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Tackling Recession Fears & Retirement Strategies in Volatile Markets - Anthony Saccarro #5950 · Financial Survival Network

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  If something happens geopolitically, or we have some kind of attack in the US
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  that could change things as well. So a lot of things that could change
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  it. But the economy is slowing. GDP is generally slowing. That's what
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  you want to happen. And if we're going to have a recession, that's
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  what has to happen. You're listening to Carrie Letz's Financial Survival Network where you
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  get valuable information. You just can't find anywhere else to thrive in today's trying
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  times. You need the Financial Survival Network now more than ever. Go to
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  Financial Survivalnetwork dot com and get your free newsletter in gift. Financial Survival Network
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  now more than ever, And welcome. You are listening to watching the Financial
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  Survival Network. I'm your host, Carrie Lutz. Well, consumer confidence is
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  dropping, Housing sales are dropping, a lot of other things are dropping.
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  Anthony Sacarro's with us. Now, Anthony, what is with this economy?
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  We're heading straight to recession? Yeah, Carrie, thank you for having me
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  a pleasure to join you as all wes. You know the consumer confidence did
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  go down, not really a surprise. I don't think we're headed straight towards
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  the recession. Uh. You know, if you would have talked to me
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  six or eight months ago, uh, maybe maybe even closer to a year
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  at this point, we would have said that overcession was inevitable and that a
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  hard landing was, you know, something that was almost a definite. I
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  think that was you know, pretty much across the board. And now what
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  you're starting to hear is more of the soft landing approach, where people are
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  tending to think that there could be a soft landing. But uh, I
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  believe that that could be the case. I also think that the market will
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  do the opposite of what most people think that happen over time. Uh,
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  And so we could still have a recession. It could be severe consumer confidence.
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  They're they're not confident. That's what the reports have told us for a
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  lot of reasons. Inflation is still elevated, even though it's come down quite
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  a bit. But now the geopolitical fears right with the two wars and not
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  on. Essentially, we've doubled our geopolitical worries over the last two or three
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  months, and that's certainly not helping things either. So we're not out of
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  the woods by any means. I think investors just have to be really cautious
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  and really careful. Okay, So so you know we have this GDP report.
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  What's your take on the latest GDP numbers? Anthony, Yeah, so
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  you know, GDP is continuing to come down. The Federal Reserve is in
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  indicating that because of that, they're probably gonna hold They're still talking strong,
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  you know, at this point, and I think they should be, but
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  all the odds are at this point that they're going to be holding rates.
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  They're probably not going to raise rates anymore. I still think that there could
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  be a twenty five basis point increase, but I think the likelihood is as
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  low. If I'm gonna put my money there, I'm gonna say, no,
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  they're probably not going to raise rates. It's still possible, I don't
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  necessarily think it's probable, and I think the futures market right now is pricing
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  in like a ninety five percent chance that they don't touch rates. But there
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  are things that could change that. If we get in out of whack inflation
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  number, you know, that certainly could affect things. If something happens geopolitically,
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  or we have some kind of attack in the US that could change things
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  as well. So a lot of things that could change it. But the
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  economy is slowing, GDP is generally slowing. That's what you want to happen.
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  And if we're going to have a recession, that's what has to happen.
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  Mm hmm. All right, So the recessions good or bad here?
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  Yeah, you know, that's a great question. Interestingly enough, all the
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  media and all the marketing people out there, all the talking heads, they
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  want you to believe that it's bad. It's the big R word. The
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  reality is is the economy is going to go through booms and bus Your life
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  is going to go through booms and bus. There are cycles. Life is
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  full of cycles. The economy is full of cycles. The stock market is
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  full of cycles. And when you try to fight those cycles, when you
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  try to keep it always elevated all the time, that's not good because then
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  when a crash happens, or when a recession happens, it actually makes it
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  worse. The answer to your question, quite frankly, as a recession is
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  good. Without a recession, we're not going to lower inflation. We want
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  prices to come down. The Federal Reserve wants GDP to come down. They
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  want inflation to come down. But what a lot of people don't understand is
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  is if inflation comes down and spending comes down and corporate revenues come down,
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  if profits come down, that's good for inflation, but it could cause a
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  recession. But there's also a balancing act. The Federal Reserve wants slower growth,
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  but they don't want to slow growth so fast that it then causes a
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  recession. But a recession is not bad, it's a it's healthy. Actually,
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  it wouldn't be bad for where we are right now. And ultimately I
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  think that is what they want, but they're never going to tell you that,
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  all right, So they're cout between a rock and a hard place,
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  aren't they. That's the factor is they really are cut between a rock and
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  a hard place. And a recession too is a mental gain. When we
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  enter a recession, consumers tend to think, well, I'm not going to
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  spend more money. It's that negative wealth of fact. You know. People
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  tend to spend money when they're feeling good about things. They tend to not
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  spend money when they're not feeling good about things, you know. So the
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  fact is that when they talk about a recession or when we have two negative
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  quarters of or two quarters of negative GDP growth, which is the legal definition
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  of recession. Or they come out and basically say we're in a recession.
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  Well, consumers' mentalities change, and all of a sudden, people start spending
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  less because oh my gosh, we're in a recession, and it becomes a
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  self fulfilling prophecy, and it becomes a snowball that could turn into an avalanche.
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  Not because the fundamentals have changed, not because things are so falling apart
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  that it requires everyone to go out and sell all their stocks, and not
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  because of any of that, but because mentally people are just not feeling good.
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  And then you throw all the fact that we have higher yields now that
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  actually compete with the stock market. People have a place to go as an
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  alternative, and that certainly doesn't help recessions a recession to end all right,
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  You know the old joke difference between a recession and a depression, Right,
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  you get recessions when you're at of work and depressions when I'm out of work.
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  That's right, that's right, that's right. It all depends where you're
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  standing, right, that's exactly that's exactly right. You're one hundred percent correct,
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  and it is all a matter of perspective for sure, right, So
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  uh, all right, so let's bring this down to the micro level.
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  You're an investor, you're thinking of retiring in the next three to five years.
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  What are you supposed to do here? Yeah, it's a great question.
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  I'm going to suggest that you have to be very, very careful and
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  past performance does not predict future results. We've heard that, right. What
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  happens is there's this your psychologists call a couple of mental phenomenons by certain names.
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  There's recency bias, and then there's normalcy bias. Recency bias says that
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  we tend to believe what's happened will recent. We tend to think that that's
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  that's that's what's most fresh in our mind, and we tend to live by
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  that. Normalcy bias is we tend to think that everything is going to continue
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  to remain the way that it's been. Well, the challenge is, for
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  the last almost fifteen years now, the stock market's gone straight out. You
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  know, if you go back to the bottom of the market No. Nine,
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  at the bottom of the financial crisis, and you and you and you
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  draw you charted that you know March ninth of nine to now it's about a
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  fifteen percent, and you will return for the last fourteen years. Now,
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  if you go back the previous fourteen years, it's no growth. So it's
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  the tail of two decades no growth or fourteen years roughly, and then now
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  fifteen percent plus growth for another fourteen years. And the recency bias says that
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  this is what people are thinking of. They forget that we add a two
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  thousand and eight. They forget that we added two thousand and one eight.
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  You know, they almost think that the stock market is now a safe investment.
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  And if if you're about to retire in two or three years and we
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  have another fifty percent or sixty percent crash, we can't say that that's not
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  going to happen. We've had two of those in the last twenty three years.
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  We yield to say that it can't happen again. It's just being iological.
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  But if we have another, you know, crash like that, and
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  you're going to retire about that time, that your portfolios down by forty or
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  fifty or sixty percent, it's going to affect your retirement. And people think
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  that that can't happen again. They're they're very uh, they're they're very optimistic
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  about things as far as the stock market. And I'm seeing that a lot
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  of people are going into retirement fully invested in equities and really just kind of
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  keeping their fingers crossed hoping that they can retire. They might not know they're
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  doing this, and that's what scares me the most is the recency bias says
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  that, oh, you don't have to worry about it. You know you'll
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  be You'll be fine if you're going to retire in two or three years.
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  That's not the case. If you're within ten years of retirement. You need
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  to start showing up now to make sure that you can retire not only if
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  the market does good, not only if the economic indicators are in your favor.
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  But I want you to be able to retire anyway, regardless of what
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  happens. And you know a lot of people are in that position. Their
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  retirements are dangerous. Okay, So you've got to be very careful at this
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  particular point in time, don't you. Yeah, one hundred percent. And
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  you know, I I've done several recent interviews recently, and I've talked about,
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  you know, putting yourself in a position to win no matter what.
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  And you know, when I say that, we get a lot of questions.
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  A lot of people ask, well, what do you mean win no
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  matter what? You're only going to win if the market does well. Right,
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  Well, no, if you're invested in the market, you're only going
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  to win if the market does well. But if you hired. The fact
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  is, there's a whole universe of options that are designed to give you interest
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  and dividends. And as a matter of fact, most investments that are growth
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  oriented where you know, when you talk about growth carry it's all about share
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  price, right, buy low and sell high, and that's what you want
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  to do, and you know, and that always doesn't work out. Here
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  you want money, but you can lose a lot of money, is you
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  know. So the reality is is most growth investments can be engineered for income.
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  Stocks are a good example. You could buy growth stocks or no an
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  injury. You can buy value stocks with a built three or four five percent
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  dividend yield and focus on income in right now, it's the income I think
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  for the next decade you can count on. Earlier, we talked about,
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  you know, the first thirteen years of this century was flat. The last
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  thirteen years is fifteen percent plus. If history repeats itself, we could have
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  another flat decade and a lot of economists are thinking that this could happen.
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  So how do we benefit from that? And the answer is in yield.
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  The answer is in dividends. Focus on income. If you if you have
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  a high quality income producing portfolio, you can count on your dividend and reinvest
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  those dividends. So if we do have crashes and recoveries is as is always
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  the case, then at least you've got dividus to dollar cost average back in
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  and you won't come out flat. You'll come out smelling like a rose.
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  All right, Well we like that and that goes along with your book,
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  right, Yeah. Absolutely. I talk a lot about investing for income in
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  my new book, More Life Than Money, which is become an Amazon number
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  one best seller, which I'm proud of in a lot of different categories.
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  But the book More Life Than Money takes my twenty five years, almost twenty
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  five years of experience in helping people retire, and I come up with ten
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  topics, ten mistakes that I've often seen retirees make that could wreck your retirement.
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  It's not what you know that will hurt you. It's what you don't
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  know that will hurt you. And there are ten saies that most investors,
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  most retirees don't know about retirement that could wreck their retirement. That's what the
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  whole book More Life Than Money is about, just to help retirees learn what
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  they need, get educated about what they need, so you increase the odds
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  of having a successful retirement. And well that's what we all want. Need
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  a where do we find you, Anthony? Where do we find the book?
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  Yeah, thank you so much. To find the book, you can
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  go to More Life than moneybook dot com or you can search for More Life
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  than Money on Amazon dot com. My website is Providence Financial Ink dot com.
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  Providence Financial ink dot com. And you know, if any one of
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  your listeners have a question for me, they want to talk about this,
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  they're about to retire. B Look, I'm more than happy. I'm an
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  educator. I'd love to help them in any way. So they can always
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  look us up on the website, fill out our contact form and you'll certainly
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  have a quick call with them if there's anything I can do to help right.
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  Excellent, Hey, appreciate you coming on, Anthony. I've got a
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  question for Anthony myself kl at Carrie LUTs dot com is the email address to
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  send it to, and you'll find the links to Anthony's book and his site
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  on the show notes to this interview on Financial Survival Network dot com and sign
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  up for your free newsletter while you're at it. Anthony, always a pleasure.
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  Thanks for coming by, Thank you for having me great saying you.
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  Thanks for listening to Carrie Lutz's Financial Survival Network, your solution to today's trying
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  times. For the latest, go to Financial Survivalnetwork dot com. Financial Survival
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  Network now more than ever,