Inflation Crushes Retirement Accounts!

Inflation Crushes Retirement Accounts! www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it will have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Yeah, inflation is crushing, crushing retirement accounts. Ej Antoni from
Heritage Economists and Heritage They've actually taken a look at
the numbers and the average four to oh one K
plan has grown from twenty twenty one to twenty twenty

(00:37):
four by eleven thousand dollars. However, you adjust for inflation,
it represents a twelve thousand dollars loss nine point two percent.
Think about that for a second. Many have a difficult
time with inflation in numbers, and I always advise people

(00:58):
to play around. You play around the the government's calculator
when it comes to inflation. Best way I can explain this,
you do this with kids. Sometimes you ask a kid,
you joke around, which which weighs more a pound of
lead or a pound of feathers, same same thing. Pound
of lead, pound of feathers, same exact thing. However, the

(01:21):
money that you have the value of it is dropping. Okay,
you can't look at the dollar as the terms of measurement,
an accurate term of measurement of buying power. You can
because of inflation, and because of these numbers. I mean
I was blown away by this.

Speaker 1 (01:42):
I really was.

Speaker 2 (01:45):
That that poorly. You know, an average four to one
k balance only eleven thousand bucks from twenty twenty one
to twenty twenty four, again, adjusted for inflation, represents a
twelve thousand dollars loss. Digging a little bit deeper into
this found that and it's unfortunate. It's obviously not Markowski

(02:07):
investment accounts. Way too many people out there are on
set it and forget it portfolios where they set up
their four to one k they answered a few questions
and there ago they've got a certain balance in stocks
and way too much in bonds. Obviously, retirement accounts that

(02:33):
have significant bond portfolios have gotten destroyed. Again you're taking
a look at the performance of the bond mark. I mean,
it hasn't been this bad. What you know, I almost
go back to the nineteen twentie for crying out lot,
that's how bad it's been for the bond market. Many
people having way too much in fixed income and it's performed,

(02:58):
god forsaken all again. Bothers me, it really does, because
again it's a problem we have with financial planning here
in this country. There's not enough firms quite honestly like ours,
that are willing to help everyone out. And many of
the firms that actually purport to help smaller investors out

(03:20):
put people on set it and forget it portfolios and
just collect their fees along the way. We've been very clear.
I don't give recommendations here on the program stock recommendations,
but we've been very clear when it comes to fixed income,
very very clear the fact that hey, you know what,
everything that we're buying is short end, short term stuff.

(03:45):
And when those rates bounce up inflate, yeah, short term stuff,
that's it. Okay, you're taking a look at lending the
US government money. You've got a Fed the Reserve that again,
no one knows what they're doing. No one knows that
what their formula is, what they're paying attention to it,

(04:06):
that they're making it up as I go along. It's
almost like playing roulette that puts you in a very
very risky situation. Again, this is to me, it's it's
malpractice quite frankly malpractice for your advisor to overweight your
portfolio with bonds. It was just ridiculous. And again I'm

(04:32):
shocked at the numbers here and how people's portfolios are structured. Now, again,
you also have a lot of weak minded advisors out there,
fearful advisors. They just go along with the flow and say, ooh, okay,
you're this old and you want to retire next amount
of years. And they go to their little handy dandy

(04:52):
financial advisor playbook and say, if I put this type
of asset allocation in there, I'm never going to get
myself and any trouble because everyone else is doing it.
And that's again there's a lot of sheep out there
when it comes to financial advisors. They all do the
same exact thing, same exact thing now same. Oh yeah,

(05:16):
they might differ a little bit in the bonds that
they're buying, but at the percentages are the same because
they feel safe. And that's why you're getting substandard returns.
That's why your portfolios can't keep up high high time
you actually work with someone that has somewhat a bit
of intelligence that can see through this nonsense. Who in
the world is buying I mean, you've got to be

(05:37):
out of your mind based upon what has been taking
place in this country to allocate assets in that fashion
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