1 00:00:01,181 --> 00:00:02,202 Speaker 1: Hello everyone. 2 00:00:02,202 --> 00:00:06,049 As most of y'all already know, I'm Stacey Hyden, I'm the 3 00:00:06,110 --> 00:00:10,121 president of Envision Financial Planning and, while I do have a 4 00:00:10,162 --> 00:00:13,268 podcast, which I would love it if you'd listen to it it's 5 00:00:13,348 --> 00:00:16,414 called Better Financial Health in 15 Minutes or Less. 6 00:00:16,414 --> 00:00:22,132 Today I wanted this is directed towards the clients of Envision 7 00:00:22,132 --> 00:00:29,521 , towards the clients of Envision. 8 00:00:29,521 --> 00:00:31,224 The turmoil in the market that started with the announcement of 9 00:00:31,224 --> 00:00:33,789 the Trump tariffs and that really accelerated late last 10 00:00:33,848 --> 00:00:37,481 week today is Monday, april 7th, as we're recording. 11 00:00:37,481 --> 00:00:42,512 This really was sort of a worst case scenario. 12 00:00:42,512 --> 00:00:47,143 I think there was some thought that there would be some tariffs 13 00:00:47,143 --> 00:00:50,970 , mostly against the countries that charge tariffs to the US, 14 00:00:51,872 --> 00:00:57,774 but in fact, the tariffs were more based on the trade 15 00:00:57,834 --> 00:01:02,183 imbalances between countries and , as you can imagine, most trade 16 00:01:02,183 --> 00:01:06,932 imbalances come about because that particular country either 17 00:01:07,012 --> 00:01:12,709 has the right resources meaning natural resources that we don't 18 00:01:12,810 --> 00:01:16,498 have here in the US or because their cost of production is 19 00:01:16,540 --> 00:01:16,700 lower. 20 00:01:16,700 --> 00:01:21,429 Think Vietnam is a very low cost producer of a lot of the 21 00:01:21,489 --> 00:01:23,813 clothing and things like that that we consume. 22 00:01:23,813 --> 00:01:32,052 So these tariffs and they also hit a lot of our allies Japan, 23 00:01:32,253 --> 00:01:36,888 canada, mexico and I think that that has really unsettled 24 00:01:36,909 --> 00:01:37,269 markets. 25 00:01:37,269 --> 00:01:42,382 I know, personally it's rattled me, but when we think about 26 00:01:42,483 --> 00:01:49,134 scary markets, the first thing we need to do is to take a step 27 00:01:49,213 --> 00:01:54,105 back, and what we really need is a hug, because it's not any fun 28 00:01:54,105 --> 00:01:59,010 to open your app or look at an investment statement and see 29 00:01:59,070 --> 00:02:03,096 that your account lost 10% in two days. 30 00:02:03,096 --> 00:02:08,031 That is upsetting to anyone, no matter what your account 31 00:02:08,050 --> 00:02:11,169 balance is, and especially if you're nearing a milestone, such 32 00:02:11,169 --> 00:02:15,382 as getting ready to retire or thinking about needing to pull a 33 00:02:15,382 --> 00:02:16,324 big withdrawal out. 34 00:02:16,324 --> 00:02:21,681 It is unsettling, to say the least, but what we have to be 35 00:02:21,820 --> 00:02:25,468 careful of because it's human nature. 36 00:02:25,468 --> 00:02:28,483 We see trends and we just assume that they're going to 37 00:02:28,543 --> 00:02:30,971 keep on going in that direction. 38 00:02:31,219 --> 00:02:34,987 You know when markets were going up and markets have really gone 39 00:02:34,987 --> 00:02:42,046 up pretty much unchecked since the markets bottomed out in the 40 00:02:42,086 --> 00:02:44,250 financial crisis back in March of 2009. 41 00:02:44,250 --> 00:02:49,681 We had a brief pullback in 2020 due to COVID, but that snapped 42 00:02:49,741 --> 00:02:51,044 back really really quick. 43 00:02:51,044 --> 00:02:57,581 And then we had a bad year in 2022, which was also unsettling 44 00:02:57,622 --> 00:03:03,010 because it hit bonds which were supposed to be safe, and it also 45 00:03:03,010 --> 00:03:06,862 hit stocks pretty much all at the same time, so that was 46 00:03:06,943 --> 00:03:07,784 upsetting as well. 47 00:03:07,784 --> 00:03:11,533 But we've had good years in 2023 and 2024. 48 00:03:11,533 --> 00:03:18,429 And I think part of what's gone on is a lot of people's base 49 00:03:18,508 --> 00:03:25,206 case was we looked back to how the economy did under the first 50 00:03:25,247 --> 00:03:28,901 Trump administration and you know you've got to be careful 51 00:03:28,921 --> 00:03:29,604 when you assume. 52 00:03:29,604 --> 00:03:32,419 We assumed it would be something similar and we'd have 53 00:03:32,460 --> 00:03:37,129 good markets, very business friendly, but with the tariffs 54 00:03:37,289 --> 00:03:43,123 it has really upended everything and it is scary and it has 55 00:03:43,443 --> 00:03:48,790 upset the markets and in the short term markets react and I 56 00:03:48,871 --> 00:03:52,355 would say that oftentimes markets overreact. 57 00:03:52,355 --> 00:04:01,076 So the markets have pulled back fairly substantially in a very 58 00:04:01,097 --> 00:04:01,620 short period of time. 59 00:04:01,620 --> 00:04:05,002 We're almost to the market close today and it's looking 60 00:04:05,022 --> 00:04:06,627 like they're going to continue to pull back, but not at the 61 00:04:06,667 --> 00:04:08,469 magnitude they have been over the last couple of days. 62 00:04:08,469 --> 00:04:14,002 But we have given back all the gains in the stock market since 63 00:04:14,201 --> 00:04:15,664 April of 2024. 64 00:04:15,664 --> 00:04:19,333 So we've essentially all the gains we've had over the last 12 65 00:04:19,333 --> 00:04:19,613 months. 66 00:04:19,613 --> 00:04:20,221 They're gone. 67 00:04:20,221 --> 00:04:22,704 But are they gone forever? 68 00:04:22,704 --> 00:04:27,713 I would argue that they're not, that valuations are now make 69 00:04:27,833 --> 00:04:30,937 much more sense, both domestically and on the 70 00:04:30,997 --> 00:04:39,059 international scale, and we've we remain cautiously optimistic 71 00:04:39,178 --> 00:04:42,264 that this is not a forever situation. 72 00:04:42,870 --> 00:04:47,478 I'm not even going to venture to guess what goes on in the Trump 73 00:04:47,478 --> 00:04:50,382 administration's collective mind as far as how they're going 74 00:04:50,382 --> 00:04:53,836 to implement this, but there are a lot of countries that have 75 00:04:53,836 --> 00:04:56,041 said they're not going to do retaliatory tariffs. 76 00:04:56,041 --> 00:04:59,697 I think it was announced that 50 different countries had 77 00:04:59,757 --> 00:05:02,434 reached out to the Trump administration over the weekend 78 00:05:02,875 --> 00:05:03,937 to negotiate. 79 00:05:03,937 --> 00:05:08,454 So I think that there's going to be some sort of resolution to 80 00:05:08,454 --> 00:05:11,401 this and I'm hopeful that it will work out. 81 00:05:11,401 --> 00:05:17,620 Because if these tariffs are implemented, it is going to 82 00:05:17,762 --> 00:05:21,889 raise the cost of living dramatically for every American, 83 00:05:21,889 --> 00:05:27,279 because so much of what we buy today, even if we're buying a 84 00:05:27,360 --> 00:05:31,653 quote-unquote American-made product, so much of that has 85 00:05:31,754 --> 00:05:33,940 components that are not made here. 86 00:05:33,940 --> 00:05:38,956 Because that's really been the beauty of our supply chain is we 87 00:05:38,956 --> 00:05:44,812 can move production to a country that can do it maybe 88 00:05:44,872 --> 00:05:48,161 cheaper and more efficiently than we can, but we can use the 89 00:05:48,221 --> 00:05:53,874 American ingenuity to create a better product the iPhone. 90 00:05:53,934 --> 00:05:57,240 The Wall Street Journal ran an article over the weekend about 91 00:05:57,439 --> 00:06:00,930 just how much these tariffs would impact the cost of an 92 00:06:01,071 --> 00:06:01,451 iPhone. 93 00:06:01,451 --> 00:06:09,363 It's almost $580, I think was the amount that the Wall Street 94 00:06:09,384 --> 00:06:12,012 Journal had said for the components. 95 00:06:12,012 --> 00:06:14,915 With the tariffs it would be almost $900. 96 00:06:14,915 --> 00:06:19,540 Well, a company like Apple doesn't get to be Apple by 97 00:06:19,601 --> 00:06:23,466 making a 20% profit margin. 98 00:06:23,466 --> 00:06:26,839 They get to be Apple by making a 50% profit margin. 99 00:06:26,839 --> 00:06:31,350 So I think that we are going to see some changes there, and 100 00:06:32,451 --> 00:06:38,540 I've said a lot and talked about a lot to say that history shows 101 00:06:38,540 --> 00:06:43,490 us time and time again that after big negative shocks so go 102 00:06:43,511 --> 00:06:52,120 back to 1987, the flash crash that happened there, 2008, and 103 00:06:52,341 --> 00:07:00,310 into early 09, 2020, 2022, when you get a year out from those 104 00:07:00,391 --> 00:07:07,887 events markets have recovered and in hindsight, those times of 105 00:07:07,887 --> 00:07:10,874 that pullback has been a good time to be an investor. 106 00:07:11,459 --> 00:07:17,774 So if you're still adding to your portfolio, keep doing it. 107 00:07:17,774 --> 00:07:19,026 It's a great time to do it. 108 00:07:19,026 --> 00:07:24,850 If you're nervous because you're getting ready to retire 109 00:07:25,391 --> 00:07:29,286 and you're looking at that, know that you still have a 25-year 110 00:07:29,327 --> 00:07:30,149 time horizon. 111 00:07:30,149 --> 00:07:36,988 If there's something that you need money for in the next six 112 00:07:37,069 --> 00:07:42,740 months year, it probably makes sense to talk with your advisor 113 00:07:42,860 --> 00:07:45,867 about how to raise those funds so that they're available. 114 00:07:45,867 --> 00:07:49,464 Your fixed income with interest rates moving down, your fixed 115 00:07:49,524 --> 00:07:53,798 income is actually up in value, so there's a way to raise some 116 00:07:53,819 --> 00:07:56,386 funds there that's not going to impact your stocks. 117 00:07:56,386 --> 00:08:03,629 And also, if you are currently receiving distributions due to, 118 00:08:03,889 --> 00:08:06,680 you know you're just taking monthly distributions or you're 119 00:08:06,699 --> 00:08:10,548 subject to a required minimum distribution this year know that 120 00:08:10,548 --> 00:08:15,745 we raised those funds back in early February, before all this 121 00:08:15,826 --> 00:08:16,668 market mayhem. 122 00:08:16,668 --> 00:08:19,423 So that money is sitting in a money market account earning 123 00:08:19,504 --> 00:08:20,466 over 4%. 124 00:08:20,466 --> 00:08:25,800 So taking that funds to support your life, your regularly 125 00:08:26,141 --> 00:08:30,432 scheduled distributions, is not going to harm your portfolio. 126 00:08:31,435 --> 00:08:34,042 If you don't need the money and you're like, well, let. 127 00:08:34,042 --> 00:08:35,524 I think it's a buying opportunity. 128 00:08:35,524 --> 00:08:38,552 We'd love to talk to you about maybe redeploying some of that. 129 00:08:38,552 --> 00:08:44,029 The other side of it is that if you wind up still taking it 130 00:08:44,070 --> 00:08:48,086 because you're prepared this year and we've already raised 131 00:08:48,106 --> 00:08:49,390 the funds, so we send it to you. 132 00:08:49,390 --> 00:08:54,447 And if, for some crazy reason, the markets are not recovered by 133 00:08:54,447 --> 00:08:59,715 early next year crazy reason the markets are not recovered by 134 00:08:59,715 --> 00:09:01,859 early next year well then, that buys you time. 135 00:09:01,859 --> 00:09:07,623 Those extra cash reserves buy you time to get through these 136 00:09:07,643 --> 00:09:08,004 ugly times. 137 00:09:08,024 --> 00:09:11,028 But just remember we as humans, the way we project, is we assume 138 00:09:11,028 --> 00:09:18,961 what has happened in the short term and even maybe over a 139 00:09:18,980 --> 00:09:19,240 couple years. 140 00:09:19,240 --> 00:09:20,663 We expect those trends to continue and whether that's 141 00:09:20,722 --> 00:09:26,633 markets going up or markets going down, both scenarios are 142 00:09:26,692 --> 00:09:27,634 likely to change. 143 00:09:27,634 --> 00:09:35,327 So right now, markets are going down and people are panicking 144 00:09:35,349 --> 00:09:36,294 because they expect them to continue to go down. 145 00:09:36,294 --> 00:09:37,380 In reality, they're going to come back up. 146 00:09:37,380 --> 00:09:41,128 The same thing was true when markets were going up and we 147 00:09:41,168 --> 00:09:45,942 were cautioning you that hey and you were saying that we were so 148 00:09:45,942 --> 00:09:48,932 smart we were also saying that no, markets are going to come 149 00:09:49,000 --> 00:09:52,484 back down at some point, because that's what markets do. 150 00:09:52,484 --> 00:09:59,092 I saw a video that showed the ocean and it was a beautiful, 151 00:09:59,153 --> 00:10:03,322 calm day and it said this feels great and normal. 152 00:10:03,322 --> 00:10:04,485 It's not normal. 153 00:10:04,485 --> 00:10:08,892 Waves and the tides go in and out twice a day. 154 00:10:08,892 --> 00:10:13,424 So you have to know that these cycles are going to happen and 155 00:10:13,485 --> 00:10:14,326 that's normal. 156 00:10:14,326 --> 00:10:15,548 We're prepared. 157 00:10:15,548 --> 00:10:18,634 We understand that it feels terrible. 158 00:10:19,841 --> 00:10:25,490 My best advice is to separate yourself from the noise of these 159 00:10:25,490 --> 00:10:26,711 scary markets. 160 00:10:26,711 --> 00:10:32,769 Go spend time with people you love and, well, get outside. 161 00:10:32,769 --> 00:10:36,317 The sun's actually out today, after you know thought we lived 162 00:10:36,398 --> 00:10:40,465 in Seattle yesterday and missed it all day in the monsoon rains 163 00:10:40,504 --> 00:10:40,965 we've had. 164 00:10:40,965 --> 00:10:47,294 So try to disconnect, because guess what? 165 00:10:47,294 --> 00:10:51,306 Worry has never improved anything. 166 00:10:51,547 --> 00:10:54,513 If you look at the list of things improved by worry, 167 00:10:55,000 --> 00:10:56,447 there's nothing on the list. 168 00:10:56,447 --> 00:11:01,106 All it does is raise your blood pressure, cause you to feel 169 00:11:01,167 --> 00:11:01,727 poorly. 170 00:11:01,727 --> 00:11:06,200 So try I know this is hard try not to worry about it. 171 00:11:06,200 --> 00:11:10,993 Let us worry about it, because that's what we do and these 172 00:11:11,134 --> 00:11:14,081 opportunities in taxable accounts is going to give us 173 00:11:14,120 --> 00:11:16,965 some ability to tax loss harvest , which is going to save you on 174 00:11:16,985 --> 00:11:17,946 your taxes later. 175 00:11:17,946 --> 00:11:24,914 If we were trying to reduce exposure to a sector or a stock 176 00:11:25,495 --> 00:11:28,586 that we couldn't, because the capital gains would be too high. 177 00:11:28,586 --> 00:11:32,744 They're lower now, so we'll be doing some of that, so there are 178 00:11:32,744 --> 00:11:34,187 advantages to this. 179 00:11:34,187 --> 00:11:37,933 But let us assume that worry for you. 180 00:11:37,933 --> 00:11:42,110 You go out, live your life, be with the people who give you joy 181 00:11:42,110 --> 00:11:45,809 and don't spend any more time worrying. 182 00:11:45,809 --> 00:11:49,669 Thanks for tuning in and if you have any issues or we can 183 00:11:49,750 --> 00:11:52,225 answer anything, please give us a call. 184 00:11:52,225 --> 00:11:54,900 Thanks so much and have a wonderful day.