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How to prepare your portfolio for the next market mess · The Financial Exchange Show

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Speaker 1: donation today. This is the Financial Exchange with Chuck Zada,
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Speaker 1: and Mike Armstrong.
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Speaker 2: Our two here on the financial Exchange. Chuck, Mike and
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Speaker 2: Tuck are with you, and we got one out of
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Speaker 2: three major US indities now in positive territory. The Dow
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Speaker 2: Jones Industrial Average now up thirty four points after being
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Speaker 2: down almost three hundred points one point today, Nasdaq down
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Speaker 2: about forty points after being down eighty plus at one point,
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Speaker 2: and the Nasdaq still struggling to get off the mat
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Speaker 2: down three hundred and five points, are about one point
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Speaker 2: seven six percent, as big tech is what is being
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Speaker 2: hit hardest today. Ten year US Treasury down three basis
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Speaker 2: points to four point two two four percent, so continuing
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Speaker 2: the last couple days of bond buying. Moving in that direction,
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Speaker 2: We've got oil up a dollar sixty two a barrel
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Speaker 2: to seventy dollars and ninety eight cents the tripa national
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Speaker 2: average four Gas prices continuing to rise as well, up
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Speaker 2: another nine tenths of a cent to three sixteen and
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Speaker 2: eight tenths of a cent. Most of this still to
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Speaker 2: this point due to the switch from the winter blends
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Speaker 2: over to the summer blends at refiners. But if we
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Speaker 2: do get oil prices hanging out and moving back up
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Speaker 2: into the seventies consistently. That could put a little bit
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Speaker 2: of pressure on gas prices as well. Finally, we've got
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Speaker 2: gold up another forty one dollars and thirty cents anounced
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Speaker 2: to thirty one to fifty five and sixty cents, a
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Speaker 2: new all time high for gold yet again as it
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Speaker 2: continues on its recent tear here. And so you've got
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Speaker 2: the yell metal just chugging right along with not a
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Speaker 2: care insight to this point in the year, at least Tucker,
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Speaker 2: where we are our mortgage rate predictions for the year.
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Speaker 3: We had that post it note out there for the
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Speaker 3: year right according to Mortgage News Daily, we're sitting at
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Speaker 3: six point seven six percent as of yesterday on that
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Speaker 3: or as a Friday rather on that thirty year fixed.
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Speaker 2: I had imagine with did we do predictions on that?
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Speaker 2: I think we did? No, Sure, yeah, I think we
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Speaker 2: did all right.
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Speaker 4: So this was back in December early December. Uh, Paul
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Speaker 4: had low fixed mortgage reads five point eight five high
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Speaker 4: is seven point one. Chuck had five point two high
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Speaker 4: seven point eight, Mike had six point five. No, Mike
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Speaker 4: said highs now, I don't know why it says that.
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Speaker 4: And then low is six point five.
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Speaker 3: You thought that rates were only going to go down
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Speaker 3: from then within a half a percentage point.
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Speaker 2: Yeah, it's fine, you know, stick to your convictions.
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Speaker 3: Yeah, yeah, that might not work out so well for
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Speaker 3: those that are trying to interpret this market. I mean,
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Speaker 3: you've got the Dow up in the nasdac off one
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Speaker 3: point seven percent here, Chuck, and I think drawing the
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Speaker 3: connection there between Okay, tariff uncertainty and tech sell off?
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Speaker 3: Are they related? Is this a contributing factor? And then
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Speaker 3: broad based sell off? I mean, one thing that I
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Speaker 3: think is worth noting the S and P five hundred
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Speaker 3: is about a third of that comprised of technology stocks.
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Speaker 2: Specifically the tech sector.
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Speaker 3: And that doesn't even include companies like Amazon, Meta, Google
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Speaker 3: who are not classified as tech stocks.
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Speaker 2: But about a third of the.
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Speaker 3: Overall sector is considered to be in the information technology sector.
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Speaker 3: Back in ninety nine, that was like twenty percent. So
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Speaker 3: where tech goes today is where the overall market goes.
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Speaker 3: But trying to make that connection here, right, like tariff
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Speaker 3: uncertainty Nasdaq sell off? Are we purely just talking about
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Speaker 3: evaluation story here or is there some direct one to
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Speaker 3: one connection that I'm not really piecing together properly, because
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Speaker 3: when I think about companies today affected by tariffs, automakers
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Speaker 3: and industrial companies in the short term seem like the
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Speaker 3: the main drawbacks.
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Speaker 2: Yeah, you're not. You're not really sitting there being like,
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Speaker 2: oh gee, like you know, Microsoft is going to be
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Speaker 2: a company majorly impacted by tariffs. So a couple different
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Speaker 2: ways that you can look at this just in terms of, hey,
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Speaker 2: could these be I'm not saying that these things are true.
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Speaker 2: I'm just you know, going through things in my head. Uh.
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Speaker 2: The first is, Mike, do you know what how much
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Speaker 2: stuff the US exports to the EU? No? If you
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Speaker 2: know how much stuff the US exports to the EU, no, okay,
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Speaker 2: I'll tell you how much the US exports to the EU.
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Speaker 2: More than a boatload. Three hundred and seventy billion dollars
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Speaker 2: in goods and about four hundred and thirty billion dollars
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Speaker 2: in services, totally, about eight hundred billion dollars.
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Speaker 3: So give me a would Meta be selling an AD
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Speaker 3: in your service is not a good?
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Speaker 2: Yeah? Yeah? Microsoft selling AI service not good? Yeah? Uh,
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Speaker 2: Ford selling a car good, not service. We could do
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Speaker 2: this all day if we wanted to. It would be
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Speaker 2: kind of a really boring game. The US imports about
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Speaker 2: eight hundred billion dollars in stuff, I'm sorry, nine hundred
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Speaker 2: billion dollars in stuff from the EU. Six hundred billion
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Speaker 2: of that is stuff, three hundred billion of it services.
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Speaker 2: So overall the US has about a hundred billion dollar
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Speaker 2: trade gap. The gap in goods is two hundred and
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Speaker 2: thirty five billion, but the gap when you include services narrows. Now, Mike,
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Speaker 2: let me ask you a question. If Mercedes Benz is
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Speaker 2: exporting a car to the United States, what do you
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Speaker 2: think the margins are on that ten percent? It's it's
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Speaker 2: in that ballpark. Okay, So again, it depends on it's
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Speaker 2: eight point a two right now, but it's generally around
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Speaker 2: ten percent. When Microsoft exports AI services to Europe, heck
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Speaker 2: of a lot higher. What do you think the margins
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Speaker 2: are on triple it? We don't know, but probably triple
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Speaker 2: to quadruple thirty somewhere in that ballpark. Okay, Again, if
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Speaker 2: you just look at Microsoft overall, they have forty five
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Speaker 2: percent margins, I'm going to assume whatever they're exporting to
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Speaker 2: Europe is probably in that same ballpark. Sure, So here's
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Speaker 2: the one potential way that I try to resolve this
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Speaker 2: is but if the US imposes tariffs on European exports
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Speaker 2: of goods that are low margin, the response from Europe, yes,
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Speaker 2: they can target goods, but they could also say no,
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Speaker 2: we're gonna target services like that. They could very easily
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Speaker 2: do that, and so potentially then it makes it more
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Speaker 2: challenging for US tech companies to sell into Europe, because
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Speaker 2: that's where the pain is for the US. I mean,
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Speaker 2: here's the thing. You got four hundred and thirty billion
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Speaker 2: dollars of high margin services stuff that you're exporting to
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Speaker 2: Europe that is potentially at risk because of a one
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Speaker 2: hundred billion dollar overall trade gap of much lower margin stuff,
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Speaker 2: and so there's some potential asymmetric pain. Is that what's
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Speaker 2: causing this? Heck, if I know, I never try to
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Speaker 2: ascribe too much meaning to any one particular market move,
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Speaker 2: because you never really know. There's millions of market participants.
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Speaker 2: They all have their own different things that they're doing here,
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Speaker 2: other things that this could be. Mike, when we look
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Speaker 2: at and this doesn't get talked about a whole lot,
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Speaker 2: but the idea of capital flows and how money moves
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Speaker 2: back and forth across borders, this is kind of a
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Speaker 2: big thing as well. And part of me looks at
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Speaker 2: this and says, okay, European investors have been buying up
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Speaker 2: a bunch of US stuff over the last couple of years,
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Speaker 2: a bunch of a bunch of US stocks more specifically.
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Speaker 2: And the reason why is, hey, regardless of where you were,
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Speaker 2: if you were an investor that wasn't Long Mag seven
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Speaker 2: for twenty twenty three, in the first half of twenty
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Speaker 2: twenty four, it's pretty ugly for you. You know what
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Speaker 2: was getting handed to you, your hat. Your hat was
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Speaker 2: getting handed to you because everything else was losing. And
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Speaker 2: so you had institutional investors in Europe saying, gee, we
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Speaker 2: gotta get Long Mag seven, We got to get Long
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Speaker 2: Mag seven. Now you look at this year, okay, And
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Speaker 2: I'll quote here. This is from the Financial Times, because
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Speaker 2: they put out a story this weekend. It's titled the
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Speaker 2: Great European Disentanglement from US stocks has only started. Oh quote.
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Speaker 2: European investors had about nine trillion dollars in US stocks
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Speaker 2: at the end of last year, around seventeen percent of
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Speaker 2: the overall value of the US market. So here's the
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Speaker 2: big thing. The stuff that they were buying, like they
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Speaker 2: weren't coming out and just being like, yes, let's buy
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Speaker 2: the S and P five hundred. No, they were trying
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Speaker 2: to buy like the best stuff in the US for
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Speaker 2: the last couple of years. So ultimately, what this means,
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Speaker 2: based on the relative sizes of US and European markets
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Speaker 2: is if you have European investors who say, look, we're
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Speaker 2: nervous about how all this is going to go down.
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Speaker 2: We don't know how the taxation is going to work,
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Speaker 2: We're worried about being cut off from our capital this
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Speaker 2: and that. Hey, let's pull some of this money back
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Speaker 2: from US equity investments and put it back into European ones.
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Speaker 2: Based on the relative sizes, even if Europeans just sell
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Speaker 2: ten percent of their equity exposure, it ends up being
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Speaker 2: around and a half one and two thirds percent of
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Speaker 2: the US market, but it's ten percent of the entire
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Speaker 2: European market then, so you got these capital flows that
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Speaker 2: come back then. So maybe that's some of it. Is
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Speaker 2: all the money from overseas that piled into MAG seven
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Speaker 2: the last couple of years comes back up, could be
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Speaker 2: heading back home. And this also kind of jives with
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Speaker 2: the fact that European equities have outperformed US ones pretty
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Speaker 2: significantly this year. So now if you're sitting there and
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Speaker 2: you're like, okay, so I'm taking this currency risk of
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Speaker 2: you know, holding stuff over season dollars, I got questions
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Speaker 2: about you know, tax rates and this and that. No,
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Speaker 2: just pull it back and I can have all those
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Speaker 2: questions answered. Maybe some of that's going on. So it's
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Speaker 2: not to say that any of it is. This could
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Speaker 2: all just be people are nervous about AI and that's
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Speaker 2: what's driving this. But there are a couple plausible stories
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Speaker 2: as to why tariffs could impact these, you know, on
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Speaker 2: an outsized basis. Does it make sense for all of this?
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Speaker 2: Not really. I mean, like you look at some other
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Speaker 2: things that are that are going on today, and you're like, okay,
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Speaker 2: if this is the case, why is you know, IBM
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Speaker 2: up three percent? Like they sell a bunch of stuff
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Speaker 2: to Europe too, So it's not just that why is
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Speaker 2: Apple up almost one percent today? They sell iPhones in Europe,
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Speaker 2: you know. So I don't think that what's going on
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Speaker 2: today is mostly related to tariffs, which is I gotta say,
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Speaker 2: kind of remarkable that we're two days out from potentially
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Speaker 2: the largest tariff implementation in the US in the last
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Speaker 2: ninety years, and markets are still kind of just like
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Speaker 2: we might pay attention, we might not.
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Speaker 3: Yeah, to be clear, like are we even off ten
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Speaker 3: percent now with the S ANDP down.
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Speaker 2: Mic only like right now there are eighty more S
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Speaker 2: and P five hundred stocks that are up than down
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Speaker 2: on the day. I know the index is down thirds
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Speaker 2: of a percent because of again MAG seven being off,
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Speaker 2: but right now there are more S and P five
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Speaker 2: hundred stocks up than down. And it's not like it's
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Speaker 2: just like you know, close, it's eighty more so it's
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Speaker 2: I still don't get the sense that markets are really
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Speaker 2: pricing in the tariff thing. It's just AI's had a
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Speaker 2: bad couple days with the core weevipo and now this
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Speaker 2: where it's kind of like, eh, the blooms off the
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Speaker 2: AI ros, I think is more what we're seeing now,
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Speaker 2: and on the tariff side, we'll see what we get.
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Speaker 2: I think markets might still be looking for kind of
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Speaker 2: what we got with Canada and Mexico at the beginning
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Speaker 2: of the month, which is tariffs are imposed for you know,
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Speaker 2: a day or two and then most of them are tracted,
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Speaker 2: and it feels like that's kind of what markets are
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Speaker 2: looking at right now? I don't know. Yeah, let's take
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Speaker 2: a quick break here. When we come back, We've got
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Speaker 2: trivia right after this.
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Speaker 2: Mike, we do have a little bit of movement continuing
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Speaker 2: to the upside on oil prices here, and it's it's
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Speaker 2: more than a little that we're seeing right now. Actually
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Speaker 2: got West text Intermediate up a dollar sixty nine a
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Speaker 2: barrel now to seventy one to five.
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Speaker 3: And I just find it interesting because most of the
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Speaker 3: last thirty days in trading has played out like a
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Speaker 3: pretty clear recession trade. Gold up, bond yields down, oil down,
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Speaker 3: stocks down. This is a reversal, right, You've got the
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Speaker 3: US equity market off by yeah, now it's a lot
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Speaker 3: less S ANDP is now off by like half percent,
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Speaker 3: and so maybe that's all it is, is just a
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Speaker 3: rebound there. But to see oil spike in it's not spiking,
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Speaker 3: but up to over two percent is just interesting to
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Speaker 3: me when I don't see a whole lot of opecker
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Speaker 3: other news on the subject.
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Speaker 2: No, I'm going through just trying to see if I
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Speaker 2: see anything notable at the moment. I mean, there's been
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Speaker 2: like some rumblings about Iran the last couple of days,
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Speaker 2: but I haven't seen anything new this morning, so I
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Speaker 2: can't make heads or tails of it.
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Speaker 3: Sometimes price moves are just price moves, but caught my
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Speaker 3: eye as different from what we've seen for the last
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Speaker 3: several weeks.
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Speaker 2: It's not usually an energy. Usually something's up, like there's
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Speaker 2: usually something going on here right again, maybe it's the
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Speaker 2: Iran chatter from the last couple of days, but I
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Speaker 2: can't make heads or tails of it. Aside from that reasonable,
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Speaker 2: who knows. Let's see, do we want to do how
15:31
Speaker 2: to prepare your portfolio for the next market? Mess? Sure,
15:36
Speaker 2: title the piece in the Wall Street Journal, and I'll
15:39
Speaker 2: quote here what happens if it all goes wrong? Okay, First,
15:42
Speaker 2: before we go further, in order to you know, define
15:46
Speaker 2: how to build the right kind of protection in a portfolio,
15:50
Speaker 2: you need to define what is going wrong. So you
15:52
Speaker 2: can't just say, like, if it all goes wrong, because honestly,
15:54
Speaker 2: if it all goes wrong, your portfolio doesn't matter. Like,
15:57
Speaker 2: let's just call a spade a spade. If we end
16:00
Speaker 2: up in a mad max end of the world scenario.
16:03
Speaker 2: Whether or not you held like this ETF or that
16:07
Speaker 2: mutual fund in your portfolio doesn't freaking matter, So stop
16:11
Speaker 2: worrying about that.
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Speaker 3: Yeah, other things that I think people have confused or
16:16
Speaker 3: or I think are worried about the wrong thing. So,
16:18
Speaker 3: for instance, you own a treasury bond, so loan to
16:22
Speaker 3: the United States government, and the worry of well, what
16:25
Speaker 3: if they don't pay me back? And then you know,
16:28
Speaker 3: again taking yourself down that logical path.
16:30
Speaker 2: Then I don't know.
16:31
Speaker 3: In my case, if the US Treasury doesn't pay me back,
16:34
Speaker 3: then I'm suddenly that there not paying right, they didn't
16:38
Speaker 3: single me out. It probably means that my bank account
16:42
Speaker 3: isn't useful because I don't have FDIC insurance anymore.
16:45
Speaker 2: And probably the brokerage firm.
16:48
Speaker 3: In which I bought that treasury bond ceases to exist
16:52
Speaker 3: in relatively short order. So again you had to find
16:54
Speaker 3: what you mean by a quote market mess.
16:57
Speaker 2: Yes, So if it's, hey, you know, I'm nervous about,
17:02
Speaker 2: you know, a big draw down in stocks, Okay, there
17:05
Speaker 2: are things that you can do for that own fewer
17:07
Speaker 2: stocks being the simplest and easiest one of them. Now,
17:10
Speaker 2: does that mean like you sell everything you know on
17:12
Speaker 2: a day like today just because the open was bad? Like, No,
17:15
Speaker 2: We've talked at length about how you don't want to
17:18
Speaker 2: make emotional decisions with your portfolio other things. Hey, what
17:22
Speaker 2: if there's inflation and interest rates go way up? Okay?
17:24
Speaker 2: Once again, there's ways that you can manage this stuff.
17:27
Speaker 3: So like, for example, I think a lesson people took
17:31
Speaker 3: from two thousand and eight was, oh, okay, you know,
17:34
Speaker 3: if I buy and hold long term treasuries as a
17:37
Speaker 3: part of my investment portfolio, then I'll have an asset
17:40
Speaker 3: class that does something different when markets sell off, because
17:43
Speaker 3: that was the experience.
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Speaker 2: No, waight right yet not. In twenty twenty two.
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Speaker 3: Equity sold off by fifty percent and then bonds went
17:47
Speaker 3: up by twenty percent in some cases depending on what
17:50
Speaker 3: you were owning. Sure, in twenty twenty two they both
17:53
Speaker 3: lost twenty five and fifteen percent, respectively. So these trends
17:57
Speaker 3: don't always hold true, and you have to understand which
17:59
Speaker 3: market message area you're worried about.
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Speaker 2: And again, even before getting into like what should you
18:05
Speaker 2: do depending on the mess that you're worried about, you
18:09
Speaker 2: got to do a healthy chunk of asking yourself, hey,
18:13
Speaker 2: what if I'm wrong, because you're not going to be
18:17
Speaker 2: right about what happens in the investment world all the time.
18:19
Speaker 2: Anyone who says, hey, I'm always right with my investments,
18:23
Speaker 2: either they're lying to you or they've been invested for
18:25
Speaker 2: a day and a half. Because if you're in this
18:27
Speaker 2: game long enough, you've been wrong plenty of times.
18:31
Speaker 3: The very best at this, the people that you read
18:35
Speaker 3: about in books in terms of investing, they're maybe right
18:39
Speaker 3: fifty five percent of the time. If they are amazing
18:43
Speaker 3: at this.
18:43
Speaker 2: Yeah, what they are really good at is when they
18:47
Speaker 2: take risk, knowing how to size it and when to
18:50
Speaker 2: cut it so they're not taking big losses. Because look,
18:52
Speaker 2: there are four outcomes when you make an investment in anything.
18:56
Speaker 2: You can make a lot, make a little, lose a little,
18:58
Speaker 2: or lose a lot. The entire ballgame basically depends on
19:01
Speaker 2: staying out of that fourth category. If you lose a lot,
19:04
Speaker 2: you're kind of screwed. It seems simple, but it's not
19:09
Speaker 2: always put this way. No, Like, that's basically what it is.
19:12
Speaker 2: You can lose a little, that's fine, that happens to everyone.
19:15
Speaker 2: You can make a little fine, not everything has to
19:18
Speaker 2: be a twelve bagger. You can make a lot great
19:20
Speaker 2: yahoo celebrate your success. You can't get crushed by you know,
19:24
Speaker 2: different things that you do and so having some humility
19:26
Speaker 2: so that you don't do that and go too far
19:29
Speaker 2: in the wrong direction. Kind of a big thing. Just
19:32
Speaker 2: take a quick break when we come back. We got
19:33
Speaker 2: the trivia answer after this.
19:41
Speaker 1: Bringing the latest financial news straight to your radio every day.
19:45
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19:51
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20:04
Speaker 2: All right.
20:04
Speaker 4: Trivia question today was what was Christopher Walkin's job when
20:08
Speaker 4: he was in the circus as a teenager?
20:12
Speaker 5: It'll be a line tamer.
20:13
Speaker 4: Pete from Worcester, Mass is our winner today, taking home
20:16
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20:19
Speaker 4: Pete there and we play trivia every day here.
20:22
Speaker 5: In the Financial Exchange.
20:23
Speaker 4: See complete contest rules at Financial Exchange Show dot com.
20:27
Speaker 2: Do you guys know the beyond that? He also uh
20:30
Speaker 2: trained as a dancer for a couple of years.
20:34
Speaker 5: Fantastic dancer.
20:35
Speaker 2: If if you haven't seen the Uh what is it?
20:38
Speaker 2: The fat Boy Slim video weapon of choice?
20:40
Speaker 5: Yeah, oh, tremendous, Oh.
20:41
Speaker 2: My goodness, just fantastic. It's just it's absolutely fantastic and
20:47
Speaker 2: not what you would expect from him. But I digress.
20:51
Speaker 3: Uh, let's see, were talking housing, Mike, Yeah, let's talck housing. Okay,
20:55
Speaker 3: we're firmly in the spring housing market. Is that fair
20:57
Speaker 3: to say?
20:58
Speaker 2: Uh? Yeah, like we're we're you know, in it now
21:00
Speaker 2: for about a month or two months almost. Yeah. I
21:02
Speaker 2: generally say that the Super Bowl is now the start
21:04
Speaker 2: of the spring housing market with how things have moved
21:07
Speaker 2: and peace from Bloomberg opinion is saying, look, you're gonna
21:10
Speaker 2: have some bargains out there. Not everywhere, though, it's based
21:13
Speaker 2: on where the inventory is. And so look, if you're
21:18
Speaker 2: looking in the Southeast, you're gonna have some options available
21:21
Speaker 2: to you. Yeah.
21:22
Speaker 3: So taking a look, I always love this tool, and
21:25
Speaker 3: Chuck has some other ones from Mike Simonson that are
21:28
Speaker 3: really useful. But taking a look at all active listings
21:32
Speaker 3: across the country, and I look state by state, so
21:35
Speaker 3: this includes both single and multifamilies, so you know, keep
21:38
Speaker 3: in mind it might not be exactly what you are
21:40
Speaker 3: looking for but in the state of Florida, for example,
21:44
Speaker 3: there are now eight point seven percent more homes for
21:48
Speaker 3: sale than there were in February.
21:51
Speaker 2: Of twenty nineteen.
21:53
Speaker 3: Yea, and by the way, all my data is as
21:55
Speaker 3: of February of twenty twenty five, so you know it's
21:57
Speaker 3: a month outdated, but it's pretty indive. In Massachusetts, we
22:03
Speaker 3: are still less than half forty five and a half
22:05
Speaker 3: percent of February nineteen levels. Connecticut, which remains just the
22:09
Speaker 3: absolute worst state in terms of home inventory compared to
22:13
Speaker 3: where they were before, twenty two percent, Oregon eighty four
22:17
Speaker 3: and a half percent for those listening out in Oregon today,
22:20
Speaker 3: New Hampshire thirty nine percent, Rhode Island thirty three percent,
22:25
Speaker 3: Maine thirty nine percent, Vermont thirty two percent. And I
22:29
Speaker 3: included California as well, just because biggest state in the country.
22:32
Speaker 3: Figure that might be helpful. Seventy four percent inventory levels
22:37
Speaker 3: compared to what I describe as more normal pre COVID
22:42
Speaker 3: home environment. And so there might be some sales going
22:47
Speaker 3: on this year, they just won't be anywhere near the northeast.
22:51
Speaker 1: No.
22:52
Speaker 2: And so this is again depending on exactly where you
22:56
Speaker 2: may be interested in buying there's some possibilities that you
22:59
Speaker 2: find some things, but also remember it's cheap as a
23:03
Speaker 2: relative term, right.
23:05
Speaker 3: You know, nobody was describing the twenty nineteen housing market
23:08
Speaker 3: is inexpensive.
23:09
Speaker 2: These might be bargains relative to what they've been like recently.
23:14
Speaker 2: But some other data that we've gotten from Freddy Mack
23:17
Speaker 2: in terms of their housing price index and where prices
23:19
Speaker 2: have fallen. Again, this is just the biggest declines in
23:25
Speaker 2: metro areas in the country. Most of them are in Florida,
23:27
Speaker 2: by the way. The biggest one Austin, Round Rock, Georgetown, Texas.
23:31
Speaker 2: That metro area down thirteen and a half percent. That's
23:33
Speaker 2: how far prices have fallen from the peak there. They
23:36
Speaker 2: still though again if you look at it, they're still
23:39
Speaker 2: up meaningfully over you know, twenty nineteen, twenty eighteen, put
23:43
Speaker 2: to Gorda down nine point nine percent, Cape Coral Fort
23:45
Speaker 2: Myers down nine to five. Lake Charles, Louisiana down seven
23:48
Speaker 2: to one. Homo Sasa Springs. I don't know where that
23:53
Speaker 2: is in Florida. Can You couldn't even pretence it or
23:56
Speaker 2: maybe it's Homasasa. I think it's Homo Sasa, but it
23:59
Speaker 2: might No, it might be Homasisa. That kind of sounds
24:03
Speaker 2: more reasonable. They're down six percent. Northport Sarasota, Bradenton down
24:09
Speaker 2: four to nine. New Orleans down three to nine. Hamasasa
24:12
Speaker 2: appears to be about an hour's north of Tampa. There
24:14
Speaker 2: you go, Lakeland down three seven, Pensacola down three seven,
24:18
Speaker 2: Vero Beach down three to five, Dover, Delaware sneaking on
24:21
Speaker 2: here down three to two to around out the top ten.
24:24
Speaker 2: But the rest it's a lot of Florida. A couple
24:26
Speaker 2: Californias start to sneak out there as well. But the
24:30
Speaker 2: place is where prices are falling again, it's dominated by Florida.
24:35
Speaker 2: Aside from that, you got some small pullbacks that are happening.
24:38
Speaker 2: It's hard for me to look at this and be like, yes,
24:40
Speaker 2: there are bargains and much more. Hey, maybe a little
24:43
Speaker 2: bit of the froth has come off here and there.
24:45
Speaker 3: Yeah, seems that way if you are. Look, there's been
24:49
Speaker 3: a lot of reasons this year to be assessing and
24:54
Speaker 3: reassessing your own personal finances, and I know market selloff
24:58
Speaker 3: is one of those key items.
25:00
Speaker 2: Right. We all tie our wealth.
25:02
Speaker 3: Predominantly to two things, the value of our home equity
25:05
Speaker 3: and the value of our investment portfolio, and for better
25:08
Speaker 3: or for worse, you don't exactly get an update on
25:11
Speaker 3: the value of your home every single day.
25:12
Speaker 2: I think for the better and you probably shouldn't you
25:14
Speaker 2: do on your.
25:15
Speaker 3: Investment portfolio, and I know that that's caused a lot
25:17
Speaker 3: of consternation.
25:19
Speaker 2: It's the last day of the month.
25:20
Speaker 3: Armstrong Advisory Group has a brand new guide out this
25:23
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25:39
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25:51
Speaker 3: not you need one in your life. If you are
25:53
Speaker 3: making that type of assessment right now and you're trying
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26:41
Speaker 2: Piece in the Wall Street Journal Everyone is a gold bug. Now,
26:46
Speaker 2: So here's the thing.
26:47
Speaker 3: Everyone was a tech bug when tech bug was reaching
26:49
Speaker 3: brand new al time highs, right.
26:51
Speaker 2: Well, I mean gold always. Here's the thing about gold
26:54
Speaker 2: and I have this conversation quite a lot. It has
26:57
Speaker 2: short periods of dramatic outperform it's relative to stocks, punctuated
27:02
Speaker 2: by long periods of combination boredom and massive underperformance. And
27:09
Speaker 2: the reason why is very simple. Gold is not a creative.
27:13
Speaker 2: It doesn't produce anything. It sits there. It does not
27:16
Speaker 2: generate any earnings. And so the periods where it does
27:20
Speaker 2: very well are periods generally where there is the threat
27:25
Speaker 2: or reality of high inflation while it's going on, or
27:30
Speaker 2: the worry about inflation that may be yet to come,
27:35
Speaker 2: but is not always, and so quite honestly, what you
27:40
Speaker 2: end up with in the look, I have no idea
27:42
Speaker 2: where the price of gold is going to go. I
27:43
Speaker 2: don't know if it's going to be higher, lower, sideways, up, down, like,
27:46
Speaker 2: no clue at all. But here's the thing. Most of
27:50
Speaker 2: the money that's made in gold is made holding it
27:52
Speaker 2: for very short periods of time, and other than that,
27:54
Speaker 2: it does absolutely nothing for you. And investors, for some
27:59
Speaker 2: reason want to treat gold the exact opposite way that
28:01
Speaker 2: they treat stocks. Where stocks, despite all of the research suggesting, hey,
28:06
Speaker 2: you're better off holding these for the long term, people
28:09
Speaker 2: love to trade in out. They're like, ooh, I'm a
28:10
Speaker 2: day trader. Let me go in and out of these stocks.
28:13
Speaker 2: I'm gonna buy some of these, sell some of those. Ooh,
28:15
Speaker 2: look what I did to my portfolio. It's upside down inverted.
28:18
Speaker 2: That's what people do with stocks. With gold, people are like, no,
28:23
Speaker 2: this is for when the world ends. I'm never selling it,
28:26
Speaker 2: which is.
28:26
Speaker 3: Fine if that's your perspective, but understand the actual performance
28:30
Speaker 3: of it.
28:30
Speaker 2: And then also, if you're buying it for the end
28:32
Speaker 2: of the world, you probably don't want it in your
28:34
Speaker 2: investment portfolio. Right, That's the piece I always get confused about.
28:37
Speaker 2: You know, like the world has ended and one man
28:41
Speaker 2: calls up his broker to ask if he can convert
28:43
Speaker 2: his ETF into actual gold. No, all those companies are bankrupt,
28:47
Speaker 2: what you know, So like, I don't know, Like your
28:51
Speaker 2: mileage may vary on all this, But personally, I think
28:54
Speaker 2: that when the apocalypse does come, the big brokerage houses
28:58
Speaker 2: probably don't answer the phone then because the phone lines
29:00
Speaker 2: are down and everyone's dead. That's not why everybody buys gold.
29:06
Speaker 3: But you do hear it a lot, and so it
29:08
Speaker 3: a lot, Like we're not making this app, we get
29:10
Speaker 3: this a lot? No, And yeah, like preparing for the
29:14
Speaker 3: end of the world scenarios by making tweaks to your
29:16
Speaker 3: investment account.
29:17
Speaker 2: No, I want animals and land and high ground, you know,
29:22
Speaker 2: like that's what I want for the end of the world.
29:24
Speaker 2: Not hey, check out my portfolio on this app. I
29:30
Speaker 2: don't know. Again, your mileage may vary. It is what
29:32
Speaker 2: it is. Everyone's got their own ways of doing things.
29:35
Speaker 2: But I'm just, you know, kind of trying to logically
29:37
Speaker 2: think through the end of the world, which is not
29:40
Speaker 2: really a thing worth pondering. Like if it happens, okay,
29:43
Speaker 2: like whatever, everything we know is gone then So in
29:46
Speaker 2: any case, gold very popular these days because it's at
29:49
Speaker 2: all time high prices, and so everyone starts to get interested.
29:52
Speaker 2: We'll see where it goes. I don't know again where
29:55
Speaker 2: this this thing goes from here, but everyone's getting interested. Now.
29:58
Speaker 2: It's getting some heat in the Wall Street Journal, which
30:00
Speaker 2: normally doesn't talk about things like gold very often. Now,
30:03
Speaker 2: to take a quick break. When we come back, We've
30:06
Speaker 2: got a little bit of stack Roulette right after this.
30:09
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31:28
Speaker 2: Mike, what do you got for stack Roulette today? I
31:30
Speaker 2: got taxes.
31:31
Speaker 3: We haven't been talking a lot about taxes because there's
31:33
Speaker 3: been one or two other things going on. But Congress
31:37
Speaker 3: is back in session and they're supposed to be taking
31:40
Speaker 3: up this issue this week. And there's also seemingly no
31:43
Speaker 3: agreement whatsoever between House Republicans and Center Republicans on what
31:47
Speaker 3: to do here. The latest I heard is that they're
31:49
Speaker 3: going to be draftware on taxes. Yes, they're going to
31:52
Speaker 3: be drafting their own budget reconciliation bills separately rather than
31:56
Speaker 3: talking together and working together and then somehow mash them
32:00
Speaker 3: together is from what I understand. But we're getting some
32:04
Speaker 3: I guess, look into what the tax on tips scenario
32:07
Speaker 3: could look like. There are two different proposals out there,
32:10
Speaker 3: one from Senator ten Cruz, another from Sorry. The proposal
32:15
Speaker 3: is from the two of them combined from Senator ten
32:17
Speaker 3: Cruz and Representative VERM Buchanan. Effectively, they would let many
32:23
Speaker 3: restaurant and casino workers claim a deduction on tips that
32:28
Speaker 3: they received. They must be w two employees of restaurant
32:32
Speaker 3: and casinos, and they would also limit the tax break
32:35
Speaker 3: to a twenty five thousand dollars income tax deduction. So practically,
32:39
Speaker 3: what this means is, unfortunately, my grand scheme of restructuring
32:44
Speaker 3: investment advisory revenue and financial planner revenue as a mandatory
32:48
Speaker 3: fifty percent gratuity is not going to get me anywhere
32:51
Speaker 3: in terms of a big tax savings. It's also not
32:54
Speaker 3: going to benefit some of the most commonly tipped workers
32:57
Speaker 3: out there, such as uber and lyft and door toavers,
33:00
Speaker 3: because this specifically limits this deduction to employees rather than
33:05
Speaker 3: independent contractors. I have no idea if this will actually
33:08
Speaker 3: make it into final bill, but again, one of the
33:10
Speaker 3: first views that I've seen into one of the big
33:12
Speaker 3: rallying cries of the Trump campaign in twenty twenty four
33:16
Speaker 3: around the taxes on tips and so looks like that's
33:19
Speaker 3: where it might be headed if it actually makes it
33:22
Speaker 3: into a final bill.
33:23
Speaker 2: Apple readying it's biggest push into health yet with its
33:27
Speaker 2: new AI doctor Doctor Apple. I presume yes, well, you
33:32
Speaker 2: know what they say in Apple a day, that is
33:35
Speaker 2: what they say, and so apparently this is a big
33:40
Speaker 2: undertaking for them. And so here's the thing that's interesting
33:44
Speaker 2: about this, just from an investment perspective. If you look
33:47
Speaker 2: at one place where there's been a pretty consistent long
33:51
Speaker 2: term trend towards more spending, it's it's been in healthcare.
33:56
Speaker 2: You know, healthcare spending is a percentage of GDP has
33:58
Speaker 2: grown very consistently over the last twenty or thirty years.
34:02
Speaker 2: Some of that is because we're getting older, and so
34:04
Speaker 2: we require more healthcare as we get older. That makes sense.
34:07
Speaker 2: Some of it is because of legislation that has either
34:11
Speaker 2: made it easier to or required more people to participate
34:14
Speaker 2: in the healthcare system. Okay, that's creating more healthcare spending.
34:18
Speaker 2: So you can see the attraction as to why Apple
34:22
Speaker 2: may want to get into healthcare. It's the idea that, hey,
34:25
Speaker 2: there's a lot of spending that's going there. It's a
34:28
Speaker 2: growing piece of the overall spending pie, and sure, why
34:32
Speaker 2: wouldn't you want to participate in that? The question is
34:37
Speaker 2: going to be, hey, like, can you actually make this work?
34:45
Speaker 2: Given your first forays into artificial intelligence that have been lacklins,
34:51
Speaker 2: not good at even reading messages and or news, and
34:55
Speaker 2: now you're going to try to give me health tips, right,
35:00
Speaker 2: or like again, be my doctor? And so I'll quote here.
35:05
Speaker 2: The induative is called Project Mulberry. Sounds lovely, and it
35:09
Speaker 2: involves a completely revamped health app plus a health coach.
35:12
Speaker 2: The service will be hired about powered by a new
35:14
Speaker 2: AI agent that would replicate or at least to some extent,
35:18
Speaker 2: a real doctor. The idea is this the health app
35:21
Speaker 2: will continue to collect data from your devices, and then
35:23
Speaker 2: the AI coach will use that information to offer tailor
35:26
Speaker 2: made recommendations about ways to improve health. And a few
35:33
Speaker 2: things on this that I find problematic. The first is again,
35:37
Speaker 2: Apple has not yet proven that they can actually exect
35:39
Speaker 2: AI particularly well. Agreed. The second part is to either
35:43
Speaker 2: of you guys, are either of you familiar with Brian Johnson?
35:47
Speaker 2: I think is his name, the longevity dude who's all
35:51
Speaker 2: over the internet. He's the guy who's trying to live
35:53
Speaker 2: to like one hundred and fifty years old by taking
35:55
Speaker 2: eight hundred supplements a day and like replacing his blood
35:58
Speaker 2: every couple days and stuff, like all kinds of stuff. Okay,
36:03
Speaker 2: And we're getting to the point where I really think,
36:08
Speaker 2: and this is not like, this is not a cry
36:11
Speaker 2: for help, so I don't think it is. But we're
36:13
Speaker 2: getting to the point where I think people are prioritizing
36:16
Speaker 2: longevity over actually living their life in that they, like,
36:20
Speaker 2: you see all these things about oh, you should do
36:23
Speaker 2: this each day and this and this and this and this,
36:25
Speaker 2: and it gets to the point where you're just not
36:28
Speaker 2: actually a human being, but you're just trying to satisfy
36:30
Speaker 2: a bunch of requirements in order to maybe live longer
36:34
Speaker 2: even though you don't really like your life, because now
36:37
Speaker 2: you're doing all of this stuff for six hours a
36:39
Speaker 2: day that you don't enjoy. And this is part of
36:43
Speaker 2: the reason why I don't own a smart watch is
36:48
Speaker 2: I just think that we are too connected already and
36:52
Speaker 2: too focused on trying to satisfy all of these numbers
36:56
Speaker 2: that are supposed to make our lives better, and I'm
36:59
Speaker 2: not really sure they do when we get into this stuff.
37:04
Speaker 2: Can I voice my hopes for this? I would really
37:08
Speaker 2: like to.
37:09
Speaker 3: I would actually really believe that by wearing a device
37:13
Speaker 3: twenty four hours a day that monitors things like.
37:17
Speaker 2: Your heart rhythm and presumably a lot.
37:21
Speaker 3: More things in the future, I would think would be
37:24
Speaker 3: pretty good at detectings, for instance, risk signs of heart
37:27
Speaker 3: attack and all sorts of different problems much earlier on.
37:32
Speaker 3: If there was some way to actually, you know, take
37:36
Speaker 3: the data from the Apple Watch and match it up
37:39
Speaker 3: with your personal medical record, which does not seem like
37:41
Speaker 3: it's happening in any meaningful way or substantial way right now.
37:45
Speaker 3: If all we're talking about is an AI doctor that
37:48
Speaker 3: tells me to walk a little bit more like, yeah,
37:50
Speaker 3: that's not gonna help anyone with anything.
37:53
Speaker 2: But I would actually be I could really.
37:56
Speaker 3: Buy the idea that, hey, if I wore this thing
37:58
Speaker 3: twenty four hours a day and millions of other people
38:00
Speaker 3: War two and doctors were able to use AI to
38:03
Speaker 3: comb through that data and look for patterns, we probably
38:06
Speaker 3: find somef.
38:06
Speaker 2: But this is like food tracking will be a big part.
38:08
Speaker 2: This is just like you want me to just put
38:10
Speaker 2: all my meals in and you're gonna become it Like, yeah,
38:12
Speaker 2: this is useless, but I'm optimistic for how I can
38:15
Speaker 2: play a round, taking a quick break for the entire
38:18
Speaker 2: rest of the day. We will see you tomorrow on
38:20
Speaker 2: the Financial Exchange