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Second Half Market Outlook · HPK Provident Advisors: The Weekly Bull

0:03
SPEAKER_01: Welcome to Friday Live.
0:04
SPEAKER_01: Today is July 10th, Friday, uh around 12 p or yeah, almost 12 p.m.
0:10
SPEAKER_01: With me today is Mr.
0:12
SPEAKER_01: Brian Peluso.
0:13
SPEAKER_01: We use this format to talk about what we're seeing going on in the markets, the economy, and talk about our financial planning blog post.
0:20
SPEAKER_01: So, Brian, glad to have you back.
0:23
SPEAKER_02: Well, it is great to be back.
0:24
SPEAKER_02: Took a little time off uh last week for the 4th of July, which was spectacular, 250th anniversary of our long weekend.
0:33
SPEAKER_02: Oh, it was spectacular.
0:34
SPEAKER_02: I don't know.
0:35
SPEAKER_02: When's our next long weekend?
0:36
SPEAKER_02: Uh when's the next time the markets closed?
0:38
SPEAKER_02: It's not till Labor Day, maybe.
0:41
SPEAKER_02: I don't even know.
0:42
SPEAKER_00: Yeah, that might be right.
0:45
SPEAKER_02: Well, there's July.
0:47
SPEAKER_02: Yeah, I think it might be.
0:48
SPEAKER_02: So we got a little stretch here where the barga won't be closed.
0:52
SPEAKER_01: So well, good.
0:53
SPEAKER_01: You have a vacation coming up in a couple weeks, right?
0:56
SPEAKER_01: Uh I think so.
0:57
SPEAKER_02: You know, I'm on a need-to-know basis about those things.
1:00
SPEAKER_02: So uh when it's vacation time, they'll they'll let me know a few hours ahead of time, throw stuff in a bag, and jump in the car and they'll tell me which way to go.
1:08
SPEAKER_00: Um well, what did you do on the fourth?
1:10
SPEAKER_00: Do you see some fireworks, light some fireworks, go to some barbecues?
1:15
SPEAKER_02: Uh you know, all the above.
1:17
SPEAKER_02: Actually, on July 4th, I decided uh to go to Philadelphia.
1:21
SPEAKER_02: And oh really?
1:22
SPEAKER_02: Yeah, I want I wanted to see Independence Hall.
1:26
SPEAKER_02: And uh so we drove out to Philadelphia a couple hours from here, across the state.
1:31
SPEAKER_02: Of course, I'm in western Pennsylvania, and um I just thought it would be uh special to see the physical location where the Continental Congress was, uh, where this whole concept was contemplated, where the Constitution written, signed, uh Liberty Bell, all those good things.
1:53
SPEAKER_02: Um and so it was, you know, not my my kids weren't as excited as I was.
1:59
SPEAKER_02: I I my guess is you know, many years into the future, they'll look back and say, What wasn't that really wonderful?
2:05
SPEAKER_01: Yeah, I went when I was little, and I gotta say, I didn't really appreciate it, but now I know I you know I didn't go in, the lines were too long.
2:15
SPEAKER_02: It was about 104 degrees.
2:18
SPEAKER_02: That's uh that's the actual number.
2:19
SPEAKER_02: That's not for uh uh effect of my story.
2:22
SPEAKER_02: It was blazing hot, the several hour line to get into the Liberty Bell, to get into uh Independence Hall.
2:30
SPEAKER_02: But I wanted to be there.
2:32
SPEAKER_02: And uh it was and on top of that, right on the lawn of Independence Hall, Fox Sports, uh, they were doing their broadcast for the World Cup.
2:42
SPEAKER_02: There was a World Cup game in Philadelphia on July.
2:44
SPEAKER_00: Oh, okay.
2:44
SPEAKER_02: They were doing their broadcast from the lawn of uh Independence Hall.
2:49
SPEAKER_02: So you had that, you had everybody, all the Yahoos like me that wanted to be there on that day in particular.
2:54
SPEAKER_02: It was hot and crowded, and I couldn't have been happier that I went.
2:59
SPEAKER_02: Um did you get a cheesesteak while you were there?
3:02
SPEAKER_02: Oh, of course I did, and it was truly spectacular.
3:04
SPEAKER_01: Where'd you go?
3:05
SPEAKER_02: Uh we went to a place called Angelo's, Angelo's Pizzeria.
3:08
SPEAKER_02: It's on the south.
3:09
SPEAKER_01: I I hear cheesesteak reviews like all the time on Instagram, and that's kind of the underlying consensus that Angelo's is the best.
3:18
SPEAKER_02: Well, you know, I've done I've done Pat's Gino's.
3:20
SPEAKER_01: Um Pat's Geno's are mediocre.
3:22
SPEAKER_01: Do you know Bradley Cooper has a a very well-known one that's that's supposed to be really good now?
3:29
SPEAKER_01: It's been open for like a year or two.
3:31
SPEAKER_02: I did I didn't know that, and I I wish I would have known that.
3:34
SPEAKER_02: I would I would have tried it, but yeah, next time.
3:36
SPEAKER_01: Next time you hit there, I'll I'll give you some names.
3:38
SPEAKER_02: Oh well, that would be perfect.
3:40
SPEAKER_02: And uh to your point, you know, Angelo's comes up everywhere.
3:44
SPEAKER_02: Uh so we got we got Angelo's pizza too?
3:47
SPEAKER_02: They're pizza with it.
3:47
SPEAKER_02: Of course we did.
3:49
SPEAKER_02: You know, I grew up with in a family that said, geez, what if we never get here?
3:53
SPEAKER_02: Well, we've got to try everything while we're here.
3:54
SPEAKER_02: Well, may we may never be back.
3:56
SPEAKER_02: And so we had pizza and cheesesteaks.
3:59
SPEAKER_02: And uh we got there about 10:30.
4:01
SPEAKER_02: It opens at 11 o'clock in the morning.
4:03
SPEAKER_02: Got there.
4:03
SPEAKER_02: There was already a line.
4:05
SPEAKER_02: And uh and again, it was hot.
4:07
SPEAKER_02: There's no seating in there, it's just a counter and there's sling in food.
4:10
SPEAKER_02: Uh so we sat in a little park right beside uh in this little neighborhood, South Philly.
4:15
SPEAKER_02: It was wonderful, absolutely spectacular.
4:17
SPEAKER_02: I highly recommend it.
4:18
SPEAKER_01: Uh well, cheesesteak's one of my favorite foods.
4:20
SPEAKER_01: So if I go to a restaurant and there's a cheesesteak on the menu, there's a good chance I'm gonna order it.
4:26
SPEAKER_02: Well, this one was uh it was special, I gotta tell you.
4:29
SPEAKER_02: So yeah, we actually hit Angelo's and then um uh then we walked.
4:34
SPEAKER_01: Now they don't they don't do whiz, right?
4:36
SPEAKER_01: They do Cooper Hawk.
4:38
SPEAKER_02: That's right.
4:38
SPEAKER_02: That's exactly right.
4:39
SPEAKER_01: Cedar roll.
4:41
SPEAKER_02: Yes, all the above.
4:42
SPEAKER_02: Yep.
4:43
SPEAKER_02: So I got uh grilled onions, the Cooper Sharp uh uh cheese, and uh that's it.
4:50
SPEAKER_02: That's all I got online.
4:51
SPEAKER_02: And then we tried uh we just it seems like the best cheesesteaks are kind of a little more plain.
4:56
SPEAKER_01: Um they don't seem to really do peppers, sometimes onions, and then either the the Cooper Sharp or Wiz.
5:06
SPEAKER_02: Well, I you know, I think whiz was an option, uh, but I did do some research ahead of time.
5:10
SPEAKER_02: Everybody said go for the Cooper Sharp.
5:11
SPEAKER_01: So that's yeah, that's what they're known for.
5:14
SPEAKER_02: And uh I did learn to your point the um uh anybody puts green peppers, grilled green peppers, that's a no-go on a chili uh Philly cheesesteak.
5:25
SPEAKER_02: Uh I think hot peppers rings are sometimes acceptable.
5:28
SPEAKER_02: Don't know.
5:29
SPEAKER_02: But I try to make it as simple as the plaintiff as it's enormous, by the way.
5:32
SPEAKER_01: Occasionally I'll do like a hot or a sweet pepper on a cheesesteak, but usually not.
5:37
SPEAKER_02: I and these sandwiches, these cheesesteaks over here, just uh ginormous.
5:41
SPEAKER_02: We have we over-ordered, uh, embarrassingly overordered.
5:45
SPEAKER_02: We're sitting in this little park, it's all of us, and everybody's got sandwiches.
5:48
SPEAKER_02: We got to do it.
5:49
SPEAKER_01: Well, if people had like I would have filled up a cooler to bring home.
5:53
SPEAKER_02: You know what?
5:54
SPEAKER_02: I hadn't even thought of that.
5:55
SPEAKER_02: So that's what I did.
5:56
SPEAKER_02: I went to Philly.
5:57
SPEAKER_02: I had to that's cool.
5:59
SPEAKER_01: I went camping over the weekend to make it.
6:02
SPEAKER_02: Philly did not look like that, I will tell you.
6:04
SPEAKER_01: It was probably a little cooler than where you were at.
6:07
SPEAKER_01: Um, pretty, pretty moderate temperature though.
6:10
SPEAKER_01: You know, it got a little warm during the day and very comfortable at night.
6:14
SPEAKER_01: Um, it went on a couple hikes, and then uh we I went with my sister's family, so we had four dogs, two little kids.
6:22
SPEAKER_01: They were in their pop-up camper, and I did a tent.
6:26
SPEAKER_01: So that that was interesting.
6:28
SPEAKER_01: Um, pretty sure my new dog uh chased a coyote.
6:33
SPEAKER_01: Oh, well, it's kind of like a husky-looking dog without a collar, and it it ran pretty far.
6:40
SPEAKER_01: So that's my guess on that one.
6:42
SPEAKER_01: She's gonna have been a wolf.
6:45
SPEAKER_02: Could have been was your dog chasing a wolf, it could have been.
6:48
SPEAKER_02: I would go with that.
6:49
SPEAKER_02: That sounds even more dramatic and interesting.
6:51
SPEAKER_01: All right.
6:53
SPEAKER_01: We have had two separate deer encounters with her at this point.
6:58
SPEAKER_01: The last one, she was off leash and found a doe and a buck, and then went on to chase them for about three miles and then met me at the car.
7:08
SPEAKER_02: Yeah, it didn't bring anything back though, right?
7:13
SPEAKER_01: Did not no, she got pretty close at one point, and then they split up and just outran her.
7:18
SPEAKER_01: Yeah, so that's good.
7:20
SPEAKER_01: Yeah, but maybe one of that she'll get me some venison.
7:24
SPEAKER_02: I I should hope so.
7:25
SPEAKER_02: There's nothing, there's not much better in the world in my mind than venison jerky.
7:29
SPEAKER_02: Uh, but that is an amazing way to celebrate uh America.
7:33
SPEAKER_01: It's yeah, it's it's nice just being out in nature, like the stars were beautiful.
7:38
SPEAKER_01: I no chance of rain, so I didn't even have like the rain flap on, so all night just seeing the stars.
7:45
SPEAKER_02: Well, that is there was uh many, many different ways to sell uh celebrate 250 years of this grand experiment that we call the United States of America.
7:56
SPEAKER_01: Yeah, I can't believe we're on the second half of the year.
7:58
SPEAKER_01: So that that's actually what we titled this Friday live what's in store for the second half of the year.
8:03
SPEAKER_01: Um you know, there's a lot of uncertainty out there.
8:06
SPEAKER_01: Um, you know, it seems like the ceasefire has kind of fallen through.
8:11
SPEAKER_01: We got a little uptick in oil prices.
8:13
SPEAKER_01: I think it were at about 71 a barrel.
8:15
SPEAKER_01: I think the low was like 67, but still well off the highs below the 200-day moving average.
8:21
SPEAKER_01: So the oil markets certainly saying, you know, we're not too concerned that this thing's gonna re-escalate.
8:27
SPEAKER_01: But you know, it's it's such a volatile headline situation.
8:31
SPEAKER_01: Um besides that, the economic data has been all right.
8:35
SPEAKER_01: Um, inflation should come down with oil prices, especially on the headline number.
8:40
SPEAKER_01: Uh cross our fingers.
8:41
SPEAKER_01: Yeah, so we'll get uh we'll get that on Tuesday, the CPI reading.
8:45
SPEAKER_01: And I think the headlines expected to be like negative 0.1 or 0.2 for the month, dipping down to uh 2.9.
8:54
SPEAKER_01: Let me uh let me just confirm that number.
8:58
SPEAKER_01: Yeah, 2.9, um, which is actually the same as last month.
9:02
SPEAKER_01: Oh, actually, that is sorry, that is the core reading is staying stagnant at 2.9, uh up two tenths for the month.
9:11
SPEAKER_01: So not not a bad reading.
9:13
SPEAKER_01: And then headlines expected to go from 4.2 to 3.8 and negative 0.2 on the month.
9:19
SPEAKER_01: And then we'll get PPI on Wednesday, which is kind of the wholesale inflation numbers, and then retail sales on Thursday.
9:26
SPEAKER_01: So retail sales are actually supposed to be a little weaker.
9:28
SPEAKER_01: The control group is gonna rise 0.4 for the month, that's down from 0.72.
9:34
SPEAKER_01: Uh, core is kind of what feeds into the GDP numbers.
9:38
SPEAKER_01: Um, so that's that has a direct link to what we can anticipate from the GDP, and then uh just the headline number is three tenths of a month, which is about a third of what it was the prior rating.
9:49
SPEAKER_01: So some deceleration there.
9:51
SPEAKER_01: Uh, maybe the consumer just pulled back a little bit with how high oil has been.
9:56
SPEAKER_01: Um, gasoline prices.
9:58
SPEAKER_01: Fortunately, we're seeing that come back down.
10:00
SPEAKER_01: So right now, I think the market's pricing in about uh three tenths, point three three tenths increase in rate hikes this year.
10:10
SPEAKER_01: Um you know, if if oil stays down, I think I think we're probably gonna be on pause.
10:17
SPEAKER_01: Before when oil was around 100, I was like, you know, the core components are going up, headlines are gonna go up even more with oil prices.
10:26
SPEAKER_01: I think it's time to raise rates.
10:29
SPEAKER_01: But with oil coming down, I think it puts us in a lot better situation.
10:35
SPEAKER_01: So we did get that fall through in um the peace talks this week, but as you can see, this is the SP 500.
10:43
SPEAKER_01: We're really not seeing, I mean, we're actually up on the week.
10:46
SPEAKER_01: Um, SP looks pretty healthy chart-wise, just kind of in a consolidation phase, slightly moving higher.
10:52
SPEAKER_01: RSI is still in like the overall buy condition.
10:56
SPEAKER_01: Uh, looks like MACD on the bottom here is about to flip up.
10:59
SPEAKER_01: That's another momentum indicator.
11:01
SPEAKER_01: The triple Q NASDAQ 100 did briefly dip below the 50-day moving average, but now is moving back higher.
11:08
SPEAKER_01: Um, yields are kind of where they've been around the four and a half range.
11:13
SPEAKER_01: Um, like I mentioned before, oil prices did tick up, but relatively overall, I mean, we're back in the pre-war range, so really not pricing in too much.
11:25
SPEAKER_01: Um, so typically, I mean, it's a midterm year.
11:29
SPEAKER_01: I was I was talking to you about this earlier.
11:32
SPEAKER_01: Have you heard anything about midterms in regard to the stock market?
11:35
SPEAKER_01: Usually it's a huge thing come usually as early as June.
11:40
SPEAKER_01: And we have not heard anything about it.
11:42
SPEAKER_02: Yeah, I heard a little bit about that uh candidate up in Maine that ran into some challenges, and so they got to find a new.
11:49
SPEAKER_02: I think he's a Democratic uh candidate of a Mayor.
11:51
SPEAKER_02: That's about it, though.
11:52
SPEAKER_02: I I you know, I think that was less about the election itself and more, you know, kind of dirty laundry that sells advertising on news outlets.
12:02
SPEAKER_02: But um, no, that's about all I've heard.
12:05
SPEAKER_01: Yeah, so I mean, typically midterm years aren't great for the stock market.
12:09
SPEAKER_01: So far, it's been a good year.
12:10
SPEAKER_01: Um, SP's up a little over nine percent.
12:14
SPEAKER_01: Um, but I'm I I am expecting some probably drawdowns into the midterm election and then hopefully finishing strong in the year end, depending on how the economic data shapes up.
12:26
SPEAKER_01: Um, so far, I think we're in a position where that could definitely transpire.
12:30
SPEAKER_01: But we're very nimble with our positioning.
12:33
SPEAKER_01: So we try to be tactical, we try to move around.
12:36
SPEAKER_01: Um, we have more in the retirement accounts, a little bit of an elevated cash position right now.
12:41
SPEAKER_01: Um, I would do that in the taxable accounts, but for a potential minor drawdown, it's just part of the stock market.
12:49
SPEAKER_01: And to pay taxes on that doesn't always make sense.
12:54
SPEAKER_01: Um, so we'll kind of be patient on the taxable accounts until we see some things truly overheating.
13:01
SPEAKER_01: Um, you mentioned earlier AI potential bubble.
13:06
SPEAKER_02: I'm just just wondering out loud, you know.
13:09
SPEAKER_01: Well, you you you were in the financial markets in the dot-com bubble.
13:13
SPEAKER_01: So yes, I was.
13:14
SPEAKER_01: You saw it firsthand.
13:16
SPEAKER_01: Um, I can tell you the earnings are a lot stronger now, the companies are a lot more stable, and we're really not seeing stretch valuations.
13:24
SPEAKER_01: So, not to say this won't ultimately end in an AI bubble, um, but we might have a little longer runway.
13:32
SPEAKER_01: You are seeing seeing some signs of exuberance here and there, like some semi semiconductor equipment makers up thousand plus percent, twelve hundred percent in the last six months.
13:42
SPEAKER_01: You're starting to see that IPO market really heat up.
13:45
SPEAKER_01: So those are potential warning signs, but I don't think we're quite there in bursting of a bubble yet.
13:54
SPEAKER_00: All right.
13:55
SPEAKER_01: I'm calling it the I'm calling it the seventh inning right now.
13:59
SPEAKER_02: All right, all right.
14:00
SPEAKER_02: Well, fair enough.
14:01
SPEAKER_02: It's uh yeah, there's some I guess uh I would say eerie parallels to all this great excitement about technology changing the world, which it is, it is changing the world.
14:13
SPEAKER_02: Can't even can't be no question of that.
14:15
SPEAKER_02: But there's also this sense of geez, everything I, you know, every investment I touch in that space, that area, that category, it they just go up.
14:26
SPEAKER_02: They're changing the world.
14:27
SPEAKER_02: You know, we're in a um we're in a new dynamic.
14:32
SPEAKER_02: Well, you know, we are, but sunflowers don't grow to the sun.
14:34
SPEAKER_02: So uh we keep our eye.
14:36
SPEAKER_01: Now we're starting to see a lot more volatility underneath the surface, especially in the tech space, like seeing huge, close to double-digit interday gains on semis sometimes, and then the next day, possibly a 10% loss on semis, same thing, or alternative days with software companies.
14:55
SPEAKER_01: Um, so the VIX is at 16, but the underlying stock volatility has certainly skyrocketed.
15:03
SPEAKER_02: So you know, there's so many of these um so many of these uh really solid companies, good earnings, that type of thing, that that are growing fast, their stock prices are growing fast.
15:16
SPEAKER_02: It seems to me that there's so many of them that if you could go out 10 years in the future and look back and say, boy, am I you know glad I um owned a piece of that company for these last 10 years.
15:29
SPEAKER_02: You go out 10 months, one, two years, I don't know.
15:35
SPEAKER_02: So, you know, it's kind of like a lot of the things we talk about you know in the financial planning.
15:40
SPEAKER_02: It's there could be some short-term sacrifice for the long-term gain, short-term sacrifice of volatility, um, uh short-term sacrifice of ooh, you know, inflation, uh, you know, these prices are too high on these stocks.
15:55
SPEAKER_02: They're they think gone down a little bit for the long-term gain.
15:58
SPEAKER_02: If you look back and say, wow, AI did change the world.
16:01
SPEAKER_02: And I'm glad that I participated in that with some portion uh of my investable capital.
16:08
SPEAKER_01: So yeah, but I think it's definitely a new dynamic that we haven't really, there's not a fair comparison previously, at least that I can think of.
16:17
SPEAKER_01: We're seeing massive capex on AI.
16:20
SPEAKER_01: Um, productivity is gonna be increasing, and then we have to, you know, think about what the long-term effects of the labor market is if some of those jobs are being replaced by computers and programs and that kind of thing.
16:34
SPEAKER_01: So I have faith.
16:36
SPEAKER_01: We'll figure it out.
16:36
SPEAKER_01: I'm gonna be more worried about uh overheating stock market potential AI bubble if we get back to a scenario like we had in 2021 after COVID, where all those like high growth, low profitability companies just skyrocket it.
16:51
SPEAKER_01: Yeah, yeah, yeah, yeah, yeah.
16:53
SPEAKER_01: And they didn't really call that a bubble, but like those stocks had 80% drawdowns.
16:58
SPEAKER_01: I mean, even in the 2022, like most of the mag 7 was down 50 percent.
17:06
SPEAKER_01: Well, we kind of forget about that because we had such a strong rebound off of that, right, right.
17:11
SPEAKER_02: Well, for those big companies, big companies, good earnings, got good products, and incredible potential.
17:16
SPEAKER_02: But you know, it really does.
17:18
SPEAKER_02: And yeah, you've got to know those companies, you gotta understand what they're doing.
17:22
SPEAKER_02: Uh, you've got to make a very, very, very educated guess on what their future might be like.
17:27
SPEAKER_01: And and I mean, that's a crazy amount of money swing because these companies are trillion-dollar companies now.
17:33
SPEAKER_01: That's bigger than countries, GDP.
17:38
SPEAKER_01: Well, we'll keep our eye on it.
17:41
SPEAKER_01: Let's get to our blog post for the week.
17:43
SPEAKER_02: Yeah, so what we do is, you know, on Friday Live, we put out posts throughout the week.
17:48
SPEAKER_02: Uh, Mike does Market Monday, kind of summarizing what happened, what's uh coming up for the week.
17:54
SPEAKER_01: Uh, we do and with a note on that before you get to the rest of the thematic themes, I've I've kind of I was writing blog posts for a while and I just kind of felt like I was repeating what we were talking about on Friday Live.
18:06
SPEAKER_01: So I've been mixing in a little more other content, talking about different um dynamics of the market, um, finding different articles.
18:13
SPEAKER_01: This week I put out one um by LPL, just getting mixing in a little bit of a varying opinion of what I typically talk about.
18:22
SPEAKER_01: Um, but yeah, then like you were saying, we have Tax Tuesday, Wealth Building Wednesday, think ahead Thursday, and Friday live.
18:29
SPEAKER_01: Here we are.
18:30
SPEAKER_02: Friday lounge kind of summarizes.
18:31
SPEAKER_02: We put some killer commentary to those.
18:34
SPEAKER_02: Um so let's do it.
18:36
SPEAKER_02: Let's do our Keller commentary on some of the posts.
18:38
SPEAKER_01: All right.
18:38
SPEAKER_01: So for Tax Tuesday, we had uh article about small businesses.
18:43
SPEAKER_01: Now, retirement plans can be a great tax strategy for business owners.
18:48
SPEAKER_01: It's a way to compensate your employees and not pay taxes on it.
18:53
SPEAKER_01: And with that, you have a lot of different options.
18:55
SPEAKER_01: Historically, it's been, you know, the 401k has been the big one.
18:59
SPEAKER_01: But you do have other options, especially if you're a small business owner, they might be more um cost effective and easier to administer.
19:10
SPEAKER_01: What uh what vehicles do you typically discuss with clients?
19:15
SPEAKER_02: You know, it's uh boy, it's all over the board.
19:18
SPEAKER_02: Typically, there's no typical, it really it's a financial planning topic.
19:23
SPEAKER_01: Yeah, company size.
19:25
SPEAKER_01: Are you the only employer, employee, employer?
19:28
SPEAKER_01: Um, how big's your staff?
19:30
SPEAKER_01: That's right.
19:31
SPEAKER_01: Uh, do you want to be the one contributing fully to your employees' contributions, or do you want them to participate?
19:38
SPEAKER_01: So there's a lot of flexibility with that.
19:40
SPEAKER_01: Um, we personally utilize the SEP program, which it's just employer contribution.
19:47
SPEAKER_01: It tends to work pretty well for smaller companies.
19:51
SPEAKER_01: Um another popular one that we use sometimes for client businesses is simple plans, which I believe is a combination of both employee.
20:01
SPEAKER_01: Well, there's flexibility in it.
20:02
SPEAKER_01: It can be, can it be fully employer contribution?
20:08
SPEAKER_02: Uh it could be.
20:10
SPEAKER_02: Um, but you know, the real you know, the real you know, the benefit to that is employees can contribute, employers can contribute, and there's some flexibility on how much the employer contributes and in which year.
20:26
SPEAKER_02: So, you know, a lot of folks like that because uh you know employees have skin in the game because they can, you know, they can do um payroll deductions.
20:37
SPEAKER_02: Uh a lot of employers like that uh dynamic.
20:41
SPEAKER_02: They also like that there's some flexibility.
20:43
SPEAKER_02: There's more flexibility in a simple plan than a set plan on how much you contribute to the employees account and um when do you contribute?
20:53
SPEAKER_01: So you know again, that kind of comes down to the but in terms of contribution limit, you can contribute more typically to a SEP, right?
21:04
SPEAKER_01: I mean it it depends on, I mean, it's either like what what's what's is it 50 something thousand max or 25% a year?
21:13
SPEAKER_02: Yeah, yeah, it's it's higher than 50,000.
21:16
SPEAKER_02: It might be 56.
21:18
SPEAKER_01: Yeah, I mean it goes up every year, I think.
21:21
SPEAKER_01: Um, so it it's a good option, especially if you're a sole owner or just have a couple owners or employees.
21:29
SPEAKER_01: Maybe it's you and your wife own a business together.
21:32
SPEAKER_01: Um, could be a good way to get retirement savings in in your um assets without having to pay taxes on it.
21:40
SPEAKER_01: Um another potential option if you're a solo business owner is the solo 401k, which has can potentially have a higher contribution limit, um, but it it also it's the either or so a percentage of your AGI or a max limit.
22:00
SPEAKER_02: Yeah, the uh solo case, solo rot, uh, you know, that's for an individual owner and spouse.
22:07
SPEAKER_02: If spouse is uh an employee of the business, considered an employee of the business, a huge fan of those.
22:14
SPEAKER_02: Uh but you know the setup, the setup of those is fairly lengthy.
22:21
SPEAKER_02: Uh it's definitely like many things, and I always talk about short-term sacrifice, long-term gain, short-term sack sacrifice, filling out a lot of paperwork.
22:29
SPEAKER_01: Um yeah, you need to have those planned documents made.
22:33
SPEAKER_01: So it's an added expense.
22:35
SPEAKER_02: Yeah.
22:35
SPEAKER_02: Uh time and you know, expense.
22:37
SPEAKER_02: But they're amazing.
22:38
SPEAKER_02: I mean, they've got huge contribution limits and uh, you know, a lot of flexibility there uh once they're all set up.
22:44
SPEAKER_02: Uh flexibility is you know a word uh I talk about quite a bit on Friday Live, whether it be flexibility in types of investments or types of accounts that you have, we like to make sure there's as much flexibility as possible.
22:56
SPEAKER_02: Solo K has those.
22:58
SPEAKER_02: But you know, it is a financial planning topic.
23:00
SPEAKER_02: It really comes down to the business.
23:01
SPEAKER_02: What are the intentions uh of the business?
23:04
SPEAKER_02: Uh are you simply trying to, you know, kind of the uh the dials, if you will.
23:09
SPEAKER_02: I want to recruit better uh employees that have are highly satisfied with their employment with my organization and they have a way to save for their retirement.
23:21
SPEAKER_02: Uh I want to save her the most possible for my own retirement.
23:25
SPEAKER_02: Uh my own, I'm speaking from business owners' terms.
23:28
SPEAKER_02: I want to save as much as I possibly can for my own retirement and then tax benefits.
23:33
SPEAKER_02: So if you that is a very simplified version, but all of these plans have a combination of all of those.
23:40
SPEAKER_02: And you kind of you know need to sit down and prioritize uh what um your uh as business owner, what your uh main goals are, uh the current status uh of your business, and then kind of what you see many years out into the future, you know, kind of what the projector is, what the plan is.
24:01
SPEAKER_02: That's why it's super customized.
24:03
SPEAKER_02: I mean, you can end up with a full-blown 401k, uh, you know, more costly on the administration side, uh, more obligation, uh, you know, a little bit more to manage those simple solos steps.
24:18
SPEAKER_02: Uh so it really does depend.
24:20
SPEAKER_02: So when you say, what do I normally recognize?
24:22
SPEAKER_02: Yeah, I normally it depends.
24:24
SPEAKER_01: Yeah, let me about a small business owner, end of summer, beginning of fall is a good time to start to think about that.
24:31
SPEAKER_01: Give us a call.
24:32
SPEAKER_01: Brian can certainly help you out with what may make sense for your particular circumstance.
24:37
SPEAKER_01: Yep.
24:38
SPEAKER_01: Um, but yeah, they're they're good vehicles.
24:41
SPEAKER_00: All right, what is it?
24:42
SPEAKER_00: Next, we have uh the bank of mom and dad.
24:45
SPEAKER_01: Yeah.
24:46
SPEAKER_01: Now it's probably something you can uh you know empathize with.
24:50
SPEAKER_01: You have kids that are just getting out of college or still in college.
24:55
SPEAKER_01: Yeah.
24:56
SPEAKER_01: So this is talking about uh there it's a large percentage of parents after after their child graduates college are still supporting their children.
25:07
SPEAKER_01: Um, on average,$1,500 a month.
25:11
SPEAKER_01: And uh that's about 75% of parents over the age of 45.
25:19
SPEAKER_01: And you really have to, I mean, it's it's great to support your kids, um, but make sure it's not coming at the cost of your own retirement, no doubt.
25:28
SPEAKER_01: This article kind of goes into like a lot of the a lot of these parents are doing that at the expense of their own financial future.
25:35
SPEAKER_02: Well, hey, uh, you know, you can save for college, you can't save for retirement, or you can uh borrow for college, you can't borrow for retirement.
25:43
SPEAKER_02: Um so, you know, kind of that's you know very similar in this regard.
25:50
SPEAKER_02: Uh, you know, you could be making the uh short-term gain of helping your child for the long-term sacrifice of your own financial stability into the future.
26:01
SPEAKER_02: Uh, it would be wonderful if uh for those of us that have children, if we sit back and say, wow, didn't I do great things for my child and I really provided for them?
26:09
SPEAKER_02: And look at the wonderful life they have while I'm sitting around eating ramen noodles and beans all day, because that's all I can afford.
26:16
SPEAKER_02: Uh, there's a real balance there.
26:18
SPEAKER_02: And uh, you know, that topic really gets into the core of what we're doing.
26:24
SPEAKER_02: You know, the facts and the figures and the contribution limits and projected returns are all uh extraordinarily important.
26:31
SPEAKER_02: But when you get into financial planning, you also uh really need to delve into values, people's values, their wishes, and their goals.
26:40
SPEAKER_02: Um, so there's certainly plenty of people that value, hey, you know, my mom and dad help me, I'm gonna help my children.
26:46
SPEAKER_02: And uh, you know, you got to begin that balance, right?
26:50
SPEAKER_02: That is uh very admirable, and we can certainly appreciate and understand why you have those values and those goals.
26:59
SPEAKER_02: Uh, but let's get back into the facts and figures and look and see what the uh short-term gain of that would be and what the potential long-term sacrifice and begin to balance all of those things.
27:10
SPEAKER_02: It's an incredibly complex uh topic when you're talking about supporting uh, we talked about the sandwich generation, got a lot of people supporting their parents, and they're simultaneously supporting their children.
27:24
SPEAKER_02: They also have their own personal goals, wishes, and hopes for the future.
27:28
SPEAKER_02: Um and it's it's a lot.
27:31
SPEAKER_02: I don't begrudge the bank of mom and dad, uh, but Mike, you know, kind of to your point and what we saw in in the article a little bit is when it's overdone, uh you know, gotta be very, very careful about balancing all of that.
27:46
SPEAKER_02: Um, you know, and hey, it you know, there's some tough love in there.
27:51
SPEAKER_02: You know, some tough love.
27:52
SPEAKER_02: Hey, you know, yeah uh you know, we've we've done what we can, and you're an adult now.
27:58
SPEAKER_02: And um, you know, it's time to figure out some things on your own, and we'll certainly help and support, and uh and uh you know, we'll do everything we can so that uh you don't completely fall on your face, but uh time to get your you know big big person pants on and get after life a little bit.
28:17
SPEAKER_01: Is it time for them to get out of the parents' basement and and buy their first home?
28:21
SPEAKER_01: This this article on 30 years.
28:23
SPEAKER_01: Right now, maybe not right now.
28:25
SPEAKER_01: Is some legislation change that's hopefully trying to make housing affordability a little better.
28:32
SPEAKER_01: It's I mean it's it's tough out there.
28:33
SPEAKER_01: It's average home price is what 400,000 interest rates are still six, yeah, six and change.
28:42
SPEAKER_01: I mean, that's it's tough to I the median age of first-time homebuyer just keeps going up and up.
28:48
SPEAKER_01: I think it's in mid-40s now, late 40s.
28:53
SPEAKER_02: Yeah, that struggle is real.
28:54
SPEAKER_02: The housing struggle is real for young folks.
28:57
SPEAKER_02: Um, you know, I see it with uh my children and their friends.
29:02
SPEAKER_02: I mean, there's no doubt.
29:03
SPEAKER_02: They hey there's a lot of things I sit around.
29:05
SPEAKER_02: Maybe I'm getting old and say, oh, you know, quit complaining and get after it.
29:09
SPEAKER_02: But on this housing thing, it's not a complaint, in my opinion.
29:13
SPEAKER_02: It's reality.
29:15
SPEAKER_02: Actually, anybody that's going to buy, you know, uh, you know, buy a home, I mean, this it is tough sledding out there.
29:22
SPEAKER_02: The prices, I just don't understand why.
29:24
SPEAKER_02: I don't understand why they're asking.
29:26
SPEAKER_02: Well, I do know why they're asking these numbers because they're getting it.
29:29
SPEAKER_02: And I don't know where these people are coming from that are paying it.
29:32
SPEAKER_01: So I yeah, so this legislation is just trying to lift some of those barriers to new construction.
29:38
SPEAKER_01: Um, but like we talked about before, I mean, I I've lived in a couple cities in Florida and now I'm out in uh Nevada, and it seems like there's building everywhere.
29:50
SPEAKER_01: So I don't know if they're really being that constrained.
29:54
SPEAKER_02: Well, I don't think the uh the housing sunflower grows in the sun either.
30:00
SPEAKER_02: Uh and you guys just build your own houses in West western Pennsylvania, right?
30:04
SPEAKER_02: Oh heck yeah, we go out, we you know, we saw the you know, we uh handsaw the timber and uh you know we uh we plan it all down.
30:13
SPEAKER_02: Absolutely.
30:14
SPEAKER_02: We're a resource resourceful group here, so probably a little handier than I am.
30:19
SPEAKER_02: Well, you gotta buy, you know, gotta buy the land with the timber on timber on it, and that's expensive too.
30:24
SPEAKER_02: So, you know, I mean it's it's all across the supply chain, all the way up to the building.
30:28
SPEAKER_02: But uh, yeah, it does save you a little bit of labor cost.
30:34
SPEAKER_00: So, yeah, that's our blog post for the week.
30:36
SPEAKER_01: As I mentioned, next week we do have the important inflation data coming out on Tuesday, CPI, Wednesday, PPI, Thursday, retail sales, and then guess what?
30:46
SPEAKER_01: We're back in earnings season.
30:48
SPEAKER_01: Um the big bang starting on Wednesday.
30:51
SPEAKER_02: All righty.
30:52
SPEAKER_02: Well, everybody, this has been great.
30:53
SPEAKER_02: Everybody have a great weekend.
30:54
SPEAKER_02: Uh Friday live, as Mike had said, uh Friday uh 12:30 p.m.
30:59
SPEAKER_02: Eastern Standard Time on uh Facebook.
31:01
SPEAKER_02: Try to bring some something interesting and relevant, immediate, and uh a whole bunch of things just to think about, contemplate, consider for yourself.
31:10
SPEAKER_02: We'll be back next Friday.
31:12
SPEAKER_01: All right, yeah.
31:13
SPEAKER_01: Hopefully we'll dive into some of those earnings.
31:14
SPEAKER_01: It's supposed to be another 20%.
31:18
SPEAKER_02: Services offered through LPL Financial LLC.
31:21
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31:23
SPEAKER_02: Brian Peluso, Michael Kutch, and David Harper are registered representatives of LPL Financial LLC.
31:29
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31:38
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31:44
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31:49
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31:55
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32:00
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