WEBVTT 00:00:01.181 --> 00:00:02.202 Hello everyone. 00:00:02.202 --> 00:00:16.414 As most of y'all already know, I'm Stacey Hyden, I'm the president of Envision Financial Planning and, while I do have a podcast, which I would love it if you'd listen to it it's called Better Financial Health in 15 Minutes or Less. 00:00:16.414 --> 00:00:29.521 Today I wanted this is directed towards the clients of Envision, towards the clients of Envision. 00:00:29.521 --> 00:00:37.481 The turmoil in the market that started with the announcement of the Trump tariffs and that really accelerated late last week today is Monday, april 7th, as we're recording. 00:00:37.481 --> 00:00:42.512 This really was sort of a worst case scenario. 00:00:42.512 --> 00:01:16.700 I think there was some thought that there would be some tariffs, mostly against the countries that charge tariffs to the US, but in fact, the tariffs were more based on the trade imbalances between countries and, as you can imagine, most trade imbalances come about because that particular country either has the right resources meaning natural resources that we don't have here in the US or because their cost of production is lower. 00:01:16.700 --> 00:01:23.813 Think Vietnam is a very low cost producer of a lot of the clothing and things like that that we consume. 00:01:23.813 --> 00:01:37.269 So these tariffs and they also hit a lot of our allies Japan, canada, mexico and I think that that has really unsettled markets. 00:01:37.269 --> 00:02:03.096 I know, personally it's rattled me, but when we think about scary markets, the first thing we need to do is to take a step back, and what we really need is a hug, because it's not any fun to open your app or look at an investment statement and see that your account lost 10% in two days. 00:02:03.096 --> 00:02:16.324 That is upsetting to anyone, no matter what your account balance is, and especially if you're nearing a milestone, such as getting ready to retire or thinking about needing to pull a big withdrawal out. 00:02:16.324 --> 00:02:25.468 It is unsettling, to say the least, but what we have to be careful of because it's human nature. 00:02:25.468 --> 00:02:30.971 We see trends and we just assume that they're going to keep on going in that direction. 00:02:31.219 --> 00:02:44.250 You know when markets were going up and markets have really gone up pretty much unchecked since the markets bottomed out in the financial crisis back in March of 2009. 00:02:44.250 --> 00:02:51.044 We had a brief pullback in 2020 due to COVID, but that snapped back really really quick. 00:02:51.044 --> 00:03:07.784 And then we had a bad year in 2022, which was also unsettling because it hit bonds which were supposed to be safe, and it also hit stocks pretty much all at the same time, so that was upsetting as well. 00:03:07.784 --> 00:03:11.533 But we've had good years in 2023 and 2024. 00:03:11.533 --> 00:03:29.604 And I think part of what's gone on is a lot of people's base case was we looked back to how the economy did under the first Trump administration and you know you've got to be careful when you assume. 00:03:29.604 --> 00:03:52.355 We assumed it would be something similar and we'd have good markets, very business friendly, but with the tariffs it has really upended everything and it is scary and it has upset the markets and in the short term markets react and I would say that oftentimes markets overreact. 00:03:52.355 --> 00:04:01.620 So the markets have pulled back fairly substantially in a very short period of time. 00:04:01.620 --> 00:04:08.469 We're almost to the market close today and it's looking like they're going to continue to pull back, but not at the magnitude they have been over the last couple of days. 00:04:08.469 --> 00:04:15.664 But we have given back all the gains in the stock market since April of 2024. 00:04:15.664 --> 00:04:19.613 So we've essentially all the gains we've had over the last 12 months. 00:04:19.613 --> 00:04:20.221 They're gone. 00:04:20.221 --> 00:04:22.704 But are they gone forever? 00:04:22.704 --> 00:04:42.264 I would argue that they're not, that valuations are now make much more sense, both domestically and on the international scale, and we've we remain cautiously optimistic that this is not a forever situation. 00:04:42.870 --> 00:04:56.041 I'm not even going to venture to guess what goes on in the Trump administration's collective mind as far as how they're going to implement this, but there are a lot of countries that have said they're not going to do retaliatory tariffs. 00:04:56.041 --> 00:05:03.937 I think it was announced that 50 different countries had reached out to the Trump administration over the weekend to negotiate. 00:05:03.937 --> 00:05:11.401 So I think that there's going to be some sort of resolution to this and I'm hopeful that it will work out. 00:05:11.401 --> 00:05:33.940 Because if these tariffs are implemented, it is going to raise the cost of living dramatically for every American, because so much of what we buy today, even if we're buying a quote-unquote American-made product, so much of that has components that are not made here. 00:05:33.940 --> 00:05:53.874 Because that's really been the beauty of our supply chain is we can move production to a country that can do it maybe cheaper and more efficiently than we can, but we can use the American ingenuity to create a better product the iPhone. 00:05:53.934 --> 00:06:01.451 The Wall Street Journal ran an article over the weekend about just how much these tariffs would impact the cost of an iPhone. 00:06:01.451 --> 00:06:12.012 It's almost $580, I think was the amount that the Wall Street Journal had said for the components. 00:06:12.012 --> 00:06:14.915 With the tariffs it would be almost $900. 00:06:14.915 --> 00:06:23.466 Well, a company like Apple doesn't get to be Apple by making a 20% profit margin. 00:06:23.466 --> 00:06:26.839 They get to be Apple by making a 50% profit margin. 00:06:26.839 --> 00:07:10.874 So I think that we are going to see some changes there, and I've said a lot and talked about a lot to say that history shows us time and time again that after big negative shocks so go back to 1987, the flash crash that happened there, 2008, and into early 09, 2020, 2022, when you get a year out from those events markets have recovered and in hindsight, those times of that pullback has been a good time to be an investor. 00:07:11.459 --> 00:07:17.774 So if you're still adding to your portfolio, keep doing it. 00:07:17.774 --> 00:07:19.026 It's a great time to do it. 00:07:19.026 --> 00:07:30.149 If you're nervous because you're getting ready to retire and you're looking at that, know that you still have a 25-year time horizon. 00:07:30.149 --> 00:07:45.867 If there's something that you need money for in the next six months year, it probably makes sense to talk with your advisor about how to raise those funds so that they're available. 00:07:45.867 --> 00:07:56.386 Your fixed income with interest rates moving down, your fixed income is actually up in value, so there's a way to raise some funds there that's not going to impact your stocks. 00:07:56.386 --> 00:08:16.668 And also, if you are currently receiving distributions due to, you know you're just taking monthly distributions or you're subject to a required minimum distribution this year know that we raised those funds back in early February, before all this market mayhem. 00:08:16.668 --> 00:08:20.466 So that money is sitting in a money market account earning over 4%. 00:08:20.466 --> 00:08:30.432 So taking that funds to support your life, your regularly scheduled distributions, is not going to harm your portfolio. 00:08:31.435 --> 00:08:34.042 If you don't need the money and you're like, well, let. 00:08:34.042 --> 00:08:35.524 I think it's a buying opportunity. 00:08:35.524 --> 00:08:38.552 We'd love to talk to you about maybe redeploying some of that. 00:08:38.552 --> 00:08:49.390 The other side of it is that if you wind up still taking it because you're prepared this year and we've already raised the funds, so we send it to you. 00:08:49.390 --> 00:09:01.859 And if, for some crazy reason, the markets are not recovered by early next year crazy reason the markets are not recovered by early next year well then, that buys you time. 00:09:01.859 --> 00:09:08.004 Those extra cash reserves buy you time to get through these ugly times. 00:09:08.024 --> 00:09:19.240 But just remember we as humans, the way we project, is we assume what has happened in the short term and even maybe over a couple years. 00:09:19.240 --> 00:09:27.634 We expect those trends to continue and whether that's markets going up or markets going down, both scenarios are likely to change. 00:09:27.634 --> 00:09:36.294 So right now, markets are going down and people are panicking because they expect them to continue to go down. 00:09:36.294 --> 00:09:37.380 In reality, they're going to come back up. 00:09:37.380 --> 00:09:52.484 The same thing was true when markets were going up and we were cautioning you that hey and you were saying that we were so smart we were also saying that no, markets are going to come back down at some point, because that's what markets do. 00:09:52.484 --> 00:10:03.322 I saw a video that showed the ocean and it was a beautiful, calm day and it said this feels great and normal. 00:10:03.322 --> 00:10:04.485 It's not normal. 00:10:04.485 --> 00:10:08.892 Waves and the tides go in and out twice a day. 00:10:08.892 --> 00:10:14.326 So you have to know that these cycles are going to happen and that's normal. 00:10:14.326 --> 00:10:15.548 We're prepared. 00:10:15.548 --> 00:10:18.634 We understand that it feels terrible. 00:10:19.841 --> 00:10:26.711 My best advice is to separate yourself from the noise of these scary markets. 00:10:26.711 --> 00:10:32.769 Go spend time with people you love and, well, get outside. 00:10:32.769 --> 00:10:40.965 The sun's actually out today, after you know thought we lived in Seattle yesterday and missed it all day in the monsoon rains we've had. 00:10:40.965 --> 00:10:47.294 So try to disconnect, because guess what? 00:10:47.294 --> 00:10:51.306 Worry has never improved anything. 00:10:51.547 --> 00:10:56.447 If you look at the list of things improved by worry, there's nothing on the list. 00:10:56.447 --> 00:11:01.727 All it does is raise your blood pressure, cause you to feel poorly. 00:11:01.727 --> 00:11:06.200 So try I know this is hard try not to worry about it. 00:11:06.200 --> 00:11:17.946 Let us worry about it, because that's what we do and these opportunities in taxable accounts is going to give us some ability to tax loss harvest, which is going to save you on your taxes later. 00:11:17.946 --> 00:11:28.586 If we were trying to reduce exposure to a sector or a stock that we couldn't, because the capital gains would be too high. 00:11:28.586 --> 00:11:34.187 They're lower now, so we'll be doing some of that, so there are advantages to this. 00:11:34.187 --> 00:11:37.933 But let us assume that worry for you. 00:11:37.933 --> 00:11:45.809 You go out, live your life, be with the people who give you joy and don't spend any more time worrying. 00:11:45.809 --> 00:11:52.225 Thanks for tuning in and if you have any issues or we can answer anything, please give us a call. 00:11:52.225 --> 00:11:54.900 Thanks so much and have a wonderful day.