Episode Transcript
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Speaker 1 (00:00):
Welcome to the hidden world of wealth, where secrets of
the affluent become accessible to you. You are listening to
Your Money Matters, the most provocative financial radio show on
the airwaves. You are about to start your educational journey
here on Your Money Matters with your host Drew Prescott,
(00:20):
President of Prescott Private Wealth and Chartered Retirement Planning Counselor.
Drew will unlock the complexities of the financial landscape with straightforward,
powerful insights. Whether you're planning for retirement, managing in a state,
or looking to grow your wealth. Consider this your exclusive invitation.
Turn up the volume, lean in closer. Let's navigate the
(00:42):
hidden paths of prosperity together. Your financial enlightenment begins now.
Securities off produce a Terror Financial Specialists LLC Member FIN
The SIBC Advisory Services Off produce a Terror Investment Advisors
LLC SI Terra firms are under separate ownership from any
other named entity. Four five one six Street, Troy, New
(01:03):
York one two one eight zero.
Speaker 2 (01:22):
Welcome back, everybody. You're listening to Your Money Matters and
I'm your host, Drew Prescott, President of Prescott Private Wealth
and Chartered Retirement Planning counselor as well as a credited
wealth management advisor. You're listening to your money matters can
be heard here every Sunday at eleven am. And I
want to say thank you for tuning in, thank you
for listening to me as you're out and about today.
(01:45):
And I heard four different people that listened to the
show over the last week that all told me that
they listened to me as they're out walking their dogs
or taking a run, So good for you. I'm someone
that needs to work on getting my steps in here
and had a little wake up call as far as
my eating habits are concerned. So I'm getting getting back
(02:08):
into the discipline of eating well doing a Mediterranean diet.
So I've had to create this, I guess, an acquired taste,
if you what, It's kind of like when you first
start having wine. Nobody really loves wine at first, but
but you can, you know, you can really fall in
love with wine. Well, I learned I can also fall
in love with this Mediterranean diet. So I really enjoyed
(02:32):
my olives and almonds and stuff. But anyways, enough about me.
You don't care to hear about that. What you want
to hear is about what is going on?
Speaker 3 (02:42):
Right?
Speaker 2 (02:42):
What a crazy week that last week was? You know,
were you even human if you didn't start to get
a little bit concerned as an investor. Well, I'll tell
you this me personally, I was. I'll be honest with you.
I was as cool as a cucumber. And if you
(03:04):
don't believe me, you can talk to some of my clients,
because you know, frankly, I only had two clients. And yeah,
typically I can expect a phone call from the same
people at certain times, but I only had two. I
only had two people that started to doubt the process.
And you know, my job is not only to work
(03:26):
with you and creating your financial plan and putting together
a portfolio that is right for you and your risk profile,
but also kind of double down, is kind of a therapist,
if you would, And that's where you know this this
show comes into play. Is I want to help you
get through times like this. All right, So with that
(03:49):
being said, here picture this. It's March of twenty twenty
five as we sit here, and the market just shed
over ten percent since it's February peak, that's five hundred
dollars that is no longer there poof just like a
magician's best trick. Well, last time we dissected the culprits,
(04:14):
the tariffs, the jittery consumers, the global tensions. But today
we're flipping the coin. We're gonna we're talking hope today,
opportunity and how you can turn this market dip into
a golden ticket for yourself. So grab a coffee if
you're if you're out walking about, go for a little
(04:36):
extra lap today. Okay, I want you to settle in
and let's prepare for story time. Everybody sit down.
Speaker 4 (04:45):
Listen, Jeff, everybody said down, sit down, please sit.
Speaker 5 (04:53):
Stormy time story time.
Speaker 2 (04:58):
So let's kick things off with the little light in
the darkness here, because boy, have we earned it. After
this last week of this market doom and gloom, the
S and P five hundred has been on an absolutely
wild ride lately. Like we said it was, it had
shed at one point ten percent from its February twenty
twenty five peak like a tree just dropping leaves in
(05:20):
a hurricane. And we're talking five trillion dollars in market value.
And it's been ugly. There was no question about it.
But here's where it gets interesting, because as we saw
on Friday, what a remarkable turnaround. I mean absolutely remarkable.
And you know, there's been this quiet buzz that's starting
(05:45):
to ripple through Wall Street and it's a little whisper
that was growing louder and louder by the day. And
they would say that this might just be the bottom.
And you know what, on Thursday, I sat in on
a national call with all of the great minds in
(06:06):
our industry, not all of them, but several, and you know,
we all kind of came to the general consensus that
if we're not at the bottom, we may be within
touching by stretching out our feet here. So we're starting
to think that it was the bottom.
Speaker 3 (06:25):
Now.
Speaker 2 (06:25):
By the way, when I say that, remember I'm not
saying that this is over with. We're still going to
see some volatility. If you don't believe that, well that's fine,
but I'll tell you this. We're going to see some
more volatility through the summertime and everything, which is absolutely fine.
But imagine that the stock market think of it like
(06:47):
a moody teenager and just bear with me here for
a second, okay, because one day it's strutting around, it's
very confident, it's got its swagger, high five and everybody dapping,
everybody up, and it's got these highs and it's popping
champagne like it's prom night. Now the next day it's
slouched in the corner right, sulking, clutching its portfolio like
(07:11):
a soggy teddy bear and a thunderstorm. Well, right now,
we just came out of a deep sulk mode and
investors had flipped from greed to fear faster than you
can say margin call. And that sudden mood swing, it's
(07:31):
like a neon sign flashing, Hey, the worst might be over. Now.
Let's see what Warren Buffett has to say about times
like this.
Speaker 3 (07:42):
You can't get yourself in that mental attitude. You're gonna
be scared whenever every everybody else is scared, and expect
somebody else to tell you when to buy and therefore
get your courage backup or something. You know. I could
get this fellow's courage and substantially by saying it's a
wonderful time to buy, and then a week from now
he'd run into somebody else tells him the world is
coming to an end and it's sell. I mean, he's
(08:03):
a broker's friend.
Speaker 2 (08:04):
See, And that's absolutely true. We see this time and
time again. See the market just like teenagers, it loves
to overreact, so they soar to a high and then
they crash too hard. And when everybody's running for the exit,
that's usually when the smart money starts to tiptoe back in,
eyeing bargains like it's a Black Friday at the mall.
(08:28):
So let's hop in a time machine for a second. Here,
back to a day that still gives old timers the shakes.
So picture this headline, stocks plummet as panic grips Wall Street.
That was from October nineteenth of nineteen eighty seven. That
was Black Monday, folks, when the Dow Jones didn't just
(08:50):
stumble it, belly flopped twenty two percent in a single day.
So pitcher trading floors, like a scene from a disaster movie,
are just ringing off the hook. Traders are yelling at
each other, cups of coffees flying around, and paper screamed.
Is this the end of the world as we know it?
Speaker 6 (09:15):
We know it.
Speaker 2 (09:17):
But here's the twist. Just two months later, the bargain
hunters were back and they're picking through this wreckage like
treasure seekers. So by nineteen eighty nine, the market was
roaring again and it was hitting new highs like nothing
even happened. So compare that to today's little ten percent dip,
and it's a speed bump next to Black Monday's mountain.
(09:41):
And we've been through worse, folks, and we've come out swinging.
So now let's talk about something that hits closer to home,
which is jobs. The labor market's still standing tall and
flexing like a heavyweight champ who laughs at a punch.
Unemployment chilling near four percent, and weekly jobless claims are
(10:02):
steady around two hundred and twenty thousand, and that's like
a heartbeat that won't quit. Sure, there's some chatter about
federal layoffs, about government tightening its belt in a while,
but step back and the big picture is rock solid.
And when people have jobs, what do they have. They
have cash, and they buy new sneakers, They book weekend getaways,
(10:27):
They splurge on overpriced lattes with fancy fomart, and that's spending.
That's the economic engine that if you listen closely, you
can hear it purring even when the market's throwing an
absolute tantrum. So flashback to another gym. Here's another headline
for you, jobless rate hits a ten year low. Now
(10:50):
that was back in May fifth of nineteen ninety seven,
and so I was just well almost twenty years old,
nineteen years old, so that that didn't mean a lot
to me at that time of my life. But the
employment dipped below five percent, and it was like tossing
rocket fuel on this nineties bull market. We saw tech
(11:13):
stocks were soaring and the good times just rolled. So
we're not quite at that party yet, but similar vibes
because they're starting to feel familiar. So let's peak behind
the curtain at the Federal Reserve as well, because, as
you know, those are the wizards who tweak the dials
(11:36):
of our economy. And the markets a buzz about possible
rate cuts later in twenty twenty five. So think of
rate cuts like a cool breeze on a sweaty summer day.
They're just refreshing, they're energizing, and for those of you
that are running around and you're sweaty, you can really
identify with that right now. But lower rates mean businesses
(11:59):
can borrow cheaper, and we've talked about this time and
time again on this show. They can hire more, they
can build more and they can pump life back into stocks.
You see, it's not a lock. Now. The fed's playing
it cool, kind of like a poker player with a
hidden ace. But even the whisper of it is enough
(12:22):
to perk up the mood. So you want the full scoop. Well,
if you flip through our twenty twenty five economic outlook,
it's like getting a backstage pass to the fed's next move.
So what if they don't cut rates, Well, things might
stay bumpy, but hope's still in the air. And I
(12:44):
want to share a stat with you that will make
your eyes pop. And here it is. There's twenty four
trillion that's with a T like Thomas okay or tango
I should have said, But twenty four trillion sitting in
cash and in money market funds, just waiting for the
(13:06):
green light to dive back into stocks. So picture it
like it's like a tsunami building behind a dam and
it's ready to crash in and lift everything that's in
its path. Now, history has a playbook for this, so
check it out. Here's another market headline cash. This is
(13:31):
from March tenth of two thousand and nine, and it
said cash pours into stocks as the Dow rebounds. So
that was after the two thousand and eight meltdown, and
investors clearly were spooked and they were hoarding cash like
it's doomed, like there were doomsday preppers. But when confidence
flickered back, all of that money rushed in and it
(13:54):
ignited a rally that ran for over a decade. And
is that damn that I mentioned before, is that damn
about to break again? Because that would be twenty four
trillion dollars that is sitting there and it's itching to
make a move. And when it does, hold on to
(14:14):
your hats because it's going to be significant. Now let
me point another bright spot out to you here, which
are earnings. So fact set is a software that we
use to look at charts and everything in our industry. Well,
fact set's calling for a twelve to thirteen percent growth
(14:36):
in the S and P five hundred profits for two
thousand and twenty five. Now, if this were to happen,
that's not just hanging on. That's thriving. So it's like
your local diner suddenly doubling its burger sales. More profits
mean stocks have the juice to climb. And if you're
(14:59):
hungry for details. I would encourage you to take a
look at Deloitte's Global Economic Outlook for twenty twenty five
because it lays it all out there for you to
sift through. And companies are not just scraping by, but
they're growing, and that is the heartbeat of any market rebound.
So let's wrap up this little history lesson and that'll
(15:25):
help ease your nerves here. So let's do it this way.
Let's go, yeah, let's do this. How about this one.
Over the last forty five years, the S and P
five hundred's taken an average tumble of fourteen point one
percent within a year, every darn year. Yet in thirty
(15:48):
seven of those years it's still finished in the green.
So chew on that for a second. Even with double
digit drops, the markets end up smiling more often than not.
And Schwab's market corrections are more common than you think.
(16:11):
That's a great read. It's a great read. If you're
feeling shaky, look up. Schwab's market corrections are more common
than you think. And it's it's basically, you know, when
you're not feeling the love of the market, you read
something like that, and it's kind of it's like a
warm embrace. It's like a nice hug from a someone
(16:34):
that cares. And this ten percent dip that we're in,
it's just a market that's catching its breath after a sprint.
It's normal, it's a healthy thing, and nine times out
of ten, it's the warm up for the next big run.
So there you go. That's a little glimmer of hope
stitched together with jobs, cash earnings in addition to a
(16:56):
nice hefty dose of history. And the market's you know,
I think it's done pouting now, but if the past
is any guide, it'll be back to its old tricks
soon enough and chasing new highs like a kid after
an ice cream truck. And when it does, you'll want
to be on this ride. So let's move a little
(17:19):
bit further down the pathway today and let's pull back
the curtain and let's set the stage for taking a
look at this global stage and trumps rare Earth gambit,
because this isn't just some Wall Street ticker taped tail.
(17:39):
This is a global thriller with all of the drama
of a spy flick. And picture the world as a
giant poker table.
Speaker 7 (17:48):
For a second.
Speaker 2 (17:50):
The chips are stacked high, and tension is thick enough
that you could cut it with a knife. And at
the center of it all is a handful of obscure
metals that are called rare earth elements or orees. And
if you're feeling fancy, you want to feel cool, are ees?
How's that These aren't your run of the mill rocks.
(18:12):
These are like little magic pixie dust that's powering everything
from your iPhone to electric cars to even fight er
just that are screaming across the sky. So without them,
as you can tell, modern life would screech to a
halt faster than a car that has no gears. And
(18:34):
right now the US is sweating bullets because our country
is not the one that is holding the cards. Because
right now there's only one country that is in control
of this and that's China, all right, So that's a concern.
(18:57):
That's a concern not so much economically as it is militarily. Okay,
So here's the kicker. China's got this planet in a
chokehold right now, and they're controlling a jaw dropping sixty
percent of the global ree production and a mind blowing
(19:21):
eighty five percent of the processing. How about the US, Well,
we're stuck begging at the doorstep importing seventy two percent
of our rare earth stash straight from guess it, it's
coming right from Beijing. And that's like handing your rival
(19:43):
the keys to your house and hoping that they don't
lock you out. So in a world where trade wars
ignite faster than a match on dry grass, it is
a vulnerability that keeps Pentagon Brass up at night. But then,
strutting back into the spotlight like a cowboy riding in
(20:03):
the town, comes President Donald Trump with a move that's
really it's so bold that it's got everybody from stockbrokers
to general's buzzing. So remember it was only about two
weeks ago when everybody was going crazy about Trump bouncing
Zelensky out of the White House. But under this context,
(20:24):
I'm not telling you you need to be this man's
biggest fan, but understand the method behind the madness for
a second. Here, Okay, let's listen to what Trump had
to say about Ukraine.
Speaker 4 (20:37):
We're telling Ukraine they are very valuable rare earth. We
want what we put up to go in terms of
a guarantee. We want to guarantee we want. We're handing
the money hand over fist, we're giving them equipment. European
is not keeping up with us. They should equalize. Look,
we have an ocean in between. They don't. It's more
(20:57):
important for them than it is for us. Way below
us in terms of money, and they should be paying
at least equal. They should really be paying much more
than us. But let's say equal to us, and they
are billions and billions of dollars below. So we're looking
to do a deal with Ukraine where they're going to
secure what we're giving them with their rare earth and
(21:19):
other things.
Speaker 2 (21:21):
So there you go. Right, let's just again, let's just
be politically neutral and look at this from an economic
standpoint and from security standpoint. Now it's been a wild swing,
and frankly, this is a bit of a hail Mary
pass in the fourth quarter. And what is it aimed at? It? Well,
(21:42):
it's aimed at prying America loose from China's iron grip. Okay, Now, Ukraine,
as it turns out, it's sitting on a pile of
untapped ries and a potential gold mine as a matter
of fact, or at least that's the pitch. Okay, now
Trump's betting big that this could be the lifeline to
(22:04):
the US and what it needs and a way to
flip the table and deal a new hand. But here's
where this plot thickens, because not everybody is sold on
this gambit, and some experts are right really raising their eyebrows,
and they're muttering that Ukraine's reserves might be more smoked
(22:25):
than substance, like a shiny car that has no engine
under the hood. Frankly right, And Trump, well, he's playing
at KOI and his lips are sealed tighter than a vault.
So I hear a lot of people saying, well, I
just wish that he would explain what he's trying to
do here, what's going on, because if I just had
(22:46):
a better understanding. Well, listen, the reality is if you
or I had a better understanding of this. So at
our enemies, right, So we have to respect the game
that's being played, love them or hate them. This is yeah,
this is the art of war, and we do not
(23:07):
want missiles flying. So you know, we have to just
let this game of poker take place as this is happening. Remember,
remember the stock market, the stock market does not love uncertainty.
But let's point back to everything that we just talked about,
(23:29):
how everything is in a good alignment for the markets
to do remarkable. So does that mean that things are
going to go up in a straight line. Absolutely not.
I already said that to you. I said, we are
going to face volatility. Remember that we're gonna see volatility.
(23:53):
Are we going to have a bang up year for
twenty twenty five? I don't expect so, okay, but I
do believe that we will be positive, probably single digits
for the twenty twenty five year. And in addition to that,
it will be like a roller coaster, or like driving
your road on in a backcountry road where from time
(24:14):
to time you hit that little dip and you lose
your stomach that much, I can tell you that you're
in store for all right. So this roller coaster, it's scary,
and sometimes it feels like nobody has a seatbelt. But
if this deal pays off, okay, this could rewrite the
script and it could give the US a fighting chance
(24:38):
to finally stand toe to toe with China in this
tech arms race. And that's the kind of stakes that
we're talking about here. This is geopolitical gold. So now
let's hop in the time machine for a quick detour,
because this is not the first time that America has
danced this dance. Let's flash to a dusty headline from yesteryear.
(25:03):
The time was June fourth, nineteen seventy nine, and the
headline was US targets Strategic Minerals. Now, at this time,
this was the Cold War, Disco was king. The Soviet
Union was a big, bad wolf and clutching key minerals
like a dragon hoarding its treasure. And the US it
(25:25):
got scrappy. It started striking deals, it was stockpiling resources.
It's playing the long game to secure its edge. Now,
it was not sexy. There were no Hollywood explosions here,
but it worked and building a foundation that paid dividends
for decades to come. Now, history's got a thing for
(25:46):
slow burns, and Trump's Ukraine play feels like a remix
of that old tune. But the question is will this
sequel live up to the origin. So let's zoom back
to the present here with me, and let's meet the
players that are in this unfolding saga. So over in Kiev,
(26:09):
we have the Ukrainian President Voladimir Zelenski. He's stepping up.
He's all smiles, swagger. He's pitching his country's arie riches
like a like a used car salesman that has a
gleam in his eye. And step right up, folks, We've
got good stuff. He's sitting there, just puffing his chest
and proud as a peacock. And behind the closed doors
(26:35):
we have these mining big wigs who are scratching their
chins and they're wondering if this is a diamond in
the rough or if this is just a lump of coal. Now, meanwhile,
halfway across the globe, China is watching this like a
chess grand master. They're cool, they're collected, they're giving nothing away.
Are they sweating, are they smirking? Are they plotting their
(26:57):
next move? Well, your guess is as good as mine,
and that's what makes this entire time so darn unnerving.
So back here Stateside, we've got Trump's inner circle, which
is a buzz and they're saying, well, he's playing three
moves ahead. Some are even saying that the man stays quiet,
but you can almost see that the gears are turning
(27:18):
behind that trademark squint of his A mix of showmen
and strategist, and he's ready to drop a bombshell when
the moment's right, and they call that, you know, that's
classic Trump. It's turning a trade deal into a cliffhanger,
which is worthy of a blockbuster film, quite frankly. But
now let's lighten things up a little bit, okay, because
(27:38):
even in a thriller, you have to have a good
laugh to break the tension. And right now on the
world stage, tension doesn't even do this justice. And even
as I'm talking about it on the radio show here
quite frankly, you know, there's a lot of emotion, and
there's a lot of passion from the from the left,
(28:01):
and even those that kind of float between the middle.
And I'll tell you, even even sharing this on my
radio show, I can almost feel your tension as you're
listening to me. But let's let's break this up a
little bit, okay. So imagine Trump here at the negotiating
(28:22):
table and you know, he's he's tossing out these one
liners and the world's holding its breath, or you know,
picture the markets as kind of a squirrel that's on
a caffeine bender, right starting this way and that, and
it's clutching its nuts and it's praying for clarity. It's
really it's high stakes. It's sure, sure, you know, a
(28:47):
little humor. It keeps us sane when the headlines hit
like a freight train. But where does it leave us
well strapped in for the ride? That's where. And if
Trump's Ukraine gambit hits the jackpot, it's a game changer
and China is forced to loosen its grip. Now, think
(29:07):
about that, they control eighty five percent of this game.
That's a monopoly here in the States and on a
global stage. We can't do anything about it unless we
find our own solve and we have some challenges with
all of our environmental restrictions here. We could make some
(29:29):
moves here internally, but because of all the regulations, and
this is kind of a strange thing. I was just
thinking about this as I was driving in this morning.
We need these right and to say that we we
can't do these things in our country, like I understand,
I mean like, but the reality is we need them right.
(29:54):
It's kind of like having a dog and the dog
has to pooh. It has to pooh someplace and just
be because it doesn't pooh in your yard. And your
yard looks beautiful because of It doesn't mean that dogs
not pooh in someplace and you're just going someplace else
to do it. And that's ultimately where we are. We
have forced ourselves as a nation to have to dirty
(30:18):
somebody else's house to get what we need. So if
we're back to square one and we're scrounging for scraps
while Beijing tightens the screws, it's a tightrope walk over
a canyon. And frankly, right now the wind's picking up.
(30:41):
So if we want to be the dominant country in
tech and be militarily advantaged, we need this rare earth.
And this is a story about ambition, about risk, and
the kind of audacity that right our history books that
our grandchildren will be reading about. This is a geopolitical
(31:06):
heist movie. Frankly, it's complete with the twist, the turns,
and a cast of characters that you just can't take
your eyes off of. And if I don't know about you,
but this this is in my mind what we're going
through right now. It feels like qualit tech, but it
(31:30):
feels bigger than that. It feels much bigger than that.
I don't have a term to describe it. But when
looking back in retrospect, I think that we're in a
period of time that is so monumental for the future
that it's like the beginning of the Industrial Age. I
really truly believe that. I don't know what to call this,
but there's something major happening right now, and it's not
(31:53):
just AI, it's not just technology it is it's magnificent
and I can feel it, and I'm sure some of
you can too. So the question is what happens next?
Will Trump pull an ace out of his sleeve? Or
is this a bluff that's going to crash and burn?
So let's hope not. Okay, let's let's sit back and
(32:14):
eat our popcorn. But let's not get heartburned from the
popcorn either, because this next chapter is coming and it's
really anyone's guess to how this is going to end.
So let's look a little bit further into this and
look at tariffs. So let's talk about the trade side, folks,
because tariffs are crashing the party again, and they've they've
(32:36):
got everybody from Wall Street traders to your Aunt Jane
clutching the purses and wallets and acting like their life preservers,
and the air is so thick with deja vu, And
the big question that's buzzing around is are we doomed
to replay history's greatest hits or flops? That's the question, right,
(33:00):
Are these going to be the greatest hits or are
these going to be the greatest flops? And to find out,
let's hop into our trusty time machine that we've been
jumping around in and spin a tail that stretches from
nineteen thirties through twenty eighteen. And that's landing us smack
(33:23):
in the middle of today's tariff tango. So our first
stop is nineteen thirty. So imagine the scene. America is
still wobbling from the stock market crash of twenty nine
and Congress decides that it's time to play hero. So
here's a headline from June seventeenth of nineteen thirty about
Smoot Hawley tariff signed and the trade war looms. Let
(33:48):
me play this clip for you and see if I
can shine a little light on the difference between Smoot
Hawley tariffs and where we are today.
Speaker 6 (33:58):
Because the other countries raise their tariffs in response to
the US raising it's tariffs, everybody's charging an arm and
a leg in taxes. And this is smack dab in
the middle of the Great Depression, when nobody can afford
to be messing around like this. Finally, in nineteen thirty two,
mister Holly and mister Smooth do not get reelected. But
there is a guy running for president of the United
States whose name is Franklin Delano Roosevelt, and he's running
on the platform of lowering tariffs. So when FDR gets elected,
(34:20):
he passes the Reciprocal Trade Agreements Act of nineteen thirty four,
and this lowers tariffs across the board. This helps to
bring all the countries back to the table to play
nice economically speaking.
Speaker 2 (34:30):
So with that clip in mind, let me point something
out here. Okay, we're talking about reciprocal tariffs, and everybody
is saying, well, this is the dumbest thing ever, because
if Canada goes to fifty, we're going to fifty. If
Canada goes to seventy five, we're going to twenty five.
And they people are saying, well, that's childish. Well you
(34:52):
know what's childish. Here's what's childish. The keyword here, what
is it reciprocal? What does that mean if Canada wanted
to go to zero. We reciprocate. What does that mean
we go to zero? Right? So this is this is
really dumb. This is this is a like a fight.
(35:14):
It's these are two men standing face to face and saying, listen,
we can choose. If you punch me, I'm gonna punch you.
If you choose not to punch me, we both walk
away and we shake hands. That's reciprocal. Okay. Well, we
just listened to a clip on and I would encourage
you to.
Speaker 7 (35:34):
Look it up.
Speaker 2 (35:34):
It's called smoot Hawly tariff. And what that did was
that was tariffs that were put in place to create
more They thought it was going to create more jobs
in the United States and just tariff the heck out
of everything that was coming in to the country so
that we would be more self reliant. Well it crushed us, okay.
(35:57):
And this wasn't just a teriff, it was a beast
and its slammed massive taxes on over twenty thousand imported goods.
Now we're talking about eggs, shoes, and even the kitchen sink.
Well almost. But the pitch here was protect American jobs
and farmers from foreign competition. The reality it was a
(36:21):
complete face plant of epic proportions and other countries. They
didn't just sit there twiddling their thumbs. They hit back,
and they hit back hard and throwing up their own
trade walls. So picture a global game of tit for tat,
except nobody's winning, and US exports tanked sixty one percent
in three years. So imagine selling apples at a roadside stand,
(36:45):
only to find that the whole towns locked its doors,
factories are closed, fields went follow and the Great Depression
tightened its grip like a grumpy old octopus. And smooth
Holly didn't just stumble. It tripped over its own feet,
and it took the economy down with it. And the
(37:06):
lesson that was learned is that tariffs used in that
sense can be like tossing a match into a gas can,
and sometimes you get a bonfire that you just can't control.
So let's zip forward now to twenty and eighteen. Why
(37:27):
twenty and eighteen, we're in twenty twenty five. We'll hold
on a second. Here's why. This is when Donald Trump
swaggers onto the stage with a headline that jolted the
markets awake, and the headline on March eighth, of twenty
and eighteen was Trump slaps tariffs on steel from China. Now,
(37:48):
this time the approach was different. It was less sledgehammer
and more of a scalpel. And these tariffs tagged under
Section two thirty two and three oh one. They zeroed
in on steel, aluminum, and a slew of Chinese goods. Well,
the S and P five hundred didn't take it lying down.
It plunged by sixteen percent, so worse than we were
(38:13):
last week. So investors started to panic and headlines screeched,
and for a minute it felt like the sky might
be falling. But here's the twist. The sky didn't fall,
and by twenty nineteen, the markets dusted itself off and
climbed back up. And those tariffs didn't vanish. They hung
(38:34):
around and they were just on like a pot that's
simmering on low heat. But the economy didn't collapse. It
bent a little bit, but it didn't break, and businesses
grumbled and they adjusted their supply chain and they just
kept on trucking. Now, it was a wake up call
for sure, but it was not a death neal. And
(38:56):
the takeaway here is that targeted tariffs absolutely sting, but
they don't have to sink the ship. So here we
are now in the spring of twenty and twenty five.
Tariffs are back in the spotlight, and the vibe feels
more like twenty and eighteen than nineteen thirty because they're pinpointed.
(39:19):
They're like think of an acupuncturist needle, not a wrecking ball.
It's aimed at a very specific sector without torching the
whole trade book. Now, prices might nudge up a bit,
like a sneaky tax at at the grocery store checkout,
and market volatility may spike, like I said earlier, but
(39:41):
this isn't the economy crushing chaos of the Great Depression.
It's more like a speed bump than it is a
cliff dive. And markets love to throw tantrums, especially when
they're surprised, but their quick studies they freak out and
then they figure it out. Okay, so let's just pause
(40:03):
here for a reality check. I want to give you
a handy snapshot that I like to look at. It's
like a treasure map through the tariff fog. Okay, so
let's look at the current status as we sit here
today and the historical echo. So if we look at
(40:25):
the S and P five hundred value. The current status
is that we were down ten percent from the February high.
In twenty and eighteen, we saw that it went down
by sixteen percent and it recovered in a year. We
were the tariff impact in the current status is it's
(40:46):
targeted and it's giving short term jitters. In nineteen thirty
it was systematic, really systematic chaos versus twenty and eighteen
where it was manageable. Now what about the economic growth, Well,
the current status is it's slowing, but it is not
pointing towards a recession. In two thousand and nine we
(41:11):
saw a rebound after all of the cash inserted itself
into the market, as we talked about in the early
part of the show. Now, the cash reserves today again
as we talked earlier, is twenty four trillion dollars, which
is tea is in tango and it's poised to move.
(41:32):
And in nineteen eighty seven it was sidelined and money
fueled it. Okay, Now we also have the earnings growth.
Now listen to this earnings growth, as I said about
ten minutes ago, is forecasted in twenty twenty five to
be twelve to thirteen percent, and in nineteen ninety seven,
(41:58):
strong earnings is what drove the gains in the market.
So what is this telling us? Yes, the S and
P five hundred has taken its haircut last week, but
it's no stranger to this, and back in twenty and
eighteen it shed sixteen percent and it's still strutted back
to the dance floor within a year. So economics, the
(42:23):
economic growth, it's it's just kind of pumping the brakes
a little bit, but we're not screeching into recession territory.
So think of it in the timeframe of like two
thousand and nine, when a cash infusion got us back
on track, and that twenty fourth trillion dollars in cash
reserves that we see that is like a pile of
(42:46):
firewood that's just waiting for a spark and it's ready
to fuel a rally when the timing is right. So
earnings are even, they're forecasting to grow that twelve to
thirteen percent, like I shared with you a moment ago,
echoing the late nineties when strong profits lit up the market.
(43:08):
And it's not all roses, but heck, it's a lot
better than the breadline in the bank runs. I can
tell you that much. So let's bring this home with
a couple of characters. All right, Let's picture Joe. Joe's
a factory worker in Ohio and he's churning out widgets.
In nineteen thirty, smooth Holy would have padlocked his export doors,
(43:29):
which would have left him whistling in the wind well.
Today today, he's annoyed because supply costs have gone up,
orders are shaky, but he's not toast. He's rejiggling deals,
he's scouting new buyers. He's keeping the lights on and
it's a hassle, but it is not a catastrophe. And
then there's Jane, our coffee sipping investor. She's eyebowling her
(43:51):
four to one K while the news blaares tariffs, tariffs,
and she's flashing back to her history class. In her mind,
images of soup kitchens and dusty roads. But then she
remembers twenty eighteen. The market dipped, sure, but it didn't die.
She SIPs her brew, she checks in on her numbers,
and she decides she's gonna hold tight or maybe even
(44:11):
snag a deal or two. Because Jane's no fool. She
knows a storm's not a shipwreck. And here's the bottom line,
my friends. Tariffs are like seasoning in soup. A dash
adds a zing, but dump the whole jar and you're
choking on salt and smoot. Holy was a full on
(44:33):
spice explosion. It was absolutely disastrous. Today's tariffs are more
like a sprinkle of pepper, just enough to make you sneeze,
but not enough to ruin your meal. And markets will wobble.
Pundits are gonna yell we know this, but history has
got our back and the Nasdaq has got a great
(44:54):
rundown at understanding tariffs if you want the nitty gritty here,
So are we cursed to relive the past? Not a chance.
We've got the scars from nineteen thirty and the savvy
from the nineteen eighteen to steer straight. And this chapter
it has drama, no doubt about it, But it's not
(45:16):
a tragedy. This is a tale of grit with the
hope of twist. And trust me, the next page is
looking like a comeback story that is worth sticking around for.
So what is your next move? Well, maybe it's investing
in these dips, because here's the picture. It's March twenty
(45:36):
twenty five, and the financial world feels like a roller
coaster that just took a sharp, stomach dropping plunge. The
S and P five hundred, that grand barometer of our
American markets, has shed over ten percent. Again. Yes, we
we came out on Friday looking pretty attractive, and wiping
(45:59):
out of five trillion dollars in one week is still
a scary thought. But it's that kind of drop that
makes headline scream and it makes us as investor sweat.
But here's the kicker. It's not a catastrophe, what is it. It's
an invitation. Welcome the dips, folks, because where the savvy
(46:24):
c opportunity during these times, this is where wealth can
be created. So before the correction crashed the party, the
SMP five hundred was strutting around at a price to
earnings ratio at twenty one, So for context, that's well
above its twenty year average of eighteen point five. Now
(46:47):
that's a signal that stocks were getting pricey. Now, a
price to earnings of twenty one means that investors were
paying twenty one dollars for every dollar of earnings, and
that's a premium that really had some people whispering is
this bubble territory. And now after the tumble, the index
(47:10):
has has settled between fifty five hundred and fifty six
hundred on Thursday, and suddenly that started to feel like
a steal in the marketplace if you had the nerve
to step up and make some purchases. But here's where
(47:30):
the plot thickens. Now there's a colossal twenty four trillion
dollars sitting in cash and in the money markets, and
like I said, it's just itching to jump back into
the game. Okay, now it's not just idle cash, it's
this is a coiled spring. So for any of you
(47:52):
that have ever heard a garage door spring pop, when
this money hits it's the market. It is going to
be as startling as that garage door spring popping, but
it's gonna be filled with high emotion, with a tremendous excitement.
(48:13):
So the question is will you be riding that wave
or you're going to be sitting on the shore watching
it come in. So what's your move in this high
stakes chess match? Well, let me break it down with
some practical plays. Just like we always say, diversify like
a pro right, don't dump all of your chips into
one square, whether it's tech, healthcare or that hot new
(48:34):
AI stock that everyone's buzzing about. Spread your bets like
a seasoned poker player. You want a mix of sectors
and asset types. You want stocks, bonds, maybe even a
sprinkle of real estate, some gold, but keep you know,
you want to keep this all diversified. Additionally, we just
sent out an email to our clients to tell them
(48:58):
here's what I see, here's what history looks like, and
I am paying attention, and if I need to make
some changes, we can make some changes. But let's reassess
your risk because during everybody feels like, yeah, I'm willing
to take risk. I'm willing to take risk. When things
are great, everybody is willing to take risk. It's times
(49:21):
like this when you're going to get an accurate read
on who you are for an investor risk profile. So
take a hard look at your portfolio. Are you riding
too many wild horses with volatile stocks or are you
playing it safe with bonds that you're barely moving Well,
it's like checking your tires before a road trip. Just
(49:42):
make sure that you're balanced for the bumps ahead. And
if you're young and you're bold, maybe lean into the bumps.
If you're nearing retirement, perhaps you could ease up on
the guas. Or maybe you just like seeing your money
grow as We just went out to dinner with some
clients last night and one of the the wife, was
(50:03):
saying that her father, who has done very well for
himself and has saved a nice amount of money, he
is eighty seven years old, and he just likes to
stay invested in stocks. He likes to see his money grow.
I've got a ninety two year old client that refuses
to do anything but stay invested in stocks, and that's
(50:27):
okay because through their time they've learned to be content
with that and comfortable with that way of investing. Now,
during these dips, could you put some cash to work now,
If you've got money on the sidelines, this could really
be your golden ticket.
Speaker 7 (50:44):
Now.
Speaker 2 (50:44):
Sure, the political noises out there, You've got the tariffs,
the trade wars, you've got Trump's latest tweets. But maybe
maybe this is so diff deafening here for you that
you can't tune it out. If you can tune it out,
then the real story lies in fundamentals, which are earnings,
(51:05):
growth and cash flow. So that being said, let's check
in with mister Warren Buffett again and see what he
has to say about times like this. The biggest thing
in making money is time.
Speaker 3 (51:18):
You don't have to be particularly smart. You just have
to be patient.
Speaker 2 (51:22):
Suit So that's just it. You don't have to be
incredibly smart. And I say that sometimes as an investor,
we don't get smart until we get dumb. But why
do I say that, Because when you overthink things, you
can do more damage to yourself. Because sometimes when you
(51:48):
overanalyze and you overthink things, I'll give you another one liner.
I've got tons of one liners. I should write a
book one liners by Drewski. So anyways, here's the other
one line. That they're paralysis by analysis. Okay, because sometimes
people put themselves in such a funk by data that
(52:11):
they absolutely paralyze themselves from making a decision. And I
will tell you this, what I have seen time and
time again in my life and through history, is that
the decision makers are the ones that win. They're the
ones that are the giants, and those are the shoulders
(52:34):
that we all stand on. So let's look at another
timeline here. Let's go back to December first, of nineteen
eighty seven, and this tells the rest. The newspapers printed
an article that said investors snap up bargains post crash.
(52:54):
So those who braved all the chaos and scooped up
stocks at rock bottom prices, they were popping champagne by
nineteen ninety and the markets had soared past the pre
crash heights and timing the bottom, which we can't do.
Some people have done it, but again, it's like catching
(53:15):
lightning in a bottle, or like catching a falling knife.
It's tricky and a bit risky. But the bold they
walk away with the prize. So let's not forget the
long game. You want to keep your eyes forward, okay,
And I want to zoom out for a second and
see the bigger picture because it's not the end game
(53:40):
where we are. This is just a pit stop, okay. Now,
the evidence is that jobs are holding strong, Unemployment is
lounging near four percent weekly, jobless claims are as steady
as we've ever seen them, and that twenty four trillion
in cash is poised like a sprinter in the starting blocks,
(54:00):
so it's ready to bolt as soon as he hears
the gunfire. Now, earnings like I said, analysts are projecting
twelve to thirteen percent growth for twenty twenty five, and
that number that whispers resilience, even as the headlines are
shouting panic. Now this dip, this is just simply a
(54:21):
speed bump. So here's my two cents and I'm gonna
serve it up straight. Stay in the game, diversify your portfolio,
and you know, don't panic. You want to look at
these dips as a sale at your favorite store, So
grab the bargains while the shelves are stocked. Investing, as
(54:43):
I said, is not a sprint where you dash out
and you dash in. It's a marathon, and endurance is
what wins. So keep your eyes on the finish line,
not the pebbles that are underfoot, because when the dust settles,
as it always, the steady ones are the ones who
are grinning. So in closing, let's not forget the words
(55:09):
of Charlie Munger. Let's play a clip here of Charlie Munger. Ah,
I lied, that was in Charlie Munger.
Speaker 7 (55:17):
I like the long term investors who figure out something
that's gonna work over the long term and buy that
the world is full of foolish gamblers. And they will
not do as well as the patient investors.
Speaker 2 (55:31):
So there you have it, giving you some wisdom from
Charlie Munger, from Warren Buffett, from Drew Prescott. And I
turn my hand. I'm like I hit the wrong button
on my little board here. I'm kind of like a
one man band. If you guys could see this, it's
nearly comical. But this is what I do for you.
I do this for you. I have fun. I make
a fool out of myself from time to time, but
(55:54):
this is fun. This is fun. When you come in
the office, you'd be shocked with my little set up here.
It's a it's a nice little thing that I've invested
some time. And so anyways, in closing, I really hope
that you've enjoyed the show today. You're listening to your
money matters. I want to say thank you for riding
along with me. Drew Prescott, president of Prescott Private Wealth,
(56:17):
chartered retirement planning Counselor and accredited wealth management advisor. And
you're listening to w g Y Radio eight ten and
one oh three one. I can be heard here every
Sunday at eleven am. So now let me roll the
song that I wanted to hit you with and say,
enjoy the rest of your Sunday, and God bless you,
(56:38):
and God bless your family.
Speaker 5 (56:40):
Lots of money's.
Speaker 1 (56:52):
Me, lots of money.
Speaker 2 (56:57):
That's melts.
Speaker 4 (57:00):
Un.
Speaker 1 (57:02):
Life's toughest financial positions don't have to be faced away.
The Ruth Prescot of Prescott Private Wealth is footed guide,
whether it's settling an estate, planning for retirement, or making
your final walk from your career into a well earned rest.
Don't let uncertainty weigh you down.
Speaker 2 (57:14):
Ask yourself, did I do this right?
Speaker 1 (57:16):
Am I missing anything? With Prescott Private Wealth, the answer
is clear, You're on the right path. Visit us at
four or five one Who's six Street in Troy, New York,
or online at Prescott PW dot com. Prescott Private Wealth
your partner in navigating life's financial journeys.
Welcome to the hidden world of wealth, where secrets of
the affluent become accessible to you. You are listening to
Your Money Matters, the most provocative financial radio show on
the airwaves. You are about to start your educational journey
here on Your Money Matters with your host Drew Prescott,
(00:20):
President of Prescott Private Wealth and Chartered Retirement Planning Counselor.
Drew will unlock the complexities of the financial landscape with straightforward,
powerful insights. Whether you're planning for retirement, managing in a state,
or looking to grow your wealth. Consider this your exclusive invitation.
Turn up the volume, lean in closer. Let's navigate the
(00:42):
hidden paths of prosperity together. Your financial enlightenment begins now.
Securities off produce a Terror Financial Specialists LLC Member FIN
The SIBC Advisory Services Off produce a Terror Investment Advisors
LLC SI Terra firms are under separate ownership from any
other named entity. Four five one six Street, Troy, New
(01:03):
York one two one eight zero.
Speaker 2 (01:22):
Welcome back, everybody. You're listening to Your Money Matters and
I'm your host, Drew Prescott, President of Prescott Private Wealth
and Chartered Retirement Planning counselor as well as a credited
wealth management advisor. You're listening to your money matters can
be heard here every Sunday at eleven am. And I
want to say thank you for tuning in, thank you
for listening to me as you're out and about today.
(01:45):
And I heard four different people that listened to the
show over the last week that all told me that
they listened to me as they're out walking their dogs
or taking a run, So good for you. I'm someone
that needs to work on getting my steps in here
and had a little wake up call as far as
my eating habits are concerned. So I'm getting getting back
(02:08):
into the discipline of eating well doing a Mediterranean diet.
So I've had to create this, I guess, an acquired taste,
if you what, It's kind of like when you first
start having wine. Nobody really loves wine at first, but
but you can, you know, you can really fall in
love with wine. Well, I learned I can also fall
in love with this Mediterranean diet. So I really enjoyed
(02:32):
my olives and almonds and stuff. But anyways, enough about me.
You don't care to hear about that. What you want
to hear is about what is going on?
Speaker 3 (02:42):
Right?
Speaker 2 (02:42):
What a crazy week that last week was? You know,
were you even human if you didn't start to get
a little bit concerned as an investor. Well, I'll tell
you this me personally, I was. I'll be honest with you.
I was as cool as a cucumber. And if you
(03:04):
don't believe me, you can talk to some of my clients,
because you know, frankly, I only had two clients. And yeah,
typically I can expect a phone call from the same
people at certain times, but I only had two. I
only had two people that started to doubt the process.
And you know, my job is not only to work
(03:26):
with you and creating your financial plan and putting together
a portfolio that is right for you and your risk profile,
but also kind of double down, is kind of a therapist,
if you would, And that's where you know this this
show comes into play. Is I want to help you
get through times like this. All right, So with that
(03:49):
being said, here picture this. It's March of twenty twenty
five as we sit here, and the market just shed
over ten percent since it's February peak, that's five hundred
dollars that is no longer there poof just like a
magician's best trick. Well, last time we dissected the culprits,
(04:14):
the tariffs, the jittery consumers, the global tensions. But today
we're flipping the coin. We're gonna we're talking hope today,
opportunity and how you can turn this market dip into
a golden ticket for yourself. So grab a coffee if
you're if you're out walking about, go for a little
(04:36):
extra lap today. Okay, I want you to settle in
and let's prepare for story time. Everybody sit down.
Speaker 4 (04:45):
Listen, Jeff, everybody said down, sit down, please sit.
Speaker 5 (04:53):
Stormy time story time.
Speaker 2 (04:58):
So let's kick things off with the little light in
the darkness here, because boy, have we earned it. After
this last week of this market doom and gloom, the
S and P five hundred has been on an absolutely
wild ride lately. Like we said it was, it had
shed at one point ten percent from its February twenty
twenty five peak like a tree just dropping leaves in
(05:20):
a hurricane. And we're talking five trillion dollars in market value.
And it's been ugly. There was no question about it.
But here's where it gets interesting, because as we saw
on Friday, what a remarkable turnaround. I mean absolutely remarkable.
And you know, there's been this quiet buzz that's starting
(05:45):
to ripple through Wall Street and it's a little whisper
that was growing louder and louder by the day. And
they would say that this might just be the bottom.
And you know what, on Thursday, I sat in on
a national call with all of the great minds in
(06:06):
our industry, not all of them, but several, and you know,
we all kind of came to the general consensus that
if we're not at the bottom, we may be within
touching by stretching out our feet here. So we're starting
to think that it was the bottom.
Speaker 3 (06:25):
Now.
Speaker 2 (06:25):
By the way, when I say that, remember I'm not
saying that this is over with. We're still going to
see some volatility. If you don't believe that, well that's fine,
but I'll tell you this. We're going to see some
more volatility through the summertime and everything, which is absolutely fine.
But imagine that the stock market think of it like
(06:47):
a moody teenager and just bear with me here for
a second, okay, because one day it's strutting around, it's
very confident, it's got its swagger, high five and everybody dapping,
everybody up, and it's got these highs and it's popping
champagne like it's prom night. Now the next day it's
slouched in the corner right, sulking, clutching its portfolio like
(07:11):
a soggy teddy bear and a thunderstorm. Well, right now,
we just came out of a deep sulk mode and
investors had flipped from greed to fear faster than you
can say margin call. And that sudden mood swing, it's
(07:31):
like a neon sign flashing, Hey, the worst might be over. Now.
Let's see what Warren Buffett has to say about times
like this.
Speaker 3 (07:42):
You can't get yourself in that mental attitude. You're gonna
be scared whenever every everybody else is scared, and expect
somebody else to tell you when to buy and therefore
get your courage backup or something. You know. I could
get this fellow's courage and substantially by saying it's a
wonderful time to buy, and then a week from now
he'd run into somebody else tells him the world is
coming to an end and it's sell. I mean, he's
(08:03):
a broker's friend.
Speaker 2 (08:04):
See, And that's absolutely true. We see this time and
time again. See the market just like teenagers, it loves
to overreact, so they soar to a high and then
they crash too hard. And when everybody's running for the exit,
that's usually when the smart money starts to tiptoe back in,
eyeing bargains like it's a Black Friday at the mall.
(08:28):
So let's hop in a time machine for a second. Here,
back to a day that still gives old timers the shakes.
So picture this headline, stocks plummet as panic grips Wall Street.
That was from October nineteenth of nineteen eighty seven. That
was Black Monday, folks, when the Dow Jones didn't just
(08:50):
stumble it, belly flopped twenty two percent in a single day.
So pitcher trading floors, like a scene from a disaster movie,
are just ringing off the hook. Traders are yelling at
each other, cups of coffees flying around, and paper screamed.
Is this the end of the world as we know it?
Speaker 6 (09:15):
We know it.
Speaker 2 (09:17):
But here's the twist. Just two months later, the bargain
hunters were back and they're picking through this wreckage like
treasure seekers. So by nineteen eighty nine, the market was
roaring again and it was hitting new highs like nothing
even happened. So compare that to today's little ten percent dip,
and it's a speed bump next to Black Monday's mountain.
(09:41):
And we've been through worse, folks, and we've come out swinging.
So now let's talk about something that hits closer to home,
which is jobs. The labor market's still standing tall and
flexing like a heavyweight champ who laughs at a punch.
Unemployment chilling near four percent, and weekly jobless claims are
(10:02):
steady around two hundred and twenty thousand, and that's like
a heartbeat that won't quit. Sure, there's some chatter about
federal layoffs, about government tightening its belt in a while,
but step back and the big picture is rock solid.
And when people have jobs, what do they have. They
have cash, and they buy new sneakers, They book weekend getaways,
(10:27):
They splurge on overpriced lattes with fancy fomart, and that's spending.
That's the economic engine that if you listen closely, you
can hear it purring even when the market's throwing an
absolute tantrum. So flashback to another gym. Here's another headline
for you, jobless rate hits a ten year low. Now
(10:50):
that was back in May fifth of nineteen ninety seven,
and so I was just well almost twenty years old,
nineteen years old, so that that didn't mean a lot
to me at that time of my life. But the
employment dipped below five percent, and it was like tossing
rocket fuel on this nineties bull market. We saw tech
(11:13):
stocks were soaring and the good times just rolled. So
we're not quite at that party yet, but similar vibes
because they're starting to feel familiar. So let's peak behind
the curtain at the Federal Reserve as well, because, as
you know, those are the wizards who tweak the dials
(11:36):
of our economy. And the markets a buzz about possible
rate cuts later in twenty twenty five. So think of
rate cuts like a cool breeze on a sweaty summer day.
They're just refreshing, they're energizing, and for those of you
that are running around and you're sweaty, you can really
identify with that right now. But lower rates mean businesses
(11:59):
can borrow cheaper, and we've talked about this time and
time again on this show. They can hire more, they
can build more and they can pump life back into stocks.
You see, it's not a lock. Now. The fed's playing
it cool, kind of like a poker player with a
hidden ace. But even the whisper of it is enough
(12:22):
to perk up the mood. So you want the full scoop. Well,
if you flip through our twenty twenty five economic outlook,
it's like getting a backstage pass to the fed's next move.
So what if they don't cut rates, Well, things might
stay bumpy, but hope's still in the air. And I
(12:44):
want to share a stat with you that will make
your eyes pop. And here it is. There's twenty four
trillion that's with a T like Thomas okay or tango
I should have said, But twenty four trillion sitting in
cash and in money market funds, just waiting for the
(13:06):
green light to dive back into stocks. So picture it
like it's like a tsunami building behind a dam and
it's ready to crash in and lift everything that's in
its path. Now, history has a playbook for this, so
check it out. Here's another market headline cash. This is
(13:31):
from March tenth of two thousand and nine, and it
said cash pours into stocks as the Dow rebounds. So
that was after the two thousand and eight meltdown, and
investors clearly were spooked and they were hoarding cash like
it's doomed, like there were doomsday preppers. But when confidence
flickered back, all of that money rushed in and it
(13:54):
ignited a rally that ran for over a decade. And
is that damn that I mentioned before, is that damn
about to break again? Because that would be twenty four
trillion dollars that is sitting there and it's itching to
make a move. And when it does, hold on to
(14:14):
your hats because it's going to be significant. Now let
me point another bright spot out to you here, which
are earnings. So fact set is a software that we
use to look at charts and everything in our industry. Well,
fact set's calling for a twelve to thirteen percent growth
(14:36):
in the S and P five hundred profits for two
thousand and twenty five. Now, if this were to happen,
that's not just hanging on. That's thriving. So it's like
your local diner suddenly doubling its burger sales. More profits
mean stocks have the juice to climb. And if you're
(14:59):
hungry for details. I would encourage you to take a
look at Deloitte's Global Economic Outlook for twenty twenty five
because it lays it all out there for you to
sift through. And companies are not just scraping by, but
they're growing, and that is the heartbeat of any market rebound.
So let's wrap up this little history lesson and that'll
(15:25):
help ease your nerves here. So let's do it this way.
Let's go, yeah, let's do this. How about this one.
Over the last forty five years, the S and P
five hundred's taken an average tumble of fourteen point one
percent within a year, every darn year. Yet in thirty
(15:48):
seven of those years it's still finished in the green.
So chew on that for a second. Even with double
digit drops, the markets end up smiling more often than not.
And Schwab's market corrections are more common than you think.
(16:11):
That's a great read. It's a great read. If you're
feeling shaky, look up. Schwab's market corrections are more common
than you think. And it's it's basically, you know, when
you're not feeling the love of the market, you read
something like that, and it's kind of it's like a
warm embrace. It's like a nice hug from a someone
(16:34):
that cares. And this ten percent dip that we're in,
it's just a market that's catching its breath after a sprint.
It's normal, it's a healthy thing, and nine times out
of ten, it's the warm up for the next big run.
So there you go. That's a little glimmer of hope
stitched together with jobs, cash earnings in addition to a
(16:56):
nice hefty dose of history. And the market's you know,
I think it's done pouting now, but if the past
is any guide, it'll be back to its old tricks
soon enough and chasing new highs like a kid after
an ice cream truck. And when it does, you'll want
to be on this ride. So let's move a little
(17:19):
bit further down the pathway today and let's pull back
the curtain and let's set the stage for taking a
look at this global stage and trumps rare Earth gambit,
because this isn't just some Wall Street ticker taped tail.
(17:39):
This is a global thriller with all of the drama
of a spy flick. And picture the world as a
giant poker table.
Speaker 7 (17:48):
For a second.
Speaker 2 (17:50):
The chips are stacked high, and tension is thick enough
that you could cut it with a knife. And at
the center of it all is a handful of obscure
metals that are called rare earth elements or orees. And
if you're feeling fancy, you want to feel cool, are ees?
How's that These aren't your run of the mill rocks.
(18:12):
These are like little magic pixie dust that's powering everything
from your iPhone to electric cars to even fight er
just that are screaming across the sky. So without them,
as you can tell, modern life would screech to a
halt faster than a car that has no gears. And
(18:34):
right now the US is sweating bullets because our country
is not the one that is holding the cards. Because
right now there's only one country that is in control
of this and that's China, all right, So that's a concern.
(18:57):
That's a concern not so much economically as it is militarily. Okay,
So here's the kicker. China's got this planet in a
chokehold right now, and they're controlling a jaw dropping sixty
percent of the global ree production and a mind blowing
(19:21):
eighty five percent of the processing. How about the US, Well,
we're stuck begging at the doorstep importing seventy two percent
of our rare earth stash straight from guess it, it's
coming right from Beijing. And that's like handing your rival
(19:43):
the keys to your house and hoping that they don't
lock you out. So in a world where trade wars
ignite faster than a match on dry grass, it is
a vulnerability that keeps Pentagon Brass up at night. But then,
strutting back into the spotlight like a cowboy riding in
(20:03):
the town, comes President Donald Trump with a move that's
really it's so bold that it's got everybody from stockbrokers
to general's buzzing. So remember it was only about two
weeks ago when everybody was going crazy about Trump bouncing
Zelensky out of the White House. But under this context,
(20:24):
I'm not telling you you need to be this man's
biggest fan, but understand the method behind the madness for
a second. Here, Okay, let's listen to what Trump had
to say about Ukraine.
Speaker 4 (20:37):
We're telling Ukraine they are very valuable rare earth. We
want what we put up to go in terms of
a guarantee. We want to guarantee we want. We're handing
the money hand over fist, we're giving them equipment. European
is not keeping up with us. They should equalize. Look,
we have an ocean in between. They don't. It's more
(20:57):
important for them than it is for us. Way below
us in terms of money, and they should be paying
at least equal. They should really be paying much more
than us. But let's say equal to us, and they
are billions and billions of dollars below. So we're looking
to do a deal with Ukraine where they're going to
secure what we're giving them with their rare earth and
(21:19):
other things.
Speaker 2 (21:21):
So there you go. Right, let's just again, let's just
be politically neutral and look at this from an economic
standpoint and from security standpoint. Now it's been a wild swing,
and frankly, this is a bit of a hail Mary
pass in the fourth quarter. And what is it aimed at? It? Well,
(21:42):
it's aimed at prying America loose from China's iron grip. Okay, Now, Ukraine,
as it turns out, it's sitting on a pile of
untapped ries and a potential gold mine as a matter
of fact, or at least that's the pitch. Okay, now
Trump's betting big that this could be the lifeline to
(22:04):
the US and what it needs and a way to
flip the table and deal a new hand. But here's
where this plot thickens, because not everybody is sold on
this gambit, and some experts are right really raising their eyebrows,
and they're muttering that Ukraine's reserves might be more smoked
(22:25):
than substance, like a shiny car that has no engine
under the hood. Frankly right, And Trump, well, he's playing
at KOI and his lips are sealed tighter than a vault.
So I hear a lot of people saying, well, I
just wish that he would explain what he's trying to
do here, what's going on, because if I just had
(22:46):
a better understanding. Well, listen, the reality is if you
or I had a better understanding of this. So at
our enemies, right, So we have to respect the game
that's being played, love them or hate them. This is yeah,
this is the art of war, and we do not
(23:07):
want missiles flying. So you know, we have to just
let this game of poker take place as this is happening. Remember,
remember the stock market, the stock market does not love uncertainty.
But let's point back to everything that we just talked about,
(23:29):
how everything is in a good alignment for the markets
to do remarkable. So does that mean that things are
going to go up in a straight line. Absolutely not.
I already said that to you. I said, we are
going to face volatility. Remember that we're gonna see volatility.
(23:53):
Are we going to have a bang up year for
twenty twenty five? I don't expect so, okay, but I
do believe that we will be positive, probably single digits
for the twenty twenty five year. And in addition to that,
it will be like a roller coaster, or like driving
your road on in a backcountry road where from time
(24:14):
to time you hit that little dip and you lose
your stomach that much, I can tell you that you're
in store for all right. So this roller coaster, it's scary,
and sometimes it feels like nobody has a seatbelt. But
if this deal pays off, okay, this could rewrite the
script and it could give the US a fighting chance
(24:38):
to finally stand toe to toe with China in this
tech arms race. And that's the kind of stakes that
we're talking about here. This is geopolitical gold. So now
let's hop in the time machine for a quick detour,
because this is not the first time that America has
danced this dance. Let's flash to a dusty headline from yesteryear.
(25:03):
The time was June fourth, nineteen seventy nine, and the
headline was US targets Strategic Minerals. Now, at this time,
this was the Cold War, Disco was king. The Soviet
Union was a big, bad wolf and clutching key minerals
like a dragon hoarding its treasure. And the US it
(25:25):
got scrappy. It started striking deals, it was stockpiling resources.
It's playing the long game to secure its edge. Now,
it was not sexy. There were no Hollywood explosions here,
but it worked and building a foundation that paid dividends
for decades to come. Now, history's got a thing for
(25:46):
slow burns, and Trump's Ukraine play feels like a remix
of that old tune. But the question is will this
sequel live up to the origin. So let's zoom back
to the present here with me, and let's meet the
players that are in this unfolding saga. So over in Kiev,
(26:09):
we have the Ukrainian President Voladimir Zelenski. He's stepping up.
He's all smiles, swagger. He's pitching his country's arie riches
like a like a used car salesman that has a
gleam in his eye. And step right up, folks, We've
got good stuff. He's sitting there, just puffing his chest
and proud as a peacock. And behind the closed doors
(26:35):
we have these mining big wigs who are scratching their
chins and they're wondering if this is a diamond in
the rough or if this is just a lump of coal. Now, meanwhile,
halfway across the globe, China is watching this like a
chess grand master. They're cool, they're collected, they're giving nothing away.
Are they sweating, are they smirking? Are they plotting their
(26:57):
next move? Well, your guess is as good as mine,
and that's what makes this entire time so darn unnerving.
So back here Stateside, we've got Trump's inner circle, which
is a buzz and they're saying, well, he's playing three
moves ahead. Some are even saying that the man stays quiet,
but you can almost see that the gears are turning
(27:18):
behind that trademark squint of his A mix of showmen
and strategist, and he's ready to drop a bombshell when
the moment's right, and they call that, you know, that's
classic Trump. It's turning a trade deal into a cliffhanger,
which is worthy of a blockbuster film, quite frankly. But
now let's lighten things up a little bit, okay, because
(27:38):
even in a thriller, you have to have a good
laugh to break the tension. And right now on the
world stage, tension doesn't even do this justice. And even
as I'm talking about it on the radio show here
quite frankly, you know, there's a lot of emotion, and
there's a lot of passion from the from the left,
(28:01):
and even those that kind of float between the middle.
And I'll tell you, even even sharing this on my
radio show, I can almost feel your tension as you're
listening to me. But let's let's break this up a
little bit, okay. So imagine Trump here at the negotiating
(28:22):
table and you know, he's he's tossing out these one
liners and the world's holding its breath, or you know,
picture the markets as kind of a squirrel that's on
a caffeine bender, right starting this way and that, and
it's clutching its nuts and it's praying for clarity. It's
really it's high stakes. It's sure, sure, you know, a
(28:47):
little humor. It keeps us sane when the headlines hit
like a freight train. But where does it leave us
well strapped in for the ride? That's where. And if
Trump's Ukraine gambit hits the jackpot, it's a game changer
and China is forced to loosen its grip. Now, think
(29:07):
about that, they control eighty five percent of this game.
That's a monopoly here in the States and on a
global stage. We can't do anything about it unless we
find our own solve and we have some challenges with
all of our environmental restrictions here. We could make some
(29:29):
moves here internally, but because of all the regulations, and
this is kind of a strange thing. I was just
thinking about this as I was driving in this morning.
We need these right and to say that we we
can't do these things in our country, like I understand,
I mean like, but the reality is we need them right.
(29:54):
It's kind of like having a dog and the dog
has to pooh. It has to pooh someplace and just
be because it doesn't pooh in your yard. And your
yard looks beautiful because of It doesn't mean that dogs
not pooh in someplace and you're just going someplace else
to do it. And that's ultimately where we are. We
have forced ourselves as a nation to have to dirty
(30:18):
somebody else's house to get what we need. So if
we're back to square one and we're scrounging for scraps
while Beijing tightens the screws, it's a tightrope walk over
a canyon. And frankly, right now the wind's picking up.
(30:41):
So if we want to be the dominant country in
tech and be militarily advantaged, we need this rare earth.
And this is a story about ambition, about risk, and
the kind of audacity that right our history books that
our grandchildren will be reading about. This is a geopolitical
(31:06):
heist movie. Frankly, it's complete with the twist, the turns,
and a cast of characters that you just can't take
your eyes off of. And if I don't know about you,
but this this is in my mind what we're going
through right now. It feels like qualit tech, but it
(31:30):
feels bigger than that. It feels much bigger than that.
I don't have a term to describe it. But when
looking back in retrospect, I think that we're in a
period of time that is so monumental for the future
that it's like the beginning of the Industrial Age. I
really truly believe that. I don't know what to call this,
but there's something major happening right now, and it's not
(31:53):
just AI, it's not just technology it is it's magnificent
and I can feel it, and I'm sure some of
you can too. So the question is what happens next?
Will Trump pull an ace out of his sleeve? Or
is this a bluff that's going to crash and burn?
So let's hope not. Okay, let's let's sit back and
(32:14):
eat our popcorn. But let's not get heartburned from the
popcorn either, because this next chapter is coming and it's
really anyone's guess to how this is going to end.
So let's look a little bit further into this and
look at tariffs. So let's talk about the trade side, folks,
because tariffs are crashing the party again, and they've they've
(32:36):
got everybody from Wall Street traders to your Aunt Jane
clutching the purses and wallets and acting like their life preservers,
and the air is so thick with deja vu, And
the big question that's buzzing around is are we doomed
to replay history's greatest hits or flops? That's the question, right,
(33:00):
Are these going to be the greatest hits or are
these going to be the greatest flops? And to find out,
let's hop into our trusty time machine that we've been
jumping around in and spin a tail that stretches from
nineteen thirties through twenty eighteen. And that's landing us smack
(33:23):
in the middle of today's tariff tango. So our first
stop is nineteen thirty. So imagine the scene. America is
still wobbling from the stock market crash of twenty nine
and Congress decides that it's time to play hero. So
here's a headline from June seventeenth of nineteen thirty about
Smoot Hawley tariff signed and the trade war looms. Let
(33:48):
me play this clip for you and see if I
can shine a little light on the difference between Smoot
Hawley tariffs and where we are today.
Speaker 6 (33:58):
Because the other countries raise their tariffs in response to
the US raising it's tariffs, everybody's charging an arm and
a leg in taxes. And this is smack dab in
the middle of the Great Depression, when nobody can afford
to be messing around like this. Finally, in nineteen thirty two,
mister Holly and mister Smooth do not get reelected. But
there is a guy running for president of the United
States whose name is Franklin Delano Roosevelt, and he's running
on the platform of lowering tariffs. So when FDR gets elected,
(34:20):
he passes the Reciprocal Trade Agreements Act of nineteen thirty four,
and this lowers tariffs across the board. This helps to
bring all the countries back to the table to play
nice economically speaking.
Speaker 2 (34:30):
So with that clip in mind, let me point something
out here. Okay, we're talking about reciprocal tariffs, and everybody
is saying, well, this is the dumbest thing ever, because
if Canada goes to fifty, we're going to fifty. If
Canada goes to seventy five, we're going to twenty five.
And they people are saying, well, that's childish. Well you
(34:52):
know what's childish. Here's what's childish. The keyword here, what
is it reciprocal? What does that mean if Canada wanted
to go to zero. We reciprocate. What does that mean
we go to zero? Right? So this is this is
really dumb. This is this is a like a fight.
(35:14):
It's these are two men standing face to face and saying, listen,
we can choose. If you punch me, I'm gonna punch you.
If you choose not to punch me, we both walk
away and we shake hands. That's reciprocal. Okay. Well, we
just listened to a clip on and I would encourage
you to.
Speaker 7 (35:34):
Look it up.
Speaker 2 (35:34):
It's called smoot Hawly tariff. And what that did was
that was tariffs that were put in place to create
more They thought it was going to create more jobs
in the United States and just tariff the heck out
of everything that was coming in to the country so
that we would be more self reliant. Well it crushed us, okay.
(35:57):
And this wasn't just a teriff, it was a beast
and its slammed massive taxes on over twenty thousand imported goods.
Now we're talking about eggs, shoes, and even the kitchen sink.
Well almost. But the pitch here was protect American jobs
and farmers from foreign competition. The reality it was a
(36:21):
complete face plant of epic proportions and other countries. They
didn't just sit there twiddling their thumbs. They hit back,
and they hit back hard and throwing up their own
trade walls. So picture a global game of tit for tat,
except nobody's winning, and US exports tanked sixty one percent
in three years. So imagine selling apples at a roadside stand,
(36:45):
only to find that the whole towns locked its doors,
factories are closed, fields went follow and the Great Depression
tightened its grip like a grumpy old octopus. And smooth
Holly didn't just stumble. It tripped over its own feet,
and it took the economy down with it. And the
(37:06):
lesson that was learned is that tariffs used in that
sense can be like tossing a match into a gas can,
and sometimes you get a bonfire that you just can't control.
So let's zip forward now to twenty and eighteen. Why
(37:27):
twenty and eighteen, we're in twenty twenty five. We'll hold
on a second. Here's why. This is when Donald Trump
swaggers onto the stage with a headline that jolted the
markets awake, and the headline on March eighth, of twenty
and eighteen was Trump slaps tariffs on steel from China. Now,
(37:48):
this time the approach was different. It was less sledgehammer
and more of a scalpel. And these tariffs tagged under
Section two thirty two and three oh one. They zeroed
in on steel, aluminum, and a slew of Chinese goods. Well,
the S and P five hundred didn't take it lying down.
It plunged by sixteen percent, so worse than we were
(38:13):
last week. So investors started to panic and headlines screeched,
and for a minute it felt like the sky might
be falling. But here's the twist. The sky didn't fall,
and by twenty nineteen, the markets dusted itself off and
climbed back up. And those tariffs didn't vanish. They hung
(38:34):
around and they were just on like a pot that's
simmering on low heat. But the economy didn't collapse. It
bent a little bit, but it didn't break, and businesses
grumbled and they adjusted their supply chain and they just
kept on trucking. Now, it was a wake up call
for sure, but it was not a death neal. And
(38:56):
the takeaway here is that targeted tariffs absolutely sting, but
they don't have to sink the ship. So here we
are now in the spring of twenty and twenty five.
Tariffs are back in the spotlight, and the vibe feels
more like twenty and eighteen than nineteen thirty because they're pinpointed.
(39:19):
They're like think of an acupuncturist needle, not a wrecking ball.
It's aimed at a very specific sector without torching the
whole trade book. Now, prices might nudge up a bit,
like a sneaky tax at at the grocery store checkout,
and market volatility may spike, like I said earlier, but
(39:41):
this isn't the economy crushing chaos of the Great Depression.
It's more like a speed bump than it is a
cliff dive. And markets love to throw tantrums, especially when
they're surprised, but their quick studies they freak out and
then they figure it out. Okay, so let's just pause
(40:03):
here for a reality check. I want to give you
a handy snapshot that I like to look at. It's
like a treasure map through the tariff fog. Okay, so
let's look at the current status as we sit here
today and the historical echo. So if we look at
(40:25):
the S and P five hundred value. The current status
is that we were down ten percent from the February high.
In twenty and eighteen, we saw that it went down
by sixteen percent and it recovered in a year. We
were the tariff impact in the current status is it's
(40:46):
targeted and it's giving short term jitters. In nineteen thirty
it was systematic, really systematic chaos versus twenty and eighteen
where it was manageable. Now what about the economic growth, Well,
the current status is it's slowing, but it is not
pointing towards a recession. In two thousand and nine we
(41:11):
saw a rebound after all of the cash inserted itself
into the market, as we talked about in the early
part of the show. Now, the cash reserves today again
as we talked earlier, is twenty four trillion dollars, which
is tea is in tango and it's poised to move.
(41:32):
And in nineteen eighty seven it was sidelined and money
fueled it. Okay, Now we also have the earnings growth.
Now listen to this earnings growth, as I said about
ten minutes ago, is forecasted in twenty twenty five to
be twelve to thirteen percent, and in nineteen ninety seven,
(41:58):
strong earnings is what drove the gains in the market.
So what is this telling us? Yes, the S and
P five hundred has taken its haircut last week, but
it's no stranger to this, and back in twenty and
eighteen it shed sixteen percent and it's still strutted back
to the dance floor within a year. So economics, the
(42:23):
economic growth, it's it's just kind of pumping the brakes
a little bit, but we're not screeching into recession territory.
So think of it in the timeframe of like two
thousand and nine, when a cash infusion got us back
on track, and that twenty fourth trillion dollars in cash
reserves that we see that is like a pile of
(42:46):
firewood that's just waiting for a spark and it's ready
to fuel a rally when the timing is right. So
earnings are even, they're forecasting to grow that twelve to
thirteen percent, like I shared with you a moment ago,
echoing the late nineties when strong profits lit up the market.
(43:08):
And it's not all roses, but heck, it's a lot
better than the breadline in the bank runs. I can
tell you that much. So let's bring this home with
a couple of characters. All right, Let's picture Joe. Joe's
a factory worker in Ohio and he's churning out widgets.
In nineteen thirty, smooth Holy would have padlocked his export doors,
(43:29):
which would have left him whistling in the wind well.
Today today, he's annoyed because supply costs have gone up,
orders are shaky, but he's not toast. He's rejiggling deals,
he's scouting new buyers. He's keeping the lights on and
it's a hassle, but it is not a catastrophe. And
then there's Jane, our coffee sipping investor. She's eyebowling her
(43:51):
four to one K while the news blaares tariffs, tariffs,
and she's flashing back to her history class. In her mind,
images of soup kitchens and dusty roads. But then she
remembers twenty eighteen. The market dipped, sure, but it didn't die.
She SIPs her brew, she checks in on her numbers,
and she decides she's gonna hold tight or maybe even
(44:11):
snag a deal or two. Because Jane's no fool. She
knows a storm's not a shipwreck. And here's the bottom line,
my friends. Tariffs are like seasoning in soup. A dash
adds a zing, but dump the whole jar and you're
choking on salt and smoot. Holy was a full on
(44:33):
spice explosion. It was absolutely disastrous. Today's tariffs are more
like a sprinkle of pepper, just enough to make you sneeze,
but not enough to ruin your meal. And markets will wobble.
Pundits are gonna yell we know this, but history has
got our back and the Nasdaq has got a great
(44:54):
rundown at understanding tariffs if you want the nitty gritty here,
So are we cursed to relive the past? Not a chance.
We've got the scars from nineteen thirty and the savvy
from the nineteen eighteen to steer straight. And this chapter
it has drama, no doubt about it, But it's not
(45:16):
a tragedy. This is a tale of grit with the
hope of twist. And trust me, the next page is
looking like a comeback story that is worth sticking around for.
So what is your next move? Well, maybe it's investing
in these dips, because here's the picture. It's March twenty
(45:36):
twenty five, and the financial world feels like a roller
coaster that just took a sharp, stomach dropping plunge. The
S and P five hundred, that grand barometer of our
American markets, has shed over ten percent. Again. Yes, we
we came out on Friday looking pretty attractive, and wiping
(45:59):
out of five trillion dollars in one week is still
a scary thought. But it's that kind of drop that
makes headline scream and it makes us as investor sweat.
But here's the kicker. It's not a catastrophe, what is it. It's
an invitation. Welcome the dips, folks, because where the savvy
(46:24):
c opportunity during these times, this is where wealth can
be created. So before the correction crashed the party, the
SMP five hundred was strutting around at a price to
earnings ratio at twenty one, So for context, that's well
above its twenty year average of eighteen point five. Now
(46:47):
that's a signal that stocks were getting pricey. Now, a
price to earnings of twenty one means that investors were
paying twenty one dollars for every dollar of earnings, and
that's a premium that really had some people whispering is
this bubble territory. And now after the tumble, the index
(47:10):
has has settled between fifty five hundred and fifty six
hundred on Thursday, and suddenly that started to feel like
a steal in the marketplace if you had the nerve
to step up and make some purchases. But here's where
(47:30):
the plot thickens. Now there's a colossal twenty four trillion
dollars sitting in cash and in the money markets, and
like I said, it's just itching to jump back into
the game. Okay, now it's not just idle cash, it's
this is a coiled spring. So for any of you
(47:52):
that have ever heard a garage door spring pop, when
this money hits it's the market. It is going to
be as startling as that garage door spring popping, but
it's gonna be filled with high emotion, with a tremendous excitement.
(48:13):
So the question is will you be riding that wave
or you're going to be sitting on the shore watching
it come in. So what's your move in this high
stakes chess match? Well, let me break it down with
some practical plays. Just like we always say, diversify like
a pro right, don't dump all of your chips into
one square, whether it's tech, healthcare or that hot new
(48:34):
AI stock that everyone's buzzing about. Spread your bets like
a seasoned poker player. You want a mix of sectors
and asset types. You want stocks, bonds, maybe even a
sprinkle of real estate, some gold, but keep you know,
you want to keep this all diversified. Additionally, we just
sent out an email to our clients to tell them
(48:58):
here's what I see, here's what history looks like, and
I am paying attention, and if I need to make
some changes, we can make some changes. But let's reassess
your risk because during everybody feels like, yeah, I'm willing
to take risk. I'm willing to take risk. When things
are great, everybody is willing to take risk. It's times
(49:21):
like this when you're going to get an accurate read
on who you are for an investor risk profile. So
take a hard look at your portfolio. Are you riding
too many wild horses with volatile stocks or are you
playing it safe with bonds that you're barely moving Well,
it's like checking your tires before a road trip. Just
(49:42):
make sure that you're balanced for the bumps ahead. And
if you're young and you're bold, maybe lean into the bumps.
If you're nearing retirement, perhaps you could ease up on
the guas. Or maybe you just like seeing your money
grow as We just went out to dinner with some
clients last night and one of the the wife, was
(50:03):
saying that her father, who has done very well for
himself and has saved a nice amount of money, he
is eighty seven years old, and he just likes to
stay invested in stocks. He likes to see his money grow.
I've got a ninety two year old client that refuses
to do anything but stay invested in stocks, and that's
(50:27):
okay because through their time they've learned to be content
with that and comfortable with that way of investing. Now,
during these dips, could you put some cash to work now,
If you've got money on the sidelines, this could really
be your golden ticket.
Speaker 7 (50:44):
Now.
Speaker 2 (50:44):
Sure, the political noises out there, You've got the tariffs,
the trade wars, you've got Trump's latest tweets. But maybe
maybe this is so diff deafening here for you that
you can't tune it out. If you can tune it out,
then the real story lies in fundamentals, which are earnings,
(51:05):
growth and cash flow. So that being said, let's check
in with mister Warren Buffett again and see what he
has to say about times like this. The biggest thing
in making money is time.
Speaker 3 (51:18):
You don't have to be particularly smart. You just have
to be patient.
Speaker 2 (51:22):
Suit So that's just it. You don't have to be
incredibly smart. And I say that sometimes as an investor,
we don't get smart until we get dumb. But why
do I say that, Because when you overthink things, you
can do more damage to yourself. Because sometimes when you
(51:48):
overanalyze and you overthink things, I'll give you another one liner.
I've got tons of one liners. I should write a
book one liners by Drewski. So anyways, here's the other
one line. That they're paralysis by analysis. Okay, because sometimes
people put themselves in such a funk by data that
(52:11):
they absolutely paralyze themselves from making a decision. And I
will tell you this, what I have seen time and
time again in my life and through history, is that
the decision makers are the ones that win. They're the
ones that are the giants, and those are the shoulders
(52:34):
that we all stand on. So let's look at another
timeline here. Let's go back to December first, of nineteen
eighty seven, and this tells the rest. The newspapers printed
an article that said investors snap up bargains post crash.
(52:54):
So those who braved all the chaos and scooped up
stocks at rock bottom prices, they were popping champagne by
nineteen ninety and the markets had soared past the pre
crash heights and timing the bottom, which we can't do.
Some people have done it, but again, it's like catching
(53:15):
lightning in a bottle, or like catching a falling knife.
It's tricky and a bit risky. But the bold they
walk away with the prize. So let's not forget the
long game. You want to keep your eyes forward, okay,
And I want to zoom out for a second and
see the bigger picture because it's not the end game
(53:40):
where we are. This is just a pit stop, okay. Now,
the evidence is that jobs are holding strong, Unemployment is
lounging near four percent weekly, jobless claims are as steady
as we've ever seen them, and that twenty four trillion
in cash is poised like a sprinter in the starting blocks,
(54:00):
so it's ready to bolt as soon as he hears
the gunfire. Now, earnings like I said, analysts are projecting
twelve to thirteen percent growth for twenty twenty five, and
that number that whispers resilience, even as the headlines are
shouting panic. Now this dip, this is just simply a
(54:21):
speed bump. So here's my two cents and I'm gonna
serve it up straight. Stay in the game, diversify your portfolio,
and you know, don't panic. You want to look at
these dips as a sale at your favorite store, So
grab the bargains while the shelves are stocked. Investing, as
(54:43):
I said, is not a sprint where you dash out
and you dash in. It's a marathon, and endurance is
what wins. So keep your eyes on the finish line,
not the pebbles that are underfoot, because when the dust settles,
as it always, the steady ones are the ones who
are grinning. So in closing, let's not forget the words
(55:09):
of Charlie Munger. Let's play a clip here of Charlie Munger. Ah,
I lied, that was in Charlie Munger.
Speaker 7 (55:17):
I like the long term investors who figure out something
that's gonna work over the long term and buy that
the world is full of foolish gamblers. And they will
not do as well as the patient investors.
Speaker 2 (55:31):
So there you have it, giving you some wisdom from
Charlie Munger, from Warren Buffett, from Drew Prescott. And I
turn my hand. I'm like I hit the wrong button
on my little board here. I'm kind of like a
one man band. If you guys could see this, it's
nearly comical. But this is what I do for you.
I do this for you. I have fun. I make
a fool out of myself from time to time, but
(55:54):
this is fun. This is fun. When you come in
the office, you'd be shocked with my little set up here.
It's a it's a nice little thing that I've invested
some time. And so anyways, in closing, I really hope
that you've enjoyed the show today. You're listening to your
money matters. I want to say thank you for riding
along with me. Drew Prescott, president of Prescott Private Wealth,
(56:17):
chartered retirement planning Counselor and accredited wealth management advisor. And
you're listening to w g Y Radio eight ten and
one oh three one. I can be heard here every
Sunday at eleven am. So now let me roll the
song that I wanted to hit you with and say,
enjoy the rest of your Sunday, and God bless you,
(56:38):
and God bless your family.
Speaker 5 (56:40):
Lots of money's.
Speaker 1 (56:52):
Me, lots of money.
Speaker 2 (56:57):
That's melts.
Speaker 4 (57:00):
Un.
Speaker 1 (57:02):
Life's toughest financial positions don't have to be faced away.
The Ruth Prescot of Prescott Private Wealth is footed guide,
whether it's settling an estate, planning for retirement, or making
your final walk from your career into a well earned rest.
Don't let uncertainty weigh you down.
Speaker 2 (57:14):
Ask yourself, did I do this right?
Speaker 1 (57:16):
Am I missing anything? With Prescott Private Wealth, the answer
is clear, You're on the right path. Visit us at
four or five one Who's six Street in Troy, New York,
or online at Prescott PW dot com. Prescott Private Wealth
your partner in navigating life's financial journeys.
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