a lot of people concerned
about what do I do? What do I do? Today.
The answer a lot oftentimes is nothing. Do you ever
see this kind of thing in your daily routine?
Speaker 1 (37:15):
Yeah? And I think this, you know, speaks to the
value of having a good fiduciary financial advisor. Forget about
products and strategies and all that a lot of times.
And Brian, we joke around a lot about this on
the show, but it is vitally important to study history
and study data and actually have some good historical data
(37:36):
to go through that is constructed in such a way
where people can understand it. And that's where I know
you do a great job of this in educating your clients.
Speaker 2 (37:47):
I think once people.
Speaker 1 (37:48):
Get armed with good information and a lot of the
best information out there, you never hear about in the
financial media because they're just talking about what's going to
go up or down over the next you know, thirty
six hours. So to have a good advisor, step back
and look at some good historical data. I have found
armed with data, people can get a little release here
(38:09):
and be willing to get off that analysis paralysis train.
Speaker 2 (38:13):
Yeah. So three quick steps here. Set a deadline, give
yourself a week, a month, or whatever. But set that
hard deadline. Narrow your options down to two or three
and embrace imperfection. You're not going to nail it. You'll
never have perfect information like Bob just said, but know
that you will have made the decision with the most
information you can and therefore the most educated manner. Thanks
for listening tonight.
Speaker 1 (38:33):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KRC, the talk station
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