Latest / WCHS Network Podcasts / 08/05/2024 Retire Right Radio with John Burdette

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08/05/2024 Retire Right Radio with John Burdette · WCHS Network Podcasts

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Speaker 2: The views and opinions expressed on this program do not
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Speaker 2: necessarily reflect the views and opinions of five eight WCCHS
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Speaker 2: its employees or WVRC Media. This is Retire Right Radio,
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Speaker 2: a weekly show from John Verdet at Fourth Avenue Financial
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Speaker 2: that aims to answer your questions about financial planning, investing,
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Speaker 2: and how to retire right. Fourth Avenue Financial is located
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Speaker 2: in downtown Charleston at one seventy Court Street. More information
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Speaker 2: online at Fourth Avenue Financial dot com. Join the conversation
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Speaker 2: by calling three oh four three four five fifty eight
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Speaker 2: fifty eight or text three oh four nine three five
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Speaker 2: fifty oh eight.
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Speaker 3: It's a twenty three till You're right money Morrows.
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Speaker 2: Let's go live to the studio with host Dale Cooper
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Speaker 2: and John Verdett from Birth Avenue Financial.
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Speaker 3: John Ford's Birth Avenue Financial. I'm Jeff Jenkins, setting in
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Speaker 3: for Dell Cooper Today, John is here, ready to go,
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Speaker 3: John things. It's a summer. Things have not I'll just
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Speaker 3: start out right hot, right, things haven't been slow on
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Speaker 3: Wall Street. I mean, well last.
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Speaker 4: Week was it was certainly a big, a big change.
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Speaker 4: We've went up, up and away and kind of took
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Speaker 4: it on the channel a little bit last week, and
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Speaker 4: it looks like this morning the market is in for
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Speaker 4: more of the same. But yeah, last week the Dow
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Speaker 4: gave up a little over two percent, but the techivy
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Speaker 4: Nasdaq was down three point four percent. Now they're still
1:37
Speaker 4: up for the year. You know, the Nasdaq has given
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Speaker 4: back a lot though it's it's up eleven percent for
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Speaker 4: the year, which is which is very respectable, but but
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Speaker 4: it's given a lot back quickly. And we've talked on
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Speaker 4: the show over the last six months or so about
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Speaker 4: leadership change in the market and the participation in the
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Speaker 4: market is broadening out from the magnificent seven tech stocks,
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Speaker 4: and you know, we're starting to see that. And even
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Speaker 4: in the pullback, you know, the ones getting hit the
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Speaker 4: hardest are the ones that were flying the highest. And
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Speaker 4: I think that's the case for maintaining diversification. One of
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Speaker 4: the things a couple of years ago, when the market
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Speaker 4: was down in twenty twenty two, people were saying, well,
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Speaker 4: the balanced portfolio, the sixty to forty portfolio is dead
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Speaker 4: because it didn't work well that year. Stocks were down
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Speaker 4: and bonds were down too, as as interest rates were rising. Well,
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Speaker 4: the opposite is happening now. So you know, you have
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Speaker 4: to be careful when you hear these stories. You know,
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Speaker 4: the death of something. You know it might not work
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Speaker 4: at that instant, but over time, the tried and true
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Speaker 4: tends to work. Last week, when the market was down
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Speaker 4: so heavily, bonds are actually up two percent for the
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Speaker 4: week as interest rates fell and all. This was really
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Speaker 4: the catalyst for it all was the jobs report came
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Speaker 4: in lighter than expected last week, which you know, I
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Speaker 4: guess it put a little bit of a cloud in
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Speaker 4: the crystal ball for the soft landing. And so here
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Speaker 4: we are. What's happening is not unusual. The Nasdaq, the
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Speaker 4: tech heavy indexes is now in correction territory, which means
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Speaker 4: it's down ten percent. That happens usually at some course
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Speaker 4: during during the year, you have a ten percent pullback,
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Speaker 4: a correction. That doesn't mean that the stock market the
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Speaker 4: bull market is over. Necessarily, to get into a bear market,
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Speaker 4: you have to be down twenty percent. You know, we
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Speaker 4: may or may not get there, but certainly even that
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Speaker 4: we've been through and come through before, just using sound
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Speaker 4: principles that try to take the emotion out of it
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Speaker 4: when these things happen.
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Speaker 3: Yeah, and it's been flying high for so long, and
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Speaker 3: you've you've talked about that, I mean, and then toward
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Speaker 3: the end of the week, John, I'm sure you've been
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Speaker 3: hearing them too. I heard the word recession, started to
4:19
Speaker 3: hear it more and more on the news reports by
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Speaker 3: the end of the week.
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Speaker 4: Yeah, And depending on what you're listening to. Also, there's
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Speaker 4: also the election thrown into the mix, and sometimes things
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Speaker 4: get amplified depending on what political point you're trying to
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Speaker 4: make as well. So you just have to be careful
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Speaker 4: with all the noise that's going on around there and
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Speaker 4: focus on what you can control, and those are your actions.
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Speaker 4: You know, you can decide how to save, you can
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Speaker 4: decide how to allocate your funds. All of those things
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Speaker 4: are in your control and largely determine your outcome over time.
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Speaker 3: John burdetz with is fourth Avenue financial number to call.
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Speaker 3: Three or four three four five fifty eight fifty eight
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Speaker 3: three or four three four five fifty eight fifty Okay,
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Speaker 3: So now where because it seems like I heard a
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Speaker 3: couple of things on interest rates last week, you know,
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Speaker 3: and so where the correction from last week? Where does
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Speaker 3: this now put the interest rate discussion on lowering or
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Speaker 3: not lowering?
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Speaker 4: Well, I think it's a pretty safe bet that by
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Speaker 4: September we're going to get the first rate cut. The
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Speaker 4: market is pricing in. I believe the last time I
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Speaker 4: saw three rate cuts this year. So so you know,
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Speaker 4: that's that's that's what the market believes will happen. Of course,
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Speaker 4: the market has believed lots of things, you know, over
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Speaker 4: over the course of the year. You know, many folks
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Speaker 4: thought that the Fed would cut much much sooner in
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Speaker 4: the year, and it didn't happen because the jobs market
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Speaker 4: was was strong. But now we have unemployment at four
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Speaker 4: point three percent, which is still incredibly historically low. Is
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Speaker 4: it's not that that's really at a critical state, but the
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Speaker 4: FED was hoping to target four percent, and now it's
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Speaker 4: it's kind of creeping up above that. Inflation, which has
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Speaker 4: come down quite a bit, you know, is now for
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Speaker 4: the last several reports a little bit below trend. So
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Speaker 4: so the market is almost throwing a little temper tantrum
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Speaker 4: because the FED didn't cut earlier. Now they're trying to
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Speaker 4: blame the FED for Hey, you waited too long.
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Speaker 2: You know.
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Speaker 4: It's it's interesting. Anytime a light jobs number would come
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Speaker 4: out earlier in the year, it was great for stocks
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Speaker 4: because that was that meant old, we're going to get
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Speaker 4: interest rate cuts soon. Well, now the market's acting opposite
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Speaker 4: to the same type of news. So that's that's why
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Speaker 4: I have to keep the long term perspective.
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Speaker 3: Yeah, I mean it's I mean, that's a great point.
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Speaker 3: And so so if the if the market's right and
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Speaker 3: they're going to be three rate cuts before the end
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Speaker 3: of the year, I mean those are to be pretty
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Speaker 3: pretty close together.
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Speaker 4: Yeah, yeah, pretty short order. So we'll see, we'll see
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Speaker 4: if that pans out. But I think for sure we
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Speaker 4: are on the path it looks like to get that
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Speaker 4: rate first rate cut, you know, within the next month.
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Speaker 3: And John go over that again because I think it's
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Speaker 3: educational and a good reminder of what that really means.
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Speaker 3: We hear it all the time. I mean, interest rates
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Speaker 3: will be cut by the FED, you know, and if
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Speaker 3: they do it, what does that mean? How does that
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Speaker 3: impact Joe, you know, John Doe on the street.
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Speaker 4: Well, largely, long term rates are controlled by the market,
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Speaker 4: you know, just bond traders buying and selling bonds, market
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Speaker 4: prices and and FED. They're controlling their real short term rates.
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Speaker 4: And so for instance, over the last year, if you're
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Speaker 4: a typical person out there going to the bank, you've
7:52
Speaker 4: probably seen signs up at the bank, you know, seven
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Speaker 4: month CDs for five percent things like that. Those are
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Speaker 4: very short term rates that you're seeing those numbers for. Well,
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Speaker 4: those are going to start to come down as as
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Speaker 4: the short term rates get cut, So you're going to
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Speaker 4: see that impact. And as an investor, that's what that's
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Speaker 4: called is reinvestment risk. So you for instance, let's say
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Speaker 4: you were a CD buyer and you were collecting five
8:24
Speaker 4: percent now on your CDs, Well it might be three
8:27
Speaker 4: and a half percent a year from now, six months
8:29
Speaker 4: from now, and so your income goes down. So that
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Speaker 4: risk is not to your principle in that case, but
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Speaker 4: it's to your income. So you have to be careful there. Again,
8:41
Speaker 4: when you when you jump all the way into something,
8:44
Speaker 4: you're exposing yourself to sometimes hidden risks. And for fixed
8:48
Speaker 4: income investors, if you're if you're too short on your maturities,
8:55
Speaker 4: you know, this is a time you need to consider
8:58
Speaker 4: that you need to either consider reaction allocating into other
9:01
Speaker 4: types of assets or extending the maturities a little bit
9:05
Speaker 4: so that so that you don't have them all maturing
9:09
Speaker 4: in the middle of the rate cut cycle and you know,
9:12
Speaker 4: taking it quickly, you know, seeing your your income and
9:17
Speaker 4: cash flows evaporate.
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Speaker 3: And then what's the flipside of that? So that's how
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Speaker 3: it affects. How so, if you're the fan your cut rates,
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Speaker 3: what do you hope the result is.
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Speaker 4: Well, you hope that people borrow and spend money, you know,
9:30
Speaker 4: to keep the economy rolling around. And you know there's
9:33
Speaker 4: some some you know that in the housing market of course,
9:37
Speaker 4: you know a lot of folks look at the housing
9:39
Speaker 4: market and say, well, you know, home prices are high
9:43
Speaker 4: and rates have been high. You know why home price
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Speaker 4: has not fallen a little more in that type of environment.
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Speaker 4: But I think there, you know, interest rates affect that,
9:53
Speaker 4: but I think to a degree, we have a supply
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Speaker 4: issue with the homes more so than than an an
10:01
Speaker 4: interest rate problem. You know, we have a problem of
10:04
Speaker 4: we don't have enough homes for sale.
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Speaker 3: You here more or that.
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Speaker 4: Actually, yeah, yeah, so that's an issue. So maybe lower
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Speaker 4: rates might stimulate more construction potentially. It's it's you know,
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Speaker 4: it's it's difficult to say how it all plays out.
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Speaker 4: But the reality is, just like the rate hikes the
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Speaker 4: rate cuts, it takes time for those to filter through.
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Speaker 4: It's not like flipping a switch. When you have a
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Speaker 4: big economy like you know, like the US and the
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Speaker 4: global economy, it it takes a long time for those
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Speaker 4: things to trickle through and actually affect consumer behavior. You
10:40
Speaker 4: saw that when the rates were rising, you know, it's
10:43
Speaker 4: like wow, people are still spending money, you know, like crazy. Well,
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Speaker 4: it took took some time for that to play its
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Speaker 4: way through and for the inflation to begin to dissipate.
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Speaker 3: And this is really the financial the foundation of fourth
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Speaker 3: Avenue financial is when things kind of get crazy, you know, hold,
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Speaker 3: you know, hold, be smart, diversify, have a plan right,
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Speaker 3: so you were able to handle the things when you
11:10
Speaker 3: know a day or two or weeks or months aren't
11:13
Speaker 3: exactly the way you thought they may be right.
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Speaker 4: And you have to stick to that plan long term,
11:17
Speaker 4: and that's the that's the trick, and that really I think,
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Speaker 4: whether it be me or another financial advisor, that is
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Speaker 4: the I think the biggest value in working with somebody
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Speaker 4: is it's separating you from emotional decision making, because that's
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Speaker 4: where the damage really gets done. Long term. You may
11:39
Speaker 4: feel like you're doing the right thing. All the market's down,
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Speaker 4: I need to I need to protect it and go
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Speaker 4: to cash, But then you have to be right one
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Speaker 4: that the market is finished going down, and then you
11:51
Speaker 4: have to be right a second time that it's hey,
11:54
Speaker 4: it's time for it to go back up. Gosh, how
11:57
Speaker 4: do you know that? You don't? You know what you do?
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Speaker 4: Know that you have goals that are yours individually, and
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Speaker 4: you know how assets work, asset classes work over time historically,
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Speaker 4: and you can blend those together to get the best
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Speaker 4: of all those different asset classes. And you know pretty
12:20
Speaker 4: assuredly march tos your individual goals with proper management. But
12:25
Speaker 4: emotions are you know, you have no long term plan.
12:29
Speaker 4: If you let emotions sway every time the market takes
12:33
Speaker 4: a hiccups, it's just not going to work. Well. It's
12:37
Speaker 4: you know, there was a mutual fund in the eighties
12:41
Speaker 4: called the Fidelity Magellan Fund, and it was the best
12:44
Speaker 4: performing fund of the decade. And they did a study.
12:47
Speaker 4: It is like fourteen percent annually something like that for
12:51
Speaker 4: a decade. I could be off a little bit there,
12:53
Speaker 4: but it was a phenomenal return. They did a study
12:57
Speaker 4: on the individual investors and the individuals only captured about
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Speaker 4: a third of that of that return because the individual investor,
13:06
Speaker 4: they bought and sold, they didn't hold for the decade.
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Speaker 4: You know, when the market was up, they were piling
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Speaker 4: into it, and when the market was down, they were
13:17
Speaker 4: hitting the exits to it. And so you're not a
13:21
Speaker 4: long term investor. You're not going to get that long
13:22
Speaker 4: term rate of return. And that was that's the kind
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Speaker 4: of damage that that emotional decision making can do to
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Speaker 4: a financial plan.
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Speaker 3: So it sounds like to me, John, you say a
13:32
Speaker 3: lot of times, there's there, you know, if you do
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Speaker 3: things on emotion whatever, you have these self inflicted errors.
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Speaker 4: Yes, right, absolutely, that's a that's a and and you know,
13:42
Speaker 4: you see you saw that, you know, pretty big time
13:45
Speaker 4: after two thousand and eight. You know, people panicked when
13:49
Speaker 4: the market went down, and that was a real market decline.
13:53
Speaker 4: I mean that was a very painful period. But the
13:58
Speaker 4: point of panic is when the pain is the highest,
14:01
Speaker 4: which generally means you should be doing the opposite, and
14:06
Speaker 4: it becomes a roller coaster, and then you feel like
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Speaker 4: you've missed it, and then you pile in at the
14:13
Speaker 4: time that it's getting ready to take another breather, and.
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Speaker 3: This compounds the problem absolutely.
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Speaker 4: Or you stay in cash and you miss out on
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Speaker 4: the what the market's up four or five times since
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Speaker 4: two thousand and eight, You know that's that's painful as well.
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Speaker 3: Yeah, wow, So.
14:33
Speaker 4: You know you have to treat your assets the right way.
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Speaker 4: Stocks are long term investments and they do things for you.
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Speaker 4: They're volatile, that's the negative, but they do things for
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Speaker 4: you over time. They keep up with inflation and purchasing
14:48
Speaker 4: power because the companies you own are making those goods
14:51
Speaker 4: and services that we're all consuming. So it stands to
14:54
Speaker 4: reason that over time they will tend to keep up
14:57
Speaker 4: with that, and so it's fairly logical when you look
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Speaker 4: at it from the long term. But that's not the
15:05
Speaker 4: right type of investment for your short term needs. You know,
15:09
Speaker 4: I need to buy a car next month, or I
15:13
Speaker 4: have an income need in retirement that I know it's
15:16
Speaker 4: going to be there every single month for a period
15:19
Speaker 4: of time. Well, then how do you mix a portfolio?
15:21
Speaker 4: How do you blend a portfolio for that need? Well,
15:24
Speaker 4: you do that by saying, Okay, I've got this income need,
15:29
Speaker 4: and we know the market is volatile. Well, we can't
15:31
Speaker 4: have my income need in the market. We have to
15:34
Speaker 4: break that up in some fashion to protect my short
15:37
Speaker 4: term needs. You do that through short term bonds and
15:40
Speaker 4: fixed income and money market funds and things of that nature.
15:45
Speaker 4: And you look at the market and you say, well,
15:48
Speaker 4: you know the market has volatility, but it always comes
15:52
Speaker 4: back and reaches higher highs. It's never failed to do that.
15:56
Speaker 4: So if the market goes down, how far? How long
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Speaker 4: could it go down? I mean, nobody has an exact
16:02
Speaker 4: answer to that, but historically, for the most part, three
16:07
Speaker 4: to five years was more than enough time to recover
16:10
Speaker 4: from most market downturns. Well, so, now what if you
16:13
Speaker 4: peel off enough of that income short term need to
16:19
Speaker 4: meet that with fixed income outside of the market.
16:21
Speaker 3: A place you can get your handle some cash if
16:23
Speaker 3: you need it or resolutely.
16:24
Speaker 4: And now you can treat the market even if you're
16:28
Speaker 4: sixty five, You can treat it like you're a thirty
16:30
Speaker 4: five year old, because your short term needs are met
16:33
Speaker 4: and you've got the cushion to insulate you against that
16:36
Speaker 4: market volatility. And by doing it that way, you're using
16:41
Speaker 4: the investments how they're intended to be used. Stocks are
16:44
Speaker 4: long term, and the money markets and CDs and cash
16:49
Speaker 4: or short term. And if you use the assets and
16:53
Speaker 4: the proper you know, for the proper job, your chances
16:57
Speaker 4: of succeeding are much much higher. It's it's like if
17:01
Speaker 4: you if you're a contractor building a house, you wouldn't
17:05
Speaker 4: get very far if you use the salt to drive
17:08
Speaker 4: a nail in a board. You know, you want to
17:10
Speaker 4: use the right tool for the job, and uh, you
17:14
Speaker 4: get a lot farther with the hammer right exactly.
17:18
Speaker 3: Okay. Lines are open. Great advice from John Lines Jervere
17:20
Speaker 3: three or four three four five fifty eight fifty eight
17:23
Speaker 3: three oh four three four five fifty fifty Lines are open,
17:26
Speaker 3: John Bredett, Fourth Avenue financialist here back in the moment
17:29
Speaker 3: on five eight WHS.
17:32
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17:53
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17:57
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Speaker 2: This is retire Rife Radio with John Burdett from Fourth
19:27
Speaker 2: Avenue Financial taking your calls at three oh four three
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19:40
Speaker 3: A forty two on five they can do wcah as
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Speaker 3: the first of Charleston Tech two job forty Avenue Financial
19:48
Speaker 3: and again let Brusson fires last week and so now
19:54
Speaker 3: you know the the one million dollars. What's going to
19:56
Speaker 3: be like this week? John, I guess this. I would
19:59
Speaker 3: think this week going to be a key week? Is it?
20:01
Speaker 3: Is it?
20:02
Speaker 4: Well? I mean the futures this morning when I looked,
20:05
Speaker 4: we're look pretty ugly. The international markets this morning were
20:13
Speaker 4: really ugly. I don't know. I mean, may be one
20:17
Speaker 4: of those weeks where you just need to get out
20:20
Speaker 4: the zen master and just relaxed a little bit, and
20:25
Speaker 4: you know, just just roll with it if you're allocated properly.
20:30
Speaker 4: If you're not allocated properly, you know, the problem is
20:34
Speaker 4: making those adjustments in the middle of a market panic
20:37
Speaker 4: is not not usually advisable. You know, if you know
20:43
Speaker 4: the problem, if you're experiencing that, now, it's not the
20:47
Speaker 4: problem of the market. Now, it was the problem you
20:49
Speaker 4: were allocated wrong before the market did what the markets
20:53
Speaker 4: naturally do you know, the markets naturally have these type
20:56
Speaker 4: of pullbacks, like I say, every every year or so.
20:59
Speaker 4: You've got you've got a correction every four or five years,
21:02
Speaker 4: you're going to have a bigger downfall. It's just part
21:05
Speaker 4: of the market. So you know, accept that before you
21:08
Speaker 4: get in it, because you're going to experience that and
21:11
Speaker 4: you're not going to like it. But you have to
21:13
Speaker 4: get through that to be successful, and you have to
21:18
Speaker 4: allocate yourself in a way that you can find that
21:20
Speaker 4: comfort level, whatever your comfort level is, so that you
21:24
Speaker 4: can stick to it, because that's how you make money
21:26
Speaker 4: over time, and that's how you build wealth by participating,
21:31
Speaker 4: and so that's that's really the key. You know, I
21:34
Speaker 4: don't have a crystal ball. If I did, you know,
21:37
Speaker 4: that would be great. But you know, I will say
21:43
Speaker 4: that like the tech stocks, the as stocks, all the
21:49
Speaker 4: things that are really taking it hard right now were
21:52
Speaker 4: the things that were also up tremendously. So there again,
21:55
Speaker 4: if you had a long term perspective, you're still up tremendously,
22:00
Speaker 4: you know, like say even the Nasdaq it's still up
22:03
Speaker 4: fifteen percent for the year something like that, So you know,
22:09
Speaker 4: you haven't given up all your gains if you look
22:11
Speaker 4: at it over the right amount of time. Now, if
22:13
Speaker 4: you just look at what it was two weeks ago, yeah,
22:16
Speaker 4: you're going to be disappointed, but you're still up considerably
22:20
Speaker 4: on those. And a difference also, people go back in
22:24
Speaker 4: time and look at you know, oh, this is just
22:27
Speaker 4: like the tech bubble in two thousand, things like that. Well,
22:30
Speaker 4: you know the magnificent seven stocks that everybody talks about,
22:34
Speaker 4: you know, your Microsofts and Apples and Googles and videos
22:38
Speaker 4: and so on and so forth. They make billions and
22:43
Speaker 4: billions and billions of dollars of profit. They're real companies
22:48
Speaker 4: with real products and real earnings. Many of the companies
22:54
Speaker 4: that just evaporated in the dot com era they had
23:01
Speaker 4: none of that. They didn't make money. They were ideas
23:04
Speaker 4: that money got thrown at and most of them failed,
23:10
Speaker 4: but a few of them made it. You know, that's
23:12
Speaker 4: a little different than this. These are real companies with
23:15
Speaker 4: real earnings, and there's a real way to evaluate that
23:20
Speaker 4: over time. And so, you know, it's not pleasant, but
23:25
Speaker 4: I don't think it's I don't think where anything you know,
23:31
Speaker 4: in any type of situation like that.
23:33
Speaker 3: How might a and again this is more of the
23:36
Speaker 3: crystal ball thing, but how might a pretty regular four
23:40
Speaker 3: one kh somebody's contributing fifteen percent and they get a
23:43
Speaker 3: little bit of an employer match, and they're they're they're
23:47
Speaker 3: not real active on it. I mean they've they've allowed
23:50
Speaker 3: things to kind of be divided up, and they just
23:52
Speaker 3: maybe check it a couple of times a year or
23:53
Speaker 3: something a week like last week. Again, if you look
23:57
Speaker 3: over a two week period, you may see a loss,
23:58
Speaker 3: but again a week like last week, you may be
24:01
Speaker 3: able to absorb that.
24:02
Speaker 4: Okay, Yes, if you're you know, participating in the market
24:07
Speaker 4: over a long periods of time, you know this will
24:10
Speaker 4: end up being a blip in the road. I mean,
24:12
Speaker 4: even as bad as two thousand and eight was, if
24:15
Speaker 4: you look now back at a twenty thirty year chart
24:18
Speaker 4: of the market, you can see it, but it is
24:22
Speaker 4: not nearly as scary when you look at it on
24:24
Speaker 4: that long term chart. You know, it's the long term
24:28
Speaker 4: smooths a lot of things out. A lot of those
24:30
Speaker 4: peaks and valleys get smoothed right out and averaged over
24:33
Speaker 4: time in and and you know, you remember when you
24:36
Speaker 4: went through it. But like I say, in reality, since
24:39
Speaker 4: two thousand and eight, the market's quintipled itself. I mean,
24:44
Speaker 4: you know it's, yeah, I pulled that one out of somewhere.
24:49
Speaker 4: But the you know, the the the idea is to participate.
24:56
Speaker 4: Don't allow emotions to pull your off your game, because
25:01
Speaker 4: if you if you're not going to meet your goals,
25:04
Speaker 4: if you're not even playing the game.
25:06
Speaker 3: Right, right, And that's that's a great thing that Fourth
25:10
Speaker 3: Avenue Financial does. They'll sit down with you and get
25:12
Speaker 3: a plan together and be kind of the buffer, a
25:16
Speaker 3: little bit of the buffer of the emotion, right. And
25:19
Speaker 3: And I thought there was a great point you made earlier,
25:21
Speaker 3: John about you know, thinking about, Okay, there's these life
25:24
Speaker 3: situations that happen. How can I get to some things
25:28
Speaker 3: where I need more short term issues and then I've
25:31
Speaker 3: got the long term over here right right?
25:33
Speaker 4: Yeah, using investments the way they were, the way they operate,
25:37
Speaker 4: you know, what their purpose is for. And and a
25:41
Speaker 4: lot of times, you know, when folks come in, they'll
25:46
Speaker 4: have these biases towards the types of investments they want
25:49
Speaker 4: to go into, and and and oftentimes they're only protecting
25:57
Speaker 4: themselves against one thing that they perceive as the major risk,
26:04
Speaker 4: but they're exposing themselves to risks that they don't see
26:08
Speaker 4: by concentrating their investment. You know, we talked about the
26:12
Speaker 4: interest rate changes, reinvestment risk. You know, well, your income
26:16
Speaker 4: goes way down if interest rates fall. If you're all
26:19
Speaker 4: tied to those type of investments protecting principle in safe investments,
26:28
Speaker 4: you're probably going to fall short of keeping up with
26:30
Speaker 4: inflation over a long period of time. That's a risk.
26:35
Speaker 4: So there are all kinds of risks that you have
26:37
Speaker 4: to try to mitigate when you're building a financial plan.
26:40
Speaker 4: And that's why it's so important to know the client,
26:43
Speaker 4: to know what the goals are and structure it around
26:48
Speaker 4: that for that individual, because somebody may need more of
26:51
Speaker 4: the short term safe depending on what the goal is.
26:54
Speaker 4: If it's a short term goal, you know, if you're
26:58
Speaker 4: a typical person in retirement, you know, even a retiree,
27:02
Speaker 4: even a sixty five seventy year old, needs some exposure
27:05
Speaker 4: to the market because otherwise, how are you going to
27:09
Speaker 4: keep up with inflation over time? How are you going
27:12
Speaker 4: to keep the purchasing power up over time? If you
27:14
Speaker 4: don't have some growth in the portfolio and money in
27:18
Speaker 4: the in a in a an asset class that is,
27:21
Speaker 4: it's keeping current because like I say, the goods and
27:24
Speaker 4: services being produced, you know that if they go up
27:28
Speaker 4: and if they inflate, you know, those companies tend to
27:32
Speaker 4: keep up with that. And and that's similar to what
27:36
Speaker 4: you do in your in your working career, when you're
27:39
Speaker 4: working your service, your wage tends to keep up with
27:44
Speaker 4: inflation over time to a degree. Because you're in the
27:48
Speaker 4: market currently. You're in the jobs market, you're in the
27:51
Speaker 4: labor market, you're in the you know, you're you're actively
27:54
Speaker 4: participating by by delivering your goods and services to the
27:58
Speaker 4: to the marketplace. Well in retire I mean you're not
28:00
Speaker 4: doing that physically anymore. In retirement, you need your portfolio
28:04
Speaker 4: to do that for you. And that's what the stock
28:06
Speaker 4: market provides for you. And and like I say, every
28:10
Speaker 4: year or so, you're not going to be happy for
28:13
Speaker 4: a for a quarter or so, but but over time
28:16
Speaker 4: it's it assuredly works.
28:18
Speaker 3: And another and that's another good reminder because maybe I'm
28:24
Speaker 3: you know, maybe I don't view this right, but sometimes
28:26
Speaker 3: I think people for Okay, I'm retired, here's my money.
28:29
Speaker 3: You know, I'm ready to go. But as you mentioned,
28:31
Speaker 3: you still got to be in the market. Yeah, yeah, yeah, yeah.
28:35
Speaker 4: There again, it might not be it's certainly not as
28:38
Speaker 4: aggressively in the market as a as a thirty year
28:40
Speaker 4: old would write, but you have to have some exposure
28:43
Speaker 4: to that, otherwise you're out of the game. You're not
28:47
Speaker 4: participating in the in the economy producing goods and services
28:51
Speaker 4: at the at the at the stage they are, you know,
28:54
Speaker 4: wherever inflation is falling, and the values of those goods
28:57
Speaker 4: and services are in the marketplace, and the market stock
29:00
Speaker 4: market allows you to do that even though you're not
29:04
Speaker 4: no longer delivering your own labor to it.
29:07
Speaker 3: Right John, How and always like when I'm one here
29:10
Speaker 3: for could always like to ask us, you know, how
29:12
Speaker 3: do folks contact you? Just do a sit down or
29:16
Speaker 3: just do an initial you know, so they can kind
29:18
Speaker 3: of get a plan together with you.
29:20
Speaker 4: Yeah, the first step is usually just an introductory phone call.
29:26
Speaker 4: We'll talk for ten or fifteen minutes, kind of get
29:28
Speaker 4: to know one another, see what the situation is, make
29:30
Speaker 4: sure that you know both parties are wanting to move forward.
29:35
Speaker 4: And that's really easy to schedule. You can call me
29:38
Speaker 4: at the office three oh four seven four six seven
29:41
Speaker 4: one seven seven. They'll schedule that call for you. You can
29:45
Speaker 4: go online to our website and you can schedule it
29:48
Speaker 4: yourself if you choose to online with an online scheduler.
29:53
Speaker 4: And like I say, it's a it's a brief phone
29:55
Speaker 4: call just to get to know one another. From that point,
29:59
Speaker 4: we will get a a questionnaire out to you to
30:03
Speaker 4: give us an overview of your of your situation and
30:06
Speaker 4: answer some questions so that when we do meet for
30:08
Speaker 4: the first time, it can be productive because I have
30:13
Speaker 4: some of that information up.
30:14
Speaker 3: Front and that that meeting, at one on one meeting
30:18
Speaker 3: is going to be okay, you know, kind of where
30:20
Speaker 3: are you, Let's talk about goals, is talk about these
30:23
Speaker 3: type of things.
30:24
Speaker 4: Absolutely, very rarely does the first meeting, you know, end
30:29
Speaker 4: up in we're doing this portfolio. It's usually a two
30:34
Speaker 4: meeting process that you know, it's fact finding, making sure
30:39
Speaker 4: that I understand the situation, and then on the second meeting,
30:44
Speaker 4: you know, we decide to move forward with a with
30:46
Speaker 4: a specific plan.
30:48
Speaker 3: Right eight fifty three three or four three four five
30:51
Speaker 3: fifty eight fifty three or four three four five fifty
30:53
Speaker 3: eight fifty I wanted to ask John because John and
30:56
Speaker 3: his wife have dived in to small business, well small
31:02
Speaker 3: business ownership and congratulations. I always been out there on
31:04
Speaker 3: Facebook obviously from the city and from Yeah, your wife
31:09
Speaker 3: opened in downtown South Charleston.
31:11
Speaker 4: Yes, yeah, yeah, vintage.
31:13
Speaker 3: And Vonn's congratulations on that looks great.
31:16
Speaker 4: Yeah, thanks, It was. It was a several months of
31:19
Speaker 4: uh you know, working uh late hours getting that, getting
31:24
Speaker 4: that set up, but it was a very successful opening.
31:27
Speaker 4: Uh we opened up uh Thursday, and and you know,
31:31
Speaker 4: uh it really it's my wife's shop. It's not you know,
31:35
Speaker 4: this is all her thing, right right right. She gave
31:37
Speaker 4: me a back corner of the of the building where
31:41
Speaker 4: I have a little a little record section because I
31:43
Speaker 4: really like, you know, that's what I kind of love
31:46
Speaker 4: to do. So it gives me a reason to to
31:49
Speaker 4: continue to hunt and be able to buy records that
31:52
Speaker 4: I would buy and and uh not uh not overwhelmed
31:57
Speaker 4: the house with them.
31:59
Speaker 3: So where'd the name come from? I like the name.
32:02
Speaker 4: Well, of course vintage. All the you know, the items
32:06
Speaker 4: in there are vintage items. I mean they can be
32:10
Speaker 4: you know, antiques, but also a lot of the items
32:13
Speaker 4: are are a little newer than that, you know, fifties,
32:17
Speaker 4: sixty seventies, eighties, you know, it sometimes makes me feel old,
32:22
Speaker 4: but when the twenty somethings are coming in, you know,
32:26
Speaker 4: vintage to them are things that I remember.
32:29
Speaker 3: Having same here, same here, So anyway.
32:35
Speaker 4: It really has appeal across across the whole age spectrum.
32:40
Speaker 4: You can find a little bit of anything in there,
32:43
Speaker 4: a lot of household goods, and in the vines part,
32:48
Speaker 4: my wife loves plants and propagates plants, and there's a
32:55
Speaker 4: section of plants. A lot of them are potted plants,
32:58
Speaker 4: houseplants in vintage pottery.
33:03
Speaker 3: Oh it's great.
33:03
Speaker 4: Yeah, And so that's that's where the name Vintage and
33:06
Speaker 4: Vines comes. And most of the things on the first
33:09
Speaker 4: floor are basically my wife's inventory and and my little
33:14
Speaker 4: record shop. And then upstairs there are about forty to
33:19
Speaker 4: fifty vendor boosts that people have their own mini stores
33:24
Speaker 4: up there. So it's it's really a great mix of
33:30
Speaker 4: things to find, and you can certainly spend some time
33:33
Speaker 4: exploring there and find something new every time you come. Yeah.
33:35
Speaker 3: Great location right there on D Street and South Trust.
33:38
Speaker 3: So Mayre Malins with the ribbon cutting, yeah yeah, the
33:41
Speaker 3: other day.
33:41
Speaker 4: Yeah, yeah, it was a big to do.
33:45
Speaker 3: All right, Now, let me read it before we go here, John,
33:47
Speaker 3: I'm going to read I just got this from Wall
33:49
Speaker 3: Street Journal. Oh noy reacting to the headline. Here's the
33:52
Speaker 3: headlines to this story. It says the route and global
33:56
Speaker 3: markets is intensifying, stocks are on track to tumble at
33:59
Speaker 3: the New York Open, and yield are sinking. Yep, there
34:02
Speaker 3: we go, hot off the presses, John.
34:07
Speaker 4: Welcome to Monday. That's right. Yeah, let me see uh
34:13
Speaker 4: real quick here, I'm trying to look if I can
34:15
Speaker 4: get service in the in this vault of a room.
34:18
Speaker 2: Yes.
34:19
Speaker 4: Yeah, the ten year yield is down considerably, down to
34:25
Speaker 4: three point sixty nine. I mean that was that's a
34:28
Speaker 4: that's a you know, three quarters of a percent drop
34:32
Speaker 4: over the last several days. That's a pretty significant move
34:36
Speaker 4: in the bond market, which if you look at your portfolio,
34:41
Speaker 4: if you're diversified, you're going to see your stocks get
34:43
Speaker 4: hit today, but you're also going to see your bond
34:46
Speaker 4: holdings and fixed in come holdings go up. So if
34:49
Speaker 4: you're blended, yeah, yeah, maybe stocks end up down three percent,
34:54
Speaker 4: but you your bonds may be up two percent, and
34:57
Speaker 4: you blend those together and you're still to be down
35:00
Speaker 4: when a market does this, but it's moderating it, and
35:03
Speaker 4: that's what you're trying to do, particularly in a retirement
35:06
Speaker 4: type portfolio. Have a plan, have a plan and stick
35:10
Speaker 4: to it and turn that TV off.
35:13
Speaker 3: That's right, that's right. Don't let Jeff Jenkins read.
35:15
Speaker 4: The headline the radio on, but turn that TV off.
35:17
Speaker 3: Thank you, John. We appreciate that. We appreciate that. Yeah, exactly. Okay, Yeah,
35:22
Speaker 3: this is uh again. It's it's all kind of interesting.
35:27
Speaker 3: It starts to get the momentum, this momentum thing, you know,
35:30
Speaker 3: it starts to get momentum going the other way.
35:32
Speaker 4: Yeah, man, And there again, the momentum is created by
35:35
Speaker 4: people making emotional decisions, right, and so stay out of
35:39
Speaker 4: that fray.
35:39
Speaker 3: Stay out of the fray. Okay, all right, John, best
35:42
Speaker 3: way again, you missed a couple of months ago, but
35:45
Speaker 3: best way to contact you and set up something.
35:48
Speaker 4: Well, the old phone is still works. It's three oh
35:50
Speaker 4: four seven four six seven nine seven seven. Or you
35:54
Speaker 4: can go to our website which is Fourth Avenue Financial
35:58
Speaker 4: dot com. Read all kinds of articles there and get
36:01
Speaker 4: lots of good information. But you can also schedule your
36:04
Speaker 4: introductory phone call right on the website.
36:07
Speaker 3: And we don't talk about this much. We say it sometimes,
36:12
Speaker 3: you know, the because we have the Dave Ramsey Show
36:15
Speaker 3: on and you know, get out of debt, get out again,
36:21
Speaker 3: get out of debt. You have more income to do
36:23
Speaker 3: things like this investment.
36:24
Speaker 4: You know those things absolutely, And there are some steps
36:27
Speaker 4: you need to do before you start to invest and
36:30
Speaker 4: and and those are things if you're young and you
36:32
Speaker 4: have questions, we can offer some guidance there, because you
36:36
Speaker 4: don't want to jump in the market if you don't
36:38
Speaker 4: have your foundation built first, and because because that will
36:42
Speaker 4: set you up to having to liquidate when an emergency
36:47
Speaker 4: inevitably comes. Life always has some kind of emergency throwing
36:51
Speaker 4: it at us. And if you don't have your foundation built,
36:54
Speaker 4: you're gonna be able to hold those stocks long term.
36:56
Speaker 3: What is the only constant thing is changed?
36:58
Speaker 4: That's correct. That's correct, and.
37:01
Speaker 3: We're seeing it a little bit on the market here.
37:03
Speaker 3: So sure, just just hang in there. Get a plan.
37:05
Speaker 3: If you don't have a plan, get the get with John.
37:07
Speaker 3: Get a plan and stick to the plan and be
37:10
Speaker 3: ready when the waves start.
37:13
Speaker 4: Yeah, and go on a little bit. And there again,
37:15
Speaker 4: when you when you start out getting the expectations right,
37:18
Speaker 4: you know, it's not if the market is going to
37:22
Speaker 4: have bad periods of time, it's you know that they are,
37:26
Speaker 4: and just accept that up front. And if you do that,
37:29
Speaker 4: it's much easier.
37:30
Speaker 3: To stick stick with it all right, John, You're seeing
37:32
Speaker 3: you all right, you too, Take care all right, Thanks
37:34
Speaker 3: a lot. ABC News is next and local news on
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37:45
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