March 4, 2025 • 14 mins
In today's market climate, diversifying your 401k is crucial as relying solely on the S&P 500 might not be the best strategy. Jon Hicks breaks down historical data that shows that energy, commodities, and managed futures can offer better returns during periods of market stagnation. By understanding the overlap in your investments, Jon explains that you can make smarter decisions and potentially reduce costs. Jon also explores how rolling over your 401k into an IRA at age 59 and a half gives you more control and flexibility with your retirement funds. Schedule your complimentary appointment today: RetirementSolutionShow.com Follow us on social media: YouTube | Facebook | LinkedInSee omnystudio.com/listener for privacy information.
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Episode Transcript
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Speaker 1 (00:00):
This is the Retirement Solution podcast with financial advisor John Hicks,
founder of jay Hagen Capital.
Speaker 2 (00:07):
Of course you should not rely solely on one index,
but you also don't want to be time in the market.
And when it comes to figuring out your market investments
and your four one k is you get closer to retirement,
what are we supposed to do in today's current climate?
Speaker 3 (00:21):
That is right, pray you just it's it's it's a
really good time to brush off whatever your your your
spiritual scripture is and pray.
Speaker 4 (00:31):
Right Heather, Yep, that's it. I'm not with you. You're not
wrong there.
Speaker 2 (00:35):
That's just many people would argue that's any given point
in time in life.
Speaker 4 (00:39):
Yeah, and there's there's a lot of prayer goes around
my house.
Speaker 2 (00:42):
There's that and might as well. Uh, this is financial
advisor retirement planner John Hicks. I'm head the branch here
to ask John founder of Jahagen Capital, Insight onto how
to improve your position as you get into your retirement years,
taking all that money works so hard to earn and save,
making it now turn around on more for you, particularly
when it comes to our four oh one case. We've
(01:03):
said this over and over probably the most utilized, most
popular retirement savings tool in America, but very often mistaken
as a retirement plan. Your four o one K is
a savings account. It is not a retirement plan, So
how do we do better with it? You can always
find us online anytime Retirement Solution Radio dot com, or
of course click on the links we've got posted in
the show notes as far as getting in touch with
(01:24):
John on his team about your specific case scenario. But
let's talk about the market and the general broad position.
An article on MarketWatch dot com says that if your
four oh one K is mostly following the S and
P five hundred, it is time to diversify. With the
uncertainty of the Trump white House. And this is something
(01:44):
you've talked about. This is not about politics. You mentioned
Trump one point zho his first run in the White House,
there was a lot of market uncertainty, So what are
we going to get in Trump two point oh? Let's
talk about that also Tariff's inflation and the Fed's response
to inflation. This article is recommending against ending solely on
an index and said during times like this, those who
use energy and commodities tend to do well. But John
(02:08):
I mean, if we have an energy sector fund in
our four oh one K Yeah, I mean it does.
Considering that make us market timers, which we've also talked about.
Speaker 4 (02:16):
You never want to be that.
Speaker 2 (02:18):
Let's break all this down.
Speaker 3 (02:19):
So it's interesting. So if you look back at the
last fifteen or so years, I mean, if you had
had energy funds, or international funds or bond funds, they've
been horrible investments compared to the S and P five hundred,
and so the crazy thing is is so everyone's like.
Speaker 4 (02:33):
Oh, well they haven't done that. Well, why don't I.
Speaker 3 (02:35):
Just put everything in the SMP. I see people every
day that that's kind of what they're doing. They may
have like five or six funds, but they're almost all
tracking the S and P five hundred. Yeah.
Speaker 4 (02:44):
Now here's the interesting thing, right, And so we talked
about this.
Speaker 3 (02:46):
I believe in one of the last segments we did,
we were talking that, you know, Goldman Sachs has recently
issued a survey and they basically say, hey, we think
that the market's only going to average around two and
a half to three percent, not because we think they
are bad, but just because if you have the kind
of run up that we've had chances are it just
all comes out in the wash, right, that's where you
(03:07):
have the average returns. So Goldman Sachs thinks three percent.
And then we talked about the Nobel Prize winner, Professor
Robert Schiller, and Schiller thinks that based on today's prices,
the market's only get average about one point six percent.
Speaker 4 (03:21):
One point six percent guys for the next decade.
Speaker 3 (03:23):
So here it all comes at a question. So if
we're looking at a four to one k or IRA's
or our portfolios, and we're thinking, man, I got so
much money, that's been doing so great, because has it
been in the s and p Five hundred? The question
is is that the right place to be now? And
this article that came out says maybe not. Maybe not,
even though international did poorly in the past, even though
bonds did poorly here recently, even though commodities have not
(03:46):
been as good, and even though energy has not been
as good, maybe it's time to own some of that stuff.
So let's unpack that for a second. Right, So, there's
a few really great strategies that exist out there for diversification.
They're called all weather portfolios, right, and they're not all
the same It's not one specific set of guidelines that
everyone should own, but it basically says, you need a
(04:08):
percentage of your money in United States equities, potentially some
in international, you need some in bonds or in this
current environment, I would say US treasuries are probably better.
But they talk about those things, but they almost always
add commodities, precious metal, energy, and managed futures. Now, the
(04:29):
majority of people I talk to, they don't have a
whole bunch of commodities or precious metals or managed futures
in their portfolio.
Speaker 4 (04:36):
Is that bad?
Speaker 3 (04:38):
To be perfectly honest, you would have made more money
had you just been in the s and P Five hundred.
But the question is is that where we should be now?
Speaker 5 (04:45):
Yea?
Speaker 4 (04:46):
And here's my context.
Speaker 3 (04:47):
My context is this, if we really think about where
the markets are right now.
Speaker 4 (04:52):
And guys, they're a little expensive.
Speaker 3 (04:53):
As a matter of fact, Professor Schuler, who won the
Nobel Prize, he says the market's around forty forty one
percent more expensive than it should be now. Is he
predicting a forty percent crash? No, not necessarily. He just says, hey,
in order for things to catch up, the market's probably
just going to stink for a while potentially. Now, what's
the other thing it could do, Heather, it could just crash.
(05:15):
If it went down forty percent tomorrow, then what does
that mean, Well, then it's price right, then we could
probably see six, seven, eight, nine percent market gains over
the next several years. So this is that interesting thing. So,
but one of the things that I want to make
sure we all understand is if we're getting closer to retirement, right,
if we're three to five years away from a retirement,
or we're already retired, we need some diversifications. We do
(05:38):
need some managed futures. I think in twenty twenty four
averaged around twenty to twenty three percent return.
Speaker 4 (05:44):
It's not bad. The year before that.
Speaker 3 (05:46):
In twenty three they did double digit returns. And here's
the crazy thing, managed futures in twenty twenty two, was
it right? Yeah, twenty two, when the market was down
and bonds were down, actually was positive in that year two.
So they've been pretty good to hold up in our
portfolios for some diversification and to kind of help out. Now, well,
they always do great, probably not, and when they have
(06:08):
still been dilutive to the returns of your portfolio, yeah,
does that matter to me, Nope, because the whole point
about getting to retirement is you want to be able
to retire and quit having to work. So we need
our portfolio to work for us. So you really need
to kind of look at your portfolio what kind of
things do you have to hedge? Because there are many
periods of time, how there are many there are There
(06:29):
are three recent periods of times that we can bring up.
One was from nineteen sixty five to nineteen eighty one,
and during that time period the stock market.
Speaker 4 (06:38):
Did you put one dollar in in.
Speaker 3 (06:39):
Nineteen sixty five, by nineteen eighty one you had less
than one dollar when you actually figured in inflation.
Speaker 4 (06:45):
Okay, very good, Okay.
Speaker 3 (06:46):
On top of that, you had the dot com bust
right two thousand to twenty twelve. That twelve year period, hookah, hookah, hookah,
no returns, you actually lost money if you factor in inflation.
And of course before then we actually had Great Depression
nineteen thirty seven and nineteen forty seven. So these are
long periods of time ten plus your periods there was
ten years, sixteen years, and more recently twelve years where
(07:09):
if you put the money in the market, you would
have made no money, as a matter of fact, lost money. Now,
think about retiring when the market is not doing what
we want it to do. Think about retiring and all
of a sudden, you're trying to pull money from your portfolio.
But not only is it not giving you positive returns,
it's losing you money. See, guys, this is why we
need to look at some of these things potentially, like
(07:30):
energy or commodities, because during those same time periods, if
you'd had some money and some energy, right, so what
are we talking about. We're talking about oil and gas primarily.
There's many other things. I don't know because I don't
know how much the solar and wind power that the
current administration is going to really really throw money at.
Chances are a kind of stay away from that. But
(07:50):
if you look historically at gas and oil, oil and gas,
those actually performed really, really, really well during those three
time periods I just mentioned where there's ten to twelve
to sixteen years of time period. As a matter of fact,
between nineteen thirty seven and nineteen forty seven, if you'd
invest in energy, it'd have been up over forty percent
of money. Okay, Yeah, and then during the middle period, right,
(08:13):
from nineteen sixty five leading into right when Reagan took office,
you would have doubled your money. You would have doubled
money in energy. And frankly, here's the big one, the
dot com bust. When the dot com bust happened and
fell apart between two thousand and twenty twelve, energy funds
would have tripled your money during that period.
Speaker 4 (08:29):
See.
Speaker 3 (08:29):
And a lot of people I talk to they don't
own these things. And I'm not suggesting everyone go run
energy funds. Who knows what they're going to do going forward,
especially when we're talking about tariffs and we're talking about
you know, America First. I'm frankly I like America first concepts.
But if we're not getting cheap oil from candidate anymore
and refining it here, I don't know what that's going
(08:49):
to do to the oil industry, right, But we have
to find those things to balance it out, managed futures,
gold oil. I don't love crypto currency. I just I'm
just not a crypto guy. Does that mean it go up? No,
But we probably need something to diversify from the S
and P five hundred. Those are the big ones in
my opinion.
Speaker 2 (09:06):
Okay, so thinking then for somebody who is getting into retirement. Again,
we don't want to time the market. But because I
think you brought up the point that you've seen a
lot of people that are heavily, if not solely, invested
in the SMP, at least in their four oh one
K because that's what we've been told for a long time, right,
get in the SMP, you'll be good.
Speaker 3 (09:26):
And and a lot of people say, well, John, own
more than just the SMP. Guys, if you look at
all those Vanguard funds, how much overlap is there? There
is a tremendous amount of overlap from this Vanguard fund
to this Vanguard fund. Or the same thing with Fidelity.
If you pulled out ten Fidelity large cap funds, they
almost all are the same. It's like eighty five percent
similarities between all these funds. So even though you may
(09:49):
have twenty three different funds, you may own almost ninety
percent of the same stuff. Right, that's the whole thing.
So because I hear people say, well, John, I don't
just own the S and P five hundred, you kind
of do. So we just want to be careful, right,
is that something because we.
Speaker 2 (10:01):
Talk about all the time, Right, if you say, if
you're fifty nine and older, come in offering you a
portfolio review complimentary. Is that something that you can lay
out for people you discover people in this review process
you say, Okay, yes, you think you're diversified because you
own these, however, many different commodities, these different funds, but
actually you have all of this overlap. Is that something
you can show to people.
Speaker 4 (10:21):
We do that all the time.
Speaker 3 (10:22):
You know, It's crazy because I'll have someone come in
and they literally will have like a whole page of
actual investments. Yeah, but when you analyze it and kind
of do an X ray if you will, yea eighty
one percent. There was a lady that came in the
other day. She had about one point three million dollars.
I think she had like twenty three different funds. She
looked on paper, literally on paper, like she was well diversified. Heather,
(10:42):
she had eighty one percent correlation, eighty one percent overlap.
All of those funds basically owned eighty one percent of
the same stuff. The only things that were slightly different
is that some of them were balanced, and so they
had some bonds in there, or some treasuries or things
like that. That guys that's that's a lot of overlap.
So she basically dumped ninety percent of those funds and
(11:03):
probably own one or two Vanguard or Schwab funds.
Speaker 4 (11:06):
She would have accomplished the.
Speaker 3 (11:07):
Exact same thing, probably reduced her costs tremendously and been
able to understand the investments better. Right, So it's not
always just about what is the what can you make
the most money from? Yeah, it's like, hey, can you
understand it? Yeah, because instead of owning twenty three funds,
wouldn't it have been nicer just to own two and
then and they will perform almost the same way and
be cheaper risk of course, reduce risk, be cheaper, make
(11:31):
it easier to understand. Come on, I mean, that's kind
of what we're looking for in the long run.
Speaker 2 (11:35):
And also one other thing I want to point out
as far as understanding, we talk about the age fifty
nine and a half because people will come to you
with a four oh one K, and how many people
don't realize when you turn fifty nine and a half
you can actually roll your four oh one k, even
at your current employer, correct me if I'm wrong, into
your own IRA. And that gives you essentially I mean
nothings one hundred percent, but freedom as far as how
(11:56):
you are invested, you have a lot more choices, right,
so you're less about n for the year.
Speaker 3 (12:01):
But like Whirlcolm in Ron, they all went out of business,
and so the government changed the rule and said, hey,
if you're still in service at your company, you don't
have to leave it. But if you're in service they
called it an in service withdraw. You're still working there,
but you're over fifty nine and a half, they give
that worker the ability to take that four to one
K and roll it into their own self directed IRA.
Speaker 4 (12:21):
Now why do we like that? Because then you have control.
Speaker 3 (12:23):
You don't have to rely on that four oh one
K company being switched around or them changing all your
investments up or whatever. You get total flexibility in control
to own the cheapest stuff like Vanguard or Fidelity, whatever
your preference is. But you can own it and you
can be basically in charge of your fees expenses, and frankly, guys,
you can hedge it. You can put stop losses in there,
(12:45):
you can use options to protect you. On the downside,
you can almost never do that in four to one ks,
but you can in an IRA and of course you
pay no taxes and making that transition as long as
it's as long as you do a conversion, it's very
very easy, and it happens all the time. But if
you're ever fifty nine and a half, that's really that's
probably the first time you should probably think about would
(13:07):
you like to have more control of your own money?
Because you can buy law do that as soon as
you're ready.
Speaker 2 (13:12):
I think that most smart Americans that are hard workers,
hard savers, would like to have more control. It's their
money after.
Speaker 4 (13:19):
All, too.
Speaker 3 (13:20):
I mean, it's obvious the government has no flipping clear
what they're doing with your money.
Speaker 2 (13:25):
Wow.
Speaker 3 (13:25):
So at least and of course if we can, if
we can help people go from twenty three funds down
to two, chances are you'll understand your money better so
you can make better decisions with it right now.
Speaker 2 (13:35):
Of course, the goal of every single plane that you
create ad ja Haagen Capital working to help people understand offering, education, offering,
increase financial freedom, more control over your money. This is
the point of having a four oh one k X ray,
which they can do for you at ja Hagen Capital.
Speaker 4 (13:51):
So if you want to.
Speaker 2 (13:52):
Begin that conversation, understand what your options are getting that education.
Find us at Retirement solutionshow dot com.
Speaker 1 (14:00):
Thanks for listening to The Retirement Solution Podcast with John Hicks.
Begin the conversation about your savings plan with John and
the team at Jayhagen Capital by visiting Retirement Solution radio
dot com. Be sure to listen to John's radio show,
The Retirement Solution Saturdays at eight am and Sundays at
nine am on NewsRadio eight forty whas.
Speaker 5 (14:21):
Jay Haagen Capital Incorporated is not licensed in all fifty states.
To find out if Jahagen Capital Incorporated is licensed in
your state, please call five zero two sixty nine oh
fifty six thirty five. Jay Higgen Capitol, Incorporated is not
affiliated with, nor endorsed by the Social Security Administration or
any other government agency, and does not provide legal or
tax advice. By contacting us, you may be provided with
information about insurance and annuity products offered through Jahiggen Capital
(14:41):
LLCNPN number one eight eight two seven zero nine four
This is the Retirement Solution podcast with financial advisor John Hicks,
founder of jay Hagen Capital.
Speaker 2 (00:07):
Of course you should not rely solely on one index,
but you also don't want to be time in the market.
And when it comes to figuring out your market investments
and your four one k is you get closer to retirement,
what are we supposed to do in today's current climate?
Speaker 3 (00:21):
That is right, pray you just it's it's it's a
really good time to brush off whatever your your your
spiritual scripture is and pray.
Speaker 4 (00:31):
Right Heather, Yep, that's it. I'm not with you. You're not
wrong there.
Speaker 2 (00:35):
That's just many people would argue that's any given point
in time in life.
Speaker 4 (00:39):
Yeah, and there's there's a lot of prayer goes around
my house.
Speaker 2 (00:42):
There's that and might as well. Uh, this is financial
advisor retirement planner John Hicks. I'm head the branch here
to ask John founder of Jahagen Capital, Insight onto how
to improve your position as you get into your retirement years,
taking all that money works so hard to earn and save,
making it now turn around on more for you, particularly
when it comes to our four oh one case. We've
(01:03):
said this over and over probably the most utilized, most
popular retirement savings tool in America, but very often mistaken
as a retirement plan. Your four o one K is
a savings account. It is not a retirement plan, So
how do we do better with it? You can always
find us online anytime Retirement Solution Radio dot com, or
of course click on the links we've got posted in
the show notes as far as getting in touch with
(01:24):
John on his team about your specific case scenario. But
let's talk about the market and the general broad position.
An article on MarketWatch dot com says that if your
four oh one K is mostly following the S and
P five hundred, it is time to diversify. With the
uncertainty of the Trump white House. And this is something
(01:44):
you've talked about. This is not about politics. You mentioned
Trump one point zho his first run in the White House,
there was a lot of market uncertainty, So what are
we going to get in Trump two point oh? Let's
talk about that also Tariff's inflation and the Fed's response
to inflation. This article is recommending against ending solely on
an index and said during times like this, those who
use energy and commodities tend to do well. But John
(02:08):
I mean, if we have an energy sector fund in
our four oh one K Yeah, I mean it does.
Considering that make us market timers, which we've also talked about.
Speaker 4 (02:16):
You never want to be that.
Speaker 2 (02:18):
Let's break all this down.
Speaker 3 (02:19):
So it's interesting. So if you look back at the
last fifteen or so years, I mean, if you had
had energy funds, or international funds or bond funds, they've
been horrible investments compared to the S and P five hundred,
and so the crazy thing is is so everyone's like.
Speaker 4 (02:33):
Oh, well they haven't done that. Well, why don't I.
Speaker 3 (02:35):
Just put everything in the SMP. I see people every
day that that's kind of what they're doing. They may
have like five or six funds, but they're almost all
tracking the S and P five hundred. Yeah.
Speaker 4 (02:44):
Now here's the interesting thing, right, And so we talked
about this.
Speaker 3 (02:46):
I believe in one of the last segments we did,
we were talking that, you know, Goldman Sachs has recently
issued a survey and they basically say, hey, we think
that the market's only going to average around two and
a half to three percent, not because we think they
are bad, but just because if you have the kind
of run up that we've had chances are it just
all comes out in the wash, right, that's where you
(03:07):
have the average returns. So Goldman Sachs thinks three percent.
And then we talked about the Nobel Prize winner, Professor
Robert Schiller, and Schiller thinks that based on today's prices,
the market's only get average about one point six percent.
Speaker 4 (03:21):
One point six percent guys for the next decade.
Speaker 3 (03:23):
So here it all comes at a question. So if
we're looking at a four to one k or IRA's
or our portfolios, and we're thinking, man, I got so
much money, that's been doing so great, because has it
been in the s and p Five hundred? The question
is is that the right place to be now? And
this article that came out says maybe not. Maybe not,
even though international did poorly in the past, even though
bonds did poorly here recently, even though commodities have not
(03:46):
been as good, and even though energy has not been
as good, maybe it's time to own some of that stuff.
So let's unpack that for a second. Right, So, there's
a few really great strategies that exist out there for diversification.
They're called all weather portfolios, right, and they're not all
the same It's not one specific set of guidelines that
everyone should own, but it basically says, you need a
(04:08):
percentage of your money in United States equities, potentially some
in international, you need some in bonds or in this
current environment, I would say US treasuries are probably better.
But they talk about those things, but they almost always
add commodities, precious metal, energy, and managed futures. Now, the
(04:29):
majority of people I talk to, they don't have a
whole bunch of commodities or precious metals or managed futures
in their portfolio.
Speaker 4 (04:36):
Is that bad?
Speaker 3 (04:38):
To be perfectly honest, you would have made more money
had you just been in the s and P Five hundred.
But the question is is that where we should be now?
Speaker 5 (04:45):
Yea?
Speaker 4 (04:46):
And here's my context.
Speaker 3 (04:47):
My context is this, if we really think about where
the markets are right now.
Speaker 4 (04:52):
And guys, they're a little expensive.
Speaker 3 (04:53):
As a matter of fact, Professor Schuler, who won the
Nobel Prize, he says the market's around forty forty one
percent more expensive than it should be now. Is he
predicting a forty percent crash? No, not necessarily. He just says, hey,
in order for things to catch up, the market's probably
just going to stink for a while potentially. Now, what's
the other thing it could do, Heather, it could just crash.
(05:15):
If it went down forty percent tomorrow, then what does
that mean, Well, then it's price right, then we could
probably see six, seven, eight, nine percent market gains over
the next several years. So this is that interesting thing. So,
but one of the things that I want to make
sure we all understand is if we're getting closer to retirement, right,
if we're three to five years away from a retirement,
or we're already retired, we need some diversifications. We do
(05:38):
need some managed futures. I think in twenty twenty four
averaged around twenty to twenty three percent return.
Speaker 4 (05:44):
It's not bad. The year before that.
Speaker 3 (05:46):
In twenty three they did double digit returns. And here's
the crazy thing, managed futures in twenty twenty two, was
it right? Yeah, twenty two, when the market was down
and bonds were down, actually was positive in that year two.
So they've been pretty good to hold up in our
portfolios for some diversification and to kind of help out. Now, well,
they always do great, probably not, and when they have
(06:08):
still been dilutive to the returns of your portfolio, yeah,
does that matter to me, Nope, because the whole point
about getting to retirement is you want to be able
to retire and quit having to work. So we need
our portfolio to work for us. So you really need
to kind of look at your portfolio what kind of
things do you have to hedge? Because there are many
periods of time, how there are many there are There
(06:29):
are three recent periods of times that we can bring up.
One was from nineteen sixty five to nineteen eighty one,
and during that time period the stock market.
Speaker 4 (06:38):
Did you put one dollar in in.
Speaker 3 (06:39):
Nineteen sixty five, by nineteen eighty one you had less
than one dollar when you actually figured in inflation.
Speaker 4 (06:45):
Okay, very good, Okay.
Speaker 3 (06:46):
On top of that, you had the dot com bust
right two thousand to twenty twelve. That twelve year period, hookah, hookah, hookah,
no returns, you actually lost money if you factor in inflation.
And of course before then we actually had Great Depression
nineteen thirty seven and nineteen forty seven. So these are
long periods of time ten plus your periods there was
ten years, sixteen years, and more recently twelve years where
(07:09):
if you put the money in the market, you would
have made no money, as a matter of fact, lost money. Now,
think about retiring when the market is not doing what
we want it to do. Think about retiring and all
of a sudden, you're trying to pull money from your portfolio.
But not only is it not giving you positive returns,
it's losing you money. See, guys, this is why we
need to look at some of these things potentially, like
(07:30):
energy or commodities, because during those same time periods, if
you'd had some money and some energy, right, so what
are we talking about. We're talking about oil and gas primarily.
There's many other things. I don't know because I don't
know how much the solar and wind power that the
current administration is going to really really throw money at.
Chances are a kind of stay away from that. But
(07:50):
if you look historically at gas and oil, oil and gas,
those actually performed really, really, really well during those three
time periods I just mentioned where there's ten to twelve
to sixteen years of time period. As a matter of fact,
between nineteen thirty seven and nineteen forty seven, if you'd
invest in energy, it'd have been up over forty percent
of money. Okay, Yeah, and then during the middle period, right,
(08:13):
from nineteen sixty five leading into right when Reagan took office,
you would have doubled your money. You would have doubled
money in energy. And frankly, here's the big one, the
dot com bust. When the dot com bust happened and
fell apart between two thousand and twenty twelve, energy funds
would have tripled your money during that period.
Speaker 4 (08:29):
See.
Speaker 3 (08:29):
And a lot of people I talk to they don't
own these things. And I'm not suggesting everyone go run
energy funds. Who knows what they're going to do going forward,
especially when we're talking about tariffs and we're talking about
you know, America First. I'm frankly I like America first concepts.
But if we're not getting cheap oil from candidate anymore
and refining it here, I don't know what that's going
(08:49):
to do to the oil industry, right, But we have
to find those things to balance it out, managed futures,
gold oil. I don't love crypto currency. I just I'm
just not a crypto guy. Does that mean it go up? No,
But we probably need something to diversify from the S
and P five hundred. Those are the big ones in
my opinion.
Speaker 2 (09:06):
Okay, so thinking then for somebody who is getting into retirement. Again,
we don't want to time the market. But because I
think you brought up the point that you've seen a
lot of people that are heavily, if not solely, invested
in the SMP, at least in their four oh one
K because that's what we've been told for a long time, right,
get in the SMP, you'll be good.
Speaker 3 (09:26):
And and a lot of people say, well, John, own
more than just the SMP. Guys, if you look at
all those Vanguard funds, how much overlap is there? There
is a tremendous amount of overlap from this Vanguard fund
to this Vanguard fund. Or the same thing with Fidelity.
If you pulled out ten Fidelity large cap funds, they
almost all are the same. It's like eighty five percent
similarities between all these funds. So even though you may
(09:49):
have twenty three different funds, you may own almost ninety
percent of the same stuff. Right, that's the whole thing.
So because I hear people say, well, John, I don't
just own the S and P five hundred, you kind
of do. So we just want to be careful, right,
is that something because we.
Speaker 2 (10:01):
Talk about all the time, Right, if you say, if
you're fifty nine and older, come in offering you a
portfolio review complimentary. Is that something that you can lay
out for people you discover people in this review process
you say, Okay, yes, you think you're diversified because you
own these, however, many different commodities, these different funds, but
actually you have all of this overlap. Is that something
you can show to people.
Speaker 4 (10:21):
We do that all the time.
Speaker 3 (10:22):
You know, It's crazy because I'll have someone come in
and they literally will have like a whole page of
actual investments. Yeah, but when you analyze it and kind
of do an X ray if you will, yea eighty
one percent. There was a lady that came in the
other day. She had about one point three million dollars.
I think she had like twenty three different funds. She
looked on paper, literally on paper, like she was well diversified. Heather,
(10:42):
she had eighty one percent correlation, eighty one percent overlap.
All of those funds basically owned eighty one percent of
the same stuff. The only things that were slightly different
is that some of them were balanced, and so they
had some bonds in there, or some treasuries or things
like that. That guys that's that's a lot of overlap.
So she basically dumped ninety percent of those funds and
(11:03):
probably own one or two Vanguard or Schwab funds.
Speaker 4 (11:06):
She would have accomplished the.
Speaker 3 (11:07):
Exact same thing, probably reduced her costs tremendously and been
able to understand the investments better. Right, So it's not
always just about what is the what can you make
the most money from? Yeah, it's like, hey, can you
understand it? Yeah, because instead of owning twenty three funds,
wouldn't it have been nicer just to own two and
then and they will perform almost the same way and
be cheaper risk of course, reduce risk, be cheaper, make
(11:31):
it easier to understand. Come on, I mean, that's kind
of what we're looking for in the long run.
Speaker 2 (11:35):
And also one other thing I want to point out
as far as understanding, we talk about the age fifty
nine and a half because people will come to you
with a four oh one K, and how many people
don't realize when you turn fifty nine and a half
you can actually roll your four oh one k, even
at your current employer, correct me if I'm wrong, into
your own IRA. And that gives you essentially I mean
nothings one hundred percent, but freedom as far as how
(11:56):
you are invested, you have a lot more choices, right,
so you're less about n for the year.
Speaker 3 (12:01):
But like Whirlcolm in Ron, they all went out of business,
and so the government changed the rule and said, hey,
if you're still in service at your company, you don't
have to leave it. But if you're in service they
called it an in service withdraw. You're still working there,
but you're over fifty nine and a half, they give
that worker the ability to take that four to one
K and roll it into their own self directed IRA.
Speaker 4 (12:21):
Now why do we like that? Because then you have control.
Speaker 3 (12:23):
You don't have to rely on that four oh one
K company being switched around or them changing all your
investments up or whatever. You get total flexibility in control
to own the cheapest stuff like Vanguard or Fidelity, whatever
your preference is. But you can own it and you
can be basically in charge of your fees expenses, and frankly, guys,
you can hedge it. You can put stop losses in there,
(12:45):
you can use options to protect you. On the downside,
you can almost never do that in four to one ks,
but you can in an IRA and of course you
pay no taxes and making that transition as long as
it's as long as you do a conversion, it's very
very easy, and it happens all the time. But if
you're ever fifty nine and a half, that's really that's
probably the first time you should probably think about would
(13:07):
you like to have more control of your own money?
Because you can buy law do that as soon as
you're ready.
Speaker 2 (13:12):
I think that most smart Americans that are hard workers,
hard savers, would like to have more control. It's their
money after.
Speaker 4 (13:19):
All, too.
Speaker 3 (13:20):
I mean, it's obvious the government has no flipping clear
what they're doing with your money.
Speaker 2 (13:25):
Wow.
Speaker 3 (13:25):
So at least and of course if we can, if
we can help people go from twenty three funds down
to two, chances are you'll understand your money better so
you can make better decisions with it right now.
Speaker 2 (13:35):
Of course, the goal of every single plane that you
create ad ja Haagen Capital working to help people understand offering, education, offering,
increase financial freedom, more control over your money. This is
the point of having a four oh one k X ray,
which they can do for you at ja Hagen Capital.
Speaker 4 (13:51):
So if you want to.
Speaker 2 (13:52):
Begin that conversation, understand what your options are getting that education.
Find us at Retirement solutionshow dot com.
Speaker 1 (14:00):
Thanks for listening to The Retirement Solution Podcast with John Hicks.
Begin the conversation about your savings plan with John and
the team at Jayhagen Capital by visiting Retirement Solution radio
dot com. Be sure to listen to John's radio show,
The Retirement Solution Saturdays at eight am and Sundays at
nine am on NewsRadio eight forty whas.
Speaker 5 (14:21):
Jay Haagen Capital Incorporated is not licensed in all fifty states.
To find out if Jahagen Capital Incorporated is licensed in
your state, please call five zero two sixty nine oh
fifty six thirty five. Jay Higgen Capitol, Incorporated is not
affiliated with, nor endorsed by the Social Security Administration or
any other government agency, and does not provide legal or
tax advice. By contacting us, you may be provided with
information about insurance and annuity products offered through Jahiggen Capital
(14:41):
LLCNPN number one eight eight two seven zero nine four
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