Market Update - With Mark DiOrio

Brian Akers and Mark Diorio from Brookstone Capital Management discussed the 2025 market performance and 2026 outlook. In 2025, the S&P 500 rose 16.6%, despite an initial 15% drop. The Federal Reserve's interest rate cuts and a strong earnings season supported the market. Diorio highlighted the importance of diversification, noting that large-cap tech stocks dominated but left opportunities in small and mid-cap stocks. He also emphasized the benefits of high-quality dividend stocks and the potential for international markets to outperform. Diorio predicted two rate cuts by mid-year, bringing short-term rates to 3.25% and the 10-year treasury to 4%.

Transcript

Unknown: 0:00

The following is a pre recorded show, welcome to winning in retirement with your host, Brian AKERS, Certified Financial Planner, professional and founder of AKERS Financial Group, now helping you win in your retirement. Here's Brian AKERS, welcome

BRIAN AKERS: 0:16

to winning in retirement. I'm Brian AKERS from AKERS Financial Group. We want to welcome you to our show. Today. We have a very special show. That show is called winning in retirement. Now their show the radio podcast, but our topic is called the market update for 2026 so what we did is we brought in our portfolio manager, Mark Diorio from Chicago, to talk about the markets. What I want to do is introduce Mark Diorio from Brookstone Capital Management to start out our morning. Hello, Mark. Good morning. Brian. Happy to be here. It's great to have you, Mark. I know with 2025 I'm in the books, and we're talking about stock markets, we do got to talk about last year, and I'd like to get your your thoughts on last year, and then we can talk more about 2026 and we have a lot of things planned for the show, but if you can give us a little look back on 2025 I appreciate that.

Mark DiOrio: 1:06

Yeah, let's jump right into it. You know, there's a tale of two halves, really, where the front part of the year, we started to get into a little bit of trouble, and the market was down about 15% into April, and then found its footing and rallied back and kind of continued throughout the rest of the year. So it ended up on a positive note. And so it's one of those lessons that you learn, that you know sometimes you have these short term risks that pop up unexpectedly in the market. In the front part of the year, we had the market selling off kind of on concerns of tariffs and the unknown, and then ultimately bottoming, and then rallying back. And part of the support for the market was that the Federal Reserve was reducing interest rates. So after about a nine month pause, the Federal Reserve, which controls short term rates, they raise rates if they think inflation is a concern, and they'll lower rates if inflation is fading, and they want to maintain a positive job outlook. So the Federal Reserve has two main goals, which is one, to maintain stable prices. That's considered about a two to 3% inflation rate, and we're well within that range today. And then second, they want to promote policies that encourage full employment, and by rule of thumb, that's an unemployment rate less than 5% so both of those factors are hit at the moment, and so the Federal Reserve is comfortable reducing rates, and that's usually supportive of stock prices, and it was also supportive of bond prices Last year as well. And from an earnings perspective, stocks actually and companies actually did very well. Earnings outpaced expectations at a pretty high clip. So the market a very good year for business, even though you hear all the challenges and there's a lot of noise out there, but the market really ignored that, and I think that's because it's driven by a major capital expenditure phase or capex phase. That's going to be a multi year cycle that really just kicked off the last two years, and that's the build out of AI Artificial Intelligence. And there just is so much spending to build out the infrastructure needed that that's really taking the place, whether it's a slowdown in the office space or a slowdown in any consumer spending that that money that's come into the economy is is coming from the mega cap, or what they call the hyper scalers today. So the largest stocks in the market are really spending, and so those are tech related stocks, the familiar names that are spending to build out this, this major infrastructure across the country.

BRIAN AKERS: 3:47

Yes, that was really where the value and the increase in the markets were pretty incredible for 2025 the one thing that you're saying is about sounds really good, but then when I see gold and silver prices going up incredibly fast. Isn't that the old school warning signs of gold and silver rising so quickly?

Mark DiOrio: 4:07

It's very interesting. So part of building out the AI infrastructure are some of those basic materials, the raw materials, critical minerals and so forth. And Silver has a little bit more industrial use case, so there's more demand on silver. And then gold is a little bit different. That's more of a monetary asset, and actually trades in the inverse of the US dollar. So the US dollar actually depreciating in value relative to other currencies. And so there was a big uptick in gold and silver, but I think for different reasons, even though they're often correlated together, gold is more of a monetary asset, and then silver, you have a little bit of speculation there, and maybe it's a tack on trade for those that want to be a little bit more speculative following gold. But I think that industrial use case is a little bit different. For silver. And so what happens in the commodity market is that you do get real world stresses when prices rise. So that is something that we're watching. But we think the gold move really has to do with just this adjustment in the global economy, where gold is becoming more of a coming back in style, in terms of a reserve asset for most foreign central banks, where they they still own treasuries as the largest assets, US Treasuries as the largest, largest asset. But gold is coming in there as well, and I think that that's actually a healthy thing. It takes some pressure off the dollar overall to basically be everywhere and and for the Federal Reserve to set policy that they know would influence all other capital markets. But To that end, one of the interesting components of the 2026 market was, and this might surprise some people, is that the marginal buyer in the US and the was foreign investors. We saw about a trillion dollars of foreign capital come into the US market, buying US stocks and bonds, which is really just telling you that the big money really thinks that US is still the number one spot for for investors.

BRIAN AKERS: 6:17

You know that makes sense. Makes sense with where all that demand came from in the cash flow. The thing that we want to do first here is Mark Diorio is from Brookstone Capital Management, and what I wanted to do is have that lead off where we talk about the markets. Then I know you don't like talking about yourself, Mark, but I just want to spend a second talking about Brookstone Capital Management, AKERS Financial Group, we work with managing money through Brookstone Capital Management out of Chicago as our third party money manager. Mark Diorio is the chief investment officer there. Tell us a little bit about Brookstone Capital Management, how they're set up, sure.

Mark DiOrio: 6:50

Well, I've been at Brookstone Capital Management for this will be my 11th year. So when I came on board, we had about a billion in assets under management. Today, we have over 13 billion in assets under management. So we are coast to coast in the US. We have clients in all 50 states. And one of the one of the exciting factors of kind of my career, and it goes back. I've been in the industry over 25 years now. And I would say that there's kind of two bookends that talk about what I've been through. One, are multiple crisis events, and two, the Advent, or the evolution of exchange traded funds. So those are the two themes that have really driven a parallel with my career. So getting into the business, it was kind of at the height of the.com bubble, where you're having the last tail end of that run. And then, of course, you go into the 2000 2002 bear market with kind of the tech bust. And then a few years later, you have the the global financial crisis in 2007 and 2009 and then multiple crisis over the last 10 years, and they've been more mini crisis events. Granted, covid was a major, major one. It was not just a market event, but we've had multiple different crisis events. So part of my philosophy, and I think what I bring to bear with when we manage portfolios, is just going the experience of going through those and the decision making framework that you have to have when you're in the face of uncertainty, and so part of that is understanding capital markets and understanding the resiliency of capital markets. In other words, the market will ultimately bottom before the good news comes out, and it'll start to head higher, and it climbs this wall of worry. So the worry is still there, and it keeps going when everyone thinks it's going to fall back and and decline. So so it's decisions in those times that actually really add a lot of value over time. And it doesn't feel like it in that in that moment, because it's hard, and you don't see maybe the decision right away, or the impact of that decision, but you know that it can come looking ahead, looking six months out, 12 months out, what the market often does. Yeah.

BRIAN AKERS: 9:13

So what I like about Brookstone is you take the market, you then design portfolios, and portfolio designs that advisors like myself can can build different sleeves, different portfolios into an account through Charles Schwab with their client. For our clients, by using Brookstone and having you and your account group of people manage that assets through the trades and handling handle it for us day to day, which is great. The the idea of your understanding money management is there's usually a fee. That fee is broken down between the financial advisor, who's your person that you're talking to, and then there is management fees. The management fees, so what will you pay the third party money manager? The other cost in trading would be like, if there's a Ira fee or something like that, or if there's ever in the whatever you pick, like ETF or mutual fund would have some internal. Costs also. So what Brookstone does for AKERS Financial Group is really helps us manage money for our clients on the active basis. We really believe in having active money when it comes to the market. And then we also have money that's very passive on the on the lower risk side. And so Mark Diorio, as we, as we're finishing up this first quarter, we have the market in 2025 I think the s p5 100 ended up about 16.6% and I think that's where it ended up. Is it about about true?

Mark DiOrio: 10:30

Yeah, correct. So you had a nice return in the s p5 100 overall and broadly in the market. So it ended up being a pretty good year, despite a lot of headlines and headline risks, and as you mentioned and talking about fees and so forth. And I mentioned just moments ago that ETFs exchange traded funds have been really part of my career and utilizing those to build out portfolios. Well, one of the benefits of ETFs is they have lowered the internal expenses relative to traditional mutual funds. So that was one of the benefits to the end investor, where now you can build portfolios at a lower internal cost. And ETFs have continued to really proliferate and allow us to build portfolios in a much more unique fashion. And talking about gold that she just mentioned as well, well, to have a gold in the traditional portfolio, wasn't until 2004 when you had the gold ETF created and launched. So it was in the ETF investment vehicle that allowed you to build gold into the portfolio. And I know you have portfolios Brian that you use with your clients, where gold really played a big diverse not even, not just a diversification element in 2025 but really a return driver.

BRIAN AKERS: 11:47

Yeah, for last year, allowing different models that that we work with through Brookstone to actually beat the markets on a diversified basis, pretty incredible. So AKERS, for natural growth, we're local, we're independent. We don't report to a big company on Wall Street, we report to you. So we do have offices in far still Lutherville, clients all around the mid Atlantic region, all around the country and even a few around the world. Remember, it's so easy to begin winning in retirement, you just give us a call and schedule a free meeting with one of our team of advisors by calling 833 win retire. That's 830 3w, I n, r, e, t, I R, E, and we'll give you a call on Monday to schedule your free in person meeting, or you go to our website at AKERS, financial group.com, or give us a call at 833-946-7384 where should we be investing our money? We'll talk about that when we return.

Unknown: 12:36

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS, indeed.

BRIAN AKERS: 12:52

Welcome back to winning in retirement. I am Brian AKERS, Certified Financial Planner, practitioner from AKERS Financial Group. I'm the president and founder of AKERS Financial Group. I'm blessed I have really great staff, really great advisors, people that work with me. And we're also honored to have different affiliations in our business, where we've had people manage money, third party money managers that are out there that we work with. And Brookstone Capital Management is a group that we've been working with for a number of years. And what we have today is our stock market update with the manager from Brookstone Capital Management, Mark Diorio. He is a Chief Investment Officer. Mark Diorio, you ready for the second quarter?

Mark DiOrio: 13:28

I'm definitely ready for the second quarter, Brian, and it's been a fun time. I've been on the show a number of times, and we keep trying to keep people invested and looking forward to the to their future.

BRIAN AKERS: 13:39

For sure, absolutely. I mean, the key thing that we try to do with having a show like this is just give people an overview of the market, and then we want to have perspective of you personally and how the market affects you. We're not trying to find the hottest and quickest way to make money quick. We're trying to get wealthy over time. Wealthy over time is very doable. Getting rich quick is really hit or miss at times. So what we're trying to do here in the second quarter is we're going to ask Mark, where should we be investing our money in 2026 What's your thoughts on that?

Mark DiOrio: 14:12

Mark? Well, and you bring up a good point. You know, there's a big difference between investing and speculating or speculating. You might get the news and be on TV and investing is really part of a comprehensive, thoughtful portfolio allocation decision, relying on market history and research as a guide. And then, as I know that you use Brian as a financial fingerprint, really to hone in on your customized portfolio that's appropriate for you and the right word to think about when you build a portfolio is not necessarily, what's the best investment, because you won't know that until hindsight. What's appropriate? Great.

BRIAN AKERS: 14:51

I'm a great investor. Hindsight and when you go backwards, oh yeah, I bought I bought that NVIDIA three years ago at the bottom, we bought pieces of it. We didn't put a lot in there. We did, but,

Mark DiOrio: 15:06

no, no, that's, that's a that's a good example or highlight for our overall portfolio. Allocation framework does not change year in year out. It's a highly disciplined yet flexible approach, and we call it a Core Plus satellite allocation framework, where you put together a good core, solid portfolio that's consistent with your risk profile, a combination of diversified stocks and bonds, and then you add a satellite allocation to maybe tilt the portfolio based on some opportunities, whether you want to be a little more defensive, maybe you want more diversification, or maybe you want more income out of the portfolio, and you can easily bolt that on to the satellite, so the satellite gives you additional flexibility to really customize your portfolio around that core and the reason you have the core portfolio is to make sure you can participate in the market up to your risk tolerance, and make sure you get the long term gains that the markets do provide over time. And so we want to build that comprehensive, risk appropriate, diversified portfolio. And we're using a Core Plus satellite allocation design, and I know you build portfolios as well.

BRIAN AKERS: 16:15

Brian, oh yeah. So I believe heavily in the core. The core is, what's important about the core is that when we invest our money, we need money that's going to be managed with the markets long term view, where we're trying to get the objective of the client, and then we build our portfolio out. What I like is getting the best of the best in every category, in the allocation. I like building the least expensive inside of the best of the best. I then try to allocate every every quarter about any changes where we want things to head on a long term basis, not just the short term. I believe diversification is a great way to be, but I don't want to have diversification. So what I mean by that is we, we don't just want to buy something, to buy it. I usually call that a target date fund, where they sort of have to have an allocation. I don't feel like the models that I like to work that build on is where I have to have an allocation in certain areas. It's more like I want to have an allocation in certain area, and that's a big deal to me. Definitely.

Mark DiOrio: 17:13

You make a good point in terms of you're trying to build a portfolio with the idea of the best, of the best, meaning that you're not tied to any one product or firm or so forth. We can review and Brookstone and AKERS together can review the individual allocations and decide, well, does this firm have the best large cap growth fund, and this one have the best dividend strategy and this and so forth and so on, and so it gives you that flexibility, and that's part of being the independent advisor. I know that you are, and I know that your firm really takes that to heart when you're building your portfolios.

BRIAN AKERS: 17:51

Yeah, because I believe the portfolio is basically what we're working with, but that portfolio is designed per person, and that's a big deal. Now, we chose Brookstone because Brookstone gives us the ability within the same account to have certain core portfolios, and we add satellites. I mean, there's things like Buffer accounts, there's different ways of investing the money based on the markets. There's different baskets of stocks, like dividend value or growth stocks. There's a lot of options at Brookstone. Do you mind explaining a little bit about your stock baskets and how you go about picking the stocks that get into stock baskets? Sure.

Mark DiOrio: 18:29

So you mentioned the dividend stock strategy, which is actually very popular here and with our end clients. And the reason for that is because you're allocating to high quality dividend paying stocks now. Not all companies pay dividends. Most of the tech stocks pay very little or no dividend. Most of the most growth companies don't pay a lot of dividends, if at all, because they're reinvesting money to try to grow. What other more established companies that we've all heard of, the consumer staples names, the energy names and so forth. They built a business that's time tested and where they share a percent of their profits with their shareholders, and that's known as the dividend. The dividend is declared by the board of directors, and then they and the board of directors can increase that dividend over time to shareholders. There's a number of high quality companies that have increased it for more than 20, 3040, consecutive years. So you're ultimately getting the raise as you're being a shareholder in the dividend portfolio. So what we do is screen for high quality first. So that's, does the company have a moat? It's called, we use a firm called Morning Star, which gives us an idea of, do they have a wide moat? Which means is their business very protective? It's hard to kind of compete with them. And so it's going to be so their their earnings are pretty stable over time. And then we look at the fundamental price, current price, relative to fair value. And so that's a nine. Other fundamental screening process using traditional fundamental metrics, and then the current dividend yield is it above average? So think in that three to 5% range, you can find a little bit higher than that, but that's usually a pretty good range in today's market to look at that. And so we try to put together a diversified portfolio, again, high quality, above average, paying dividend stocks trading at a reasonable price to fair value, with the expectation that those companies will raise their dividends to shareholders over time. And so if you just see a stock and it's yielding 3% you'd say, Oh, it's just 3% but the idea is that company can raise that dividend the shareholders. So if they raise it at a 7% annualized clip, well in 10 years, your payment is actually double what you initially invested at and the income coming off that. So that's very different than a bond, which would just have stable interest, and it would be the same amount in 10 years that you're getting and then so part of the battle is obviously thinking forward of what those companies can do. And interesting coming in 2026 dividend payers lagged behind the overall market. And we would say dividend stocks don't go out of style. They go out of favor, and then they come back in favor if you get a more challenging market. So we had a growth led bull market last year. This is setting up. Dividend stocks actually look quite appealing. The dividends are starting. Dividend yields are elevated, which make them attractive, and they didn't perform or run up in price all that much. So I think that's one of the areas I would be looking at for 2026 right?

BRIAN AKERS: 21:46

And so you build that portfolio on the basket model through a combination of industries, yield and price. Is that how you build your model correct?

Mark DiOrio: 21:55

So we want to be sensitive to where it's actually currently trading. We want to be sensitive to where the yields are, and you can build a very good dividend portfolio. You don't have a lot of growth or flashy names in there, but there's solid, solid companies that year in year out, continue to deliver. And like I said, a lot of them are very familiar names, and it's really just a matter of putting that roster together, monitoring fundamentals, monitoring prices, yields and so forth. So, you know, the benefit for the investor, of course, is you're getting the cash flow currently, with the expectation that the cash flow will continue to grow. And then, third, you get the potential price appreciation of those stocks over the time. And sometimes I get asked, you know, people look at the market over time and you see this up, upward trending line with corrections a lot along the way, and they don't. And I'd say, you know, you can overlay that line, the upward sloping line with earnings and dividends. In other words, the reason stocks go up over time is because dividends payable per share go up over time. In other words, it's following the prices are following the money.

BRIAN AKERS: 23:07

Yeah, I like the idea. You get paid to hold it, I mean, and then agree and people, as they retire, the dividends are tax efficient and that there are capital gain rates, and that money flows out, you pay less tax, and you do on CD interest, things like that. It's a nice way to trigger some income to flow out, to be able to build, build up, build upon. And now at Brookstone, you've been able to make that into an exchange traded fund, and you also have it as a portfolio of actual stocks. So we have different choices for our clients, which is nice. So different size portfolios have different options, and that's one of the best things about work with Mark Diorio at Brookstone Capital Management for us, is that we take what's out there and available through them, and then we see what our clients needs. We build with money there, and we also have some money on the outside of Brookstone that we really build more of our fixed income side outside of Brookstone, even though Brookstone offers fixed income investing too. Now the idea here is this, we're talking about investing money. Investing money is really important, and that's what we're going to talk about throughout this show, is investing that money, understanding the market, the market updates, the market outlooks, and really understanding why you should invest. That's really what we want you to think about as you're thinking about winning in retirement. This year is this year actually going to be the year you finally have a plan to achieve all your financial freedom goals. Is financial freedom can be achieved when you have a proper plan for retirement, a plan that is as unique as your fingerprint. We have helped hundreds of families in Maryland plan for retirement. Our goal is for you to have a plan that will allow you to have a true, have true financial freedom. We designed that plan with you. Monitor and adjust as needed. We are local. We don't report to a big company on Wall Street. We report to you our client. Make this year the year you begin to achieve financial freedom. So give us a call at 833, when retire, to schedule an in person meet. Dean with one of our team of advisors as a, three, 3w, I n, r, e, t, I R, E, A, 3833946, 7384, or visit our website at AKERS, financial group.com Should we just buy the s, p5, 100 and hold it. We'll talk about that when we return.

Unknown: 25:18

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833 win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS,

BRIAN AKERS: 25:33

welcome back to winning in retirement. I'm Brian AKERS from AKERS Financial Group. We do welcome you back to the second half of our show today is our stock market update for 2026 going over 2025 and talking a little bit about 2026 and how you should have looked into your investing for this upcoming year. To do this, we brought in from Brookstone Capital Management, the Chief Investment Officer, Mark Dario, who happens to live and breathe in Chicago. So Mark, welcome to the second half of the show, and I'm going to give you like two seconds to talk about a certain football team that's in the playoffs this year. What's the name of that team, the Chicago Bears. You weren't gonna just say the bears.

Unknown: 26:13

The bears. That's true. I do have a framed wall art in the office, for sure.

BRIAN AKERS: 26:21

We're always envious and greet in not a greedy or envious of teams are still in playoffs and Chicago Bears. It's nice to see some new names in there. It's pretty fun. The Baltimore we're we're sort of changing on portfolio managers that are on our football level here. So it's a new it's a new, new day in Baltimore. We've had 18 good years with a great coach, but new portfolio managers are just the same as new coaches. They give you a new perspective, right?

Mark DiOrio: 26:48

Yeah, I think that, you know, Harbaugh had quite a run there, that not many coaches had a run like that, and the bears would have, would have taken them in a heartbeat. Over the last 18 years, we've had many changes and many challenges since, since about 2010, well,

BRIAN AKERS: 27:06

the hardest part is, you think about football, right? And football has managers and coaches everywhere, working and actively moving and working with the people. And then there's this whole concept of investing, of let's do the opposite of that. Let's be passive, let's buy the s p5 100 with all of our money. So Mark dirio, this is a hard question is, should we just buy the s p5 100 and just say nothing else? Is that really investing?

Mark DiOrio: 27:33

Well, today you wouldn't the s p5 100 does not provide the diversification that you think that it does, and so you have to go back 50 years to find the level of concentration in the s and p5 100. So it really is kind of this long, long phase where today, the s and p5 100 is comprised by 500 stocks. They're market cap weighted by their size. So the largest companies have the largest weighting in that s and p5 100, right? The top 10 stocks represent 44, 0% of the entire index. That is a highly, highly concentrated risk. So sometimes people talk about that there's a valuation risk in the market. I would, I would say it's a concentration risk, not a valuation risk. So the valuations are elevated in those mega cap, tech related stocks in that top 10, sometimes called the mag seven, and then you just add a couple of other stocks in there, and you get the you round out that top 10. But it's concentration. That's the risk overall. And so investors going into the s, p5, 100 are bearing that risk and that elevated valuation, where the other the rest of the market, and then we don't even talk, we didn't even mention the mid cap and small cap have not participated. Do not show at the same level. Recently perform with recent performance, leaving them really available to move higher. And so in the 2000 2002 bear market, small caps, value stocks, they actually had positive returns during what was seen as a big bear market, and it was led by growth stocks. So those could decline while other stocks rise. And I think we have a big setup where that could definitely take place as we look out here going into this next phase of the market where some stocks that were out of favor come back in favor, and maybe the darlings start to fade. Not that they're not important companies, but that they start to get challenged from a market returns perspective. So I don't think I would go with the s and p5 100 directly. Now I think the rest of the market looks better. That would be the, you know, even 490 stocks and more. And there's different ways to approach that, to get the right exposures, where your portfolio looks a little bit better from a valuation standpoint and expected forward returns and has less risk overall.

BRIAN AKERS: 29:59

Yeah, I. I think about in your value stock basket you have Berkshire Hathaway and with Warren Buffett retiring and his legacy of beating the S and P for his lifetime, that's an example of active management, active stocks, and that's something that you have in your value basket, that that concept of what Buffett did over time is exactly the idea of what we're trying to do is by building portfolios that are more diversified, that can handle the good days and the bad days, and also not over concentrate, to add risk to your portfolio to where the volatility on the downside gets almost like multiplied. I call it like a rubber band. If you take a rubber band, you stretch it back and forth, it's nice. If you really stretch it, it's going to break at some point in time. That breaking could ruin your financial future by the by taking too much risk, too concentrated risk, and that's why this S, P only concept might not be best, if you think about it, if you've had the NASDAQ, the Q, Q, Q, over the same period here, you would actually beat in the s, p5, 100, because you concentrated in technology with that. So I believe there's allocations of the technology. Having it heavier than normal is fine. I think to have it double a percentage in allocation than you should probably not fine, because there is a time when you need to reallocate,

Mark DiOrio: 31:22

pivoting or piggybacking on your point on risk earlier in 2025 when we had the market sell off the big cap names, they're kind of the mag seven names, as it's called, the tech related stocks. They were down about 25% as a group, and they declined from mid February to late June, the other 490 stocks actually didn't decline until April. Have a negative number in April, and by the end of April, we're back positive. In other words, the S and P was kind of driven down and lower to about a negative 15% and because of those tech related stocks where the rest of the market actually held up very well. And so I think that that's really a snapshot of what I think we can start to see in 2026 maybe even to a bigger degree, with maybe a little rotation in the marketplace.

BRIAN AKERS: 32:18

Yeah, when I when I think about core and satellite and how we invest for people with purpose and build, build everything out. I always like to think back to 2000 to 2010 and that was a negative decade for the s and p5 100, which would have been a really hard if you take the concept of putting all your money in the s p5 100, and you're retiring, you're withdrawal from the market with a market that was sideways at best, and big negative years, and you're taking withdrawals, it's directly out of the market. You can experience a lot of loss because of their withdrawing through those negative years, because it was a negative decade. And so I think retirement and how you diversify and how you draw money, and what kind of portfolio is coming out of really does matter, and we should not have the S P only as an idea. It should be part of a portfolio, but not the only answer. So the hardest thing for me is, when people are getting started and they put in the S P, I'm not, I don't really think that's a bad thing to start. And then as you grow and build, then you start diversifying, because when you add small, mid cap, they've all outperformed the market, the S and P and Dow over the last 7080, years, because they take extra risk, and that's the design of investments. If you take extra risk, there should be more return over time. So when you build like Mark, when you build your ETF portfolios out like you build like that Summit Series, you have, you have a bunch of different categories. You buy into, right

Mark DiOrio: 33:42

for sure, and you bring up a really, really good point. Portfolio construction is different because the risk is different. Whether you're in the accumulation phase, buying, kind of consistent into the market, buying, and if you're in the the withdrawal phase, or taking money out of the portfolio. And when you're doing that, you have to build really a sustainable, enduring portfolio that contemplates, well, what happens when the market inevitably has some type of correction? Do you have the right hedging or defensive or diversification in that portfolio to withstand that and withstand the withdrawals in there? And so what you bring up is a big, big point of sequence of returns risk that you mitigate with diversification or having some of that defensive posture in the portfolio and income as well, because the s, p5 100 does not kick out a lot of dividend income either. So technically, if you're withdrawing out of that, you're taking you're eating into principle and so and the income really isn't covering the expenses for normal when you, when you draw it up a normal withdrawal phase.

BRIAN AKERS: 34:51

Yeah, there's some, some fundamental tax issues. When you have portfolio designed for income and you're draining, like, let's say you're taking out of the stock market every month. Month you're selling, every month you're selling, usually the most recent, and you could have some short term gain, long term gain. Short term gains are always taxed at the highest rate. Long term gains are the only one that are discounted. All dividends of all qualified stock dividends are going to be at a lower capital gains rate. So this tax management of the income flow, the idea that people take withdrawals from across a portfolio. It's sort of like I was talking to a client about their tsp retirement plan. If you take a withdrawal from there 1000 bucks, they take a little bit out of every account. And I say, I just don't like that. And that's one of the things I don't like managing income and distribution phase of life, with them. Handcuffs on where the money comes from. I really like when the markets up to build my cash for a year so that that's we're taking money from there. When the market's up, we take profit when the market's down, we take the month, take money for what they need in retirement from other locations, other money that might not have gone down at all. So trying to build all this together is very, very important. So this quarter has been spent talking about, should we just buy the s, p5, 100 and hold it? And so your simple answer is, no, is that true?

Unknown: 36:09

Mark, that's a simple answer. All right.

BRIAN AKERS: 36:13

Now in the Summit Series, you have things such as mid cap, small cap, other categories

Mark DiOrio: 36:20

we do and yield based categories as well, because we want to make sure that the portfolio is generating sufficient yield in today's interest rate environment. So the 10 year treasury is born a quarter percent the yield on broad based stocks, that is less than 2% and so we try to build a risk based, diversified portfolio where we elevate the yield as best that we can, and while still getting that capital appreciation potential

BRIAN AKERS: 36:51

absolutely All right, so this third quarter is just flown right by. Our topic this quarter was, should we just buy the s, p5, 100? Aaron's answer is no, unless you're just getting started, it's not a bad way to start and then you build an ad on it based on your perspective objective, getting that all working in retirement, we all know that the best part of retirement is getting your time back, where you decide how to use it. Before retirement, your time is tied up with other commitments, you know, mainly your job. A lot of that goes away in retirement, your time is now consumed by things that you want to do. It's so, so easy to begin winning in retirement. So go to our website, at AKERS financial group.com scroll to the schedule a meeting section and let us know you like to schedule your free consultation with one of our team, teams of advisors, right now, right there. That's AKERS financial group.com we can call us at 833 win retire. That's 830 3w, I n, r, e, t, I R, E, and we'll give you a call on Monday to schedule a free in person meeting. Go to AKERS financial group.com or give us a call at 833-946-7384. To start planning for your retirement. Now. Why do you invest? The reason truly matters. We'll talk about this when we return.

Unknown: 38:00

You're listening to a pre recorded Show. Welcome back to winning in retirement. Call 833, win retire now to schedule a visit with Brian and his team and begin winning in retirement once again. Here's Brian AKERS.

BRIAN AKERS: 38:15

Welcome back to winning in retirement. It's the fourth quarter. I'm Brian AKERS, president and founder of AKERS Financial Group. I'm a financial advisor, and I do own AKERS Financial Group. We have wonderful advisors that work with us here. We also have companies where we use as third party money managers, and that main one is Brookstone Capital Management out of Chicago. And today, we're blessed to have the chief investment officer of Brookstone Capital Management out of Chicago, Mark. Welcome to the fourth quarter.

Unknown: 38:41

Let's do this fourth quarter, and I would give the ball to. Derek Henry,

BRIAN AKERS: 38:45

oh, man, you brought up my topic, didn't you? That's my reason. I think Coach hardball is gone. Is that that one game he didn't give the ball to the right guy, he made a comment about it wasn't his turn, and I thought that was probably the end of his career here. But the key thing you just said is give the ball Derek Henry. You want to finish her. You want the guy that win that game. You want to put in the handle the best. And I believe that's how you manage your money, how you do your finances, how you do all that. So why do you invest your money? What is your purpose? So in the fourth quarter of games, your goal is trying to win that game. If you got the lead, you got to hold on to that lead. Of all those things matter. So when we're coaching people on finance and financial planning, we need to know where you are. That's called a financial fingerprint. We need to know where we're going, what we want to do, what we need, when we need it. And then we got to plan for the worst case scenarios, and then invest like your money's going to live forever, and you're going to live for a long time to make that money last as long as you do all that comes together in planning, it also will dictate how we invest the money. We don't want to have all of our money invested in the same thing, I believe accounts like Roth IRAs should be aggressive. I think Roth accounts that are in a joint account might need dividends. Stocks. If it's an account that is for cash for the next year, you might need, like a CD, a Treasury or just a high end money or high yield money market, to get your money safe then ready to come to flow out to you. So Mark, when we're talking about portfolios that you guys build out, you have a lot of portfolios, so that advisors like me, we can say the client's purpose is this, and then the port this portfolio fits for that. So I think that's a good way for us to talk a little bit about Brookstone having different choices. So like, you have a growth basket, and that growth basket is truly designed for growth. So I put that in portfolios where I need a growth portion, I usually don't take money out of that unless it's up a lot, like it's been, then I take some winnings off the table, then you have other portfolios that are designed more based on topics, right we do,

Mark DiOrio: 40:48

and I would just add that when we're building the portfolios, we're balancing the two challenges that the investor faces. One is volatility, which is the short term risk and gets all the headline of the discussion, but the second risk is the inflation risk, or what you're trying to do is preserve your purchasing power over time and grow that purchasing power over time as well. And that gets lost sometimes. Now, recently, it's kind of come back in fashion to keep to be able to remind investors where we had inflation pretty low for a while, and you forgot about that. But prices consistently rise, so your portfolio has to keep up with that for sometimes, you know, 510, 2020, years, if you think about prices out that far that well, we want the portfolio to make sure that we can maintain your present purchasing power and possibly grow that purchasing power for for the duration and longer if needed. So when we're building portfolios, we're balancing those two factors, and you're talking about as well Brian, where you're putting together these pieces of the portfolio that have certain objectives to them and reasons why they're in the portfolio. So any any holding that goes into the portfolio, it's in the context of that portfolio, and in the balancing of both the volatility and the inflation component, the long term inflation risk that you have as well, right? And so we've built out thematic portfolios where you can get certain exposure to certain areas that might be a hot today, or might be kind of in the nascent stage, whether that's kind of the electrification theme, whether that's disruptive innovation, broadly, genomics, defense tech. So there's a number of different pieces that you can add to the portfolio as well. And one of those you mentioned kind of going over, which was something called the buffer strategy, which is a hedged equity approach where you can define your downside risk, and that's easily available to be implemented in the portfolio. There's not a lot of hoops to jump over. It's just a function of understanding that. And I know you understand those Brian and can bring that kind of expertise to there when you're constructing that portfolio, basically giving you upside market participation with defined downside protection as well. And I think that's a that's a pretty big benefit when you're building that portfolio.

BRIAN AKERS: 43:12

Absolutely, having all these choices is great for financial advisors, and that we put and diversify. We have people that bring new clients that bring money from other advisors in, and they really have just a standard model, standard model, you know, stocks and bonds and or even, like, target date models, where currently they might have 40% in international combination of stock and bonds. And we're really not doing the high ever in my career. What's, what's your thought on? Really just different diversification tools, like, let's just talk International and international investing. You said earlier in the show that international is investing in the US by buying stocks about trillion, trillion plus dollars added to the market last year. What's your thought of international investing for our US? Dollars to go to go more globally?

Mark DiOrio: 44:00

Well, so we think of it as a globally diversified, risk based portfolio, kind of in longhand form. So that does include international stocks, and it doesn't mean you have to have them, per se, but it does mean that they can perform well during times when maybe the US market is not performing as well, because they really they're now different markets, international and even emerging markets, the US is a lot, lot more tech dominated than the other markets as well. So you think, well, maybe International has a little bit of luxury and a little bit of industrial and some financial. That's a little different than emerging markets, where it's resource based, and that economy so those they have underperformed for quite a long time. 2026 actually we are 2025 we actually did see international markets perform relatively well. And so we think that the that may continue, and particularly. Into, including emerging markets now, they have more risk, so you don't go all in, but that's that's an area that you can add to the portfolio provide diversification benefits with the potential of doing something different than the US market. So it does add diversification effect.

BRIAN AKERS: 45:15

Yeah, well, so 30 years ago, there was this concept of, if you had about 16% International to your portfolio. So on the whole quadrant analysis of everything, you could actually add return and lower your risk by having up to 16% in international companies. What's your feeling about that today? I think you can be

Mark DiOrio: 45:38

I think the data does say that we see some firms go very heavy International. What I would say is, since the global financial crisis, the size of the US market in the All Country World Index, the US was about 40% of the entire index in certain around the global financial crisis phase, 1007 2008 today it's about 67% so the US has really moved quite a bit and really dominated the All Country World Index, or the returns. And what that says is, well, you know, maybe that those statistics were a really long form, I would say today, that also provides the opportunity for international to actually do well in a diversified portfolio, just because the US has, you know, grown so much in relative terms that it's left a lot of areas very undervalued relative to the US.

BRIAN AKERS: 46:38

You mean, you might like the idea of selling high and buying low.

Mark DiOrio: 46:44

I think you can do that, and particularly in today's environment, I think there's some of the most unique diversification opportunities to add, just as you said, add return and reduce risk that we've seen in a number of years.

BRIAN AKERS: 47:00

All right, I got some quick hitting questions for you as we try to close out the show our interest rates in 2026 Do you see it going down? And how by down? How much this year? When? When? What do you think?

Mark DiOrio: 47:10

I think there's two rate cuts by the Federal Reserve starting mid year June, maybe the second one in September. So doing short term rates to about three and a quarter percent, and then the 10 year treasury, just as a year mark will will hover around that 4% range and going maybe a quarter

BRIAN AKERS: 47:27

the mortgage rates, it would drop a little, and that's about it. Is that? That what that means?

Mark DiOrio: 47:33

Yeah, yeah. I think there'll be a little more action just from policy initiative on the on the mortgage front.

BRIAN AKERS: 47:38

So you don't think a federal power replacement in May would trigger a big interest rate cut just because of the politics of it.

Mark DiOrio: 47:46

I don't, and that's one of the uncertainties that you have. You know, you try to make estimates, and then you adapt and adjust sure accordingly. So that's one of the areas where we're definitely watching. But no, I think two more cuts would be reasonable. You get, some easy on the housing. And I think maybe there,

BRIAN AKERS: 48:03

yeah, easy on the housing. I like that. I got to hit you with this last question. Now, one of your charts you that you gave me over the last last week was the video versus the 1973 IBM. And it bad. IBM dominated to market like Nvidia is now. Can you tell me a little bit about that history? Sure.

Mark DiOrio: 48:23

So this is going back to that 50 years. It's been 50 years basically since IBM was the largest stock in terms of occupying about 8% of the entire s and p5 100 index. Nvidia today, which is the largest company in the US, in the s and p5 100 is about a four and a half trillion market cap company represents 8% of the entire index. And Nvidia, for those who don't know, is a major artificial intelligence semiconductor player. So that's the firm that's really been the poster child for AI infrastructure or semiconductor. And semiconductors process and store data, is what they do. It's just very advanced. Those are those little chips,

BRIAN AKERS: 49:08

absolutely, and they're and they're using that stock value as currency to add on to their their big holdings, for sure.

Mark DiOrio: 49:15

So you get the kind of the issue of law of large numbers. And I would say after IBM hit that level, it kind of faded relative you know, never hit any much higher than 8% on the index. So if it's going down in percent terms, that means other stocks are kind of rising in relative value.

BRIAN AKERS: 49:33

Yes, yeah. So I think it's been great talking to you, Mark, and I know we could talk for hours about what's going on the market. I love applying what you say to my clients, and I do appreciate it. Thanks for a good show today, Mark. I wish you the very best at investing money this 2026 like I do, I wish everyone the same. So today we covered the stock market update of 2025 and what's going on 2026 and some ideas on planning and investing. We do look forward to meeting with you. We want you. To win in your retirement by taking advantage of the opportunity to begin planning with us at AKERS Financial Group to schedule a free meeting with one of our team of advisors. Go to our website at AKERS financial group.com scroll the schedule meeting section and let us know you like to schedule your free meeting right there. That's AKERS financial group.com or you can call us at 833 win retire. That's 833 3w, I n, r, e, t, I R, E, we'll give you a call on Monday. On the schedule. Your free in person meeting with one of our team of advisors. Start planning for your retirement now. Go to AKERS financial group.com or call us at 833-946-7384, thank you for listening. I'm Brian AKERS from AKERS Financial Group, and we want you to be winning in retirement.

Unknown: 50:40

You've been listening to winning in retirement with your host, Brian AKERS of AKERS Financial Group. AKERS Financial Group offers securities through arcades capital an SIPC and FINRA member firm. Advisory services are provided through arcados wealth. AKERS Financial Group and arcadios do not share any common ownership. Neither arcadios nor AKERS Financial Group provides tax or legal advice. Advice given on winning in retirement is general in nature, and one should seek further advice from their financial advisor, broker, attorney andor tax accountant before investing, be sure to read each prospectus carefully to understand all the risks associated with each investment. Examples and scenarios shared are meant to be for illustrative purposes only past performance is not indicative of future results.