Latest / Financial Survival Network / Deep Dive into Economic Uncertainty and Investment Strategies -- Eddy Gifford #5988

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Deep Dive into Economic Uncertainty and Investment Strategies -- Eddy Gifford #5988 · Financial Survival Network

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  And so we could see the spation of wealth through look consumer spending. But
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  you know, all that's going to do is wide and wealth gap because the
• 0:07
  people that are invested are going to be basically capitalizing the fact that all these
• 0:11
  people are spending all this money. And then the other side of the coin
• 0:14
  is everyone's so bodied in the passive right now that and everyone has very very
• 0:19
  concentrating portfolios. Because of it, things roll over and go down. We're
• 0:23
  going to see a lot of people really really get burned. You were listening
• 0:26
  to Carrie Letz's Financial Survival Network, where you get valuable information. You just
• 0:31
  can't find anywhere else to thrive in today's trying times. You need the Financial
• 0:37
  Survival Network now more than ever. Go to Financial Survivalnetwork dot com and get
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  your free newsletter and gift. Financial Survival Network now more than ever. And
• 0:53
  welcome. You are listening to watching the Financial Survival Network. I'm your host,
• 0:58
  Carrie. Looks well, we're mid way through the month. We just
• 1:00
  got the producer price numbers and everything is looking great. So I guess,
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  I guess all your worries about the economy, credit, bankruptcies, defaults,
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  it's all been solved. Well, here to discuss is our good friend Eddie
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  Gifford. Eddie, welcome back, So we should all breathe a sigh of
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  relief. Huh, well, it's certainly seen that way. You know that
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  it's all in how they present the data. Of course, when you look
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  at PPI, it was a fell point one percent and it was only one
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  percent up over a twelve one period, so you know that's obviously below the
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  two percent target. But then when you look at CPI the day before,
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  it came in harder than expecting. So from a wholesale standpoint, it appears
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  that things are kind of under control, but from an actual consumer demand standpoint,
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  not so much. And I think the issue right now is you have
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  so much consumer demand and it's all on credit, but we're not really punishing
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  credit yet. So unfortunately, I think we're going to hit that wall.
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  And I don't know if it's this year, if I or it's after the
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  Lord of the New Guy is it gets in, but this is this is
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  heading towards something that could be really bad. We absolutely need the soft landing
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  because if we don't, you know, it's it's not going to be good
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  for anybody. Not all right, so soft landing, are you sure well
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  we need it? I'm not saying we get it. I think that,
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  you know, I'll I just don't know like what reaction we're going to get
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  because we're in this scenario now where we could be in a commodity supercycle where
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  inflation starts to run away again, which would mean the higher for longer and
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  maybe more more increases in rates. And in a situation like that, we
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  see the stock market and bond market probably implode. And then the other scenario
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  is, well, what if things are or kind of heading good, but
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  then something breaks under the surface causing the Fed to really have to loosen the
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  money supply and do a wrapid amount of great cuts, in which scenario we
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  see bonds rally and we see the stock market and move down pretty fast.
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  So you know, we have like these two outliers, which I say,
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  are you know, probably like more favorable. I just don't know which one
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  is more favor right now. And then you have this like Goldilocks soft landing.
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  It's like, oh no, it's right, We're going to get it
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  perfect. And it just doesn't seem in that way, and you know my
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  beard that way in real life either does it. I've never I've never seen
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  it happen personally. You know, I've been told that it's going to happen
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  thousands of times, but I've never seen anything actually like go the exactly the
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  way that you wanted to go. I mean, we we've watched playoff football
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  this week, and everyone thought that games were going to go one way,
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  and you know, guess what they didn't? Right that That's that's kind of
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  what happens in real life. And I think that that's the thing that when
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  you're so hopeful of something being perfect and ending up exactly the way that it
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  needs to be, it makes the reaction that much worse when it's not.
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  And you know, my biggest fear is the is that we end up in
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  a scenario where the FED actually has to start raising again, because that'll catch
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  everybody off guard and that will just get real bad, real fast. All
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  Right. So, anyways, you know the experts that have called the twelve
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  out of the last three recessions, right, well, you know that's kind
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  of how it works. The one thing we have on our side is the
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  fact that the inversion and then the you and then when the yield curve becomes
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  uninburided right and goes back to normal, that's typically the sign, and that's
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  starting to happen right now. And the issue just just comes down to the
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  fact that there's so many things that happened over the last three years. There's
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  so much money that came into the system. There's so many people out there
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  that still aren't working and are just kind of doing whatever. And then the
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  other people are keeping unemployment rate down because they have three jobs. And so
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  when the three when the three jobs go to one right, and that limit
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  and credit card limit is hit for everybody, and student loan payments or the
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  missing those student loan payments actually start counting against you, which is later this
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  year. Those are the things that add up to kind of a credit crunch,
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  and it's at a whole different scale than it was during the crisis.
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  You know, the great financial cursives were primarily real estate driven. Well,
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  now it's consumer demand driven, which we had all this pent up demand from
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  COVID. And that's not only like for consumers, that's also for businesses.
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  That where people had to go out there and start businesses because they need to
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  make money because they weren't allowed to work and they borrowed a ton of money
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  to do that, and so like all this stuff is snowballing, snowballing,
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  snowballing. So yeah, all these all these experts I've called for the recession
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  last year, but now they're saying, oh no, there's not going to
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  be a recession. And I would argue the alternative. I would say that
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  this is exactly why the recession is going to happen, and this is exactly
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  why it's going to be deeper than anyone anticipates. All right, so there's
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  no avoiding this recession. How bad is it going to be? Well,
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  that just depends on the factors. If we end up in a higher industry
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  environment for longer, I think it's going to be it's going to take a
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  lot longer, Right, It'll be kind of more of a slow grind down
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  like twenty twenty two was, except for that might last for like three years.
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  On the flip side, if something just breaks, I think it'll be
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  pretty rapid, where we might have a six to nine month just like collapse
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  in the stock market, and then at least it would kind of flush things
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  out and we could kind of get things going again. So I would prefer
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  things to just get flushed out so we can kind of get out a fresh
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  start, so to speak. But it doesn't seem like that's happening, because
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  at the end of the day, everybody around the world is beginning to trust
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  the United States less and less and less, and because of that, I
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  think that demand for higher interest rates on the United States debt is going to
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  occur. And so if more and more people are demanding higher higher interest rates,
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  that means the interest rates are staying higher. That's going to hurt the
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  American consumer, and that's going to make this a slow grind written down,
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  I hope I'm wrong. I would prefer the other side, where we just
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  rip the band aid off, but I don't know if that's how it's going
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  to work this time. All right, Well, it's worked that way in
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  the past. Does this mean the end of the dollars primacy hegemony in the
• 7:46
  world because nobody else's currency is doing too great either. That's absolutely true.
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  I think the dollar is still the main game. I don't see it like
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  going away in the next three years. But I think that there's more and
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  more people and more and more countries that are open to the dollar not being
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  number one anymore, and so that's that's an issue. And know, any
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  time that you get kind of a challenge or you get uncertainty, that's what
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  can lead to a domino effect. So you know, maybe things change if
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  we get some different leadership in this country. But right now, it just
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  seems like we're going down this path and the path doesn't look good, and
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  it makes it hard, you know, especially for me as a sort of
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  my financial planner. And I'm you know, my job is to be optimistic,
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  right Like I mean, I'm supposed to believe the asset prices are going
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  to be hired ten, fifteen, twenty years from now, because that the
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  end of the day, Like that's why I have a job. We're going
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  to grow your wealth, and we're having to look at like a lot more
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  more active or and then even tactical investment strategies. We're having to look at
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  more alternatives, you know, leading more into like things like gold and finding
• 8:52
  alternatives to bonds potentially since that flight the safety didn't work in twenty twenty two,
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  and so we're just having to find a lot more ways to make money
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  if we end up in like another lost decade type scenario. But we don't
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  have the traditional risk on risk on relationships, so it makes a tough but
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  you just stay nimble, you be disciplined, and you continue to attack,
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  you know, from a standpoint of take chances, cut your losses, and
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  take profits on the way up, so that if we aren't a trade down
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  markin market, at least we end up ahead. Then what the passive flows
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  will do. Right, So you got to be very very careful then,
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  is what you're saying, because you don't know this thing is going to turn
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  out. Yeah, very very careful. I mean, you know, you
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  could make the argument that if you're twenty years old, like you can afford
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  to just continue to do cost average in but if you're fifty years old and
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  you're thinking of retiring in the next fifteen years, well you can't have as
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  a lost decade where you lose half your money twice like people did from two
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  thousand and twenty ten, and then you have to work an extra ten years
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  that you weren't anticipating. So you start getting a little bit closer and you
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  really need to be careful because you just can't afford to make a mistake.
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  And you know, on the other side, the twenty something you don't have
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  to make a mistake. I mean, you know you can. You know,
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  Unfortunately, as it's been my experience that a lot of the twenties and
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  thirties, including myself when I was that age, we like to learn things
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  the hard way. But you don't have to. There are people out there
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  that can help, and you know, we believe that we are one of
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  those people. All right, So this is a real conundrum or this I
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  guess it's really entail into the Baby boomers and Gen X coming up right.
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  Yeah, I mean, we have this huge transfer of wealth that's right around
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  the corner with the boomers and the next generation, and a lot of a
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  lot of the next generation just isn't as good with their money, and there's
• 10:56
  a little bit more of a like a now I want it now type attitude,
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  And so we can see dissipation of wealth through consumer we're spending. But
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  you know, all that's going to do is whidden wealth gap because the people
• 11:11
  that are invested are going to be basically capitalizing the fact that all these people
• 11:13
  are spending all this money. And then the other side of the coin is
• 11:16
  everyone's so bodied in the passive right now that and everyone has very very concentrated
• 11:22
  portfolios. Because of it, things roll over and go down. We're going
• 11:26
  to see a lot of people really really get burnt. And then you know,
• 11:30
  it makes it tough because it's like, okay, well that's okay,
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  let's get back in and nobody wants to so good old behavioral economics. We've
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  seen it happen time and time and time again, and my fears that's a
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  little bit worse this time because the next generation is just not as educated as
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  the previous one was. All right, well, it's lots of interesting things
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  ahead, so again, what do we do well, I think at the
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  end of the day, right now, Hey, if we're looking like big
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  picture of macro, it's like, yeah, it looks glomy. But if
• 11:56
  we're looking like short term, next six months, next nine months, maybe
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  not so much. Generally speaking, an election year, they try to do
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  whatever they can to make sure that nothing happens until after the fact, right,
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  So we need to get the election over with before that we can let
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  things collapse. I think it's kind of like the attitude of most politicians because
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  they don't want to be able to have either side blame it on the other
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  side. So I think that if we're looking over the next three six,
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  nine months, we still have to lean in a you know, earning season
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  is starting, we're going to see a wrap up in volatility. We are
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  due for a pullback in the market. So right now might be a good
• 12:33
  time to kind of dollar cost average in. But as far as your portfolio
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  itself, you have to be disciplined and you have to have a predetermined reason
• 12:41
  to get into something in a predetermined reason to get out of it. It's
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  not just good enough to buy anymore. We have to have a reason to
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  get out, whether that's a profit, whether whether that's a stop, you
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  know, whether that's a big picture relationship. But there needs to be a
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  reason because right now it's going to be more important to protect your wealth when
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  things get bad. But at the same time, the everyday investor just can't
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  handle that fomo and they just want to ride the wave up. So you
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  know, my job is to kind of have a balance of Okay, well,
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  let's try to give you as much of it as possible, but then
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  that's also protect you things get really really bad, really really vast, So
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  I think discipline to take the emotion out of it and don't be afraid to
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  be nimble, and at the end of the day, like if you're scared,
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  there are things like cash. There are things like gold that can serve
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  as a good hedge against uncertainty, and so you know, have some of
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  that in your portfolio. All right, Well, that presents a lot of
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  challenges, but with challenges often come opportunities. So it's time to start figuring
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  this out. Now, Eddie, where do we find you out these days?
• 13:50
  Yeah, So the easiest thing is that it's attactivewealth dot com slash Eddie
• 13:54
  dash Gifford. That's my website and then once you get there that there's all
• 13:58
  my contact information and everything as far as contact information and general easiest way to
• 14:03
  get a hold of me is email. That's Eddie with a Y dot Gifford
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  at tactivewealth dot com. And you know, we're just looking to help anyone
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  who's a little bit unsure uncertain about what's going on out there, and I
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  think there's a lot of them out there right now, So read out all
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  right, appreciate that. Hey, you've got a question for Eddie myself,
• 14:22
  shoot me an email. Katelatcarrie LUTs dot com and of course on link to
• 14:28
  Eddie's site will be in the show. That's this interview on Financial Survival Network
• 14:31
  dot com. Make sure you sign up for your free newsletter. Eddie,
• 14:35
  always a pleasure. We'll talk to you again soon. Appreciate it. Thank
• 14:37
  you, Gerry, thanks for listening to Carrie Letz's Financial Survival Network, your
• 14:43
  solution to today's trying times. For the latest, go to Financial Survivalnetwork dot
• 14:48
  com. Financial Survival Network now more than ever,