Finance Roundtable Podcast
It is a complicated and tricky world out there. Without a solid understanding of how money works, life can be even more challenging.
We get it, talking about money is uncomfortable but we all can agree that it is an important topic to understand.
The Finance Roundtable Podcast team wants to bring you along as we interview some remarkable professors, professional athletes & financial strategists about money.
If you have ever wondered what is talked about between financial professionals and what goes through our minds when we are off the clock; then you will want to check out the Finance Roundtable Podcast.
Jacob Gold and Michael Cochell are Financial Advisors offering securities and advisory services through Cetera Advisor Networks LLC (doing insurance business in California as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker dealer and Registered Investment Adviser. Cetera is under separate ownership from any other named entity. Jacob’s California insurance license # 0E55425 Michael’s CA Insurance License # 0K90130. The views depicted in this material are for information purpose only and are not necessarily those of Cetera Advisor Networks. They should not be considered specific advice or recommendations for any individual. Neither Cetera Advisor Networks nor any of its representative may give legal or tax advice. Kelvin Gold is a Marketing Associate. Registered Address is 14850 North Scottsdale Road #255, Scottsdale, Arizona 85254.
Finance Roundtable Podcast
Episode 19: demographic trends and the predictable behaviors that can ignite bull markets
We are excited to announce the latest episode of the Finance Roundtable Podcast, featuring an insightful interview with Jason Churra, Senior Vice President of Voya Investment Management.
This episode delves deep into demographic trends and the predictable behaviors that can ignite bull markets, offering invaluable knowledge for investors and financial enthusiasts alike.
Whether you are keen to understand market dynamics or looking to enhance your investment strategies, this conversation is both enlightening and impactful.
Tune in to gain sophisticated insights from a leading expert in the field.
#FinanceRoundtable #PodcastEpisode #JasonChurra #VoyaInvestmentManagement #MarketTrends #InvestmentStrategies
Welcome everybody to the Finance Roundtable podcast. We're glad you joined us today and we're pretty confident that you're going to walk away. Glad that you joined us. Today we have a special guest, jason Chura. He's a certified financial planner and a senior vice president at Voya Investment Management. We've known each other for about 10 years. We have same mannerisms. We've even worked with some of the same people, and it was maybe about two, three months ago.
Speaker 1:Jason, my son Kelvin and I went to lunch and Jason had this theme that he shared with us that I want to share with you today. It's very timely. It's back-tested, based on proof and evidence of demographics, and I think you're going to walk away with a new perspective of what motivates individuals and where we spend our money. Long term motivates individuals and where we spend our money long term. Mark Twain once said history doesn't repeat itself, but it often rhymes. And today Jason's going to talk about demographic trends and predictable behavior that can fuel bull markets. Many would agree that today we have some unpredictable global events. There's fear of economic recessions, high volatility in equity markets, geopolitical unrest, a recent pandemic and drastic changes to interest rates. But if we take a step back, this isn't completely foreign. It's happened before. Isn't that right, jason?
Speaker 2:Yeah, absolutely. This isn't the first time. We've been going through this Right Before we get into prepared remarks. Jake and Michael good seeing you both again, for it's been a while is. This is a fantastic room. I appreciate it.
Speaker 2:I've spoken in a few different events like this, but this is top notch, so not a surprise coming from you after all these years. You always do things at the top level. Thank you Absolutely. Thanks for having me Absolutely. Thanks for being here, Absolutely. Yes, this is not first time, but one thing that never changes is the human, emotional elements of this. We must, if you take nothing else out of our time together is human beings are not wired for success. We are wired for fear. It's part of our DNA. Wired for success we are wired for fear. It's part of our DNA. So one thing I will ask all the audience is give yourself permission to be afraid. When people say not to be afraid, discount that, but understand is your fear taking you away from an opportunity? And understand that fear comes with credibility, while optimism comes with skepticism, meaning we trust fear. If you had two minutes to go on television right now and you could either sell fear or optimism, you'd be foolish to take optimism because it's so hard to get people to understand it.
Speaker 2:That's why the news media is constantly pushing fear at us, because it's easily accepted. If you don't mind, let's prove it. Let's pretend that us three said you know what, let's go grab a cup of coffee over at Starbucks. So for the listeners, think in your mind of a coffee shop close to your house or your office and imagine walking towards that place and we're walking together and a stranger comes up and says hey, gentlemen, you might want to be cautious because around that corner, over there, there's an aggressive, homeless person kind of acting crazy. Our first response would be oh really, right around that corner. So, number one we give instant credibility to the threat.
Speaker 1:Thank you. Thank you for giving us that heads up. Right, yeah, right. Thank you so much.
Speaker 2:Number two is our body would release certain chemical compounds that would bond us to the stranger. Number three we see him at Starbucks. We say hey, thanks again for looking out. Can I buy you a latte, my friends? That's for a threat we never actually sought, but we gave instant credibility to it. Let's do the exercise again is let's pretend that we're walking to the same Starbucks and somebody comes up to us and goes hey, right around that corner, over there, somebody's giving away $300 bills. You should go get one. What would your reaction then be? I'd be skeptical, skeptical, absolutely what? What are you trying to get from me?
Speaker 2:Fear comes with credibility, while optimism comes with skepticism, and the challenge with that is the news media knows this and they constantly are bombarding us with negativity. And with that negativity comes our thoughts about how to invest money, and sometimes, again, does fear take us away from an opportunity? If you don't mind, I'm going to put you guys through an exercise. Sure, that's okay, that would be great. Let's pretend I had a crystal ball right in front of me and I go gentlemen, I know exactly what's going to happen in the United States economy. Go forward and just don't tell anybody. But I'm going to tell you to, but in return, after I tell you what's going to happen, I want you to tell me honestly how you would invest your money If I say okay, do not. Guys, jake, michael, do not worry about recession, because there's two coming. We're going back to back recessions in the United States of America. When you get your financial statement at the end of the year, you are going to lose money. 20% of the calendar years go forward.
Speaker 2:Coming into the office, I was watching a television that showed China has a new gunship. Well, that's problematic because we are going to Asia to fight a foreign war. We're sending soldiers there. Number four is you thought COVID was bad? Well, that's nothing. We have disease X coming. That's a pandemic that's going to kill 4 million people. And finally, everybody in financial services is dead wrong about interest rates. My friends, they're not going to go down, they're not going to flatten, they are going to double.
Speaker 2:If all five of those events happen with 100% certainty, what would you do with your money? I'd be cautious. Okay, michael, very careful. And the challenge with this is you are business professionals Heck, you're a university professor, right? And you still take that information and we still go. I'm going to cash or be careful or go to gold or something. The reality of it is, my friends, is my crystal ball is a bit foggy, but my history book is decent.
Speaker 2:All these events happened in the decade of the 1950s. So, as you can see on these slides here, in the 1950s we had back-to-back recessions 1953, 1957. We had two of 10, 20% of the calendar years were in fact losses. We did go to war in Asia it's called the Korean War. We did have a pandemic in 1957 that killed 1.1 million people, but based on today's global population it's closer to four. And finally, interest rates doubled. They went from 232 to 475.
Speaker 2:All five of those events happened, all five of those events that we in our minds were thinking I hope don't come down the pipe, jason, you're scaring us. And look there, the markets in the 1950s annualized at 19.23%. That means we turned a million dollars into five and a half million dollars amidst those five events. So if we were scared of those, I asked you guys what you do we would have missed out on huge returns of that fear. So let's get a little more granular on this. Let's give the punchline to this is how in the world can these five events happen and the market still do. Well. Now, you're a professor, correct me if I'm wrong here, but the stock market tends to go up. When stocks go up, pretty simple Sure. Why would a stock go up? I think it's because we are buying a company's things.
Speaker 1:Sure Profitability is rising.
Speaker 2:Thank you, Profitability is rising. So for the next two and a half, three minutes, let's just factor in one thing. I'm going to ask you guys a question what forces us to spend money? Because, again, all we're concerned about is a company's profitability. What forces us to spend money more than anything else in our lives? Do you guess? Emotions, Emotions. Great answer Raising, a family Raising. And that's the exact right answer. So you can see, on this slide here there's my wife, Stephanie, and my daughter Marissa, and you can see there that the cost to raise Marissa from zero to 17, not including education, is $374,000. And that's if I make $70,000 a year of income. Make less than that, I'm going to spend less. If I make more, I'm going to spend more. And, gentlemen, I do not have a choice. When Marissa was born 13 years ago, I came to the very quick realization she's a very selfish person. She doesn't work.
Speaker 3:She just depletes my research. She's on the take selfish person. She doesn't work, she just depletes my research. She's on the take Selfish person.
Speaker 2:I have to buy her food. I have to buy her clothes, I have to buy her a backpack. Yesterday, start at school again.
Speaker 1:And I do not have a choice.
Speaker 2:Nothing drives my consumption more than having a child. So if we look at the next slide, what drove the 1950s? We didn't create one Marissa. So if we look at the next slide, what drove the 1950s? We didn't create one Marissa. We created 75 million people called baby boomers. Once a child is born, Michael, what?
Speaker 4:do we force to do with our money?
Speaker 2:Spend it, did it matter if there was recession? Did it matter if there was war? Did it matter if there was pandemics?
Speaker 1:No, those 75 million people needed backpacks and clothing and shelter. Yeah, you'd almost sacrifice in other areas, but you wouldn't sacrifice in raising your children. So that's where you're kind of like this is a forced spending because you do need those necessities for the kids.
Speaker 2:Absolutely so. Those five events happened, but we still have the forced necessities of those kids. Okay, let's fast forward. Is 1982 to the year 2000,. We go and create the largest generation to date in this country, called millennials, and we didn't create a few of them. Baby boomers do not do things in small numbers, they do things in excess. So they said huh, we're big, let's create bigger. So we create 83 million. Okay, so from 82 to 2000,.
Speaker 1:Jake, once a child is born, what?
Speaker 2:are we forced to do with our money? Spend it on, okay, and how? Were the markets in the 80s and 90s? Pretty good, absolutely. It didn't matter what was going on. We had that forced consumability of it. So, right about now, if I'm speaking in public, someone's hand usually goes up and goes yeah, jay, but these millennials are not getting married, okay, they're surely not having children, still live in their parents' basements, okay, well, the reality of it is. You can see on this slide here that we've gone I think it was two years ago was the single biggest wedding year in the history of this country. Last year was fantastic. The expectation is this year 2024, is we might sell more engagement rings this year than we've ever sold in American history in a single year, so it's not a it's not a pandemic thing.
Speaker 2:that why all the weddings happened. It's just that we're 30, 31, 32. Look, millennials are not getting married at 21. They're getting married at 31. Is that a problem? No, it's not a problem at all. But now you have the biggest part, the biggest hump of that 83 million of those millennials are in that bandwidth of ready to get married. So they are in fact getting married. Yeah, jay, but they're surely not having babies. Well, we've gone two of the last three years in America. We've increased births. That's the first time that's happened in 17 years and, according to the CDC, the expectation is we increase births from 2023 to 2032 by 40,000 per year again up to 2032. Michael, once a child is born, what are we forced to do with their money? Spend on them Then?
Speaker 4:that's a darn good slide, absolutely.
Speaker 2:So now we got married, now we're having more babies and spending money. Now we have to leave our parents' basements. I love that one. This has been going on for quite some time. You actually, if you look at the aggregate, there's more millennial homeowners now than renters. They started leaving their parents' basements a long time ago.
Speaker 2:It's just a false narrative and let's put a bow on this. Okay, let's go back to where we started. I said what if these five events happen? You know the scary events of the 50s and we also were going to cash. Let's do it again. Here's what I do know.
Speaker 2:I know there's 82 million millennials. I know give or take half more women. I know that current fertility rate in America is about 1.7. So we should create 70, 72 million people. The cost to raise those people is about $374,000.
Speaker 2:So we have about $26 trillion of forced consumption coming in. Oh, by the way, grandparents are helping now too, and that's to the tune of about $179 billion per year. So that brings consumption up to about nearly $30 trillion. $29 trillion that is the size of the Chinese, japanese and German economies combined. Okay, that is the size of the Chinese, japanese and German economies combined. Okay, that was a lot of words. If you don't mind, I'm going to try to please tie this bow together.
Speaker 2:Let's go back. I said what if these five events happen? And we all said we're going to cash? Let's do it again. Gentlemen, I know what's going to happen. Okay, we're going to take the predictive element of what people do, and that is, household formation and the consumption ability that follows. What that means is we're going to take the entire size of the Chinese economy pretty darn big the entire size of the Japanese economy and the entire size of the German economy. That's all going to be combined and thrust into America's absolute, predictable forced consumption. Now what are you doing with your money? Yeah, there's opportunity.
Speaker 2:There's opportunity, there's your bull market and it brings us back to where we started. Do not let fear. Take away as you mentioned, jake opportunity from us. It is here, my friends, and we see it everywhere. The goal here is next time you get a wedding invitation in the mail, is you look and go? Oh yeah, jake told me this. All these people are getting married. Next time you're at your favorite mall and you see a couple pushing a baby stroller through, you're no longer going. Oh, that's a cute baby. You're going. There's 374,000. You're looking?
Speaker 1:at the numbers.
Speaker 4:There you go. You're looking at the numbers.
Speaker 2:We're rewiring ourself to optimism. When you see the 40-year-old move into your neighborhood, you go. Oh yeah, Michael told me, all these millennials are buying homes. Now we're rewiring ourself to optimism.
Speaker 4:The old adage is.
Speaker 2:You know, you don't see a red car until you want one, then they're everywhere.
Speaker 1:That's the goal here is let's, let's, let's really create an opportunity for us to trust optimism. So, and it's so important too, because we can all get so caught up in the news, we can get caught up in the noise that we hear on the daily, and I often tell my students and my clients you shouldn't be trying to time the market, you should be diversifying in a way that you have time in the market so you can ride it, because you don't know really when the best times are going to be, and when they hit, they usually hit pretty quick and pretty hard. And so I think that what you're saying is be divers, know, be diversified, focus long term, because the demographics are predictable. I think about Morgan Housel, who's an author. He wrote the Psychology of Money and Same as Ever, and he talks about, in Same as Ever, how a lot of things change, but certain things related to fear, and greed is universal, and we have to recognize the power behind those universal forces.
Speaker 4:Thank you for sharing that. It's a reminder of thinking things differently than what we just see. I was reading an article the other day and it reminded me of some of what you were talking about, and think about flipping a coin heads and tails but we only see the heads or the tails, and this reminds me of thinking there's always the other side, to be mindful of using fear to make decisions. But there's the other side which creates opportunity and it's always hidden. In many ways, especially with the media, as you shared, we get caught up into the noise piece of things, but it's good for investors to remind themselves about. Well, let me flip this coin over and see the other side and think about it in a different way. I think listening to you talk about this presentation reminds me of that and reminds us talking to clients and see things from a different perspective.
Speaker 2:I'd like to say that is, is, is I don't know. I mean, I've been doing this for 25, 26 years you've been a little longer than I is I don't. I'd never have it in my career where a bell goes off that says everything is cotton, candy, rainbows, invest now. I don't know if you ever seen that, and if you do you probably there's always something to be concerned about. It's just how be aware of it but maybe don't be concerned about it.
Speaker 1:Yeah, and, too, I mean, you realize too that, because fear creates credibility, you have a lot of people stirring the pot to create fear for selfish reasons, right, because they want eyeballs on them, they want attention on what they're doing and their own motives, but their motives are hidden many times. So you have to take all of this with a grain of salt, and I've recognized too, like within the media, you can't and this is just my opinion you can't just go to one source, even if that one source has been reliable for decades, because everyone has a story to sell, and what you really have to do is you have to find multiple sources. Maybe you read the Wall Street Journal and the Economist, and then you read the New York Times and the Arizona Republic and the Weekly. You need to get a variety of opinions and be methodical and then come up with your own interpretation. If not, if you're just blindly taking what other people are saying and believing it, you really are setting yourself up for perhaps some not so pleasant surprises. I think it's well said.
Speaker 4:Absolutely.
Speaker 4:I might add one more piece A lot of what you shared, Jason gets you thinking in different ways, and I think that's one of the purposes of us doing this podcast and not going into technical pieces and all the data, and it makes me think about the purpose of investing, the idea of something, and something I thought about the other day and we can always ask the question what might be a main ingredient when it concerns investing in? Something I thought of the other day was it's not the technical terms, it's not standard deviation, alpha or anything like that, but patience. And something that you just shared is you just discussed decades of change, decades of fundamentals, good and bad and we think about investing and if we could have patience through what you're talking about, experiences that we've seen that history has shown us what a difference that makes.
Speaker 4:Um, I was listening to another podcast not too long ago and warren buffett obviously comes up in conversation a lot when it concerns investing, but a majority of his wealth came in at the 60 or later yeah and so it made me think about one of the comments the gentleman that was being interviewed talked about is 70 to 80 years of patience with investing, and if we correlate a lot of the details that you just shared, it takes patience for that to invest for a decade, two decades or, in his case, 70, 80 years, decades, or, in his case, 70, 80 years.
Speaker 4:So it's just a different way of thinking about investing or change that's going on in our environment. So it really, yeah, I appreciate the presentation because it makes you think about the details that really make a difference.
Speaker 1:Yeah, it's well said, I like that. And so many times you have to take a couple of steps back and say what is my objective, what am I trying to accomplish and what is the path of least resistance. So you can give it time and you can be patient, and I feel your presentation was right on. You are always a presence, you always bring optimism, excitement. We appreciate the years that we've known each other and I would say to you just keep it going, because really there are few sources out there that are as reliable and energetic and positive as your message that you've been delivering to us for over a decade. So keep up the good fight, thank you sir, appreciate it Good to see you both.
Speaker 2:Thank you, good to see you, absolutely.
Speaker 1:Thank you everybody for joining us today. Stay with us in future months with future episodes. So once again, thank you for watching or listening to the Finance Roundtable podcast. Take care, thank you.
Speaker 3:Thank you for listening to Finance Roundtable. Make sure to check out our episodes at wwwfinanceroundtablepodcastcom. We also encourage you to explore wwwjacobgoldcom to find articles, research videos and more from Jacob Gold and Associates Inc.
Speaker 1:If you have a question for the show, please email Jacob at jacob at jacobgoldcom. G-a-n Insurance Agency LLC. Member FINRA, sipc, a broker-dealer and registered investment advisor. Cetera is under separate ownership from any other named entity. Jacob's California Insurance License 0E55425. Michael's California Insurance License 0K90130.
Speaker 1:The views depicted in this material are for information purpose only and are not necessarily those of Cetera Advisor Network. They should not be considered specific advice or recommendations for any individual. Neither Cetera Advisor Networks nor any of its representatives may give legal or tax advice. Kelvin Gold is a marketing associate. Registered address is 14850 North Scottsdale Road, suite 255, scottsdale, arizona, 85254. Arizona, 85254. Jason Chura is not affiliated or registered with Cetera Advisor Network LLC. Any information provided by Jason Chura is no way related to Cetera Advisor Network LLC or its registered representatives.
Speaker 1:All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. A diversified portfolio does not assure a profit or protect against loss in a declining market. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability and differences in accounting standards. The views stated in this letter are not necessarily the opinion of Cetera Advisor Network LLC and should not be construed, directly or indirectly, as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable. However, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
