December 27th, 2025 - 2025 Is In The Books!

In a lively Saturday morning discussion, Steve Van Wie and Joey Loss wrap up the highlights of 2025, emphasizing stock market trends and economic forecasts. They share intriguing insights on bull markets, consumer spending, and adventurous options trading. With a touch of humor and holiday spirit, they also take calls from listeners, keep the conversation engaging, and promise more excitement for the upcoming year.

Transcript

Steven H Van Wie 0:00

It's Saturday morning, it's 10 o'clock. This is the Van Wie Financial Hour. I'm Steve Van Wie. And the prodigal son is doing what he frequently does, prodigaling or whatever. He's on his way up to, I believe, North Georgia. Right.

Joey Loss 0:06

And I'm Joey Loss.

Joey Loss 0:18

I honestly don't know. I just knew he wasn't going to be here.

Steven H Van Wie 0:20

He was hoping to run into some snow or something. I think they're gonna bring in the new year with the possibility at least, which we're hopefully not going to have around here.

Joey Loss 0:30

Yeah. Not a bad place to do it, North Georgia.

Steven H Van Wie 0:32

Nope. And here on this very last show of the calendar year 2025, that means we're only one month short of finishing up year number 11, because our anniversary date was the first part of February. So Angela was just talking about that a little bit ago. It. It kind of got her just how long it's been and how quickly it went and I couldn't agree more. I remember walking in here the first day, which is part of the story I'll tell you next, about a month from now. But I remember it like it was yesterday and that was it. So here we are, decades later. And as I welcome everybody to the show, I always remind the regulars that if you keep listening, we'll keep talking. And if you're new to the show and you, you probably want to stick around for the hour, you'll learn something. Pretty much a guarantee. As much as anything in life can be guaranteed, you generally learn something. You might even, even. You might even learn something that's really only our opinion because we do a lot of that. Yeah. I have never been without opinions, as all of my friends and relatives know. And sitting in this chair rather than at home doesn't make a bit of difference to me. So we'll, Joey and I'll discuss the events of the week and what we're thinking about the new year and all that over the course of the day. It's probably going to turn out to be sort of a conversational rather than academic show just because we're wrapping up the year. Then we'll come back next week, we'll tell you exactly how the year went. And from my standpoint, looking at what I see, we're probably going to have a pretty good time next week. Yeah, that would be my guess.

Joey Loss 2:26

I mean, the trend from this week certainly suggests positivity. It was a positive week in the stock market. Since our last market wrapped before Christmas, indices have risen. The five day Returns for each index is as follows. The Nasdaq is up 2.5% over the holiday week S&P 500 is up 2.3%. The Dow is up 1.6. Small caps rose about 1. The international index was up 1.8%. And emerging markets was the winner for indices this week at 3%. But I would be remiss not to mention that silver had another massive week, 16% up and gold was up 4.44%.

Joey Loss 3:09

It's, you know, we keep saying this can't go on forever, but every week is a little bit closer to forever. It just keeps going. So I don't know where that's going to go. Angela was just in here saying, you know, asking us about it and it's very hard to comment when something's so statistically at the top of its performance history. I mean, I told her the truth.

Steven H Van Wie 3:27

I said, you listen and I will tell you how much of it I sold this week personally. Yeah, it was just a little, but it had a 200% profit on it. And I can't look at things like that and say, oh, it'll go to 250 or 300 because I've watched metals. If you want to see volatility, you don't have to look any further than precious metals. Generally speaking. How many times have we rip and snorted on the way up and over only to come crashing down? There was the event when the Hunt brothers tried to corner the market and lost gazillions. And then in 08 we had the same thing where it climbed up to 49 in a hurry. And when it crashed it was just

Joey Loss 3:40

Yeah.

Steven H Van Wie 4:16

sudden and steep and typical. I guess I would say I don't know if this will keep going up, but I sure know one thing. I do not have a penny invested in gold and silver anymore. I sold off all of my investment. Everything I've got now is running on the house money. So then I feel a lot more confident. Yeah.

Joey Loss 4:34

That's good. I mean that's the only way to ensure that you become a winner no matter what happens. Right. Is sell below your whatever you invested initially. There are three more trading days for the year 2025 next Monday through Wednesday in next week's market wrap will provide a year end review of all the major indices and performance by sector and get and have some fun there. But overall, this fourth quarter appears to be headed for a healthy close, despite some mild up and down weeks since early October. In the December 24 jobs report, initial jobless claims fell sharply to 214,000 for the week ending December 20. This was significantly better than the expected 223,000 and represents the lowest reading of the year when we remove the volatile Thanksgiving week. While hiring has slowed, companies are largely avoiding mass layoffs, which has been kind of the fear in the AI realm. And this suggests a low hiring, low firing environment in the job market. Q3 GDP initial estimate was published by the Bureau of Economic analysis on the 23rd. It showed that real GDP increased at an annual rate of 4.3% during the third quarter of 2025. Notably, the growth was driven by resilient consumer spending and government spending. Despite

Steven H Van Wie 4:41

Yep.

Joey Loss 5:51

the late year long lasting government shutdown, the economy has significant momentum heading into these final three months of the year that are now coming into a close. Personal income rose by 0.4% in September. Consumer spending rose by 0.3%. That pretty much sounds like everybody's spending whatever they have left after taxes. That's a good thing. And at least until the budget impasse began in Washington, consumers remained willing to spend. As Adam mentioned last week, non farm payrolls grew by a modest 64,000 in November and unemployment actually hit a four year high of 4.6% while inflation cooled to 2.7%, which is well below forecasts. So to summarize what's good and bad out of that, the only negative here is a slowly rising unemployment rate which is honestly still within a healthy range of 4 to 5%. And that's due largely to slowed hiring, not due to mass, mass layoffs and jobless claims are in a decreasing trend. Inflation is on a cooling trend and GDP growth is up. These are all positives. Yeah.

Steven H Van Wie 6:49

And as I reported a couple of times lately, you're seeing that unemployment rate tick up. Everybody's looking at price levels when they talk about the, the tariffs. And that's not the direct effect of the tariffs. The unemployment is much more related to the tariffs than are the price price levels. So is there an effect? Yes. Is it all negative? No. Is it all positive? No. None of the above. But if you look at our trade deficit being as low as it's been in forever, and, and really all of that is decent news. But the thing that's most fun to me is watching all the experts whining and crying in their soup. Yeah, it just makes my day.

Joey Loss 7:32

Yeah. I mean, where were predictions 612 months ago? It was going to be a terrible year. All this bad stuff was going to happen. Turned out to be a great year. And now the only thing that has me worried is that strategists are starting to say it's going to be a good year next year, which is never a good thing.

Steven H Van Wie 7:47

The kiss of death, right? Never know. Yeah. And I would like to also mention that with all the people traveling this week, national gas average is 284A gallon and there are nine states where it's under $2. Tell me you've seen that lately.

Joey Loss 7:59

Wow.

Joey Loss 8:02

I can't remember that since I was a kid looking at the media.

Steven H Van Wie 8:04

Who told us that was going to happen? Yeah, some, some guy in the White House, I think it was. And everybody poo pooed him. He don't. It's not good to, to second guess Trump's ideas without some background. I'm going to take a short break and we'll be right back to wrap up the wrap up and we'll see you then. So don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 8: 35

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Joey Loss 8:37

And I'm Joey Loss. 

Steven H Van Wie 8:39

And we do as usual have a trivia question brought to you by Paul Lloyd at First Coast Alarm, 904-636-7888. We'll get you right to Paul. The question. Let's talk about broad markets and the sectors. The S&P 500 index classifies 12 different sectors throughout our stock market. And as we speak right now, only two are extremely overbought, meaning they're more than a couple of standard deviations above their averages. Those two are financials and materials.

Steven H Van Wie 9:10

Bet you might have thought one of those would be technology, but you'd be wrong. My question is there are two that are also classified extreme, but they're extremely oversold. What are they? So you have two out of a total of 12 that are oversold. I did want to mention also that lines are open 904-222-8255

Steven H Van Wie 9:35

where you can take a shot at the trivia or change the subject to what you would rather talk about or wish everybody a Merry Christmas and a happy New Year or whatever the heck's on your mind. How's that? All right. I wanted to say one thing. No, I already said it. Yeah. I thought the, the gasoline thing is indicative of so many things. And I think one of the reasons that people are willing to spend a little more money is they have an extra 10 or 20 bill in their pocket after they fill up their truck. Yeah, it counts, people. It counts. All right. So you want to wrap up?

Joey Loss 9:46

Sounds good.

Joey Loss 10:16

Yeah. So we, we use something called bespoke research, which just does a fantastic job of pulling all different sorts of market data together and creating points that mean something to investors. And at the end of each year they do a big pros and cons list going into the next year. And I think that's interesting because if anybody has a perfect insight as to what might happen, it's them. And instead of saying here's what's going to happen, they say, here's all the reasons it could be good, here's all the reasons it might not be good. And so of that massive list I pulled five pros and five cons that I thought would be interesting to talk about. What do you think we should start with? Pros or cons?

Steven H Van Wie 10:55

Which one?

Joey Loss 10:56

What do you think we should start with? Pros or cons going into 2026?

Steven H Van Wie 11:00

Let's use reverse psychology and start with the cons.

Joey Loss 11:03

Okay. All right. So con number one is, is that valuations are getting a bit lofty. I think we've been defensive of valuations for some time, but now we are kind of getting into that lofty zone. And if you look at Buffett's market cap to GDP ratio, it shows that we are near or at all time highs on any given day of the value of the market against the underlying GDP supporting that value in the market. This doesn't necessarily mean we're due for a market decline, but it may suggest that the market needs time for revenue to grow at current prices in order to level things out. Con number two is that the mega caps are faltering. Nvidia, Microsoft, Amazon, Meta and Tesla are all off 10% or more from their 52 week highs. You could call that correction territory for those stocks. But the overall market is still up. So in a way I'm kind of attaching a pro to this because that points to healthy market breadth. If the market can still go up and these titans are down, that's actually kind of a good thing. It means the water's rising for everybody, not just seven companies like we saw many years ago. Con number three is for much of this year we've said that massive capex capital expenditure taken by these tech stock companies has been from cash flow. And so we're saying, well this, this is nothing like 2000 because these companies are using real profits and free cash flows to pay for new investment that will create more of that in the future. Well now we're starting to enter a realm where that spending is reaching debt territory. They're borrowing money to do some of this exposure expenditures not Necessarily mean it's a horrible thing. It just means it's worth noting.

Joey Loss 12:38

Con number four, we've had historic beat rates for earning per share numbers and revenue estimates over the last few quarters. And I think the market's getting a little bit used to the market just being awesome. Every time these reports come out, we'll find out if, you know, these beat rates are inevitably going to revert to the mean at some point before, you.

Steven H Van Wie 12:56

Know it will be in the next earnings season.

Joey Loss 12:58

Yeah, I mean, it's already almost here and you know, we'll see what happens, but at some point they're likely to revert to the mean and we'll have to see how the market responds to that. And then con number five is pretty interesting. Year two of any presidential term is historically the worst of all four years of any presidential term. And I was shocked by the numbers. Since 1928, the S& P has seen a median gain of only 0.58% in year two of the four year election cycle. Years one, three and four of any presidential cycle, Republican or Democratic, have median returns of 9% or higher. That's a massive disparity.

Steven H Van Wie 13:35

It is. Agreed.

Joey Loss 13:37

So I consider that a pretty heavy headwind.

Steven H Van Wie 13:39

It's not without exceptions.

Joey Loss 13:40

There are exceptions for sure.

Steven H Van Wie 13:42

But you know, your. What are your chances that it's going to be an exception versus what are your chances that it's going to not be an exception? Who knows?

Joey Loss 13:50

Right.

Joey Loss 13:52

And then the honorable mention, we kind of touched on it earlier. This is an honorable mention. Con strategists are bullish and they haven't been for several years and the market's been fantastic. And so I think a lot of analysts looking at what strategists are saying say that there's a pretty inverse relationship between whatever strategists are saying is going to happen and what actually happens. Well, they're now forecasting a gain of 12% for the S&P for 2026, which just made my heart sink. I don't like seeing that. Doesn't mean it's going to be bad. They could be right on the money. Who knows? But not a good history there Any of those cons a surprise to you? None.

Steven H Van Wie 14:17

Danger, danger.

Steven H Van Wie 14:31

None. Exactly what I would expect.

Joey Loss 14:34

All right, let's get to the good news. So the good news, we're in a bull market, and we have been for quite some time. This bull market started on October 12, 2022, after what was a painful year that people don't talk enough about. It has lasted about 1,165 days with a gain of over 89% in the S&P 500 during that time.

Steven H Van Wie 14:53

Should probably remark on that one too because the S&P 500, the broad market index, set an all time record on Wednesday night. And it only pulled back a little tiny fraction. So all we got to do is not hiccup Monday and it pulls. Probably be another record.

Joey Loss 15:02

Yeah.

Joey Loss 15:10

Yeah. The average historical bull market post World War II lasts 1600 days versus the 1165 of the current market. So about 500 days longer than where we are now. And the average historical gain is about 155% by the end of the bull period. So if we're looking at means here, we've got another 60% to run.

Steven H Van Wie 15:30

That would be okay with me.

Joey Loss 15:32

Yeah. And that's not necessarily 60% from today. 60% from the, the beginning of the market. Yeah. The median bull market lasts around 1420 days and sees a gain of 91%. So the most common thing is we're a little bit closer to the end of that. The average is a little bit higher. But good news there, three headed monster. This is ten year yield oil and US dollar. All of these remain low, which historically has been a great thing for the. For the following 12 months. Long term market breadth trends are positive. This means it's not just seven stocks leading the entire market as it was in years prior. While those, a lot of those companies are down, other companies are pulling the market up overall. So that's a good thing. Signals good health. The 200 day moving average, a smooth version of that, is on a trend going in the right direction. That's a healthy thing to see. And final point, very positive. Everybody thinks that the market's being entirely propped up by AI and that is just not the case. We see retail sales, spending at car dealerships, spending on gas stations, on building materials, all these things are up. And so I think the takeaway is as long as labor markets are relatively stable, consumer spending can be a durable foundation for a continuation of what we've seen.

Steven H Van Wie 16:47

Yeah. In other words, common sense might prevail.

Joey Loss 16:49

Yeah. People have money, they spend money.

Steven H Van Wie 16:52

Yeah. I'm all for the savings rate which has now finally sort of recaptured its pre Covid energy. That's good, but people just got to keep spending money too. I do think there's a significant headwind still in the housing market because of the interest rates, which they may be historically normal, but most people looking to buy their first home especially are very disappointed that they're not more Flexible downward. Because it was so easy. Easy for quite a few years actually, and now it's not anymore. So, you know, it's not going to make anybody feel particularly better to say, yeah, but long term, you know, they don't want to hear that right now. I want to know about today or tomorrow, which is why you've had the first time homeboat home buyers go up from average age of 33 to 40. And if I saw a little satisfaction survey and questionnaire thing that was published this morning, it was, what decade of your life do you feel will be the best years of your life? And they broke it down into 20s, 30s, 40s, 50s. I didn't see anybody my age that was very optimistic that this would be the best 10 years. Although I might be arguing with that. But the 30s were pretty high and they're having trouble buying houses. We're gonna set up Bob here, I think. Good morning, Bob.

Joey Loss 17:06

Yeah.

Bob 18:28

Good morning, gentlemen. How are you?

Steven H Van Wie 18:30

Excellent. I trust you had a merry Christmas.

Bob 18:32

We had a wonderful Christmas. We went into Jacksonville and the mess and had dinner at the lodge.

Steven H Van Wie 18:40

Oh, nice. Very nice.

Bob 18:42

Yeah, it was good scenic too. We had. We had a great time. It was a seven fishes dinner, so. Yeah, it was. It was really good.

Joey Loss 18:48

Oh, wow.

Steven H Van Wie 18:51

I gotta interrupt you for a moment to. Yes, reminisce way back to two or three hours ago when I just finished off a plate of scrambled eggs that was so wonderful. And I think one of our nice clients and friends might have dropped off some eggs at our place. And I took them, used them up.

Bob 19:13

It was one of maybe one of Santa's.

Steven H Van Wie 19:15

It might have been. Yeah, they were so good. We've got about 45 seconds and then I'm going to ask you to go and hold if you would like. Okay. All right, well, let's.

Bob 19:28

Hey, I want to ask you guys, as you do your market wrap, your quote and I'll. I'll hold on with the question until you guys go to the break, but I think I have an interesting question you're talking about. I have a question about that for next year.

Steven H Van Wie 19:47

Okay, we'll do that. I'm going to put you on hold and we'll pick you up as soon as we're back.

Steven H Van Wie 19:54

Okay, that worked fine. This is going to be fun because this is going to be a question that I was hoping he'd slip it to us in advance so we could look it up, but it's not going to happen that way. So when we get back, we'll put Bob back on and we'll Talk about whatever he wants to talk about. We'll see in a minute. Don't go anywhere. This is the Van Wie Financial Hour. 

Steven H Van Wie 20:16

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Joey Loss 20:18

And I'm Joey Loss.

 Steven H Van Wie 20:20

I do want to remind everybody before we go back to to Bob that lines are open. 904-222-8255 and I did, I did have one more thought. I wanted to wrap up on why I think next year is going to be better than most people believe.

Steven H Van Wie 20:39

We passed, we passed, Congress passed and Trump signed the OBBBA on the 4th of July. Taxes were set to go back to the 2017 standard on the 1st of January. That eliminated that. That was the first good part of that. Second good part of that was they gave us a lot of time to realize that this was not going to be horrible. So people didn't have to shuffle everything around. But what they haven't figured out so far is that IRS had not had time to change the withholding tables for people who have overtime and tips. So all those people that will be affected by the no tax on tips and the no tax on overtime, all those people have been over withheld. And Trump mentioned this this week that it's going to be the biggest tax refund season in the history of the country because all that excess money that was withheld is going to be refunded when the filings start going in in March or so for the, the year 2025. And it is going to then have a double whammy because they do have new withholding tables coming up January 1st, which means people are going to improve their take home pay. Bottom line will be larger relatively according to the same top line that's going to put disposable personal income into a lot of people's hands. And I think that is a really big deal. So just something to think about. You're looking for reasons for optimism. All right, let's say. Thanks for waiting, Bob.

Bob 22:28

No, not a problem. I'm out here just relaxing listening to you guys.

Steven H Van Wie 22:33

Oh, here, you want to hear a note I just got on my phone? It's from a guy named Adam Van Wie. He says to you and Joey Loss, we're listening from South Carolina. How about that? Everybody get the app.

Bob 22:49

Little family holiday or is he still looking at colleges?

Steven H Van Wie 22:52

I know this hood I think is just a family holiday trip. I don't know. I, I could be wrong. They may drop in somewhere up there. I'm not sure. Okay. Haven't just seen Clemson.

Ron 23:03

It may Be that one may have.

Bob 23:04

A potential gamecock going there.

Steven H Van Wie 23:06

Potential.

Bob 23:08

You never know. You never know.

Steven H Van Wie 23:09

All right, what's this mystery question?

Bob 23:12

Okay, so when you guys develop your list of, you know, your report for, for last year, can you come up with maybe the top 10 things that you think would be outside influences for the market's success or lack of success for 2026? And I know, you know, earnings has been big, the big driver this year, but with all that going on in the world, I think there's, you know, there's a bunch of stuff out that, out there that could really make the market take off or, or tick the other way. So, you know, it's probably a balance, you know, on outside factors. So I'm just wondering if you guys could come up with what you think are the top 10 outside factors that may influence the market upside or downside. And we'll keep that under our hat for 2026 and see how the market actually does.

Steven H Van Wie 24:07

Challenge accepted.

Joey Loss 24:08

Yeah, that's a good list. Okay. Yeah.

Bob 24:11

Okay, Good, good. So that's, that's basically all I have. We, we had a great Christmas. I want to take a stab at your. I'm looking at my UnitedHealthcare just came in the mail last night at 5 o'. Clock. What my deductibles are for this year. And we're still waiting on things that have, we've ordered for, you know, sales, consumer sales. So I'm going to say consumer. Consumer concern. Consumer goods and health care are the most oversold in the S and P. If those are two categories in the S and P for, for, you know, this past year.

Steven H Van Wie 24:52

Well, the question demanded a complete correct answer. Two out of two. And you got 50%. I'm not going to tell you which one.

Joey Loss 25:01

Hmm.

Bob 25:02

You're not gonna tell me which one?

Steven H Van Wie 25:04

Nope. I want somebody else to try it. I'll tell you before the end of the day, though.

Bob 25:09

Okay, tell us at the end of the hour. And I'm looking at my bill here, and I'm like, okay. Or my deductibles. And I'm thinking, you know, all the sales started the Black Friday sale started in October 31, so it has to be, you know, consumer goods. So I don't know. We'll see.

Joey Loss 25:11

So.

Steven H Van Wie 25:11

Yep.

Steven H Van Wie 25:29

Well, you will see and it won't be long till you do.

Bob 25:32

Okay. All right, Enjoy the program, guys. Thanks for being there on, on, on the holiday. Yep.

Steven H Van Wie 25:35

Thanks.

Joey Loss 25:38

Thanks, Bob.

Steven H Van Wie 25:40

Yeah, he's. Like I said, He's 50%. Right. I had another quick little thought about last year too and can't remember what I was going to say. But there was one more, I had one more in my optimism list. So that means I'll start with that on my 10. We'll have next Saturday. Yeah, that. Oh, and I was talking to Joey too. Imagine the world where you got up and you never heard at any time of day or night for an entire year the excessive hatred of President Trump and how different the attitude of the world would be and how different the attitude in the market might be. And Joey pointed out, I think something very relevant to that. He said those people aren't trading like they have that much problem with them. They're, they're all in on this money making thing.

Joey Loss 26:42

This market can't do what it's doing with only 50% of the money. You're absolutely right about people, you know, have to take a long term view or I think, you know, people practice what we preach, which is that markets can perform under Republicans and Democrats, whatever your views are, as long as people know the rules of how to play the game, which OBBBA did, set a new standard of rules that were better for business. When people know what those rules are, they want to make money. And if you're an investor, you get to participate. That simple.

Steven H Van Wie 27:11

I had an accountant and an attorney back in the 80s when was running manufacturing businesses. And I loved these guys because they were the optimistic type and the, the accountant, I, whenever I'd call him and say, well, what do you think? I can do this? Or I can do this? And his answer was usually both. That's what I liked about him. The attorney was, was a specialist in estate planning and he went to all the biggest seminars and all that stuff. And he, he knew taxes inside out, he knew a state law inside out. And he was always fun to talk to because something would happen. And immediately he came to all of us and told us what they're going to do about it. And I remember Sarah asking him one day, said, do you keep a notepad and a pen next to your bed? When you wake up thinking about these things, you write it down. And he sort of sheepishly looked at her and said, yes, he did. And he was. That was back when taxes were fun. And you've all heard me say that the tax law in 1987, which was effective in 88, I think everyone has heard me say that they took the fun out of taxes with that bill. And I think it's very unfortunate that Ronald Reagan was at the helm at the time because the guy who actually wrote it was Dollar Bill Brady, the New Jersey senator, big guy, formal basketball player. And he.

Steven H Van Wie 29:01

I won't say anything nice about him because I can't. So I just drop it now.

Joey Loss 29:05

So he wrote it.

Steven H Van Wie 29:07

Tax law took so much fun out of being in business and, and messing around with your own tax planning and so on. Since then it hasn't been as much fun. But we can't let that get us down. I mentioned a couple weeks ago that this had been shaping up to be a really fun tax planning year for 26 because of the Obbba. We got so many of the rules handed to us in July instead of December, but of course, not all of them. So what did Congress do? As they usually do. They went home. They've got all this stuff sitting on the table. They went home because the Republicans didn't want to have to vote on extending the ridiculous

Steven H Van Wie 30:02

subsidies for Obamacare that were put in for Covid and therefore have long since

Steven H Van Wie 30:10

just gone. What am I trying to say? They're useless. We don't need to spend that money. But Democrats want it to be extended for three more years. So whether they're anticipating the return of COVID or what, I don't know. But rather than have to vote on it, they went home. So now there's all those things that have no chance to be acted upon in the year 2025 because they don't even return until after the first of the year. And it just jacks my jaws to see these people be so predictably.

Steven H Van Wie 30:49

What's the word? I don't know if it's stupid or political or what it is, but they're just absolutely predictable and they're trying to do all the funding and they're not getting it done.

Joey Loss 31:02

Yeah, the. Until there's a real repeal and replace option, which I think a lot of people are in support of something taking place on that front. And until then, I would consider the elimination of some of these subsidies a headwind for next year in the market because you have a lot of families, let's say two adults, two children. Right. Pretty standard four person household. Their credit situation for healthcare going into next year is wildly different. They might have paid a maximum of 8.5% of gross income on health insurance subsidies back then and now they're going to be paying, you know, in some cases 20, 30%. So it's a big difference. That's all money that would go towards discretionary spending, theoretically. Or something else. So I think it's an important thing to figure out. And this solution can be an interim solution for a bigger repeal and replace. But I do think they're under the gun to figure out how to help people.

Steven H Van Wie 31:43

Yeah.

Steven H Van Wie 31:54

Well, this has been a failure of the Republicans in Congress for decades now. And wrap that up right after a quick break, which Roger's telling me we better do right now. So don't go anywhere. We'll be right back. This is the Van Wie Financial Hour. 

Steven H Van Wie

Welcome back to the Van Wie Financial Hour. I'm Steve Van Wie.

Joey Loss

And I'm Joey Loss.

Steven H Van Wie

And we will go to the phones momentarily. We just wanted to wrap up our discussion about the Congress taking off on us sometime. They're going to have to take the filibuster off of funding the individual parts of government. I think the, the Congress has gotten so used to running the place with continuing resolutions rather than funding department by department. You can't truly cut government unless you break it into pieces and do it. My opinion only. Good morning, Ron.

Ron 32:47

Good morning, gentlemen. How are you today?

Steven H Van Wie 32:49

Excellent. And you?

Ron 32:51

Very well, very well. Beautiful day.

Steven H Van Wie 32:53

Yes, it is some places here.

Ron 32:59

Yeah. Nice to be in southeast Georgia. That's where I'm calling from at this time of the year.

Steven H Van Wie 33:04

Yep. What's on your mind?

Ron 33:06

I was going to take take a shot at the trivia question and maybe have a question for you afterwards.

Joey Loss 33:10

Sure.

Ron 33:12

I went and say utilities and health care as far as the most oversold.

Steven H Van Wie 33:19

Well, sorry, no, close. I was trying to put it nicely.

Ron 33:25

50% right?

Steven H Van Wie 33:28

Let's see.

Steven H Van Wie 33:31

Don't think so.

Ron 33:33

No, no, I'll be darn, I'm way off.

Steven H Van Wie 33:36

Well, I'm going to give everybody a hint here. Utilities is actually rated right now as neutral. So if people aren't exactly sure where they stand, that's why that's the only one I'm going to give you yet.

Joey Loss 33:51

And since Bob was, since Bob was close but not on the money, we'll say that he was onto something with his consumer goods because he also guessed health care is a second option. So we know that that's not on this list.

Steven H Van Wie 34:02

All right. See, we practically opened it up to everybody else now thanks to Bob and Ron. Anyway. What's your question?

Ron 34:09

Well, I'm wondering what you think about the strategy. And if I thought of it, it's probably bad.

Ron 34:16

Two months ago I bought Tesla at $445 a share. I mean, yeah, 445 a share. And I sold a covered call for September 18th and I got $10,000. Right off the bat. And the way I'm looking at it, the only way I lose money is if Tesla goes below 350, I may not make as much money as the guy that just holds on to it, but I'm not going to lose as much either. If it, if it went to, say, 320, I'm only losing $303,000

Joey Loss 34:31

Right.

Ron 34:50

instead of 13,000. And I'm thinking, is that what hedge fund managers do?

Steven H Van Wie 34:54

That's what a lot of them do. Sure. Absolutely.

Steven H Van Wie 34:58

Hedge funds have a terrible reputation, and it's more to me about taxes than it is about what they do. But all they are is a group of transactions that are totally legal that you and I could make if we wanted to. But the taxation on them has always been a bugaboo for most of us. Carried interest.

Ron 35:18

I'm thinking in the meantime, I'm able to use that $10,000, maybe buy some other stock.

Steven H Van Wie 35:23

Yeah, yeah. There are some funds out there, and I know we use at least one, maybe two of them, that are called covered call strategy funds. They do exactly what you're talking about, but on a whole range of stocks.

Joey Loss 35:37

Yeah. And in general, that approach will limit the upside that you capture, but it can create regular income out of something you haven't actually sold, which is. A nice feature. And.

Bob 35:46

Right.

Ron 35:48

And I'm gonna. Oh, go ahead.

Steven H Van Wie 35:50

I was just gonna say the key to that is the word covered, which is what you told us. You want to own the stock. I don't short selling. And. And the borrowing, although I'm just so against that for the average person.

Joey Loss 35:54

Right.

Ron 36:02

Yeah, No, I. I absolutely agree on. In fact, my accounts won't even let me do that. And I'm glad because I want to. Anyway.

Steven H Van Wie 36:07

Good.

Ron 36:13

I'm not. Go ahead. I'm sorry.

Joey Loss 36:14

I'm sorry I interrupted you.

Ron 36:17

No, I was gonna say, I don't want to brag, but I'm in a position right now where I could buy back the. The call and sell the stock and be twenty five hundred dollars ahead.

Steven H Van Wie 36:27

Is it?

Joey Loss 36:27

Yeah.

Ron 36:29

And I'm thinking, you know, why would I want to do that, though? Because, you know, I got a potential to still make the 10,000. If it goes to 550. And if it goes over 550, I. I missed out on a little bit, but I'm still. I'm stuck. I'm still up $10,000.

Steven H Van Wie 36:37

Yeah.

Steven H Van Wie 36:45

Yeah. That's money in the bank.

Joey Loss 36:47

That's the investor's dilemma right there.

Steven H Van Wie 36:49

And.

Ron 36:50

And, you know, and ideally, it closes on September 18th at like 440 or something like that. And I don't lose the stock. But I still have that $10,000 and then I can do it. I can do it again.

Steven H Van Wie 37:03

Yeah. Other people who do this, There are a lot of retired people who do that kind of thing. In the reason I say retired people. You got to have your eyes on the market if you're going to do this.

Ron 37:15

Oh, yeah, I learned definitely retired.

Steven H Van Wie 37:19

Yeah, I learned to chart options and so on when I was studying for my Series 7, which I then abandoned back about.06, I think. But I learned enough about them. But we don't use them in our practice. We're kind of the old stodgy types that the CFP board doesn't look nicely upon. People like us doing things like that. But if I ever retire, maybe I'll do that something for. Another discussion.

Ron 37:43

All righty.

Ron 37:46

I'll let you guys go and I'm going to listen closely here to find out what the answer was. I thought I had this one in the bag.

Steven H Van Wie 37:51

Well, congratulations. I think what you've done has a great percentage of working out very well for you.

Ron 37:58

Well, thank you so much. I appreciate you saying that, Steve. You guys have a happy New Year. We'll talk to you soon.

Steven H Van Wie 38:01

And take care.

Steven H Van Wie 38:04

Talk to you next year.

Joey Loss 38:05

Absolutely.

Ron 38:06

All right, thank you guys. Bye bye.

Joey Loss 38:08

You know, what he talked about is you see more and more clients having to do something like this because if they work for Microsoft or Nvidia or any of these companies where they have a massive concentration in a stock, you know, they can't realize all the capital gains at once and sell it. That's a tax bomb. But their alternative is do you just stay with potentially millions in this position and it represents 30, 40, 50% of your net worth.

Steven H Van Wie 38:32

And a non dividend stock is all of a sudden paying you money.

Joey Loss 38:35

It's paying you money. And you've kind of hedged the movements of that stock so you can be a little bit more methodical about moving out. So thanks for bringing that up. That's an interesting topic. That's a little bit more prevalent than it used to be.

Steven H Van Wie 38:47

Yeah, the, the thing, as we're saying, the thing about playing options is that you have multiplied your risk a lot. The only one that's safe enough that Uncle Sam will allow you to do it in an IRA is a covered call. Joe. He's on the right track. All the other ones are forbidden transactions within your IRA. Something to know. Speaking of IRAs, I also checked and the. There's a bill called the Charitable Rollover Facilitation and Enhancement Act. There's a mouthful, but it, it is the one that would allow what everybody thinks seems to think was a mistake in the drafting the donor advised funds that we've talked about the last couple of weeks. You can do that with your non retirement money and you can input money into the donor advised fund. Let's say we did it Monday morning. However much we put in is totally deductible in 2025. But there would be no money distributed from it until sometime in 2026 when you name your charities that you'd like and most of the good funds will take your word and just do what they want. If this would go in there, this would mean we could take our required minimum distribution out and throw it into a charitable or a donor advised fund. Your income comes out for your RMD and if you put the whole RMD in the donor advised fund, you just went to zero taxes. So how to avoid taxes on IRA required minimum distributions, I will let you know. It of course was part of the we went home and didn't do anything group of laws that were sitting there. But I got a funny feeling this one's going to pass.

Joey Loss 39:05

Yeah.

Joey Loss 40:41

Yeah. And I think it should. It's just logistically wise. And it has no impact that I can really think of to their revenue.

Steven H Van Wie 40:43

Yeah.

Steven H Van Wie 40:47

There was something originally on that didn't get through, I think, but it was limiting. I think the limit was $54,000

Steven H Van Wie 40:57

to put into the donor advice fund and this one would take that limit away. So you're really talking about a lot of people with big accounts and a lot of income. But you don't have to do 100% either. Any money that comes out of your IRA prior to the amount of your required minimum distribution is applied to your RMD. So if you want to do 25, 50,000 and you got a big RMD, you just take it out, throw it in the DAF and you did not incur any income. And that to me is very special if you have any inclination toward charitable giving and especially if you're doing it over time. And I would encourage everybody to go to our website strive uswealth.com

Steven H Van Wie 41:45

and look at the blog section under education. And the, the latest blog I put in there is about exactly this and how flexible it is. So I, I'm, I think this is an idea whose time has come. I hope I'm right. I always hope I'm right. But I really hope I'm right about this one. All right, we have Two minutes left. I guess we'll talk about this a little bit. The financials and materials are extremely overbought. And utilities and materials are showing neutral. Now, that all came out of the same article. So you take that for what it's worth. And then the extremely oversold sectors are consumer staples. And the one nobody ever seems to think about, real estate.

Joey Loss 42:01

Yeah, I think it'd be a good thing.

Steven H Van Wie 42:33

You have probably noticed, if you have any rates or anything like that. That real estate funds are not doing well right now. And I would imagine that they'll perk up when we get the next couple of interest rate cuts next year. We'll see. Yeah, yeah. Nothing certain in this business. But that was an interesting enough question for me. Aside from the little idiosyncrasies in it that I. I thought you'd all enjoy hearing that. And by the way, what's going on with consumer staples? It's so weird. Those things are the slow, the steady. Most of them produce dividends. They're. I guess I could put it this way. They're kind of old people's stocks. And, you know, back in the old days when we were young and the rich people that our parents Knew would own AT&T and it would never sell it. They live on the dividend checks and all that in Wisconsin. Kimberly Clark was always up there. Everybody who's ever known anything about Procter and Gamble knows that that's one of the most important ones in the whole industry index. Procter and Gamble's made a lot of millionaires out of a lot of people. Including their own employees, truck drivers and so on. But they're the kind of stocks that at my age, I really like. So can't please everybody, I guess. All right, everybody, I gotta leave you until next year. Thanks for listening. Happy New Year. We'll see you next Saturday.