Money Matters with Greg
Needing guidance on finances, or just curious about investments? Join CEO and Owner of Farrall Wealth, Greg Farrall, as he dives into all things relating to money and often interviews interesting people he is fortunate enough to call his friends.
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Money Matters with Greg
Episode 165: Betting on Anything That Moves: Wall Street's Wild New Game
The financial world is witnessing the rise of what experts call the "Degenerate Economy" - a fascinating yet concerning trend where retail investors are betting on virtually anything that moves. From traditional stocks to cryptocurrency, from sports outcomes to inflation rates, the lines between investing and gambling have never been more blurred.
As markets hit all-time highs across major indices, this new wave of speculation deserves our attention. The Degenerate Economy Index, tracking companies benefiting from this behavior, has surged an astonishing 156% since 2023, vastly outperforming traditional benchmarks. Companies like Robinhood have seen their stock skyrocket 450% in just twelve months as they expand into prediction markets, while sports betting platforms are moving into financial predictions.
This phenomenon mirrors the dot-com era's speculative frenzy - a period I witnessed firsthand as a trader in Chicago's pits. Back then, we called ourselves "degenerates" for betting on anything imaginable. Today's digital version is more accessible and widespread, fueled by mobile technology and social platforms connecting millions of young investors to markets with just a few taps.
While this trend creates opportunities, it comes with significant warnings. During market downturns, these speculative investments typically suffer more dramatic losses. The Degenerate Economy Index plunged 41% in 2022, nearly double the decline of broader markets. As September historically sees pullbacks when August performs strongly (as it has this year), caution is warranted.
Looking ahead, we'll explore smart investing strategies across various life stages - from Gen Z's first investments to retirement planning for Baby Boomers. We'll tackle debt management, home buying in challenging markets, college funds, tax strategies, and specialized approaches for business owners and women investors.
Have questions about navigating today's complex financial landscape? Email greg@farrellwealth.com - I'd love to address your specific concerns in future episodes. Remember, disciplined investing beats speculation over time. Your financial future shouldn't be a casino.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may suit you, consult the appropriate qualified professional before deciding.
Welcome to Money Matters with Greg, where we dive into the money conversations shaping your life, from investments to estate planning, insurance to taxes. We cover it all with a fresh perspective. Join Greg and his guests each week to get inspired and take control of your financial future. Let's get started. Securities and investment advisory services offered through LPL Financial, a registered investment advisor, member FINRA, sipc.
Speaker 2:All right, good morning and welcome to another episode of Money Matters with Greg Greg Farrell here, CEO and president of Farrell Wealth, a wealth management firm here locally to Valparaiso, Indiana, and also serving clients in 24 states. We have an office in Tampa now too, which is very exciting. We are here to talk about the exciting. We are here to talk about the markets. We're here to talk about money and how it can help you with your money, how your investments look now into the future as we move forward daily here in the markets. You can find the show on any Apple or anywhere you pod, Apple, Spotify, you name it and then also here at 103.1 FM WVLP, Locally here at Valparaiso, Indiana. We're very excited to always be on at WVLP and thank you for the opportunity to be able to broadcast here For everybody at WVLP and the family that is here locally. It is a great, very tight-knit family and we are very proud to be a part of it.
Speaker 2:As always, we like to remind everybody that the opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations to any individual. To determine which strategies or investments may suit you, Consult the appropriate qualified professional before deciding, that's obviously go talk to your tax attorneys, go talk to your accountants, talk to your financial advisors, you name it. We don't want to sway one way or the other and we'll definitely try to drive down the middle of the road. In regards to our conversation today, we're going to talk about the degenerate economy and what that means, who that is and how that looks. We're going to talk about the companies that are contributing to the degenerate economy and also what's going on with the stock market today, where that's our plan and making sure that you're informed as far as the market goes, because it has been a wild ride and we are at all-time highs. So I feel like it's necessary to talk about these things as much as possible so you get the right information and you can take with it however you want, you can use it however you like and move forward.
Speaker 2:But the whole point of this show is Money Matters with Greg is to help you with your money, to add some value to you, to your family, to help you increase your wealth, grow your wealth, create your wealth and then also protect your wealth, distribute your wealth in life and distribute your wealth after death. So those are our four quadrants we always talk about here on the show. It's in our logo. We also include the fact that life is a game and it's full of X's and O's, and that is also in our logo as well. The X's and O's are constantly moving and they're always rotating and always changing. So happy to help you with those things in life.
Speaker 2:As far as your financial literacy and then also really just investments, We've been trying to stick with the investment theme here, or having to stick with the investment theme here as much as possible, just because the market has been fast and furious. Typically, we don't necessarily talk so many times about the market, but it's just been one of those things that we just feel like it's necessary. So, that being said, again, the show's on WVLP 103.1 FM, here locally, and then also anywhere you pod so excited to have you here and then also on our YouTube channel. Please find us there. Any socials at Ferrell Wealth. And then also, before I get going, I really want to mention please contact me, greg, at farrowwealthcom with any questions you'd like to be able to jump in and certainly have me answer, or any questions you want to ask. I'd love to be able to have you be a part of it. So please email us, greg, at farrowwealthcom.
Speaker 2:And the next last thing of housecleaning before or housekeeping before we get going is guess what? It is NFL season. We're ready to start. Baby Got a fantasy football draft tonight. I'll find the last one. And then ultimately we have games. Our Bears are playing on Monday. I'm looking forward to it, Very, very excited to be able to go and attend. They're playing Minnesota on Monday Night Football, so I'm looking forward to reporting back on that. Hopefully we have a good outcome and we are very excited to have football back here in the Midwest.
Speaker 2:The weather has been tremendous. There's no humidity, there's no heat. The weather is perfect. The temperatures are incredible and we are getting a fake fall for sure here in September and anxiously awaiting higher temperatures to come back and get us. But for now we're very, very happy as to how things look. So happy football season to everyone. It's been great to see college start and then also with the pros starting this weekend, All right. So just giving everybody an update on the markets We've hit an all-time high here across the board among every single indice.
Speaker 2:Sock features today are up. This is as of Wednesday morning. We're broadcasting on Thursday at 1 o'clock and then also Saturday at 1 o'clock as a replay. Thursday is the broadcast now and stock features are higher. Today Google's up about 6% as a favorable court ruling saw the company avoid this severe antitrust penalties. And then international stocks were sort of mixed and bonds have steadied. They've definitely been volatile. With the recent conversation about tariffs and the Trump war, Trump's trade war, we had sort of a recap.
Speaker 2:Just want to talk about the Dow at 45,295. The Hang Seng's at 25,345. Let's see the Nikkei is at 41,938. Ftse's at 91.58. So it's you know, basically as far as the overall numbers and things, how you know. As far as changes goes, the Dow, the S&P and the NASDAQ have all hit all-time highs and kind of reversed a little bit.
Speaker 2:The one thing I want to be able to mention is, as August goes up, September has a history of going down, so we watch things as far as the months go. Typically, if August is greater than 1%, which was up 1.8% in the S&P 500, history has shown us that September has been down at least a half a percent or if not more, as many as sometimes three to four percent. So just be aware that September has a tendency to be soft going into October. October also has a history of being soft, so we'll see how things go. We're cautiously optimistic for the end of the year and how things will follow through by the end of the year is where we are today. But really wanted to be able to talk about one just to kind of update you. You're seeing gold at $3,600. You've seen the US dollar at 98.31. And again, S&P futures are 65.57 as of this morning here today. So that's the update on the markets.
Speaker 2:I won't go into individual stocks or anything as far as that goes, but really had a lot of concerns with the Fed governors that have been talking and Federal Reserve, so there's been definitely watching that as far as the economy goes. So you know. Just as far as who's talking about what, whether we're being dovish or whether we're being hawkish is still to be seen, but we are looking at a September 86% chance of a cut in rates. The October number has gone up a little over 25% as well as another cut. So, looking towards the future here and the dot plot that they have for the Federal Reserve governors, just trying to see where they line up, and there's definitely a fight between many of them arguing as to what this looks like here as far as rate cuts, but the odds are we're going to get a rate cut here in September, which will certainly affect a number of different things that will help consumers out and hopefully we'll even see a mortgage rate as to what that happens.
Speaker 2:Wanted to talk today about this new degenerate economy that's out there. Americans have renewed their romance for the stock market, for sure, and retail investors have really come in in droves here recently. There's a lot of cash on the sidelines for years, and certainly in the last year, the year before and this retail investor group has really helped to drive a historic rally in the S&P, the NASDAQ, like I said, and the Magnificent Seven, Gold, Bitcoin. They've all set new highs, new all-time highs overall, and you know there are fundamental positives for sure, and it's undeniable that part of the year-to-date rally has been driven by old-fashioned speculation, which does exist and has not existed in a while, but this has really manifested in many ways, as this is really manifested in many ways as extreme valuations for companies that are AI, and that has something to be considered for sure. You've got new interest in IPOs and meme stocks, altcoins, digital asset treasury companies you name it.
Speaker 2:Single stock asset leveraged ETFs have become very popular and you know prediction markets and prop tests and these things, and this is why I bring this up, because not because we're advocating in any way one or the other or anything like that We'd never do that but just making sure that you are checking and not falling prey to this world of speculation, because, with just disciplined investment principles allow you to make money over the long time, and a lot of this news has been in this degenerate economy, has been noise that has affecting investors. So some of the gains, though, in this risky group have really delivered short periods, have been delivered in short periods of time. So you've got the MAG7, you know, up 46% in four months. You know Plantier Technologies is up like 397. Circle Internet Group is up 335%. You've got Cantor. Equity Partners is up 142%. Kohl's is up 127%. Maple Finance CERP is up 371%. You just see these numbers and they're staggering.
Speaker 2:Robinhood, the online broker, has really been seasoned on this speculation. Robinhood is up 450%, by the way, in 12 months. Robinhood's rolling out prediction markets for the NFL and college football and Interactive Brokers even launched a prediction market in the US and Canada. And, of course, not to be outdone, sports betting apps aren't sitting still at all. Aren't sitting still at all. They DraftKings, applied for a new, applied to the National Futures Association to run its own prediction markets, and FanDeal partnered with the CME Group out of Chicago to offer bets on S&P 500, the NASDAQ, oil, gold, crypto and GDP and inflation even. You can even place bets on that. So, riding this wave of momentum, really, companies are trying to cash in on the willingness that investors are willing to wager really almost on anything that moves, and a relatively new index is watching what's connected with this trend and holds a collection of the aforementioned types of speculative stocks and assets, and this is one to keep an eye on.
Speaker 2:It's called the Degenerate Economy Index. Now, I can totally relate to this because, as a trader and former trader in the pits in Chicago, we used to bet on basically anything and everything. This is not healthy. This was not beneficial for anybody's psyche other than the fact that we would bet on how fast clerks would walk back to desk to return tickets that we had dropped in the belt desk to return tickets that we had dropped in the belt. We would bet on who was dating on the floor and who was going at how fast clerks would be able to pick up lunch and you name it. It was bet on. So I totally get it.
Speaker 2:And, without a doubt, we all call ourselves degenerates and we knew it. And, without a doubt, we all call ourselves degenerates and we knew it. But now here, fast forward, there's this entire economy index that is allowed and capable of being able to really bet on anything of stock twits and social leverage and a couple other companies. I believe he was one of the angel investors in Robinhood. He created this index a few years ago and he really describes a degenerate economy as this new phase of investors' ownership and gambling living life with the wallet on and in your phone ownership and gambling, living life with a wallet on and in your phone. And this degenerate economy includes education, experiences and activities that you can bet on. So we've really seen that you've connected hundreds of millions of young people into investing, trading, speculation, crypto gambling, betting, and essentially, this is a huge economy that's connected to free time and to mobile, Social, tech-heavy world. You know these social, tech-heavy worlds and you know anybody that wants to speculate.
Speaker 2:And I'm just bringing this up because, of course, I'm not advocating in any way, but you need to be aware that this is out there and there is a lot of noise. You're seeing a lot of players on X, on Instagram, on TikTok, on a number of different places that you know they're not vetted, they're not licensed and you need to be very, very careful. Where you're getting your information from is my whole point. So not saying that the information is something you should ignore, but just be very cautious and cognizant of the fact that you any recommendations that you're getting out there in the noise of this degenerate economy might not be true. So that's really it's more of a warning than anything else able to talk about this, because I'm seeing it a lot and having conversations, certainly with the interns that we have in our firm, as well as my kids the kids are children's friends that they have a lot of questions and so let's make sure that we're getting the right information and the right financial literacy that is being disseminated for sure into this.
Speaker 2:You know, into into into everyone's minds here, to make sure that you're considering the fact that it might not be the best guidance, it might not be the best advice, best guidance, it might not be the best advice, but this indice holds a lot of companies, both new and old, that can really maybe benefit from this degenerate economy. And, by the way, this indice changes a lot. There's a lot of movement in and out because some of these companies movement in and out, because some of these companies aren't necessarily doing all that well or they move on. But since the indexes inception started in 2023 through August here, it's been up like 156% compared to like a large cap benchmark of like 67% and it's up 23% year to date and that's more than double the performance of the S&P 500. So it's really it is helpful in two ways. First, if the bull market stays intact and the companies of this industry, you know, sort of receive additional tailwinds, that kind of push, the speculation, it can outperform the S&P 500 and probably will, even though there's just tons of risk. But the second way is many of these companies are benefiting from this enthusiastic, crazy speculation and they offer this sort of loose proxy to kind of show us when this impulse wanes and I've seen this before traded through the dot-com boom and the dot-com bust. It could be a warning, certainly for broader markets. And to reinforce this point, a back test of the indice from its website goes back and shows that it plunged 41% in 2022, and large cap benchmarks dropped about half as much. So you know if it turns and if it goes down, you're in for a world of hurt for.
Speaker 2:But moderating this and moderating this indice is something that really doesn't hurt to educate yourself and doesn't hurt to at least pay attention to and basically says oh, I've lost money, I'm out, and the retail investor comes in, kind of like as a sheep, where the institutional share classes and the institutional institutions are going to basically be the sellers, where the retail is the buyers, and then the world falls apart. You want to see that, that you would see that that indice would break down before the S&P 500. That's the whole point. It's kind of a tell to keep an eye on, and so that's why I bring it up. I also wanted to be able to make sure that you're getting good advice out there and also paying attention to things you've probably never heard of At least most of you out there and also paying attention to things you've probably never heard of At least you know most of you out there.
Speaker 2:It is a degenerate economy index and it is based on the degenerates of the world that are trying to really bet on anything that moves. So I hope that was helpful. If you have any questions on this or anything in the future, certainly. Greg at fairwealthcom is my email. We're broadcasting on WVLP 103.1 FM. It shows Money Matters with Greg. You can find us anywhere you pod as well on Apple, spotify and YouTube or anywhere else that you go, and we're always happy to be here trying to help you grow your money, invest your money, protect your money and, ultimately, distribute your money however you like. So, with that being said, I also wanted to mention that the Sevens report that we follow quite often has a really nice report on that as well, as far as the degenerate indices. So I want to thank that report for the ability to be able to kind of use that report for and give props for what this indice is. And if you need more and more information, I highly recommend you subscribe to their newsletter. It's a paid newsletter. It's very, very good and if you need more and more information. I highly recommend you subscribe to their newsletter. It's a paid newsletter. It's very, very good. It's very unbiased and very down the middle as far as information. It's called the sevensreportcom.
Speaker 2:I wanted to update everybody on the next and what's coming down the line here for Money Matters, for Greg, as far as a number of different things. We did open up an office in Tampa and we are very, very proud to be able to welcome John Farrell as our Chief Investment Officer onto Farrell Wealth. He's been with us for a little over a year now. I want to congratulate him on his nuptials, got married over the weekend. We were down in Florida, down in the Anna Maria Island area, with family, had a wonderful time down there and it was great to put everybody together and it was great to wish John and Shannon a fantastic future. Very, very excited for them and very excited for our guy, john, to crush it in Tampa and bring the same things that we've brought to all the different clients throughout the nation to the area of Florida and with our office in South Tampa and Hyde Park, we're very excited to be able to have that be a part of it. So congratulations to John. Well done, brother, and looking forward to having him on the show as well as many times as we possibly can to use his big brain that he has with a number of different topics, and that's what I want to mention today, which is following up here as far as the end of the show.
Speaker 2:Some of the things we're going to talk about and this is where I really would love some input I wanted to talk about. We typically talk about market volatility and the volatility that is the roller coaster of the world of investments and that we try to get you to be really able to focus and not derail your financial goals. We've always said that and learned from our father, dr John Farrell, that if you make a plan, you work the plan and that is your financial goal and your financial strategy. So, topics in relation to market volatility and making sure that you're sticking to your goals and staying focused, staying diversified and just remember that volatility is normal. It does happen.
Speaker 2:The other topics we're going to breach coming here in the next few months are paying off debt. The average American carries about $104,000 in total debt and if you're ready to tackle your debt and sort of giving up you know, giving up coffee or vacations you know how we might be able to do this and where you need to do it is. You can find this at consumeraffairscom. That's many of the debt statistics that are out there are on that website, so I highly recommend as a source. You find that we're going to be talking about how to pay off debt. You know what are the techniques to be able to do that. Then we'll also be talking about buying a first home. Right now, the unaffordability of homes is pretty intense, especially for the Gen Z generation, without a doubt. But if you're thinking about buying a first home, you know that all starts with the plan as well Budgeting, saving for that down payment and really understanding what your mortgage options. As we mentioned, interest rates look like. They could be cut at an 86% chance here in September, so that will how that affect the mortgage rates and we'll be talking about that as well.
Speaker 2:And then what everybody has as a goal or most people do for sure, because they want to move on and make their life everyday, life a Saturday is retiring early. How can we go about that and want to, and do you want to, retire early? Is it possible and what's the right strategy as far as that goes? I think you know, determined savings, smart investing, minimizing debt and all those other things that go along with retiring early are really, really important. We want to talk about that. We're going to have lots of topics along those lines. Then starting a college fund or maintaining a college fund for your kids. College costs have been rising and you know starting a fund doesn't really have to be this overwhelming thing. It's very simple to do.
Speaker 2:529 plan offers many tax advantages and flexibility. For sure, depending on your state and what that might be, it might even include tax benefits or even tax credits that you're able to use by funding an account for your child or your grandchild, which is really key. So, look, starting early on that, contributing consistently, really kind of want to, if you want to explore those options. You know obviously that's what we do. But we're going to be talking about starting a college fund, how you can do it, what's the best ways to do it. And then we're going to talk about, of course, we always talk about advanced tax strategies, and we're not an accountant and don't play one on TV talking about advanced tax strategies, and we're not an accountant and don't play one on TV, but we do know enough about the tax codes to be dangerous, to at least help you and then also consult your professionals, of course. But reducing your tax burden, advanced strategies on really tax loss harvesting, charitable trust, asset allocation, that can kind of make an impact overall. These are all really things that we want to be talking about and we do on this show.
Speaker 2:And then going into legacy and estate planning. You know, leaving a legacy isn't just about wealth. It's about the impact you can make not only to your family's life but to others. Estate planning can really ensure that these values and the assets and the intentions live on. We want to talk about that. How you can build a plan that honors your legacy. That is something that's really, really important to you we're going to talk about again.
Speaker 2:We're going to go into more values-based investing too. You know investments can be more than just returns. They can reflect your values and make sure that you are reflecting those values, whether it be sustainability, social impact, governance, you name it the values-based investing. It does help align your wealth with what matters to you most. Some people are really into this. Some people absolutely want to follow it every single as much as they can. Some people don't necessarily care, they just want to be able to make a return and move on. But let us help with that vision. I'm going to help you with that vision here, with Money Matters. As far as that goes, then I'm going to just keep on rattling off some of the things we've been wanting to talk about and if you want in addition to some of these, please let me know gregatferrowellcom.
Speaker 2:But the one thing that we feel like we do a really good job of as a multifamily office and family office services is managing significant wealth really takes more than just investing and it takes coordination. And you really need to make sure that the family office services sort of bring together all these tax, legal, estate, philanthropic planning. These are all things that we do at Fair Wealth and that's what we ultimately bring to you here as an audience too is what we do for a lot of people throughout the nation. We bring on and bring these ideas to you. So some of these family office services that's what very, very wealthy families have is a family office where they just manage their own wealth and there are no other clients involved. So what can we bring as far as a coordinated approach to you? We want to talk about small business owners that is, 95% of all businesses in America are small businesses and as a business owner, you have your personal and professional finances and your business finances. They're sort of very connected. Trying to help you manage those as a business owner Tax strategies that can help with retirement planning, retirement plan services you know we're really really good at formulation of plan design for business owners. That is, without a doubt, a forte and something we love to do and help business owners grow their wealth and also see if they can't put away more money for their family.
Speaker 2:To the women investors we're going to be talking about how women are building wealth like they've never before, investing with a purpose for financial independence. We've seen it across the board financial independence to legacy planning, to intention for their family, legacy planning to intention for their family. Their goals really have now seen a focus of a much better strategy and much more concentration and discipline to help this, you know, really to help this demographic, you know, invest more, invest wisely and building that plan that it's really, you know, ready to take control. We're seeing definitely a shift and it's fantastic to see how really women investors have really moved forward with intention. We are also going to talk about baby boomers and retirees. Retirement just really isn't a finish line now. It's sort of a new chapter, and whether you're retired or planning ahead, these tailored wealth strategies really matter. In retirement, there's ways to be able to change your allocation that isn't so growth-focused to go towards more income-focused. What does that entail? How do we do it at Fair Wealth, but also how do others do it as well. So that's something we're going to be talking about.
Speaker 2:Then we're going to go into the Gen X sandwich generation, which is my generation, for sure, and my wife, uh, and really caring for aging parents, uh, while raising kids and still planning, uh, your own retirement. Um, you know you're not alone and thoughtful financial strategies are really, really important, um, and then I want to talk about the millennials. You know, building a career, raising a family, planning your financial future, it's a lot, and you know you don't have to go it alone. You need to assemble a team. But from budgeting to investing, you know how you can help as far as creating a strategy that's working that's best for you and your family as creating a strategy that's working that's best for you and your family. And then Gen Z. You know, as I speak to a number of different kids out there, especially our kids, because we have three of them just starting out. You know, just basically starting to build, investing in even small amounts is really, really important. It can help you build a ton of wealth over time. So thinking long-term, staying consistent, letting compound growth do its thing and work for you are things that we want to be able to talk about. So I bring up all those topics because that's really the intention of this show and what we try to do here at WVLP 103.1 with Money Matters for Greg, and then also on our podcast and everywhere we podcast as well. So that's what's coming. So, if you're all in, you know like us, follow us. We'd love to have you aboard with the family, and that's our intention is to kind of grow with these things. You aboard with the family, and that's our intention is to kind of grow with these things.
Speaker 2:If there's other things you want to be able to know about or you think we should include in regards to these topics in addition to, please let us know. It's greg at farrowwealthcom. It's my email. I'm Greg Farrell, ceo and owner and president of Farrow Wealth Management. It's a wealth management firm here locally in Valparaiso, indiana, and then nationwide, in 24 states. We're helping people all over the nation. If you want to be a part of it, we'd love to be able to have a conversation with you. But also, please let us know if I can say one more thing, one more time. Let us know what you want to hear about and how we can help you and make this podcast the most informative, best value ever. So thanks again for being here today, listening in I believe it's 164th episode or something. That was just crazy, maybe 165. We're flattered to be here. Thanks for being to WVLP 103.1 and then anywhere your podcast. You can get us on our socials as well. So thanks, have a great week. Go Bears, beat the Vikings. See you Bye.
Speaker 1:Thanks for tuning in to Money Matters with Greg. We hope you gained some valuable insights today. Remember, your financial journey is personal, but you don't have to go it alone. If you enjoyed the show, be sure to subscribe and share Until next time. Here's to making your money work for you. Securities and investment advisory services offered through LPL Financial, a registered investment advisor, member FINRA, sipc.
