Latest / HPK Provident Advisors: The Weekly Bull / HPK Friday Live Episode 85 August 29th

Transcript

HPK Friday Live Episode 85 August 29th · HPK Provident Advisors: The Weekly Bull

• 0:00
  Speaker 1: All right, I'm going to hit it Well.
• 0:03
  Speaker 1: Welcome to HBK Provident Advisors Friday Live.
• 0:06
  Speaker 1: Of course, every Friday, partners of HBK Provident Advisors, there's three of us.
• 0:12
  Speaker 1: Sometimes you get one, sometimes you get two, sometimes you get three, but every Friday, 1230 pm Eastern Standard Time, we are on Facebook, talk a little bit about the markets, talk a little bit about financial planning.
• 0:24
  Speaker 1: I apologize for the rough audio and video.
• 0:28
  Speaker 1: Today we are on Facebook Talk a little bit about the markets, talk a little bit about financial planning.
• 0:31
  Speaker 1: I apologize for the the rough audio and video today, making some changes here in the office and so I don't have the normal equipment.
• 0:38
  Speaker 1: I look good over here, brian.
• 0:39
  Speaker 1: Well, I hope you know.
• 0:40
  Speaker 1: I hope it's hiding some of the flaws.
• 0:41
  Speaker 1: This is Friday, august 29th, the last Friday of August.
• 0:47
  Speaker 1: We're cruising through the year.
• 0:49
  Speaker 1: Of course, what we do is pretty much each day throughout the week.
• 0:54
  Speaker 1: We have social media posts, mike puts out the week ahead in the markets.
• 1:00
  Speaker 2: Sometimes we have some personal observations A lot of times it's financial planning, and so we'll kind of cover some of those.
• 1:12
  Speaker 2: Those things can be found on our website.
• 1:26
  Speaker 1: Yeah, you had a good one about linking retirement to kind of the stage of life you're in, taking your youngest daughter to college and also trying to fill that extra time you have now.
• 1:30
  Speaker 1: Is that correct?
• 1:30
  Speaker 1: Yeah, so that you know, that was on Tuesday.
• 1:31
  Speaker 1: So last week and this is a somewhat of an ongoing series for me I took my daughter to, took her to school and as as observing her and other students, you know it's.
• 1:40
  Speaker 1: It's a huge moment right, and there's so many emotions and it's a big life transition, and it dawned on me how similar that was to the folks that we work with going into retirement.
• 1:54
  Speaker 1: It's a lot of the same things.
• 1:55
  Speaker 1: The big thing is how do I pay for all of this?
• 1:58
  Speaker 1: Who are my new friends going to be?
• 2:01
  Speaker 1: What are my new hobbies going to be?
• 2:02
  Speaker 1: What do I want to explore?
• 2:03
  Speaker 1: Who do I want to be in this next phase?
• 2:07
  Speaker 1: And it was just amazing to me, as I was watching all these students moving in, how similar that was to a lot of the folks that we work with in another huge transition in retirement.
• 2:19
  Speaker 1: I enjoyed writing that one and I encourage everyone to take a look at it.
• 2:24
  Speaker 2: It's a very quick read and you do a great job of linking those personal stories into finance.
• 2:31
  Speaker 2: I love it.
• 2:34
  Speaker 1: Well, there's a lot of things that we work with our clients on.
• 2:37
  Speaker 1: It seems new to them, it seems daunting.
• 2:42
  Speaker 1: I've never done this before, I've never had this.
• 2:45
  Speaker 1: I'm not familiar with this.
• 2:46
  Speaker 1: But you know what we like to do and I hope I did it with this post to say you know what.
• 2:51
  Speaker 1: It's probably more familiar to you than you realize.
• 2:56
  Speaker 1: Let's simplify it, let's get some clarity around it, let's do some planning, and so you understand your options.
• 3:05
  Speaker 1: You know, it's kind of like when Natalie went off to college.
• 3:08
  Speaker 1: She's going to University of Kentucky.
• 3:11
  Speaker 1: They do a great job of advertising all the resources academic resources and social resources and how to connect with different groups.
• 3:24
  Speaker 1: And you know, just to have that clarity, not that she's going to do all of those things, not that somebody going into retirement is going to do all of those things.
• 3:33
  Speaker 1: But it's nice to sit down and say, hey, here are the options, here's what's viable to you.
• 3:37
  Speaker 1: And so it becomes much less daunting when we could sit back and say you know, we could sit back and say you know, this isn't as foreign to you as you probably feel like.
• 3:47
  Speaker 1: And so anyway, so take a quick read at that one.
• 3:50
  Speaker 1: I enjoyed doing it.
• 3:53
  Speaker 2: I had fun writing the Wednesday one.
• 3:54
  Speaker 2: It was the top five investment lessons I've learned throughout my career.
• 4:02
  Speaker 2: It's tough.
• 4:03
  Speaker 2: I just kind of started and rolled with it.
• 4:05
  Speaker 2: I probably left some off that are very important to me.
• 4:07
  Speaker 2: But number one law of relative returns If you lose 50%, you got to make back 100%.
• 4:14
  Speaker 2: So that kind of links with our strategy at HBK.
• 4:16
  Speaker 2: We try to win in the long term by losing less in these drawdowns.
• 4:20
  Speaker 2: And that really sits well with our client base, because our ultimate goal is keeping the client invested to be able to reach their financial goals.
• 4:31
  Speaker 2: And when we have a 10%, 20% pullback, things get scary.
• 4:35
  Speaker 2: People panic.
• 4:36
  Speaker 2: So we try to reduce that downside risk and participate in the upside, giving them a smoother journey toward their financial goals.
• 4:43
  Speaker 2: Number two and participate in the upside, giving them a smoother journey toward their financial goals.
• 4:49
  Speaker 2: Number two understanding diversification.
• 4:50
  Speaker 2: Everyone preaches diversification and it is important.
• 4:51
  Speaker 2: But just understand that those dynamics and correlations change in different environments.
• 4:54
  Speaker 2: For example, if there's global economic weakness, having an international equity portfolio is not going to really give you any buffer to your US stocks.
• 5:04
  Speaker 2: Everything's going to move in tandem.
• 5:05
  Speaker 2: In 08, I think EM was one of the worst performing asset classes, but in that environment fixed income might do pretty well.
• 5:15
  Speaker 2: Fast forward to a year like 2022, where inflation is rearing its ugly head.
• 5:21
  Speaker 2: They're going to be highly correlated Stocks go down, bonds go down.
• 5:25
  Speaker 2: So just understand how those dynamics change over time.
• 5:27
  Speaker 2: Whether we're at all time highs and you want to take some risk off the table, or if we just dropped 20% and the headlines are saying you know, this is the start of the next 2008,.
• 5:44
  Speaker 2: Like, you need to bear down, get out now and you put money to work.
• 5:48
  Speaker 2: It's going to feel really bad, but that that probably means you're onto something.
• 5:52
  Speaker 2: I mean you might not time the bottom is very hard to time markets but you're probably going to make money off that in the longterm.
• 6:00
  Speaker 2: Number four and sorry I'm doing speed round, I'm limited time today, fair enough.
• 6:05
  Speaker 2: Number four don't be a fundamental or technical analysis.
• 6:11
  Speaker 2: Do both, and what I mean by that is they're both very important on their own, but they work so wonderful together.
• 6:17
  Speaker 2: Fundamental analysis finding great companies with great balance sheet and cash flows.
• 6:22
  Speaker 2: But if you're getting in at the wrong time of the cycle or maybe the chart is broken it's a big downtrend line.
• 6:28
  Speaker 2: You're probably not going to make any money on it for a while.
• 6:31
  Speaker 2: So in corporate technicals, they'll give you good insights on when to get in and out.
• 6:35
  Speaker 2: I'm a big fan of them.
• 6:37
  Speaker 2: And then number five links with what we believe.
• 6:40
  Speaker 2: I'm a big fan of them, and then number five links with what we believe.
• 6:43
  Speaker 2: Time is your friend.
• 6:43
  Speaker 2: The earlier you can get started investing and the more often you invest, the better off you're going to be.
• 6:49
  Speaker 1: I think this is a very important post for folks that don't know us as well or for the people that we work with that want a refresher on hey, how do these folks think about you?
• 7:01
  Speaker 1: Know how?
• 7:02
  Speaker 1: How does HPK Provident Advisors?
• 7:04
  Speaker 1: How do they approach the, the, the planning, how do they approach the investment?
• 7:12
  Speaker 1: And, mike, I thought you did.
• 7:14
  Speaker 1: Not only is that the, you know the lessons that Mike has learned, which is a fascinating part about what we do.
• 7:20
  Speaker 1: There's always new lessons and we're always studying.
• 7:22
  Speaker 1: But for anybody that wants to get a refresher or wants to get a feel for how we look at things, how we look at our financial planning, how we view the portfolios, I thought this was an excellent summary of that, and these are timeless, timeless concepts.
• 7:41
  Speaker 1: This will be true in the AI world.
• 7:44
  Speaker 1: This will be true beyond the AI world.
• 7:46
  Speaker 1: These things are true in the technology world.
• 7:48
  Speaker 1: However you look at it, it is about the planning, taking multiple approaches and, you know, doing some things that are uncomfortable at the time.
• 8:02
  Speaker 1: It's uncomfortable to save a dollar.
• 8:04
  Speaker 1: Now that you plan to spend 40 years from now, that's a little uncomfortable, but it's really important.
• 8:10
  Speaker 1: So, mike, I thought you did a fantastic job.
• 8:12
  Speaker 1: Thanks.
• 8:14
  Speaker 2: And then Thursday, we had our continuing series on the OB3, as Brian is coining it, that's my term.
• 8:21
  Speaker 2: We have a lot more posts coming out on Thursdays.
• 8:23
  Speaker 2: Keep an eye on that.
• 8:24
  Speaker 2: It's very good tips, big changes.
• 8:27
  Speaker 1: Big changes, Big changes for everybody.
• 8:30
  Speaker 1: So that's every Thursday for the next several Thursdays, For the past Thursdays and moving forward.
• 8:35
  Speaker 1: There was a lot of things that went on in the one big beautiful bill, the OP3, as I like to call it.
• 8:42
  Speaker 2: So please take a look out for those the fun stuff, woo, yeah.
• 8:47
  Speaker 2: So I think we're starting a new trend here.
• 8:50
  Speaker 2: We don't get any price movement until Friday.
• 8:52
  Speaker 2: So, as you can see by this chart, we have a big down day today.
• 9:01
  Speaker 2: It's really being carried down by NVIDIA.
• 9:06
  Speaker 1: Well, I guess I'm allowed to say that name just as a reference, but I'm not really sure.
• 9:10
  Speaker 2: Both of those are kind of tariff related.
• 9:12
  Speaker 2: Caterpillar's just released earnings and their margin guidance is really affected by those tariffs being implemented.
• 9:19
  Speaker 2: I think NVIDIA is a mixture of that tariff discussion about tech exports as well as a little bit of a carryover from their earnings report.
• 9:29
  Speaker 2: Now I don't know if you've heard.
• 9:30
  Speaker 2: Overall it was another strong report by them, but data center was a little weak, so markets sold off on that.
• 9:37
  Speaker 2: But the stocks had such an incredible run.
• 9:39
  Speaker 2: I mean, what do you expect?
• 9:40
  Speaker 2: So, as I mentioned last Friday we had another big move.
• 9:45
  Speaker 2: That was following the Jackson Hole Symposium where we heard from Fed Chair Jerome Powell.
• 9:51
  Speaker 2: Now, what markets celebrated that day was him indicating that there is now risk to the labor market.
• 10:01
  Speaker 2: So why does the market like that?
• 10:04
  Speaker 2: I mean it sounds like a bad thing, right.
• 10:05
  Speaker 2: The market likes that because that means rate cuts are going to start, likely in September.
• 10:11
  Speaker 2: Personally, I don't get as excited if the Fed chair says that economic conditions are going to weaken while inflation's also risked upside.
• 10:23
  Speaker 2: But the market likes it.
• 10:24
  Speaker 2: So it is what it is.
• 10:25
  Speaker 2: It seems like it's a little short-lived because we haven't gotten above that Friday high yet, which also coincides with the high of around August 14th and we haven't really gotten much past the end of July high.
• 10:41
  Speaker 2: So I mean you'd like to see more of a definitive breakout from all-time highs and we really haven't seen that, as you can see in this purple box below momentum, the RSI indicator another bearish divergence.
• 10:55
  Speaker 2: So momentum's not keeping up with new price action.
• 10:59
  Speaker 2: One good thing, though, that we've seen a broadening out in recent weeks.
• 11:03
  Speaker 2: This is the equal weight S&P.
• 11:05
  Speaker 2: It's really outperformed over the last couple of weeks.
• 11:08
  Speaker 2: The market cap weighted, so that's a good sign.
• 11:10
  Speaker 2: Yields are cooperating.
• 11:13
  Speaker 2: The 10 years in a downtrend, or it broke the uptrend.
• 11:16
  Speaker 2: I should say we're at below 430.
• 11:20
  Speaker 2: That's a good thing.
• 11:22
  Speaker 2: Typically that's good for equity markets, as long as it's not because of severe economic weakness.
• 11:27
  Speaker 2: Then the market might think otherwise.
• 11:29
  Speaker 2: Overall, lower rates are better for equities and better for the economy, because that's the availability of credit.
• 11:36
  Speaker 2: Then, yeah, a little speed round.
• 11:41
  Speaker 2: We didn't have much economic data this week.
• 11:43
  Speaker 2: We asked some housing numbers, which arguably remains in a recession.
• 11:48
  Speaker 2: Besides that, consumer confidence came in a little weaker than last month, especially in regards to expectations around labor.
• 11:57
  Speaker 2: Jobless claims, however, remain low.
• 12:00
  Speaker 2: So we're seeing a dynamic that hiring is really slowing.
• 12:04
  Speaker 2: The last non-farm payrolls, which we're going to get another one next Friday, but the last one came in 75,000, not bad.
• 12:12
  Speaker 2: However, the previous two months were down by 254,000.
• 12:16
  Speaker 2: So I've been saying, instead of the three-month average being 150,000, it's actually 35,000.
• 12:23
  Speaker 2: So next week, friday, is when that will come out.
• 12:26
  Speaker 2: It's expected to come in at $100,000.
• 12:29
  Speaker 2: So uptick from last month.
• 12:30
  Speaker 2: But make sure you pay attention to the revisions.
• 12:33
  Speaker 2: I mean the trend's been lower on those.
• 12:35
  Speaker 2: Besides that, we get job openings on Wednesday, ism manufacturing on Tuesday, ism services on Thursday.
• 12:43
  Speaker 2: So it's going to be a lot of economic data in the shortened trading week.
• 12:47
  Speaker 2: As you know, we have Labor Day on Monday, so markets will be closed.
• 12:54
  Speaker 1: And I think this is a great way to look at.
• 12:58
  Speaker 1: You know, between your post on, you know the five important lessons that you learn and the details of what you're talking about and mike had talked about this before in our portfolios, when we we have a strategic component which is kind of you know for lack of a better term you know what is the appropriate combination of invest stocks versus bonds and percentages and that kind of thing.
• 13:24
  Speaker 1: Then there's also a tactical component In between your post and this discussion today.
• 13:31
  Speaker 1: I think it gives people a really good picture on hey, we kind of have a philosophy here that is a long-term way that we approach things and give yourself plenty of time and set yourself up in the right pots of money in the right places and that kind of thing.
• 13:46
  Speaker 1: But there's a ton of details that go behind that.
• 13:48
  Speaker 1: You know that doesn't become a static.
• 13:50
  Speaker 1: Hey, this is what we do and you know, 40 years from now, we think it'll work out for you.
• 13:54
  Speaker 1: There is a ton of daily, hourly research that goes into this and that's what those charts really indicate to you.
• 14:04
  Speaker 1: So, yeah, we do have a philosophy, but the philosophy isn't hey, you know, set it and forget it, don't worry about it.
• 14:10
  Speaker 1: These are active things that we're doing on behalf of folks that that work with us, and so you get to see, you know the general construction and then the details behind it.
• 14:25
  Speaker 2: I've been flagging the potential for a pullback and the way we manage portfolios.
• 14:29
  Speaker 2: I've been raising cash because of that, because when we do get that pullback which does happen we get 5% pullbacks three times a year, 10% pullbacks once a year.
• 14:39
  Speaker 2: We like to be able to buy stuff when markets pull back, unless the economic environment really changes.
• 14:46
  Speaker 2: We're not always buyers of the dip, but usually.
• 14:51
  Speaker 1: Well, you know people should know what they're getting and you know that's not timing the market.
• 14:55
  Speaker 1: We don't claim that.
• 14:57
  Speaker 1: You know it's going to be perfect and we get it.
• 14:59
  Speaker 1: You know, right to the center.
• 15:00
  Speaker 1: But you should know how we do things around here.
• 15:03
  Speaker 1: But you should know how we do things around here and I personally think, mike, one of the biggest ones is, you know, obviously being Pittsburgh.
• 15:16
  Speaker 1: I'm a Steelers fan.
• 15:16
  Speaker 1: Offense wins games, defense wins championships.
• 15:18
  Speaker 1: You know, I think one of the great lost secrets of investment management is do what you can to protect on the downside.
• 15:26
  Speaker 1: You know, over if you lose less over time or we attempt to do that in those time cycles you end up potentially doing a little bit better by losing less.
• 15:37
  Speaker 1: Mike, I know you're on a time crunch.
• 15:40
  Speaker 1: You can jump off if you.
• 15:42
  Speaker 1: Yeah, but everyone have a great Labor Day.
• 15:44
  Speaker 2: Well, time crunch you can jump off if you and not, yeah, but everyone, have a great Labor Day Tune into our blog post next week and we'll see you Friday again.
• 15:54
  Speaker 1: And thank you to everyone that joined us at the wild things baseball game, washington, pennsylvania, last Friday, august 22nd.
• 15:59
  Speaker 1: We had about just about 80 folks out to the game and it was.
• 16:04
  Speaker 1: It was fantastic, so All righty.
• 16:07
  Speaker 1: So I am going to conclude with some very important information, so stay tuned with us for the next couple of minutes.
• 16:15
  Speaker 1: We want to indicate to you that the everything we talked about, that security, is offered through LPL Financial LLC, which is a member of Finneran.
• 16:25
  Speaker 1: Civic Advisory services are offered through LPL Financial LLC, a registered investment advisor.
• 16:33
  Speaker 1: Brian and Mike are registered representatives of LPL Financial.
• 16:36
  Speaker 1: Content discussed is for informational purposes only and not intended as an offer or a solicitation to buy or sell any security or any strategy.
• 16:47
  Speaker 1: Any opinions that we expressed are those of us, brian and Mike, today, and do not necessarily reflect the views of LPL Financial or its affiliates.
• 16:58
  Speaker 1: All investments involve risk, including the possibility of loss of principal.
• 17:04
  Speaker 1: This communication may include links.
• 17:07
  Speaker 1: You saw a couple of links that we had and those are for reference only, and there's a couple of those are third-party sites.
• 17:13
  Speaker 1: The links are provided only as a convenience, only as a visual.
• 17:16
  Speaker 1: Lpl Financial and its representatives are not responsible for the accuracy of the content of those sites.
• 17:23
  Speaker 1: Brian and Mike and HBK Provident Advisors may only transact business in states where we are properly registered or exempt from such registration, and please contact us directly for information regarding licensing and registration status.
• 17:37
  Speaker 1: Most importantly, past performance is no indication of future results.
• 17:41
  Speaker 1: You should consult with your financial professional, tax professional and or legal professional regarding any specific situations and before making any of the financial decisions.
• 17:54
  Speaker 1: So thank you again.
• 17:55
  Speaker 1: We will see you next Friday, 1230 pm Eastern Standard Time on Facebook.
• 18:01
  Speaker 1: Enjoy the long weekend and be safe.