On this episode of A Wiser Retirement Podcast™, Casey Smith is joined by Andrew Pratt, CFA, and Missie Beach, CFP®, CDFA®, to discuss the potential impact of the 2024 election on the stock market. They give a 2023 market recap and their 2024 market predictions. They also discuss various market influences, including political manipulation, tax changes, the housing market, and inflation. They emphasize the importance of long-term investing, and to be cautious about what financial news sources you read or watch.
Podcast Episodes Referenced:
- Ep 186: Market Up in 2023, but Choppy Waters Ahead
Youtube Videos Referenced:
- Are you ready for market volatility?
- Looming Market Threats in 2023
Learn More about Wiser Wealth Management:
- Our website
- Schedule a complimentary consultation (learn more about our services)
- Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!
Connect With Wiser Wealth Management:
- YouTube Channel
- Facebook
- LinkedIn
- Instagram
- Twitter
- Casey Smith's Twitter
- Podcast
- Blog
This podcast was produced by Wiser Wealth Management. Thanks for listening!
On this episode of A Wiser Retirement Podcast™, Casey Smith is joined by Andrew Pratt, CFA, and Missie Beach, CFP®, CDFA®, to discuss the potential impact of the 2024 election on the stock market. They give a 2023 market recap and their 2024 market predictions. They also discuss various market influences, including political manipulation, tax changes, the housing market, and inflation. They emphasize the importance of long-term investing, and to be cautious about what financial news sources you read or watch.
Podcast Episodes Referenced:
- Ep 186: Market Up in 2023, but Choppy Waters Ahead
Youtube Videos Referenced:
- Are you ready for market volatility?
- Looming Market Threats in 2023
Learn More about Wiser Wealth Management:
- Our website
- Schedule a complimentary consultation (learn more about our services)
- Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!
Connect With Wiser Wealth Management:
- YouTube Channel
- Facebook
- LinkedIn
- Instagram
- Twitter
- Casey Smith's Twitter
- Podcast
- Blog
This podcast was produced by Wiser Wealth Management. Thanks for listening!
May I remind you that the data shows that you want a Democratic president and a Republican House and Senate. If you can tell me how to make that happen, I don't know how you make that happen. That is the best for the stock market every single time how Republicans and House and Senate Democratic president get more done for the good than any other scenario in history. Welcome to a Wiser Retirement Podcast. We believe the best financial advice should always be conflict free. I'm your host, Casey Smith, and I'm your YouTube financial freedom. Today is my co-host Andrew Pratt and Mr Beach.
Speaker 2:Hi Casey, how you doing Missy Great, hey Casey.
Speaker 1:Hey, andrew, I was excited to have you guys on here. This is kind of a fun episode which we kind of recap the prior year. Talk about 24 and what's going to happen going forward. I don't have any specific predictions for 24. I just wanted to be over, but we'll talk about that when we get to. Already it's the beginning of the year.
Speaker 1:When I was much younger I was really active and not active, but just really monitored politics. I had to pince about things. Now I'm just like let business do business and I don't care about the politics. This year is going to be nasty.
Speaker 2:Because of the election year. Because of the election year.
Speaker 1:It's going to be absolutely nasty. The bottom line is let small business people be small business people. I'm on the Small Business Council of America, so I get the emails and the talking points and all that and I read those things and I'm just like gosh, how many more regulations can be put in place that are going to slow us down from growing?
Speaker 1:Red tape Our businesses are red tape. But yeah, you've got in 24, you've got a nasty election coming up. You have a current president that is actively trying to put a former president in jail, or he's not. I don't think he's responsible for anything.
Speaker 2:I don't think he's really trying to do much.
Speaker 1:But the people that are there but the people that are there, and then the guy that's trying to put in jail is crazy. So I'm like I got to choose between a crazy person and another crazy person is how I see it, and this just sucks for America. It sucks for business.
Speaker 2:Yeah, but neither one of them might be the choices come November, maybe not, we will see.
Speaker 1:I would love for someone in their mid 60s to run for president. Not upper 70s Is Biden upper 70s.
Speaker 2:No, he's 80.
Speaker 1:Yeah, he's 80 something and Trump's 80 something.
Speaker 2:They're just too crazy, old people.
Speaker 1:Yeah, and just the childhoods, childlessness on those sides, and it's just bad for America to keep dividing us like this. And then people who don't, people who get their news from just mainstream news, these people are getting so angry. People are just angry people. There's angry people out there.
Speaker 2:It's just not a good look for our country period.
Speaker 1:Yeah, just not good. Look for people's neighborhoods. I mean, forget about the country level. What about your neighborhood? You know?
Speaker 2:Oh yeah, you mean neighbors against neighbors. Yeah, people used to be friends can't talk to anybody.
Speaker 1:Now there's grumpy, so there's Trump's on all those buttons. Oh, they're Biden people. I'm like you know what? At some point everyone should be voting, we should have 100% voting. And at some point, you know, maybe maybe you go back to the old days where we didn't talk about it. Yeah, it's just about politics or religion? Yeah, or taxes or income whatever. Yeah, that's just what I'm bummed about, I think, for this year. I just like for it to be over and for all those people they're like oh, you're the.
Speaker 1:Trump supporter. May I mind you that the data shows that you want a Democratic president in a Republican House and Senate. If you can tell me how to make that happen, I don't know how you make that happen. That is the best for the stock market every single time how Republicans in the House and Senate Democratic president get more done. Yeah, the good that any other scenario in history. Balance of power definitely that's it. Yeah, so maybe you keep Biden in, but you got to make sure you got a Democrat and Republican Senate. But people vote tickets now.
Speaker 1:Right, people don't pick and choose anymore People just are hardliners, so I don't know how you make that happen, but when it has happened it's been good, I think. Typically, what is it? A whole party gets in and then after the two year then it shifts back. Those have been the best economic years for our country.
Speaker 3:And usually the market has done well in election years. I don't have specific stats, but yeah, that's very true which now people are emailing me.
Speaker 1:clients email me stuff all the time, but now they're emailing me, you know. Oh, the government's trying to manipulate, or the feds trying to manipulate, the economy for Biden, so he can win the election. Well, they did it for George W, they did it for every president.
Speaker 1:They probably did it for everybody but, Trump, I would say that they probably. No one seems to know, do anything. But yeah, if you believe that they're supposed to be fed, supposed to be independent, right, andrew, they're supposed to be, they're supposed to be independent and do what's good for the economy and it's good for America.
Speaker 2:And you know, I don't know it's pretty easy to sink, sink into these political theories and but that should be independent of your long term investing. It has nothing to do with investing.
Speaker 1:That's what's so frustrating about the whole thing is it has nothing to do with your portfolio. Amen, Nothing Game over. Now I will argue. I would argue the only exception was in Bernie Sanders was running. He was anti-ca. He calls himself anti-catalyst, right, so he's anti you owning a business. He's pro the government taking over your business.
Speaker 2:That was scary.
Speaker 1:And if the Democrat Party had been set up differently, you wouldn't have had a Hillary, because it's super votes right For Democrats. You wouldn't have had a Hillary Trump election. You would have had a Bernie Sanders Trump election and that would have been a hilarious, also very scary, because you literally would have put capitalism on the ballot sheet or on the ballot.
Speaker 2:On the ballot.
Speaker 1:Yeah, where we don't have capitalism on the ballot right now. I don't see a scenario where people are saying we should, all these public companies should be, should be government owned, wow.
Speaker 4:Right.
Speaker 1:So so to me, I'm like OK, well, as long as capitalism can survive and we can be free thinkers and doers and create things here, people are still getting off the airplanes in this country, still creating companies in this country, developing AI, developing all these things in this country, not doing anywhere else. Smart people are coming from other places here. True, they can't do it there because they don't have the capital structure that we have.
Speaker 5:Are you curious why annuities keep coming up as a potential investment option? People are often told that annuities can effectively mitigate investment risks and help secure their financial future. However, annuities often benefit the salesperson and might not be the best choice for you as a consumer. To learn more about the various types of annuities, the negatives of owning them and better investment alternatives, we have a free ebook on our website just for you. To download our ebook Fire beware. Why do they keep trying to sell you that annuity? Simply click the link in the episode notes or visit wiser investor dot com. Slash guides. Now let's get back to the episode. So I mean another.
Speaker 1:This is not our politics episode, but another angle on this missy is we have expiring tax changes. It was at January of 26. We reset back to 2019. Yeah, the tax cut and jobs act, tcga, expires at the end of 2025.
Speaker 2:So we're going to be doing a little bit of a review of that At the end of 2025,. So all those nice tax cuts that we've all taken advantage of, both as individuals and corporations. So we have to remember that, yes, corporations get tax cuts and we think, oh, big, bad greedy corporations, but it all trickles down to consumers and helps us with the goods and services that we purchase. Yeah, so that could all come to a screeching halt at the end of 2025, both in the tax rates that we pay personally at the federal level on our own 1040s, and then in the goods and services that we buy.
Speaker 1:everything because corporations are going to cover that bill. We're going to pass it down to the people buying it. Exactly You're you're. Yeah. So they're not going to cut their margins Again that goes back to like to common person watching TVs. Never going to connect that.
Speaker 2:No no.
Speaker 3:Corporations should be paying their taxes.
Speaker 2:Well who?
Speaker 1:pays their corporation taxes.
Speaker 2:You do the purchaser, yeah, and shareholders, hello. All of our investments, our long term investments are going to be hit.
Speaker 5:Yeah.
Speaker 2:So yeah, that it's a big deal that those tax cuts are about to expire, so we don't know what Congress will do.
Speaker 1:We don't. We also have expiring estate planning.
Speaker 2:Oh, big deal.
Speaker 1:And we've talked with other attorneys that come on the podcast about that. But but yeah, right now, as a married couple, 24 million ish is where the exclusion is. So if you have a net worth above that, you're going to pay almost 50% tax and that tax money above the 22,. But then that number is going to get reset. So we think it comes down to maybe 11 to 15 somewhere in there. For a married couple that's a much lower number and if you look at projections for most of our clients, especially the younger ones, oh yeah their networks will be way over that.
Speaker 2:When we're looking at pilots and projecting out there you know networks. There's a lot of people that could creep into an estate tax situation. So whole new realm of planning.
Speaker 1:So the end of 25 is when all this would have to start being planned for. You wouldn't plan for that now, but January of 26, we could wake up to a different world Again, depending on how the election goes. So there's a lot of important things on the docket, as there are every two to four years. Well, let's celebrate 23. Q the confetti.
Speaker 2:Yeah, wow.
Speaker 1:This was a year that was doomsday. We're going to have a deep recession. The world was coming to an end. Everything that you read said this. Everyone agreed yes, definitely a deep recession in 23.
Speaker 3:The 6040 portfolio is dead.
Speaker 1:Oh, the 60 portfolio died multiple times in 23. Andrew, what would the S&P do? Twenty eight, 25,?
Speaker 3:26. What was the rate of return? The S&P was up over 26 percent.
Speaker 1:Twenty six percent rate of return in the year that everyone said you had to be in cash because the world was going to fall apart.
Speaker 2:It's incredible.
Speaker 3:Yeah, most analysts were calling for a recession. It never happened. I think you know a lot of reasons why equities did so well was, for one, you know, inflation, sort of I don't want to say stabilized, but started, you know coming off its peak and, you know, lower inflation. And then also the Fed signal into the market back in November that they're pretty much down on the rate I can cycle. And ever since then there's been you know not upper pressure on interest rates and rates have been declining, which is a positive for equities for the most part. So all that, and then there was AI optimism and enthusiasm.
Speaker 3:A lot of companies like NVIDIA were taken advantage of their AI products and their applications and calls and synergies to their bottom and top lines and then also to it's kind of interesting, I saw a chart that shows, you know just corporations in the SP500. A lot of them you know back in like 2019, issued debt at a very low interest rate. So a lot of the larger companies have a lot of lower interest rate debt and this didn't really affect their you know net profits, like it would in the past, and traditional rate hike and cycle. So a lot of them were able to maintain their profit margins and then and so deliver on their projected guidance.
Speaker 1:I was looking at something when you were talking. So 26% on the S&P uh, spiders gold ETF last year was up 9.6%. That's not horrible, but for all the dims dayers you missed out. And then over the last five years you've averaged 9% per year, s&p's giving you much better than that. Over three years it's 1.26%. The 10-year annual return of GLD is 4.73% Ten years. Compare that to the S&P. You're losing so much money with these fear trades.
Speaker 2:Yes, no need to rush to gold and silver, please.
Speaker 3:Now and that's where you know, obviously 2022 is one of the most historic, worst years for bonds. But that's where bonds do come into play. Traditionally is they offer that diversification and that you know people, a lot of people use gold as like a hedge or a diversifier, but really bonds are more efficient and better diversifier than gold.
Speaker 1:Yeah, short-term bonds, especially except for 22. That was only one time, and was it three times in history? That's happened, yes, yeah, Since the 1920s, so chances of that happening again are pretty slim. Okay, let's talk about fixed income. So we had a 5.5%. Is that the ag return last year?
Speaker 3:That's a yeah, us broad US bond market. The Barclays aggregate was up about 5.5% through 2023. Interestingly I talked about it earlier Most that return came in the fourth quarter and that's really when the Fed signaled that rates were they're down with their rate hiking cycle and that's when you know not to get too technical, but longer duration bonds started to outperform and that's, you know, bonds that are, you know, in the turkeys of like over two years and you know two years to the US bond markets average durations about six years. So you know you can think about it again that if there's a 1% decline in interest rates for every point of duration you have, for every year of duration you have, that's you know it's not perfect math but that's about that would equate to about a 1% increase in price return. So six year duration would equal about 6% price return for 1% decrease in interest rates.
Speaker 2:So, andrew, does this mean the yield curve is becoming more normalized?
Speaker 3:So it's funny, you know I was looking at earlier today the yield curve is still very inverted, meaning short term interest rates are higher than long term interest rates, which is not a typical economic, you know, which is typical in economic cycles where typically, you know, the yield curve is upward sloping.
Speaker 3:And that makes sense because long maturity should have a higher yield due to a higher risk premium for that illiquity. But you know, longer term rates have declined more but the Fed funds rate is still at five and a quarter, so the short end is still up higher. You know, one thing I think that could be a positive tell in for markets is I've seen some people forecast and that there could be a possible uninversion for the yield curve. I think that would be kind of difficult. But the Fed does cut rates and if it's not due to a dire economic situation and they were able to cut rates three to five times that could cause that, you know, shorter end to come down and be somewhat more normalized. But inverted yield curve is very bad for capital markets and you know, so far nothing's broken or nothing has broke yet.
Speaker 1:But I had this video sent to me, I couldn't watch it. I don't subscribe to Tucker Carlson on his new platform, but a client does, and he had a guest on basically claiming that the government is manipulating interest rates for the benefit of the Biden administration. And I was like, well, first of all, if you think that the Fed manipulates based on politics, you're probably right and that's always happened. It's not something new and you just don't like the players. But really, the second part is everyone assumes that there's going to be a drop in interest rates in the third quarter of next year. Now, why do they assume that? Do they assume that because they think there is a mild recession that could happen and they would? Fed would need lower rates to spur on the economy. That makes economic logical sense. Otherwise, why are we lowering rates? Why are we talking about lowering rates?
Speaker 3:Yeah, I think a lot of those comments were referenced because the Fed has been pretty set in stone that they're going to hold rates higher for longer. They don't want to risk inflation creeping back up and adversely affecting the market in that aspect. But I think late in December Jerome Powell and maybe some other Fed board members came out saying that they actually made with the cut in early 2024. And that's where I think some of the speculation came into play. But the market's kind of always priced in and I was looking at it. I think there's like a 50% probability of three rate cuts by June.
Speaker 3:So there is and there's always a small percentage of a recession.
Speaker 1:Yeah, that's like second quarter.
Speaker 3:Yeah. So whether it's and I still think the Fed's going to be dependent on inflation and I believe there's going to be no action at the January meeting. But if inflation continues to be tame, they might actually ease and do a rate cut here. There I don't think there's going to be any drastic cuts, but I guess we'll see. Time will tell.
Speaker 1:You know, I sat here in the room and we were going over our asset center management and where our goals were for the year growing as a firm and I remember Andrew sitting on the corner over there going I think we're going to stay right here because there's really no reason why the portfolio should be dropping by year end. I said that to me and you know what? He was right. Yeah, he was right. I think that's the first prediction, right? He just looked at.
Speaker 3:So remember that he's like so confident.
Speaker 1:Well, yeah, there's no reason why the portfolio dropped here in December 31st.
Speaker 4:I should ask you about the first the second and the third yeah.
Speaker 3:I should go get a lottery ticket now.
Speaker 1:That's right. I'm a terrible short term predictor of the markets because I focus on the long term so much. But you know, when we think about lowering interest rates I think about now, if you lower the Fed rate, it doesn't directly affect mortgage rates. That's really more tied to what tenure used to be the 30 year.
Speaker 3:Yeah, there's some like spread between the 30 year and the 10 year. Right, it's a math behind that.
Speaker 1:But we listen to our recent podcast with Tom Townsend, our realtor expert, our realty expert. He was saying that if you, if interest rates came down to five, home prices are going to be like be bid up again. It's gonna be made which which promotes inflation.
Speaker 1:Yeah so you just wonder Do they really have room to lower rates and not have an inflation problem? Yeah, some people are angry that they kept rates as high as they have and they raise them so fast. But inflation year-over-year is 3%. People laugh at me when I say that. But CPI is 3%. Inside CPI, groceries are probably up 10. Yes, yes okay but the average is 3, so you know any thoughts on that. I mean why. I just don't understand why they would lower rates.
Speaker 3:Yeah, and I think, and in this week I think the feds actually walked back on what they on those late December comments they really want to be data dependent and data driven and, again, not not have inflation just kind of bubble back up. Yeah so I still think they are. It'll be interesting to see what happens and what they communicate after the January meeting, but I still think they're gonna hold rates at the same level, at least for A couple meetings. But again, the markets is pricing and I can't help it.
Speaker 1:Chuck, when you say Data driven, all their data is rewered looking data. They don't use any forward-looking data, so it just tells me, when they do, lower rates is gonna be too.
Speaker 3:It'll be too late.
Speaker 1:But the data they produce in that report is all we were looking none of it's forward-looking right, that's true. Okay, so let's move on to 24 Outlook. Well, I've got your notes here, you can tell. You can read off your notes as well as I can.
Speaker 3:So you know that's P 500. Right now is around 4700. I think most of the major you know institutions, banks, analysts are calling it's obviously always a wide price range interviewer target. I think the most bearish actually, interestingly, is JP Morgan at 4200. Goldman Sachs is at 5100. They're one of the more optimistic. And then capital economics is a research Provider. They're at 5500. They're the most bullish that I've seen. So obviously the range is between, you know, from 4700 about 7% price appreciation to minus 11.
Speaker 3:So Got a cover kind of coin toss there, yeah, but you know, just kind of dive in and a little bit digging in a little bit further If you look at like the EPS targets and the you know current valuations, most of the EPS earnings per share.
Speaker 3:Yes, eps growth is flat and the valuation for valuation and when I say valuation mean the price to earning it's multiple. That is also about 0% increase or unchanged. So a lot of them are basically pricing in no growth, even though that their price targets may range. And then you know flat to no growth and then also a little bit little change to the Valuation.
Speaker 1:So basically, companies earnings aren't growing. Yeah, and maybe a slight drop in earnings actually.
Speaker 3:Yeah, and that's one of my, I think, biggest concerns is we had such a great run up in Q4 2023. I think a lot of this could be priced in and if there's any kind of misstep, and you know, and they're Pricing and maybe a salt, a softer landing on the interest rate hiking cycle, and that they're able to ease rates Without their cutting rates, cuts of a recession, my fear and valuations are higher because of this, because we had a lot of price appreciation last year. So my concern is that a lot of this is currently priced in and if there's no kind of catalyst to drive us higher, like you know, companies further develop in their AI technologies or, you know, high interest rates are persistent and are more of a, you know, restrictive to company balance sheets, and then we could that could be a concern.
Speaker 1:What are some of your themes? Predictions on themes for 2024.
Speaker 3:So we kind of already talked about these. I Will say lower interest rates and lower inflation. And when I say lower interest rates, not necessarily, I think, just the Fed, you know, even if they have to raise one or two more times, I think there is not that upper pressure on rates. So I think, you know, even if they don't cut as much as the market is expecting, you know there's kind of gonna be a dower, continued our trend, which you know that would benefit, you know. Again, longer duration, fixed income and then also just inflation. I feel like Inflation will kind of normalize, you know, continue to normalize and come down, you know, as long as the Fed keeps rates high and at the appropriate level. We already talked about it earlier.
Speaker 3:Heightened volatility, I feel like there's always last year's volatility, you know, to me was below Long-term averages and I think you know, obviously because election year, a lot of it's still up uncertainty out there with geopolitics Wars, you know we're gonna have a lot more volatility in the markets. And you know, as far as you know, I put some themes on here. You know we're not really Style pickers, are, you know, sector rotators, but I think you know, just, you know, as far as like pretty good thing. I think, the good barbell between, like high quality you know stocks and and the tech stocks you know stocks that have an emphasis with this Growth, your technologies that I've done well. There's a lot of momentum behind them and, again, like a lot of the quality players, like they have like good valuations that were kind of hammered last year. I think some people might be searching for good value and that will do well this year.
Speaker 1:On inversion of the yield curve. Mrs Ordea, yes, a little differently, but that could be.
Speaker 3:Yeah, if they do cut the short end, yeah, that could be a positive call. It's for stocks, as long as it's not in connection with a recession.
Speaker 2:What.
Speaker 1:Yeah, what do you think puts us into a recession at this point? Because they're not getting the jobs. The job, the jobs would keep increasing jobs, we keep increasing jobs.
Speaker 4:People keep spending money.
Speaker 1:I don't know where it's coming from, because the credit card. I guess it's credit cards, but our loans.
Speaker 2:And that's the recession definition in America, right With the jobs.
Speaker 1:Yes, with the jobs Additive. Yeah, we've been recession already.
Speaker 2:Two negative quarters.
Speaker 1:Yeah, but even with the sell off in the tech sector or AI, taking too many entry-level tech jobs, no-transcript those people that clearly were re-employed somewhere.
Speaker 2:Yeah, so we're not taking the hit in jobs.
Speaker 3:So yeah, and immigration too it's always a recession has been caused by an unforeseen catalyst. So, yeah, I think the conditions are still kind of primed. I mean, there's a lot of risks still out there. A lot of these traditional indicators are still flashed in recession signal, but then again there's a lot of on the flip side, a lot of positive economic data points like again stronger growth and expect that stronger than expectations and then strongly overmarket, so kind of these battle and forces here.
Speaker 1:So it would take a major catalyst probably to get us off of that right, which would definitely change the White House. I don't think we've ever had a sitting president get reelected during a recession Right.
Speaker 2:Yeah, no, yeah it's never happened.
Speaker 1:So the you know what are some surprises, and this is a little, you know, putting you on the spot, I would say. I would say that you have one of these major or one of these regional wars that becomes a major war. I think that could be a shock to the, to the market.
Speaker 1:You know Israel is doing their thing, fighting a loss, and but if that blows up and creates Iran and gets involved, and then the US gets involved, and then Russia is involved, and then you've got Ukraine again, which is a whole, another whole, another front, that man, I mean this, poor people there. I remember when that, when that war first broke out and I thought, oh, maybe like 10 days.
Speaker 2:I know, and here, what it's a year later yeah.
Speaker 1:But it's still fairly contained. And there's so many other wars too that we don't don't even make the news news cycles right now. Yeah, I think that are happening.
Speaker 3:If China were to invade Taiwan, that could be. And who knows if that will happen, but yeah, obviously.
Speaker 1:I just China is such a train wreck right now. That would just solidify their train wreck. Yeah, that would. That would become a official disaster. I think that's more pandering of you know beating the drums, but I don't think that would actually ever happen. I don't know what the incentive. You don't know, not now. Their economy is their economies and shambles.
Speaker 2:Yeah, but do they really care?
Speaker 1:I mean, it's more about just, I guess, if they grab, maybe if they need a distraction from how bad their economy is, yeah, and what a facade and it is, I don't know, but that's beyond my expertise. We need to bring over here we need to bring in someone who's an expert on China to talk about that, because that is not my area of expertise.
Speaker 3:I just know.
Speaker 1:I don't have my money there. I know that, no, no, yeah, yeah, it probably. You know, maybe maybe some politics here Potentially could cause some additional drama, but it would be short term, it'd be very short term.
Speaker 3:I think you know, if there's any noise, q4 of next year, hopefully the dust settles by Q1 2025.
Speaker 1:But yeah, I think the most important thing and you know, there's always going to be an event that pops up that was never on our radar, like a COVID.
Speaker 2:Oh yeah, here.
Speaker 1:Yeah here, but and that could be a catalyst for something negative but I think the important thing that I would I would want to say to everyone is just be careful and understand where your news is coming from. Good point, and we've had whole podcasts associated with this in the past over 201 episodes but it's like I remember when Brad was working with us and I found this article that was talked about value stocks for one particular year and I was like, oh my gosh, this guy's really convincing that value stock growth is done and I sent the article to him and he responds back Because the guy who wrote it is one of the largest value money managers in the country.
Speaker 3:Of course.
Speaker 1:That makes total sense. Or the guy that shows up on CBC every now and then. I won't say his name because I don't want to promote him, but his whole thing was like oh, this is all coming and crashing down, blah, blah, blah. Well, he runs a hedge fund that benefits from things crashing down.
Speaker 1:So it's the gold commercial on TV talking about inflation. Because they want you to buy gold. It's the opposite in traders Buy these options, you'll make money overnight. It's because they want to sell you a newsletter and make more money on the newsletter than do in trading options themselves.
Speaker 3:And they're already probably in these investments and they're just more. Yes, absolutely.
Speaker 1:I would love to think the world is as innocent as I would like it to be in my head, but it's not and you're being sold things. It's no different if you walk down the Ever Jones or any of these other shops and they want you to buy the annuity. It's the same thing. There's a 10% commission sitting on the side of that. There's no benefit to you for owning it. I can put you in the S&P 500 and put you in short term treasuries or, heck today, a CD, and I can mimic the exact same thing at no cost.
Speaker 2:Exactly.
Speaker 1:It's hard, but those guys aren't trained to think. Those trades are trained to sell.
Speaker 2:You're right, that's their salespeople.
Speaker 1:They sell stuff, and that's what's so frustrating is that people go in and go. Oh no, their whole thing is they make sense of investing and they help and guide me. No, I can show you their commission schedule. It says nothing about guiding, it's all about selling. That's what they do.
Speaker 2:Look at the perspective, so, as you, roll into 24,.
Speaker 1:This is the year to open your eyes and realize that it's not as warm and fuzzy as you would like it to be, and understand that people are trying to sell you. That's why we try to have this unbiased podcast. That's why we run an unbiased company. You don't sell anything.
Speaker 2:Long term, healthy asset classes. How many times do we have to say it? I know.
Speaker 1:And so many people think that there's a secret to investing and you know what, guys? There's not. That's why we're a financial planning firm. First, it happens to do portfolio management.
Speaker 1:Absolutely Low cost you know something else and I'm going to do a short video about this. We knew something else. I found out recently and I suspected this, but when I found out it just made me feel dirty. So everyone knows that I have a background in aviation. I flew in the Delta system for 10 years and use our US airway system for two years prior to that over the Northeast, and so we have a lot of pilot friends and we have a lot of pilot clients.
Speaker 2:Yes.
Speaker 1:Of our client base. Well, if you count hourly people, we probably get over 500 pilots.
Speaker 2:Yeah.
Speaker 1:So you're a strong aviation community, You're a wiser. Well, there's another firm that manages assets and they want to manage your 401k plan for a half a percent. And I keep telling them these guys like guys. Look, you need to do financial planning. We have free allocations in our website for your 401k plan Go, download those. If you don't believe you know we'll give you a custom one if you come through with the planning process.
Speaker 1:It's a one time fee, small hourly fee for updates each year. But if you pay a half a percent in a pan to over two and a half million dollars in fees over your right yeah.
Speaker 3:You need an asset manager for retirement.
Speaker 1:You don't need asset management necessarily when you're accumulating assets inside these big 401k plans because they have everything you need A half a percent a year. So that has resonated. We have so many clients now, especially from the Delta side, starting to get some from United American now. But then I started thinking, you know, I talked to these guys and they say, oh, I flew with this guy and he's really pushing this company. It's, it's an all worth company.
Speaker 1:All worth is a private equity firm that buys up our A's and I started thinking why are they so you know, advocating for this one company? Why would a pilot do that? It's strange. And then we went to their disclosures for this company and basically they are paying pilots to refer pilots.
Speaker 2:Oh, no way.
Speaker 1:So here's the conflict of interest here is that you're flying with a person who had to hire a financial planner because they're not one themselves.
Speaker 2:Right.
Speaker 1:And that planner says hey, I like to have more people like you, so I'll tell you what I'll give you a commission. So for every person that you send me, for every person that you send me, you're going to get a trailing fee forever.
Speaker 2:It's a pyramid scheme. It's a pyramid scheme.
Speaker 1:So I'm like holy crap. So you can't even trust your own brother or sister sitting next to you.
Speaker 1:So I do want to say that we do not place pay solicitor fees. And if you want to see these solicitor fees, if you want to know who they are I know who these people are because they have to be disclosed and some of those are in the union Wow, they're in the union are union representatives. So that creates a whole other level of complexity. It just made me really sad because when I was there and I did RNA workshops, it was a free advice.
Speaker 2:Free advice.
Speaker 1:We're going to help these people as true best interests If they choose us as a firm, then that's great, but that's not how we're there. We're there to help people and anyway that's sad.
Speaker 1:So that's a whole other thing of people getting sold, and you always have to understand how you get paid and where is the information coming from. Anyway, that's enough of my soapbox, guys. Thanks for listening. If you're interested in learning more about Wiser Wealth Management or want to schedule a consultation, meet with one of our Fadoo Chief financial advisors. You can do so by going to wiserevestorscom or you can click on the link in the episode notes below. And that's great. See you guys, next week.
Speaker 2:See, ya, see ya.
Speaker 4:Thanks for listening to a Wiser Retirement Podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wisereinvestorcom and reach out.
Speaker 4:This episode was produced and edited by Ken Hoatley. This podcast is strictly for informational purposes only and is not to be considered as investment advice or a solicitation to buy or sell any financial products, securities, digital assets or any other investment vehicles, or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investment advisor with SEC. The host and or guest may personally own securities, digital assets or other investment vehicles mentioned on this podcast. Neither the host nor guest of the show are compensated for their participation and no referral fees are paid to or received by any host or guest for clients, listeners or similar interests. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional and or legal professional before implementing any strategy discussed herein. Test performance is not indicative of future performance.