The Arsenal Money Clip Podcast

Market Insights and the Three C's With J.P. Morgan's Jordan Jackson

• Arsenal Financial • Episode 16

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Arsenal Financial advisors Doug Orifice and Jeremy Vaille are trying really, really hard to make a listenable podcast about money and finance. In this episode they have guest Jordan Jackson on, a Global Market Strategist with J.P. Morgan, to discuss the three C’s guiding his thoughts on the markets and financial planning right now: the consumer, costs, and complacency. Take a listen for financial insights and dad jokes.

Learn more about Jordan here. 

Find Doug, Jeremy, and Arsenal Financial at arsenalfinancial.com or call (781) 335-9100.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The information in this podcast is educational and general in nature and does not take into consideration the listener’s personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

Doug: 0:04

All right, and welcome once again to another episode of the Arsenal Money Clip, where we are trying really, really, really hard to give you a listenable podcast about money and finance. As always, we're doing this on a Friday. Ah, thank God it's Friday, JV. I am with my pal and partner, Jeremy Vaille. Jeremy and I run a firm called Arsenal Financial. Based out of Massachusetts, we have offices in Watertown, Mass, Norwell, Mass. Thank God it's Friday. Hey JV, what's up?

Jeremy: 0:31

Good. Friday before the Thanksgiving break. Couple of days off coming up. I'm looking forward to that. Some football.

Doug: 0:37

It's that time of year where we look back and we're like, A, how the heck did we get here so quickly? B, man, we get a lot of context now. We got 10 and one half months of data.

Jeremy: 0:48

Yep. It's been a year.

Doug: 0:48

So you and I are, we're thinking and talking to clients about a lot of year-end stuff, right. We get our calendar of things and checklists that we have for folks, but it's also where we start thinking about next year, too, right? 

Jeremy: 1:00

Yep, absolutely. Lots of changes this year. Or this year going into next.

Doug: 1:04

So as we think about next year, thought it was appropriate to bring in a guest. One of our partners here at Arsenal Financial is JP Morgan Asset Management, who's just been a wonderful partner over the years, especially from a high-level data point of view. They have this fantastic guide to the markets, which we'll talk a little bit about. So we are blessed and lucky enough to have a member of the guide to the markets team from JP Morgan Asset Management, one Jordan Jackson. Hey, Jordan, welcome to the podcast.

Jordan: 1:33

Doug, Jeremy, thank you so much for having me.

Doug: 1:35

We're thrilled to have you. I'm so tempted to just go right into basketball, right. And just talk Knicks Celtics. 

Jordan: 1:42

Dangerous territory.

Doug: 1:44

It's, I mean, especially this year, it's dangerous territory, you know? So maybe we'll just talk about finance, we'll talk about economics, we'll talk about the year that was, the year that is, and what lies ahead. But before we jump into that, Jordan, we have, you know, approximately 13 and one-half listeners for every podcast. They are dying to know what you do on a day-in-day-out basis. Tell us a little bit about your role at JP Morgan and what your day-to-day looks like.

Jordan: 2:07

Sure. I'd love to meet that half individual, by the way. 

Jeremy: 2:11

It's actually a child. 

Doug: 2:12

It is. It is.

Jordan: 2:14

Yeah. So thanks again. Really excited to be here. I've been with JP Morgan for about 10 years now. I work on our market insights team where we put together the guide to the markets. And, you know, really our focus is to simplify the complex and to see the present with clarity. And the way that we do that is to leverage the access to data that we have. And this is across the economy, how we're thinking about consumers and labor markets, inflation, and how all that feeds into broader asset allocation for investors. So, how do we think about stocks? How do we think about bonds? How do you think about the direction of interest rates, international stocks, alternative assets, really, you know, covering the whole gamut. And so I love what I do. I love, you know, meeting fun guys like yourself and doing podcasts along the way. So really excited to get into the conversation.

Doug: 3:03

Great. Yeah, and thank you to you for being here. And thanks to JP Morgan, too. You know, every once in a while, especially a busy year, busy week like this. We're a five-person small business in America, Jeremy and myself and three others on our team. And really the only reason that we can serve the hundreds of households that we do is because of partners and firms that have a ton of scale. So JP Morgan's one of our fantastic partners for a whole host of reasons. But really, the guide to the markets, which we'll talk a little bit about, and I think it's going to kind of form our conversation today. It's a way that we can go just click a few buttons, go to a website and get literally up-to-date data on a whole host of things from the intricacies of the stock market, what's going on in the bond market from an economic point of view, what's going on with employment, what's going on with immigration, all kinds of stuff. So it's fascinating what you guys do. So thank you for putting that out there for advisors. Really appreciate that.

Jeremy: 3:55

And we're using that data. We've used it several times in podcasts before, right? I'd say it's my favorite nerd out spot. Love nerding out on the guide of the markets.

Doug: 4:04

So I guess as we frame this, right, the podcast we try not to make super time relevant because we get a delay when we issue these podcasts. And we hope that any podcast that we do is actually helpful years down the line, right. So I think some of the stuff that we'll talk about today is maybe unique to this time frame, but maybe some of these things are not unique and rhyme with any sort of market or any sort of year. But you know, JV, I feel like a broken record. I don't know how many times we've talked about this, but I feel like we've labeled 2025 the year that folks kind of feel icky about money. Our client conversations are varied, our clients are different. What's been fascinating about this year is in 2025, which started off pretty rough, there was a lot of questions about global trade policy, tariffs. We were waiting for a tax bill. There was a whole bunch of issues that really had CFOs and businesses kind of hitting the pause button, had investors very concerned. It's really interesting to see how the measuring stick for success or the measuring stick for how people feel about their money has been so different. And I was so surprised to talk to clients halfway through the year, how shocked they were that they had made money after six months here in 2025, when 2025 really got off to what felt like an uneven start, depending on what your measuring stick is. And that's just the thing is, and maybe this is where we could start our conversation, Jordan, right? The measuring stick for folks is so different. Some people feel not so great about money because food inflation is up 6% year over year from last July to this July here in our six New England states. Open enrollment time, Jeremy, right? We just talked to a lot of clients about open enrollment. You were just on the road last week dealing with one of your clients doing some enrollment. Premiums for health insurance up a lot more than people expected. Home insurance, car insurance. If you're buying a car itself, that became such an onerous experience over the last couple of years. So the measuring stick hasn't just been how people have done on paper in their 401k. Sometimes the measuring stick is I don't feel good about what I'm spending or I don't feel good about what I'm hearing about on the news. Jeremy, tell us a little bit about your conversations that are about like the measuring stick for how people feel about money.

Jeremy: 6:17

Yeah, I have a good case this week. And it's like, hey, I'm not feeling good about this year. My income's down, my expenses are up, and it just hasn't felt good this year. You know, hopefully there's a brighter day coming next year. But when you zoom out, the 30,000 foot level, great. Your accounts look good, your long-term planning looks good. It's not feeling really good right now for a lot of people. And I think that's what we're seeing. And to your point on the roadshow, we did an open enrollment, and you know, you're looking at insurance premiums going up 20, 40% for a lot of companies, a lot of people. And that's going down to the participants and the people that are actually in these benefit plans. So yeah, it's there's some challenges for sure out there that I'm seeing.

Doug: 6:57

So, Jordan, we really enjoyed talking with you a couple of weeks ago as we get to kind of talk about our practice and hear about your day-to-day. And as we talked about this topic, you know, 2025, the year that people feel kind of icky about money, you kind of distilled that down into something you like to call the three C's. You want to kind of tell us about the three C's? And I think maybe that can kind of be our agenda today is going through those three C's one by one.

Jordan: 7:18

Yeah, absolutely. And I think as you guys walk through your comments, you really hit on all three. And those three are consumer, costs, and complacency. And, you know, obviously we spent some time talking about how consumers and Americans just feel kind of icky, icky about, you know, whether it be politics, icky about whether it be prices. So that gets us into the cost piece of it. Where do we think costs are kind of headed from here? And then complacency. You know, this could very well be three consecutive years of double digit returns on the market. And who knows, we've got a fairly optimistic outlook. We think next year could be also a pretty good year on the markets as well. But it won't be an easy year, right? And so we want to make sure that we're not being complacent. This is, you know, a great time. We actually, not to do a JP Morgan plug, but we just released our outlook yesterday, and we've titled the outlook AI Lift and Economic Drift. You know, obviously AI is just an integral part of the markets. It will continue to be a bigger integral part of everything we do in our day-to-day activities. And we've got a pretty cool graphic also generated by AI. It is literally an AI robot that is lifting up the globe. And within the globe, we have inflation, we have asset bubbles. You know, sort of folks are worried about the markets being a bubble, geopolitical risk. And again, this AI robot is kind of just lifting things up this hill. And, you know, that's kind of what we're seeing right now, at least from an equity market perspective. So let me know when you're ready to dive in, Doug, on these three C's.

Doug: 8:48

Yeah, I think we can. Just before we jump into that, I think 2026 could be a year that sets up as almost the sequel to not feeling great about money, because there is the soup where sentiment could continue to not be great as potentially unemployment ticks up as people continue to not feel great about money, but you could also have a stock market that does well at the same time. So, you know, we've talked to our clients a lot about hey, we have to kind of filter out the noise here and filter out some evidence that we have absolutely economy that may be weakening in some ways, but the dynamics of an economy and certain measurements doesn't mean that a stock market will perform poorly, because those could be two completely separate things and may be driven by the AI bus that you're talking about, too. So yeah, why don't we get right into it too? So, first C, the consumer, right?

Jordan: 9:37

That's right. You hit the nail on the head. Consumers feel just absolutely terrible. And we actually have data to back this up. So if you were to look at consumer sentiment, very popular measure that's published by the University of Michigan, they have sentiment measures that go all the way back to the 1970s. And just last month, the most recent reading for the month of November, consumer sentiment fell to a level of about 50.3. To put that into context, that is the weakest reading of consumer sentiment going all the way back to 1980. 

Doug: 10:11

Wow. 

Jordan: 10:12

Worse than 2022, right. Where the markets, both stocks and bonds sold off and the Fed was hiking rates. Worse than 2008, where we had double digit rates of unemployment. You know, I kind of laugh. I think everyone should just get a big bowl of water and a bat and put your phone in the bowl of water and take a bat to your TV, right. Because if you are watching news and watching headlines, it's just very, very pessimistic. And if you're scrolling up and down your social media feed, it's just a lot of pessimism and fear mongering that's out there. So I think a lot of that is fueling some of the challenges amongst consumers. And, you know, we're seeing it across, you know, spending. Consumers are being a little bit more conscious about where they're spending their next dollar, you know, being thoughtful about whether they go to the nice restaurant, you know, whether they shop at Target or stop at Walmart, kind of all these things, we're kind of seeing it play out in consumer behavior. So consumers don't necessarily feel great, but as you mentioned, Doug, that hasn't translated into the stock market. So the stock market has, you know, we're still up double digits, even though the last couple of trading days have been a little bit of a challenge, but we continue to see enthusiasm around artificial intelligence and AI, those big companies that have continued to get bigger and bigger and have driven a lot of the returns in the market. So it's been a very concentrated market. And, you know, again, I tend to think of kind of the economy and markets as on two different sleep schedules. And, you know, for those parents of young kids, I'm sure you are very aware of folks being in different sleep schedules in the house and how difficult that can be. So that then sort of translates to the cost side of things. So our second C. And costs have risen. Obviously, 2022, we were looking at nine percent increases in inflation year on year. And I know the Fed they target year over year changes in inflation, but consumers feel the price level. You know, you can't see me, but I've got a nice Caesar haircut, but that used to be $35 and now it's $55, $60. Feeding a family of four, weekly expenses has gone from about $350 to $400 to over $700. You know, American families are feeling that, and it doesn't feel great. So that's a real challenge that the Fed is focused on that. But interestingly enough, even amidst you know all these uncertainties around the consumer and higher costs, consumers, at least by the measures of economic data and consumption numbers, they're still willing to kind of get out there and spend. You know, maybe we're still in this revenge spending coming out of COVID or wanting to continue to experience services and all those good things. But we can see a bit of resilience amongst consumer spending of both across goods as well as services. So I think that's a bit of an interesting dynamic.

Doug: 12:51

I think one of the topics that we've seen in our office too is we think about consumer and we think about costs. You know, those are our families, and those families are investors too. And Jeremy and I are honest with people about the fact that when we get questions that are kind of addressed at, you know, the broad set of families, sometimes we feel conflicted in what we do because the folks that we help, they have high incomes, they have resources, they have assets. Our practice is not a great barometer to what's going on across America, across all classes, right. And we don't see a lot of those balance sheets that have very few assets and a whole bunch of debt. And year over year, those balance sheets have gotten worse and it has gotten harder for those families. And sometimes it's hard to hard to reconcile that, right? But we have to work with the client that's in front of us. And the client that's in front of us, year over year, has often had a balance sheet that has improved, which I think makes a lot of this information even tougher to swallow. Jeremy, to your point, when you said you were having a conversation recently with a client who's going through a tough now, but year over year is in a better place because that client has paid down their mortgage and has been able to keep up with expenses, keep up with debts, has added to their retirement plans, has had an experience over the last 12 to 18 months where bonds have made money, stocks have made money, heck, even cash has made money. Sometimes it's tough to reconcile these two things. The now and what we feel, the fact that there's a whole swath of America that is year over year not in a better position. But what we've seen is we have seen a subset of people, Jordan, to your point, year over year, they're in a better place. They're still able to spend, and their spending is helping to drive the economy.

Jordan: 14:30

Doug, I think you hit a great point. It kind of gets back to this concept of a K-shaped economy or K-shaped consumer. You've got upper income individuals on the upper leg of the K, and you have lower income individuals on the lower end. And you know, over the last couple of years, upper income individuals have benefited. They typically own stocks, they own assets, they own real estate. And what's going up? Real estate prices, home prices, stocks. This could be the third consecutive year of double-digit returns in the S&P 500. So if you've been invested, it's been a fun ride. But for those lower income consumers, they have not enjoyed that ride up. You know, they've, again, are kind of feeling the pinch of higher prices, debt levels. When we look at other metrics like credit card debt, auto loan debt, student loans kicking back into high gear as well, all those are weighing on those lower income consumers. You know, they're very much dependent on getting that paycheck every Friday or every two weeks. We haven't seen a broadening out in terms of layoffs, but it's also been very difficult for a lot of those people to find a new job at a higher wage to try to participate in some of this upside. So certainly a K-shaped economy. And I think this divergence helps to explain a lot of why things feel so challenging.

Doug: 15:44

Jordan, I don't mean to put you on the spot, but you mentioned a couple of metrics with debt and loans. Could you dig a little bit deeper into that? At JP Morgan, what are you guys seeing? Are you seeing certain segments of the credit market and the loan market reach some tipping points? You know, there's certain statistics that we have read about auto loan defaults reaching a high that they haven't seen in a number of years. I'm wondering if you have any data or any thoughts about numbers now and maybe how that plays into the road ahead.

Jordan: 16:13

Sure. So there's two numbers that we tend to want to look at. And this actually comes from the Federal Reserve. They put together every quarter a big report that looks at household debt and credit. So they look at the levels, they look at the overall change, and then they also look at the delinquency rates associated with that. The delinquency rates are particularly important. So these are just individuals who aren't able to meet their interest payment every month, whether it be on their student loan or their auto loan or their credit cards, et cetera, et cetera. And you know, we continue to see, you know, really just peaks. If you look at these are big numbers here, but total debts in the third quarter of 2025 reached a high point of just shy of $18.6 trillion. So trillion with a T. 

Doug:17:02

Wow.

Jordan: 17:03

Now, most of that, unsurprisingly, is in mortgages. You know, mortgage tends to be the largest liability item on most consumer balance sheets. So of that 18.6, mortgage debt accounts for about 13 trillion of that 18.6. But other areas that, you know, it's kind of evenly split, the remainder between student debt, which is at 1.6 trillion, that's another high, auto debt also equally at 1.6, and credit card debt, which is now at 1.2 trillion. All those have shown pretty sizable increases over the last year. And then when we look at the delinquency rates associated with this, so these are, I would call these sort of severe or serious delinquencies. These aren't just, you know, 30-day or one-month missed insurance payments. These are missed payments over the last three months. And they're particularly high across student debt. So about 14% of outstanding credits has been defaulted or ends in serious delinquency.

Doug: 18:02

That's a big number.

Jordan: 18:05

Huge number. Some of it is reporting. Just keep in mind, coming out of the pandemic, there was some legislation in which credit bureaus did not have to report missed student loan payments, and there was a period of forbearance as well. But now they had to start reporting missed student loan payments. So perhaps that number may be a little bit artificially high, but it's still quite high. Credit card debts also very high as well, at right around 7%. Auto loan debts around 3%. And I would say a lot of those delinquencies are concentrated in some of those lower credit score individuals. Think the difference between a prime borrower and a subprime, that difference is roughly a credit score of around 660. A lot of those delinquencies are concentrated in those individuals that have generally weaker credit scores.

Doug: 18:50

All right. So we've hit consumer, we've hit costs. That third C is really interesting right now because it's been a period of time where I think some investors have been complacent. Again, we try not to timestamp these podcasts, but it is what it is. As we're recording this, we're starting to see some volatility froth up in the markets. So, you know, complacency is maybe something that might be waning, but is still a factor that is there. And from a year in and year out perspective, investors can get complacent, right. Because over a long period of time, a lot of times inertia works, but inertia works until it doesn't, right. Until we wake up and we realize the thing that we've been doing passively for a number of years doesn't work anymore because either the market has moved, the puck has moved, your goals have moved, your life has changed, your job has changed, you're 15 years older, right? You know, our practice is completely run by a bunch of Gen Xers. We're all Gen Xers in our 40s and 50s. And our average client is probably in their late 50s. So we often have the conversation, what got you here won't necessarily get you there. And if you're 55, you may not want to be invested in the same way that a 35-year-old investor is invested, right? So I think there's a lot of ways to slice and dice that third C, complacency. You know, in terms of the data, Jordan, right, in terms of what you're seeing, and I think maybe as a window into 2026. What's your thoughts about complacency, whether it is from an investor's point of view, from a money manager's point of view, from a consumer's point of view? Thoughts on complacency?

Jordan: 20:25

Yeah. I mean, it's easy to fall into being complacent when the market has done so well. But to your point, Doug, necessarily what worked well last year or last two plus years may not necessarily work next year. You know, that being said, I think one thing that we can do that avoid that complacency is to be thoughtful and is to be active. You know, embracing having a conversation with your financial advisor, with you guys, thinking about, you know, where do we have exposures within our strategic plan where we might be a little bit overweight or a little bit long? Where can we kind of dial things back? How can we shift the portfolio perhaps a little bit more conservative? Or on the other end, are in a position where we can take a little bit more risk, potentially given time horizons or where we think things are. So I think complacency is dangerous, but we also don't want to necessarily overreact. You know, I tend to think of portfolios like a bar of soap. The more you touch it, the smaller it gets. So again, we don't want to, you know, just trade, trade in, trade out, and try to time this market, but we do, I think it is appropriate to make some shifts where it makes some sense. Obviously, if you've allowed your portfolio to sort of run over the last couple of years, you probably want to look at your growth exposure. You want to look at your US tech, your large cap tech, because it's probably gathered a much larger share of your overall portfolio and your holdings. And maybe this could be a good time to start to rebalance as there's continued to be a lot of concerns around AI, the AI theme, the hyperscalers that are driving the AI theme, whether it be Microsoft, Google, Alphabet, Amazon, Oracle, even in the private space, OpenAI, and all these circular deals that are happening, valuations look pretty expensive across a few of those names. And, you know, you have to get a little bit concerned when one company reports, Nvidia, which they just reported mid-November, this is the micro indicator turned macro. And, you know, it's everybody's watching Nvidia's earnings to get a sense of is this AI trade real? Can it continue to run? Just driven by some of their number, it does seem that that may be the case. They continue to see a lot of demand for their chips and GPU products, but there's a lot of question marks on how much spending is actually going on there. And now that a lot of these companies are tapping the debt markets, so issuing bonds or borrowing. Historically, bubbles have popped or you know, come crashing down, either via excess borrowing or stretch valuations, and we're starting to see both. You know, we may not want to be too complacent by just kind of leaning into AI trade, and maybe we want to start putting dollars some other places of the market, whether that be more value companies, financials, industrials. So I think that's an appropriate conversation to start having as we move into year end.

Doug: 23:10

I'm gonna throw two items in here. One is about index investing, second one's about international investing. And kudos to you guys at JP Morgan for being on that latter one for a number of years. I just had this conversation this morning, funny enough, as it pertains to index investing. We're talking about the Vanguard Total Stock Market Index ETF. And this person was asking if adding something like the QQQ, which is the NASDAQ 100 ETF, makes some sense. And I told that person that that would be duplicative. Pretty much the same thing as having the total stock market index. And he's like, What do you mean? I was like, clicked on the ticker symbol for Vanguard Total Stock Market Index, and I read off the top nine holdings, and the top nine holdings are the top nine holdings of the NASDAQ 100. So, to your point of complacency and to your point about the AI trade, which all of these companies are taking part in, there are thousands of other companies that you can invest in. There are thousands of private companies, which you can gain exposure to. There are thousands of non-stock-oriented income-producing investments like bonds or like real estate or a number of other things. And there's even cash investments. So the theme of what got you here may not get you there. We're thinking about that all the time again, especially when our clients are thinking about retirement, right. Like our average client that we're talking to is T minus 10 years away from retirement or is recently retired. And really, we would be doing them a disservice if they're 100% in stocks and they're dominated by those nine names. So, again, there's different ways to invest in U.S. stocks. And sometimes getting under the hood of something like the total stock market index doesn't mean that you get well, well diversified. Jordan, I want to throw this back to you in a second, because as we listen to Dr. David Kelly, who heads your team, and we always tune in for his quarterly guide to the market when the quarterly is issued and he has his calls. A big theme for JP Morgan is making sure we don't sleep on investments outside of the boundaries of the U.S., countries that are domiciled outside of the U.S., because in terms of how much you pay up to own these companies outside of the U.S., international stocks have been a little bit cheaper, quote unquote, than U.S. stocks for a while. And you guys have been talking about this for years and for years also in our portfolios, international stocks have always been a component of that as well. So love to have you talk a little bit about, you know, US stocks, that complacency and international stocks, maybe what's gone on here in 2025 and maybe what the road ahead looks like.

Jordan: 25:51

Yeah. So, you know, a number of points there. Maybe I'll start with the indexing one and about complacency. We tend to look at flows a lot. Like flows really matter for the market.

Doug: 26:01

So for our clients out there listening that don't know what flows mean, because they might be thinking of like watering their garden in the spring. What does flows mean?

Jordan: 26:08

Money coming in and money not coming out. 

Doug: 26:11

To investments, right? 

Jordan: 26:12

To investments, right. So that kind of flow of capital and money. But to put some numbers around this, the average American consumer with employer match contributes about $8,500 a year to their 401k. About 70%, to your point, in terms of passive investing, about 70% of 401k assets are in the US stock market, are in things like the Total Vanguard stock market fund. And because 40% of the market is invested in the max 7 or those really big companies, you know, just from sheer 401k money alone, the average American is putting about $2,300 a year into these seven companies, seven, eight, nine companies. Whether the outlook is good or bad, that's a lot of money and flow going into the market. And I think that's having an impact on keeping the market elevated. You talked about the duplicative nature and the overlap. You know, ETFs or exchange traded funds, those are an investment vehicle to gain access to a basket of stocks. There's about 4,500 of them or so, different types listed across the US. Here's an interesting stat. 1,600 of those ETFs have exposure to Nvidia. Think about that overlap and that kind of complacency. You know, what this allows for is a lot of money can just blindly come into the market, keep markets elevated, keep markets pushing higher. But because markets have done so well, now a lot of investors are sitting on cap gains. And so, you know, you don't want to necessarily sell to realize those cap gains to pay Uncle Sam. And so that makes money coming in really easy, but money coming out really hard. I think that is a big reason that's contributing to this market continuing to rip and move higher. And any sort of little bit of volatility, you tend to see like the market sell off one and a half or two percent in a day. And the next day it's up two and a half percent, right? So incredibly difficult to try to time this market. But I think kind of the structure of the industry and how it shifted and the growth in passive, and I can almost use passive and complacency as kind of one and the same, really kind of allowed markets to move higher from here. Now, look, we want to be thoughtful. We don't want to leave money on the table, right? So again, we want to be thoughtful about where markets can go. If you got out of the market at the end of 2022 when you were sitting on losses and you didn't want to get back in, well, you've missed two years of north of 20% returns. You certainly don't want to leave that kind of money on the table because that translates to real dollars. So that's the first thing I would say around kind of indexing and some of the complacency tied to it. On international, it's been really interesting after 15 years of international underperforming the United States, that dynamic has shifted so far with you know many economies, whether it be the Euro zone, European equities, Chinese equities, emerging market equities, they're up over 30% in US dollar terms. Whereas the US market, you know, again, after maybe a bit of a choppiness in November, it's still up around 10 to 15% so far this year. So it's been a good year for international assets. And one of the, I guess, the contra to complacency is again being active. And we're taking a very much an active approach towards international. And we're not just blindly buying, you know, the index for Japan or the index for Europe and emerging markets. We're really leaning into some of these structural shifts that have happened and are taking place in global markets. So, you know, you think about Europe and the fact that they've had, call it self-imposed fiscal austerity, for many, many years, where the government wasn't willing to spend. Many would call that prudent, right? But the war in Ukraine has been a reminder for Europe and European countries and their allies to fortify their military, their defense, their aerospace. And so they're looking to spend upwards of 5% of their debt to GDP, or getting up to 5% of debt to GDP in spending towards those areas to really help to fortify themselves. And that's having a significant impact on defense stocks, military stocks, contractors. Those equity markets have done incredibly well over the last couple of years. You know, other pockets, you think about the AI craze and the amount of semiconductors and chips and all those inputs and parts, those aren't being built in America. They're being built in South Korea, Taiwan, and Japan. And those parts of the market, stocks like TSMC, for example, have done incredibly well on the back of this AI demand. And we think that will continue. And it makes sense for investors to have that exposure in their portfolios. Value stocks like banks and financial institutions. I think people forget that just six plus years ago, central banks globally were experimenting with negative interest rates. You know, you think about negative interest rates. If you're a bank, you're losing money just by your everyday functions, right? So, and that dynamic has completely changed. Interest rates have moved higher. Banks are able to do what they do, i.e., borrow deposits and lend money out in the long end and things like mortgages and things like that. And they can actually make money on that difference. And those stocks have done incredibly well also. So it's really about not just blindly buying international stocks, but being, as I mentioned a number of times, very thoughtful and looking into structural themes that are supportive for these assets.

Doug: 31:48

So as we put it all together here, right? We got the consumer who are, I don't want to say struggling end-to-end, but having to adjust end-to-end. Because whether you're a, you know, somebody who has a higher income and higher expenses, whether you're somebody who's experiencing an employment outage, everybody's having to adjust one way or the other if you're a consumer. Costs are up no matter who you are, right. And from a complacency point of view, our clients who have resources, who are trying to figure out how to get from point A to point B, we're not making leverage bets to any one part of the economy or any one type of investment. And oftentimes, you know, if you're just plunking money into the S&P 500, maybe you're making a bigger bet on tech and AI than you think. So, you know, Jordan, as we wrap this all up, let's maybe think about the road ahead for 2026. Not that we want to give blanket advice, right? But maybe where we just covered the three C's as topics for today, a couple bullet points for 2026. You know, an investor or somebody who is just trying to get to the finish line for retirement, if we can get them to focus on just a couple of things from an investment point of view, what's JP Morgan underlining and highlighting?

Jordan: 32:57

Sure. No, we talked a little bit about how the stock market and the economy can be on two different sleep cycles. I think a lot of the challenges that face the economy this year are going to continue to face the economy next year, whether it be higher prices, tariffs, tariffs increase prices. And we've seen modest increases, but perhaps we haven't seen the full brunt of those increases. We very well could see that impact next year. So again, those prices, costs, you know, are not necessarily coming down. They likely are going to continue to move higher. But even on the back of that, we think from an investor perspective, we actually remain pretty optimistic of the investment landscape. And I know that may be contra to what we're seeing in the headlines. Everyone's trying to call the next bear market or the next correction and stocks. And this doesn't mean that the path higher won't be choppy, there won't be some slips. But we do think that we could see another year of positive returns coming from the equity market. You know, obviously there's worries about AI being in a bubble. We wouldn't necessarily subscribe to that notion of this being a bubble. A lot of the spending that we're seeing is coming from companies that have billions worth of cash. I mentioned a little bit that they've been tapping debt markets, but even after borrowing, they still have more cash. Many of them have more cash still than relative to what they borrowed. That's a sign of really good balance sheet strength. And so these companies, you know, maybe it's not another 40% year for these companies, but it could be another 5 to 10% year for those AI hyperscalers. And then also, we've spent a lot about time talking about spending and these companies putting money into data centers and infrastructure and compute capacity. One company's spending is another company's revenue. So as we start to think about that implementation phase, this next phase of this AI build out, it's looking at the industrial companies. It's looking at these material companies because to build these cooling systems to cool down these data centers, you need the copper, you need the nickel, you need the lithium, you need the pipeline companies that are going to be able to transport these materials to where these data centers are being built out. So infrastructure assets, you know, these are all areas, investable areas that look really, really interesting, kind of in this backdrop of this broader AI build-out phase. So, and I think this provides areas of opportunity for investors to make another dollar in the market. I would also say that from a policy perspective, what's really going to be impactful for 2026 is the implications of the one big beautiful bill, how that impacts broader consumers. A few components of the bill itself, right, removal of federal income tax on tips and overtime bonus deductions for senior citizens, folks in high-tax states, like in the New England area, that increase in the salt deduction from 10,000 to 40,000. Folks might go back from claiming the standard deduction over the last couple of years to going back to itemizing. You know, suffice it to say, putting some numbers around this, the average refund check in 2025 was $3,200. We now forecast that the average refund check next year is going to be $4,000. So that's an additional $800 per average household. And look, we've seen this story again. You give an American consumer a dollar, they're going to find a way to spend two. I joke with my wife, she's going to find a way to spend three. But that tends to be pretty good for growth, right? You know, as consumption potentially picks up in the first half of the year, we could see companies becoming a little bit more profitable as folks go out and spend that additional dollar. And that bodes well for earnings and that bodes well for assets. And concerningly, it also doesn't bode well for inflation because more demand tends to push prices higher. So we again, we don't want to be complacent. We want to kind of balance these risks, but also thinking about taking advantage of these opportunities. And then lastly, as we think about the bond side of things, you know, income still looks attractive in the bond market. And so if you don't necessarily want to take a whole bunch of equity market risk, you can still, you know, park your money in a bond fund that's yielding, you know, right now, somewhere between four to four and a half percent. And you probably be able to sleep at night, right? Over the next 12 months or so. And I have a three-year-old and a one-year-old, so I haven't slept in four years. But if you don't want to take that risk to be able to park it in a risk-free asset and actually get an income stream. So as we come into next year, we remain cautiously optimistic on risk assets and the broader market. But we recognize for those who are a bit more conservative with their portfolios, there's still opportunities for conservative income in things like real estate, in the bond market as well. And then also, you know, gold. So we didn't mention gold, but the precious metal itself, we think there's some further upside to gold from here also. It's had a great year, obviously a bit of choppiness coming into the back end of the year, but there are some dynamics that are still quite supportive of gold continuing to move higher and be a safe haven asset in 2026.

Doug: 37:59

Appreciate that. So as we think about next year, too, you know, on our door, right, JV, it says financial planning and investments. I think we've covered a lot with investments. As our head of financial planning, right, from a planning point of view, it's not just investments that move the needle for folks. What are you thinking about and what are you talking about with folks as we sort of transition into next year?

Jeremy: 38:19

You know, I think I grapple with going back to what we talked about with the consumer and the cost, grappling a lot with the sentiment coupled with the consumer finances look pretty decent when you look at the guide of the markets, right? But when you couple that with the sentiment and how people are feeling and what we see kind of at the local level, there's a tale of two cities there, it feels like in a lot of ways. But I think a lot of the conversations going into this year continue to be how do we capitalize on the one big beautiful bill changes and making sure that we're well positioned for kind of this next chapter.

Doug: 38:55

I think from a planning point of view, as we go into next year, I think one thing that can help stave off, you know, there's a lot of topics we've talked about, and it might be tough to act on some of these things. And I think from a planning point of view, just being systematic about everything you do oftentimes is the secret sauce, right? Jordan, really interesting stats. I didn't realize that $8,500 a year was the average amount of money that went into a 401k plan. And that's all done from systematic savings, right. That's all done from planning 12 months in advance and saying, hey, you know, like how much can I afford to invest in the future version of me by putting money in a way in a 401k plan? One of the reasons our clients' balance sheets are better year over year is because they're systematically paying down debt. They're systematically paying down a mortgage. So maybe some things to think about as we go into next year, right. Is A, you talk about maybe a few dollars back extra in people's hands because of larger tax returns. That could be $800 that you could not spend. That could be $800 that you decide to put somewhere else. You know if you're going to get a bigger tax return this year, and you got extra thousand bucks, hey, let's plan in advance and figure out where that goes. You recently bought a house in the last couple of years. You don't have a two or three percent mortgage. You may have a six or seven percent mortgage. Does it make sense to add a few bucks to paying down that mortgage? Does it make sense to ratchet up 401k? Does it make sense to go try and build up your cash reserves just in case there's an emergency, right? Maybe it's yes to all of these things. But again, like if we know that we're going to have a few extra dollars from something like a tax return or we got to raise, in addition to the spending that's come up, a lot of wages have come up too. Where are we directing that extra cash so that we can make some headway?

Jeremy: 40:37

Douglas, what's my favorite financial planning term? The one word that I love. 

Doug: 40:41

Oh God, what is it? 

Jeremy: 40:44

Consistency.

Doug: 40:45

Consistency. Of course, the fourth C. 

Jeremy: 40:48

The fourth C. 

Doug: 40:49

Consistency, absolutely. We talked about that last time. Hey Jordan, we really appreciate you. Thanks so much for your time and your insight. And thanks to JP Morgan for everything they do as a partner. We've come up on the most important part of the podcast, and we're glad to have you here for this. And this is Jeremy's dad joke segment. Are you ready for this?

Jordan: 41:07

Uh I'm a little scared. 

Doug: 41:10

As you should be. 

Jeremy: 41:11

I always try to be on theme. So I got two for you today, Jordan. So we've got the big Giants Patriots game coming up. By the time this airs, the game is going to be long and over, and we're going to have the result. But Jordan, big New York guy, I thought I'd give you a Giants joke. By the way, looking for a Giants, Yankees, or Knicks joke? Not a lot of PG jokes out there. So here's one that I found that I enjoyed. And only the guys in this room are probably going to understand it. But did you hear about the joke that Eli Manning told his receivers? 

Jordan: 41:47

No.

Jeremy: 41:48

It went over their heads. 

Doug: 41:54

I love it. 

Jeremy: 41:55

Alright. Last one. Why is Ireland a good investment?

Jordan: 42:01

Why? 

Jeremy: 42:03

Anyone?

Doug: 42:05

Got me.

Jeremy: 42:07

Because its capital is Dublin.

Doug: 42:10

Oh, that even took me three seconds to process. Amazing. Amazing. Oh man. Jordan, thanks for being with us today. We appreciate it. JV, any closing thoughts?

Jeremy: 42:21

No, I just I love having our guests. And Jordan, thank you so much. It's been great. Wish you a very happy Thanksgiving and end of the year and prosperous 26.

Jordan: 42:30

Thank you. You two really appreciate it. You guys did the best in the game. I spent a lot of time talking to advisors across the country. And you guys are definitely a few of the more thoughtful individuals. So thank you for what you do and all you do for your clients.

Doug: 42:42

Appreciate it. For those who have been listening, all 13 and one half of you, if you have questions about anything that Jordan's gone over today or any topics that we've talked about, please feel free to reach out to us. You can always get us at info at arsenalfinancial.com. Feel free to ring us up. We're at 781-335-9100. We're here. This is year-end planning time. This is get ready for next year time. Man, it's been a busy couple of weeks as we get ready to plan for year end and JV, maybe even take a little bit of time off towards the end of the year. So I know we're looking forward to that. Thanks again to Matt Hanna, who always helps us out with this podcast. If you are in the Watertown area, please listen to Matt's fantastic podcast called Little Local Conversations, where Matt is having these great conversations in and around our city of Watertown here, talking to all kinds of interesting people in the community. So Matt, thank you so much for everything that you do. Appreciate it. And we will see you next time on the Arsenal Money Clip. Thanks for joining us. Jordan Jackson, JP Morgan, thank you again.

Jordan: 43:43

Thanks, guys.

Speaker: 43:47

Securities and advisory services offered through LPL Financial, a registered investment advisor, member of FINRA, SIPC. The information in this podcast is educational and general in nature and does not take into consideration the listener's personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.