The Fagan Financial Report

November 24th, 2024

Episode Transcript

Speaker 1 (00:00):
Welcome to the Capital District's Money an Investment Program. You're

(00:02):
listening to the Fagan Financial Report on Dennis Fagan sitting
here with my son Aaron, as we do every Sunday
right here at News Talk A ten and one oh
three one w G wide. We don't really sit there
on Sunday. It is a Friday morning at about nine fifteen,
right before the market open, So as we usually do,
we just put together some topical information and digress a
little bit from time to time. And in the second

(00:23):
half air, we're going to be talking to Doug Keenholtz.
He's a new Hire Fagan associate studying for a series
sixty five to become a finance coming an advisor alone
with you and I will take him a couple of months,
got a lot of industry experience, and you'll be talking
to him for the second half hour. What are you
talking about?

Speaker 2 (00:38):
We record recorded on Thursday. We talk a little bit
about you know, he comes from the annuity industry, so
you know the pros and cons of annuities, college planning,
how to save for college planning, and you know, I
guess some personal things as well. You know what he's
learned here what he learned in the past at different companies,
and you know, kind of what he brings us at

(00:58):
Fagan Associates.

Speaker 1 (01:00):
And historically and we are generally speaking, we don't work
with annuities, No.

Speaker 2 (01:04):
We don't, but I do think they fit specific you know,
they you know, he said something really he said something
really good and he's I think it was something along
the lines of there's no bad products.

Speaker 1 (01:16):
There's just bad applications.

Speaker 2 (01:18):
Bad application to products, you know, and I do, I
do believe that to a certain extent. Obviously, you know,
there are some products with high fees. There are some
mutual funds that you know, one point seven percent that
you should really stay away from. But you know, for
the majority of products that are sold out there, I think, yeah,
I think that that does make a little bit of sense.

Speaker 1 (01:36):
So bells and whistles generally speaking, that you take away
from the quality of.

Speaker 2 (01:40):
The product that aren't as transparent, yes, you know, and
I think also too, there's bad there's bad salespeople and yeah,
and I think you have to you know, go to
someone to trust as a good reputation.

Speaker 1 (01:51):
And we've been yeah, we've been a fiduciary for thirty
years We've been in business since nineteen eighty nine. We
clear all of our counsel swabs, so we pretty much
stick to uh, straight and narrow, you know what I mean.
And I think it's paid off for our clients. That's it.
So let's get right to it. Let's talk about There's
a couple of things that I wanted to talk about,
one being I guess performance of sect different sectors over

(02:14):
the past week, and performance of different sectors, specifically information
technology and also specifically some of the larger cap technology
stocks over the past you know, since the election. You know,
if I look at you know, since the election, well, actually,
if I look at the past you know, week to date,

(02:34):
and this doesn't include Friday, you got Alphabet down two
point eight two percent of some Justice Department issues. You've
got Amazon down two percent. You've got Tesla continues to
move forward, you know, based upon you know, President Trump's
being elected. You have Microsoft up down point five percent,
you have Meta up one point sixty three percent. You

(02:55):
know most of those are lagging the market in videos
up three percent, pollunteers taking a break down six percent.
You have that, and then you also have the United
Health you know flat, you know United Health is down
substantially ge flat ge healthcare excuse me flat.

Speaker 2 (03:12):
You have.

Speaker 1 (03:14):
Most of a rather big healthcare st regeneron down one
point sixty, so those are coming under some pressure. And
I just want your thoughts on you know, first of all,
some technology, the larger cap technology, and then also this
past week and if this is kind of still lagging
a little bit on a on an election to date basis,

(03:38):
but you know, technology and general information technology surpassing the
S and P five hundred and a year to date
basis a week over the past since election week, this
past week a relative to the market, probably week from
the end of the first half on relative to the market.
You know what's going on?

Speaker 2 (03:55):
Yeah, I think I think large cap tech has at
just such a great run, and you're you're seeing just
you know, I think a divergence from you know, historical
you know, let's say that the market are are you know,
like the rs pay equal crap weighted index, and I
think it's lagged just for so long that you know,
there might be a catch up trade. And I do
think that, you know, if we do bring manufacturing and

(04:17):
jobs back home, that will allow for a lot more
companies to do well. So if you look at you know,
the mag seven has a price to earnings ratio of
I want to say, like thirty two, When the S
and P has a price to earnings ratio of about
you know, historically of about seventeen. I think you're seeing
some overvalue valuation there. I think you're seeing a lot
of AI spending. It's almost half a trillion dollars in

(04:40):
AI spending between you know, the Magnificent seven tech technology companies,
and you know, I think there's just a lot of
unpredictability out there with the you know, transferability of that
spending to revenue, as well as a lot of these
companies being undervalued historical from historical metrics in the market.
So I think people are trying to speculate a little

(05:02):
bit on on what's going to happen and what Trump has,
what Trump said on the on his campaign trail, and
I'm just you know, in me personally, I'm waiting to see,
you know, once January twentieth hits next year, you know
what he tackles first, you know what he thinks are
the important issues, and and go and go from there

(05:26):
a little bit, you.

Speaker 1 (05:27):
Know what, you know what uh President elect Trump tackles
leading up to as as he gets the appointments behind him,
what's uh, you know, what are his areas of priority?
Uh specificviously specifically economically? You know how he applies tariffs?
You know, I think he I think he made I

(05:49):
forget what his one of his campaign slogans was what promises,
caped promise or something like that, where he's going to
keep his promises? So how how tariffs are applied to
which countries, what percentages in what industries, and what those
countries do assuming there's going to be some sort of retaliation,

(06:09):
And then you know, how did the stocks react? And
I don't know, I don't know, like you mentioned earlier,
whether there was just overbought in some of these areas
are a great run up. I think if you mentioned
the thirty two pe on the seven stocks that comprise
what you know has been named the Magnificent seven to
the Apple, Testla, Microsoft's Alphabet, Nvidia, Meta, and Amazon, if

(06:30):
you stripped Tesla out of there, you've got a much
more reasonable pe relative to the to the S and
p F.

Speaker 2 (06:34):
I've wanted it, but yeah, I think I think I
did say the magximum, but it is a top ten stock,
so it doesn't eli Lillian Berkshire. So some things that
are more fairly valued. But also like, you know, I
think we've been pretty down on let's say, you know,
large cap tech this year, but.

Speaker 1 (06:51):
You know, the QQ, I mean pretty down.

Speaker 2 (06:54):
You know, I think people have been calling for a
pullback all year on the triple ques. But you know,
if you look at there, you know, if you look
at their charts, they're up, you know, twenty three point
three one percent year to date, and the SMP's up
twenty four point nine zero. So you know, you could say,
you could say they're overvalue, but people have been saying
that for a year, two years, three years. And you know,

(07:15):
I saw a stat I heard on the you know,
Animal Spirits podcast that said that was, you know, the
S and P five hundred is cheaper than it was
four years ago on a price to earnings ratio. On
a price to earnings ratio, it's not in the ninety
first first percentile since nineteen eighty, so that's high. But
on a price to earnings over growth ratio, it's in

(07:36):
the fifty second percentile, so you can say, hey, you know,
the market's a little overvalue. But you know, thee the
PE ratio shows a lot more of revenue growth. So
when you're in you know, a period of cutting interest
of a ray cutting environment, and you know, if we're
going through a period of let's say this, you know,
artificial intelligence, you know, you're still seeing a lot of

(07:57):
growth from these companies. So I think that I think
it's easy to say, you know, there there will be
a rotation, but at the same time, you know, these
companies are still growing pretty rapidly, have huge expanding margins,
are in are in the you know, technology sectors that
we think are going to do good over three to

(08:18):
five years. So I think it's it pays to be diversified,
but you know, I don't think it pays to get
out of a whole large cap tech because every time
earnings comes out, you see, you know, hey, Azora has
twenty five percent year over year cloud growth, and even
in Nvidia came out this week and I will talk
about that in a little bit, but they had over
one hundred percent revenue growth in data centers, which you

(08:40):
saw Dell do well, you saw Equinix do well after
that ninety four percent revenue growth year over year, So
you can say, hey, these companies are overvalued, but at
the same time they're the companies that are still growing the.

Speaker 1 (08:52):
Most, right you know, I yeah, for sure, and I
think you've got to have if you look at investing
as a barbell on the on the equity side, you know,
you certainly don't want to get out of these There's
there's some of our largest holdings, Microsoft, Alphabet and Vidio,
Metah and they also comprise you know, if you look
at communication services, you know, information technology, uh and the

(09:16):
third big hit or the consumer discretionary selects consumer discretionary.
You know, you talk a forty percent of the S
and P five hundred. So as the S and P
five hundred goes or as these companies go, so go
the S and P five hundred. So you certainly don't
want to get out because you want correlation to that index.
And then there's been a lot of different headfakes along
the way that have occurred. It's just that you know,

(09:38):
and we'll see, we'll see with the justice appointment the
Trump White House, you know, in the selection of JD.
Vance and his rhetoric prior to the election makes you
believe it's a different Republican party certainly is a different
Republican Party with Trump at the helm, but you know,
it's it's also could be different in as much of
the Republican Party as historically seen as a party of

(10:01):
the wealthy, a party of the you know, uh that'll
take care of big business. And you know there's been
some you know, I guess uh, you know speak statements
from from President Electrump along with you know, his uh
other the others in his in his group that there
that's going to be a change.

Speaker 2 (10:18):
And even if you look at party in the middle
class now and parties shift, you know, if you look
at historically, parties do shift. And I think you know,
what the Republicans did really well this election was, you know,
try to listen to what people cared about. And you know,
I don't think the Democrats and the DNC did that
at all. You know, it was the same old, same old,
and you know, you have Nancy Pelosi worth X amount
of dollars you have, you know, you could say insider

(10:40):
trading with him Congress, and you know, they didn't fix
the things that people were mad about.

Speaker 1 (10:45):
Yeah, I think that right, that's what they do.

Speaker 2 (10:48):
That's kind of you know what what what what what
what happened?

Speaker 1 (10:51):
You know you mentioned, uh, what are some things you
want to bring up? I know I just brought up
that to performance and so what I mean, I guess
before we break from that, I think you still take
a little weight and see attitude. This time of the
year is a little weird. You know, you got the
end of mutual fun kind of pairing winners and losers
or gains and losses that came at the end of October.

(11:13):
They have that type of calendar fiscal fiscal year basis,
and the last two year months of the year you
look at you know, investors, some investors not wanting to
take capital gains, so maybe these stocks are artificially prepped up.
Some of the losers get over sold because investors are
offset and winners and loser. It's got I think you
just got to kind of be patient with your portfolio

(11:37):
right now. But I think by and large, over the
past six months, we have seen a broadening out of
the rally. And you know, some of the sectors that
have not done well, and then you mentioned it earlier,
some of the sectors that probably will do well in
the Trump administration includes more on shoring near shoring, and
that would probably be like the industrial sector, the materials

(11:59):
of financial energy, you know, areas like that. So it's
just something to keep an eye keep an eye out
for utilities a back bounce back a bit. Also in fact,
they're probably the best performing sector this this past week.
So what do you gotta what do you want to
branch out to?

Speaker 2 (12:14):
I think we could talk about in Nvidio earnings a
little bit more, but it is, you know, although you
could say, you know in video is just.

Speaker 1 (12:21):
A well that's what I was gonna say, and it's
it's the lead, and I apologize when you'reupt to. But
my gosh, you get into a four hundred thousand dollars
car and before you know it's it's a fourhunde thousand.
O Oh my gosh, this is great. I gotta get one.
And then you're like, someone says, this is a fourtunit
thousand dollars car and you're like, oh no, I won't
bother is in Nvidia at that point and go ahead
with whatever you're gonna say first.

Speaker 2 (12:41):
And then and then that you know, I don't think
so you know, I think that it's the largest market
cap company in the world earnings for shared verse eighty
one cents verse seventy five revenue thirty five billion dollars
versus thirty three point one. But I think estimates estimate
versus estament before expected. But I think when you when
you dig into the quarter, you know, sales rows revenue

(13:04):
rising ninety four percent on an annual basis. This is
still a consecutive slowdown from the previous three quarters where
sales rows one hundred two hundred and sixty two hundred
and sixty five percent, but data center revenue was up,
you know, over one hundred percent. So you know, although
I think there could be a shift out of tech,
I do think what we've seen here is it is

(13:25):
is a floor in tech as well as as companies
continue to spend on strong AI demand and as well
as you're seeing technology companies by semiconductors and in Vidia products,
but you're also seeing you know, countries, energy companies, utilities, utilities,

(13:46):
all of these companies are starting to uh, you know,
buy in vidio chips to make themselves more profitable and
increase their margins. So you know, I although I do think,
you know, in video has gone gone a long way. Obviously,
you know, I do think that it could, it could
continue to do so. Do I think in Video is

(14:06):
gonna you know, be five six trillion dollar company next year?
Probably not, but I do think it could work its
way up there over time as the as these uh
these companies continue to build that artificial intelligence and if
they can you know, make some revenue off of this
or or you know, profit or I think, uh, hey,
you'll you'll really see uh this this company continue to

(14:30):
do well and and have a floor. It does have
that you know cultish field that Tesla had five six,
seven years ago, where people bought it and they said, hey,
I'm gonna hold this forever. And I think in Video
is one of those companies now too.

Speaker 1 (14:41):
For a while. So it's prudent to trim it where
it's outsized in your portfolio. And I guess you decide
what outsized is. But I think you're you're right, You're right,
But I agree with you in as much that a
lot of different industries are going to benefit from in
an efficiency from it from a better efficient sees by
applying artificial intelligence through AI chips, you know, a couple

(15:07):
other things in their in their data center area. You know,
they started to delivering hopper, their Hopper two hundred to AWUS,
Amazon Web Services, Microsoft Azure, Google Cloud, Oracle Cloud, India, Japan,
Indonesia building out their AI infrastructure. So you mentioned you
mentioned not only our technologies purchasing it, but but you

(15:30):
talked about, you know, different industries. You mentioned utility, you
mentioned energy, so I mentioned I did mention some technology companies,
but also you mentioned countries. There are some countries, so
you just kint a lot going on there. Positively, you know,
stock probably could digest these gains, you know, one from
one forty to ninety, you know, you know in the
third quarter, and it's bounced back. It's one of our

(15:52):
larger holdings. You know, I would think, you know, you
trim it when it's where it's prudent, but otherwise probably
got some more upside to go. A couple other things,
you know, i'd uh, you know, just you know, we
try to address some broader stuff and then some some
narrow things for the listeners, again noting that we're going
to speak with Doug Keyholts in the second half hour.

(16:13):
But you know, fed Ray cut sparks a two trillion
dollar exodus, will spark a two trillion dollar exodus from
money market funds, Apollo chief economists, tourists and Slock says,
and and we filed toursts and Slock quite closely and Apollo.
So his question is, so what we're hangen with the
money in the money market accounts? You know, money market

(16:34):
accounts increased by two trillion dollars. Now that money could
come could have come from the bank, you know, bank
sweeps at schwab You know, we've cut our bank sweep
down at least by half and have different money markets
with trib We also have shorter term treasuries over the
past couple of years, and we'll continue to do that.
So there's probably if you if you look at that

(16:56):
two trillion that was put into the money market money markets,
I wouldn't it's all going to come out and go
into the stock market. You know, maybe it'll just stay
in the money market. Maybe it'll you know, we we've
picked up a lot of clients that you know, from
from people who had money sitting in the bank. The
bank's offer them two or three schwabble off for four
and a half or five on that one day settlement

(17:17):
money marketing, and then they're saying okay, let's let's ladder
some bonds as you just mentioned, or or the like.
So some of it's not going to the market, but
you know.

Speaker 2 (17:24):
Some of it could go into the market. You know,
you could see the markets at all time highs. Valuations
are at all time highs. But you know, what Trump
does have is quite the following. And people were pretty
negative on, you know, the economy before he was elected.
Now they're positive on the economy. So I think you
could still I think you could see some money come
into the stock markets as people with people thinking that,

(17:47):
you know, the stock market will do better with Trump
elect it also, but you know, I don't think you
can make a you know, a broad statement exactly where
it's going. I think it could go, and I think
we'll see that in the next month or two where
these flows are going. But I think it'll be pretty diversified.

Speaker 1 (18:00):
It's going to be quite interesting on a couple of fronts.
One would I One that I would say is that,
without a doubt, in the first Trump presidency, the stock market,
by his own admission, was a barometer of his success.
You know, the stock market is the one x he
would say it's done this he's done that in his
second presidency, is without without the ability to be re

(18:22):
elected again, is that going to be as important or
you do think so, or or you need even hear
the ord Or is he going to work on his
legacy and thinks that making America great again? Quote unquote,
is is going to be his legacy that will that
will trump how the market does over the first couple

(18:43):
of years. Is he gonna play I is he gonna say, look,
you know, in his mind or and with with others,
And maybe that's why he's having trouble getting that. Maybe not.
Maybe he's not having trouble getting Treasury secretary, but maybe
you know, he's got to get a Treasury secretary that
aligns with his beliefs. Uh and and they are not,
you know, middle of the road beliefs. They're a little

(19:03):
bit of clectic beliefs that you know, maybe he'll sacrifice
the first two years in the market thinking okay, and
then the the the the US economy will come roaring
back after that and so will the stock market.

Speaker 2 (19:15):
Or is he not.

Speaker 1 (19:16):
Going to want to take take the public criticism. Is
he still gonna be concerned about the stock market?

Speaker 2 (19:24):
You know, I don't know at this point. Uh, you know,
I don't think that in four years that if Trump
does a bad job, I don't think it's it's hard
for me to believe that, you know, people will actually
think he did a bad job. Even if he did
a bad job, I guess. And I think the policies

(19:45):
he has in place are policies that will know if
he did a good or bad job in six or
seven years, you know, in ten years bringing jobs back home.

Speaker 1 (19:54):
I think six or seven months, I think I think
we'll know from the tariffs, you know, how those how
those are going.

Speaker 2 (19:59):
To Yeah, but I mean I think it's this is
just the beginning of a bring jobs back home. You know,
manufacturing plants don't get built in four months. Yeah, he's
been at I mean he's picked up that with this
with the Chips Act. But you know, yeah, I don't know.
I think that's kind of a tough question.

Speaker 1 (20:18):
Well, what we're saying to our clients is and I
think you know, people who who who are people who
have back Trumped and then people who have backed Kamala
Harris both all agree. I think that the potential range
of outcomes is broader under a Trump presidency. Then they
would have been under a traditional uh, you know, traditionally

(20:41):
a traditional politician. And so that's kind of what we're
talking about. You know, they could be great with tariffs,
and they could be you know, selectively applied. And I
think most economists would say if they are selectively applied,
they can be they can be very positive. If they're
too broad, that can be very negative. So I think
you just take away and see. But I said to
say that it is our belief that the potential range

(21:02):
of outcomes is greater under a Trump presidency that would
have been under Kamala Harris over the next three or
four years. Yeah great, all right, what else you got?
What else you got in your in your hopper so
to speak?

Speaker 2 (21:13):
How about Netflix and the fight?

Speaker 1 (21:15):
Now, I watched that last week.

Speaker 2 (21:17):
I didn't watch it at all.

Speaker 1 (21:18):
It was you know, it was it was sad.

Speaker 2 (21:20):
Whopping sixty million households turned in for reference, you know,
Super Bowl fifty eight had one hundred and twenty eight
million households, and you know what I find interesting. And
then this week also Comcasts said it's set to spin
off cable networks and including MSNBCCNBC. I think USA as well, so,
you know, I think what we've seen is, you know,
Netflix had a first mover advantage to the max. Right,

(21:43):
You're seeing all these companies struggle. Disney just became profitable
I think on their streaming like two quarters ago, and
Netflix continues to get new get new viewers. Hey, you know,
they said we're gonna we're gonna add advertisements and people
didn't leave. So you know, Netflix has just kind of
continued to be a juggernaut. I think you'll continue to
see them venture into live sports more and more. I

(22:06):
know they have a package with the NFL, but you know,
it's it's quite it's quite amazing really.

Speaker 1 (22:14):
And you know, we we do own some Netflix, not
as much as we'd like we do on you know,
substantial amount though, And I would say that it was
a brilliant move by Netflix. I mean, regardless of how
the fight went.

Speaker 2 (22:27):
So too, I think I think what we think is, oh,
you know, we're just gonna be you know, cable news,
cable cable again. We're gonna have five or six streaming device.
But Netflix doesn't care, no, you know, so I don't
think there will be a backlash. And I think if
there is, Netflix isn't the one that people aren't going
to pay for?

Speaker 1 (22:46):
True? You know, so we got about you know, maybe
a couple of minutes to a couple of minutes. Minute,
one minute left? Yeah, So what thanks? First of all,
I want to wish everybody a very happy Thanksgiving, you know,
the time of year I like personally because there's no gifts,
there's just family and food. We were running the turkey trot.
You signed us up today, right, so we're back at
it there. But what are you thankful for? As far

(23:08):
as investing goes, and maybe touch on you know, something
a little bit broader than that.

Speaker 2 (23:13):
That's a tough question. You know, I guess, you know,
the transparencies of the US market. You know, from an
investing standpoint, innovation, I guess that the United States has,
you know, on a personal level, like I love working here.
We have a we have a great group of people
that work here. It's you know, a pleasure to come
into work every day. And I you know, that's I

(23:34):
guess from a work standpoint.

Speaker 1 (23:37):
I would say, you know, I can't really improve on
you know, the US economy is dynamic. I hope it
continues to be, uh continues to be dynamic and also
innovative and help help more people get Thankful for the
opportunity we've had and also for the opportunity we've had
in g Y and thankful for all of our clients. Uh,

(23:57):
there's there's such good people and they understand that them
it goes up and down. They understand we try to
do our best. Thankful for you know, you and your
family and.

Speaker 2 (24:06):
What time you guys know about twenty seconds over?

Speaker 1 (24:09):
Am I right out? Have a good holiday and we'll
talk to you later. Take care of by.

Speaker 2 (24:14):
Bye, Good morning, and welcome back to the Fagan Financial Report.
This is Aaron Fagan sitting here with Doug Keenholtz, one
of our new employees at Fagan Associates. We talked a
little bit about bringing him on on the first half
and we thought he'd introduce him to our listeners and
hopefully over the next coming years take a little bit
of the Sunday load off of our backs. You know,
I know, my dad's been doing this for thirty thirty years,

(24:36):
my uncle did it for about twenty five, and I've
been doing it for about like seven years now.

Speaker 3 (24:42):
It's a good run.

Speaker 2 (24:43):
It's a good run, you know, I know I haven't
been canceled. Yeah, yeah, yeah, you know you always kind
of making sure you don't say the wrong thing though,
But I guess tell us a little bit about yourself, Doug,
where are you from? Sure?

Speaker 4 (24:55):
Yeah, thanks Aaron, thanks for having me. I'm I was
telling Dennis earlier today. I'm a long time radio listener
back there. I remember listening to Mike and the Mad
with my dad, and so I used to like when
of the guys called in the first time a long time.
So my first time, the first time, long time, you know,
being on the show. So excited to be here. Yeah,
I'm I'm a lifelong Capital Region resident. Grew up in

(25:17):
East Screambers, live in Eat Scream Bush Now, went to
Columbia High School and went to r p I where
I played baseball and and managed and our majored in
the school management and with a with a finance concentration.
So always kind of been in this business. And married,
three kids, uh, two daughters and a son. Two daughters
in high school, a son who's in who's in elementary school.

(25:40):
So we're we've got a wide spread of of things
we're things we're dealing with our kids there. Yeah, it's
it's uh, it's great. I'm happy to be here. So
I started with Fagan Associates first part of October.

Speaker 2 (25:54):
Done.

Speaker 4 (25:55):
Yeah, yeah, I had had three weeks here. Then I
got a hip orplacement surgery which fulled the school closure.

Speaker 3 (26:00):
I was.

Speaker 4 (26:01):
I disclosed that before before it came on and offered
to start after the fact. But uh, but it worked
out great to kind of get my feet up for
a little bit before I went out for a little
while to uh to rehab the hip. But I'm I'm back,
uh back here physically, so I'm not I'm not ready
to uh to join you guys in the Turkey track
this year, but maybe maybe next year. Maybe at yes,
I could, I could certainly cheer you down.

Speaker 2 (26:22):
So so you know, you said you went to r
P I and I think would you say majored in
data managements like finance, data management, right, yeah, So it was.

Speaker 3 (26:31):
Was that, like, yeah, it was the school management.

Speaker 4 (26:33):
It was concentration was called basically financial uh financial management.
I think it was the actual name is escaping me
because it was so many years ago. But everything in
the school management RPS, the Lolly school management was was
kind of data driven, tech driven, you know, you didn't.
It wasn't just a finance concentration. It was more financial systems.

Speaker 3 (26:53):
I think was.

Speaker 4 (26:53):
Actually the concentration now that it's popped in my head.
But so it was kind of looking at the world
of finance a little bit from you know, tools and data.
And we've talked about I consider myself kind of an
amateur excel geek, if you will. I like, I like
messing around with all the different formulas and things you
can do with spreadsheets and whatnot to kind of, uh,
you know, look at data and look at it a
bunch of different ways, and and I've kind of always

(27:15):
you know, I started my career, you know, in a
completely different industry. I was, you know, doing my first
fifteen years in the in the working world, had nothing
really to do with the financial services and whatnot. And
you know, company companies, a couple of companies got bought
and sold in in the in that industry and ended
up deciding to kind of venture into this. And so
I started out at a at a Guardian General agency

(27:40):
wealth advisory group. I was there for a few years
and then went over to pers Chaplin Sterling Broke a
dealer here in Albany and then you know, jumped over here.
So that's been about twelve years in the financial service.

Speaker 2 (27:50):
So at Guardian, you know, what did what did you do?

Speaker 1 (27:53):
Yeah?

Speaker 4 (27:54):
So, I, you know, I went there with with the
goal of becoming an advisor at the time and obviously
being an insurance based you know firm. I learned a lot,
you know, certainly about the life insurance and launch them
care insurance, disability insurance, everything kind of in the insurance
aspect of it, and learned early on at that there
that I you know, I enjoyed that aspect of it,

(28:16):
and I ended up partnering with with the folk with
the gentleman there to kind of work on the investment side,
and I worked on the insurance side of my clients.
So I had I had clients, I sold insurance, I
sold products, and then kind of moved over a little
bit into helping the recruiting side of that business, try
to help, you know, bring on new advisors to that firm,
and you know, it was it was a great intro
to this you know career for me. I learned, I

(28:38):
learned a lot, learned a lot about myself, learn a
lot about the industry, learn a lot about you know,
products and services and things along those lines.

Speaker 3 (28:44):
And uh it's a really good jumping off point for me.

Speaker 2 (28:46):
Yeah. You know, I think sometimes on this show we
talk about you know, stocks and bonds, and you know,
at the end of the day, you know, for for
ninety percent of the people, you know, if you just
perform somewhat in line with the indices, if you're just
allocated correctly, you know, what it comes down to, Yeah,
is planning and that holistic approach of of you know,

(29:08):
doing the right thing with your investments. And uh in
and as you said, you know you kind of worked
on the insurance side, and you know what was that?
Like what what? What? Like? You know, I don't know,
I'm just thinking to myself, you know, since you started
working here. You know, I I know a good amount
about annuities, I know, but you know I've I've actually

(29:30):
kind of learned a lot from you with annuities, you know,
just even in the aspect of you know, using whole
life to pay for college and things like that. But
you know what, I guess, like, what are your takeaways?
What what are the what are the biggest pros and
biggest kinds of annuities? Because you know, so I feel
like we don't give annuities enough credit here because you know,

(29:51):
the older I get, the more I think they really
do fit in a lot of people's lives as an
income stream. But you know, I guess what what what?
What are the best things I guess that you got
out of a new and I guess the worst?

Speaker 3 (30:02):
Yeah?

Speaker 4 (30:03):
Yeah, you know what I've learned, you know, through my
career to date on the you know insurance product side
is both both life insurance and anybody as well says
there are no you someone said this a long time
ago to me, and it made sense. There are really
no bad financial products. It's just bad usage of it.
You know, an annuity for the wrong person, you know,
in the right the wrong time, but for certain people.
You know, there's a product was built with with a

(30:25):
certain client profile in mind, no matter what the product is.
So you know, my kind of philosophy with all that stuff,
a little bit is is you know, we've talked a
little bit about the here in the office, they've been
here is everything in life is better with balance, right,
your balance, work, home life, your balance, diet, your balance,
you know, everything balanced budget and and financial services to

(30:46):
me is kind of the same way. You know, it
certainly is that way in the in the equity markets,
you don't want to have all your money in one stock.
You don't want to, Yeah, you want to have good balance.
And that same can be said for kind of the
insurance products marketplace. So you've got you know, all sorts
of different types of life insurance, which, depending on where
you are and your you know, financial journey, can can
be incredibly impactful.

Speaker 3 (31:06):
If you're a young.

Speaker 4 (31:07):
Family with you know, kids and a mortgage and you know,
just starting your savings, you know journey. You know, term
life is probably the right product for the majority of
those people because it's you know, it's a it creates
and you know, an immediate estate if God forbid, something
were to happen to someone along the way, you know,

(31:28):
and as you mentioned annuities, as as you get into
kind of you know, later in life and and annuities.
To me, where you know annuities come into play, is
you know, twenty thirty years ago most people had pensions. Yeah,
the defied benefit plan is not there as much for
most people anymore. I mean, certainly certain career paths still
have that and it's a it's an obviously very valuable asset.

(31:50):
But for those that it isn't, that's where nudies can
sometimes come in and kind of you can kind of
create a self pension for yourself. Guaranteed income for life
can be very powerful. You know, we talked a little
bit about the playcheck paycheck model, where you know, if
you can create guaranteed income for yourself that covers all
your necessary expenses, all your you know, your your mortgage,

(32:10):
if you still have your food, your gas, your your electricity,
all those things, if you can guarantee that through some sort.

Speaker 2 (32:16):
Of like an annuity product, right, then yeah, and then
have the balance and.

Speaker 4 (32:20):
Then the rest of your money and your investments things
on those lines, you can you know, draw draw down
off of that, and that's your playcheck. That's the money
you used for your trips and your vacations and.

Speaker 2 (32:28):
The and I think I think that's, you know, obviously
a great idea. I think a lot of times, you know,
people think of financial advising, they think, yeah, you know,
asset allocation, they think, you know, a state planning, retirement planning.
But a lot of it is like you know, planning
for against people's own human nature, right and their own biases.
And their own. You know, everyone has a different, uh

(32:49):
I guess financial personality, whether it be conservative, aggressive, you know,
a gambler mentality, set, a spender or a saver. You know,
a lot of these innuity products, you know, in my opinion,
do a really good job of, you know, helping you
spend your money. I read a stat that let's say
you had a forty thousand dollars pension or forty thousand

(33:10):
dollars coming in a year from an annuity, and if
you had a million dollar portfolio that kicked off forty grand,
you're like fifty times more likely to spend that forty
thousand dollars if it was an annuity. So you know,
it's it's good ways to you know, help you enjoy life,
help you get through times of stress in the market,
don't do the wrong thing at the wrong time, right,
that's a big thing in the market. And you know,

(33:32):
at the end of the day, I think we talk
about that on this show a lot, and hopefully not
too much, because you don't want people to spend all
their money. But you know, the main goal in life
is to you know, say or your financial life is
to save money, to enjoy it and spend it in retirement.

Speaker 3 (33:46):
Yeah, all right, Yeah, we talked about it a little
bit here.

Speaker 4 (33:49):
Like my my experience to date, you know, certainly was
when I was you know, you know, in the field
of being an advisor before you know, we can talk
a little about my time at PKS and in a
minute where I was kind of working with other advisors.
But back you know, when I first started this business
and was you know, it was having clients and things
along those lines. Most of them were people around my age,
and so the conversations a lot of times were more

(34:11):
about the accumulation phase, right Like you're in the process
of of saving money, and there's a you know, I
think a great conversation about what's more important at that
age the rate of return or rate of savings, and
I you know, I think as you're growing, it's really
the rate of savings. It's it's making sure you're saving,
you know, the proper amount of your paycheck every month,

(34:31):
putting it somewhere different places, balance all along those lines,
because rate of return at that age, you know, you've
got a long ramp stoll. You know, the market's gonna
go up, the market's gonna go down. You're gonna You're
gonna experience a lot of highs and lows during those
period of times. As long as you don't need that
money in that moment. You know, you have plenty of
time to worry about that.

Speaker 2 (34:49):
Right now, you're in that preservation You're kind of in
the middle of that you know, preservation accumulation stage, right,
you know, you lean more towards the preservation. You know,
you'll give up a few percentage points for having little
bit like even a less volatile portfolio. Right, So, you know,
I think I think that's obviously huge as well. You
know one you know, yeah, and you know, we were

(35:10):
talking about that a little bit in the first half
of the show. Is you know, in video was including
the down Now, so like the Dow is twenty five
percent tech, the S and P thirty five percent tech.
It's like, you know, do you really want to have
that concentrated portfolio? You know, the older you get, you know,
you want to have a diverse five portfolio. You want
to decrease the volatility in your portfolio. And you know,

(35:33):
you know, there's a famous ratio called, you know, the
sharp ratio, and it's basically how many ups and downs
you have in your portfolio, right, you want to decrease
those ups and downs, you know, so if if both
portfolios are going to be up ten percent, you want
to you want that line to be as straight as possible,
because you know, half half the battle with with investing

(35:53):
is not doing the wrong thing at the wrong time.
So then you started working at PKS and that's kind
of now, that's not where we found you, but you know,
we we actually manage a church's board and you were
yet churches Endowment and you were on the board and
you said a couple of really smart things and uh yeah,

(36:13):
and we had uh and then then we kind of
got together and you know, I thought you were a
great fit, but you were at p k as Pershing
Kaplan Stirling.

Speaker 3 (36:21):
Yeah.

Speaker 1 (36:21):
Yeah.

Speaker 4 (36:22):
So PKS is a you know, a broker dealer that
that caters to the hybrid advisors. So advisors that are
ra as have their own ra A business, but also
want to have commissional business as well, so they want
to be able to you know, sell products that they
own commissions on, be it you know, variable annuities, direct
mutual funds, five two nine plans, things along those lines
where they'll they'll you know, have a commission from their rep. So,

(36:44):
you know, I moved over there and had you know,
five and a half six years there. I basically worked
on for PKS Financial Services, which was the kind of
the insurance and annuity arm of that business, where I
kind of managed the day to day operations there and
worked with you know, we have PS had about fifteen
hundred advisors nationwide that they cleared through them, and so

(37:04):
anytime they were you know, working in annuity space or
in the life insurance space, they would kind of come
through through my department. You know, I had a lot
of connections with a lot of the various you know,
big insurance companies, annuity companies, you know, with their wholesalers
and their products, and would kind of marry you know,
an advisor and their client with the proper company, the
proper product, whatever the case may be, for whatever they

(37:26):
were looking to accomplish for their client. And so I
learned a lot, you know, about that space, and also
you know a lot about advisors, you know, a lot
about the people that I was working with. The you know,
my clients quote unquote at that time were other financial
advisors in the industry, and you know, you pick things
up along the way. You learn you know, strategies and
things that you know, people you know have that you

(37:49):
think are, Wow, that's really smart, that's really impressive. That
would be something that I would like to do if
I ever got back into this space. And then, you know,
on the flip side, you meet some people that you're like,
I can't understand how this person is in this industry
and uh and you know, managing the amount of money
they're managing because you just you know, you wonder you
scratch your head sometimes. So yeah, as you mentioned, when I,

(38:09):
you know, I met, uh met Dennis and Aaron, you know,
I was impressed with them and uh and and excited
and uh you know, was was happy to to meet
and chat and it was the right time for me
to kind of make a move back into this I'd
always kind of wanted to to to you know, move
back into the advising world and uh and and you know,
help help individual clients, help people in my world and

(38:31):
help you know, the clients here at fake and associates
already with yeah, with what they're what they're working with
and whatnot. And uh, you know, the timing was right
for me to to to move on and try something new.
So I'm excited to be here.

Speaker 2 (38:42):
Yeah. So you know, you have to, you know, to
be in in our you have to you know, pass
you have to have some sort of qualification, whether it
be uh, you know, a test. So you're you're doing
your series sixty five right now.

Speaker 3 (38:54):
Yeah, you go, and it's it's good. It's good.

Speaker 4 (38:57):
You know, it's having been in and around this industry
for you know, twelve years, a lot of the a
lot of the terminologies, a lot of things are are
you know, second nature to me. So but then some
of the chapters it's like, well, I don't know much
about you know, corporate bond yields.

Speaker 2 (39:11):
And even options that right exactly you know you know
about them.

Speaker 4 (39:16):
Those and it's been a long time since I've had
to study for a test, so you know, sometimes at
this age the eyelids pretty early at night and uh,
and so the thoughts. But but no, I I'm excited
to get that beyond me and and really be able
to work with clients and help them. So hopefully my
goal is sometime between Thanksgiving and Christmas, we'll we'll check

(39:36):
that box.

Speaker 2 (39:37):
And yeah, off and running right, And you know, I
think it's a good mix. You know, my dad's in
his sixties year in your forties. I'm in my thirties,
so you know, we're kind of at three different stages
of life. So even when it comes to finance, and
you're in quite a different phase than me and my
dad in terms of you have, what a daughter going
to college next year?

Speaker 4 (39:56):
Yeah, my oldest daughter is a senior in high school,
so she's she's started in college and is in the
application phase. And then one right right behind that it
was a sophomore in college or sophomore high school.

Speaker 2 (40:07):
So certainly I was to in college for two years, right, Yes, correct,
that me and my sister were both in college at
the same time during the financial crisis. I do vaguely
remember sometimes like because I was. I was in college
from two thousand and seven to eleven, so right in
the midst of it, you know, I'm I'm down there,
you know, having a great time, and I do. I

(40:29):
still I still remember a few phone calls with my
dad where, you know, he just didn't sound like himself.
I literally remember walking to class one time and him
like kind of you know, me asking about kind of
what's going on, you know, when I was in college,
there was a lot of like business management was pretty
I guess popular, but it was in the it was
I guess on the brink of like stocks becoming cool,

(40:52):
you know what I mean, Like, you know, bitcoin started
kind of at my senior year, started to hear about it,
and then finance was kind of getting in vogue. And
I know finance is one of the larger majors right now.
But you know, what's it been like? You know, I
guess saving for one in college, you know, because the

(41:14):
average cost to couch has gone about eight percent per
year since nineteen eighty, so, you know, I know it's something.
You know, people are always thinking about, what are some
things that you've done to prepare.

Speaker 4 (41:23):
I guess yeah, it's it's it's daunting. It's scary, there's
no there's no doubt about it. The I mean, the
prices are you know, for a four year you know,
private institution, you're talking eighty ninety thousand dollars a year
in all in and it's you know, that is a
that is a large number. So yeah, there's there's so
many factors to try to kind of work through. You know,

(41:44):
how much do you pay for it? Do you do
you finance part of it, You take out loans, does
the child take out loans? Do you qualify for you
know aid? All those different things, and you know we've
for our family. It's it's been you know, a little
we talked about before balance, right, so there's a little
bit of you know, we've utilized five twenty nine plans
along the way and uh and have saved in those vehicles.

Speaker 2 (42:04):
You know.

Speaker 4 (42:05):
Being that insurance background, we do have some you know,
some insurance savings that they could potentially be tapped.

Speaker 2 (42:11):
Uh, how do you do that?

Speaker 3 (42:12):
Yeah?

Speaker 4 (42:12):
So right, so so you know, whole life insurance or
I think you can do it au L's as well.
But you know, we have some whole life policies that
you know, whole life gets a bad rap, right, it's
a it's the idea is you know, you're you're kind
of always chasing your tail a little bit in the
early years in terms of putting money, and it's it's
you know, it's it's both an insurance product but also

(42:34):
it can be a savings tool. Yeah, and so you know,
the one of the things that that kind of a
light bulb went off for me at the time was,
you know, you can tap into the cash valuable whole
life policy through the through loans and basically you're you
you don't have to necessarily pay the interest back, or
if you pay the interest back, you're just paying yourself
back over time. But you get that money out tax

(42:54):
free and you can it basically just becomes a lean
on your on your death benefits. So if as long
as you keep the policy in force over time, when
when that day comes for you, there's you know, just
the death benefit is reduced by what you borrowed for
and there's some advantages there when it comes to, you know,
applying for aid, where you know, the cash value of

(43:14):
life insurance policy depending on the college, may or may
not count towards your h the amount that you're you know,
have saved for college, and so you may be eligible
for more aid from certain schools that you wouldn't be
from others with five twenty nine and others.

Speaker 2 (43:28):
This is off not an off topic question, but I
was thinking about this the other day when talking to
a client, is your home equity? Do they take that
into account when applying for colleges? That's a good question, right, Yeah,
I'm going to think that they could. We honestly, haven't
you know, the FAFTSA for anyone listening, who's who's going

(43:50):
through the college financial aid applications or anything like that.
The the FAFTSA forums haven't even come out yet for
for next year, so I'm not even sure because this
is my go around with them, is what they ask
for that I know, certainly on all the forms they
do want to know, you know, what the value of
your home is, what the what the mortgage balance is.
But I'm not sure if that's a calculation necessarily on

(44:11):
the on the financial aid or not. But certainly taking
out a home equity loan to help pay for college
is probably not one of the one of the best ways. Yeah,
you get it's usually very variable too. Yeah, it's a
risky thing.

Speaker 4 (44:31):
The thing with college is that, you know, it's it's
a hard conversation, especially with you know, probably a lot
of listeners that are that are engineering retirement.

Speaker 3 (44:39):
You know, you can't.

Speaker 4 (44:42):
You know, you can't overwhelm and think you got to
pay for every cent of college to the detriment of
your retirement later or borrow from a.

Speaker 2 (44:50):
Four oh and K or an i R A to
pay for your care of yourself.

Speaker 3 (44:54):
Right, exactly.

Speaker 4 (44:54):
There's a reason why when you're on an airplane they
tell you to take the mask and put it on
your child first and not on your.

Speaker 3 (45:00):
Self, or excuse me, put I said that backwards.

Speaker 4 (45:03):
Put the mask on yourself and not on your child first,
because if you don't take care of yourself, then you're,
you know, your kids are gonna up having to take
care of you later in life if you short your
own retirement.

Speaker 3 (45:13):
To to over overpay for college.

Speaker 4 (45:15):
So it's it's gonna be a you know, a challenge
all on for everybody who's whose children are going to
school in terms of, you know, how to pay for
that through savings, through income, through other way, through through
you know, through borrowing. It's it's it's not an exact
science or an exact formula for everybody.

Speaker 2 (45:30):
It's just you know, and that's kind of you know,
when people come in here, you know, it's not just
this one broad plan that we give everyone. You know,
everyone's situation is completely different. Everyone has different incomes, different savings,
different means to pay for these things, and different goals
in life. For sure, some people are like, hey, you know,
I want my daughter by my son to have some

(45:50):
skin in the game. These are all personal decisions that
people make that there's no right or wrong answer, you know,
but if you if you want to call, give us
a call. We can tell you some of your actual options.
In some ways, we've seen other people you know, help
their children pay for college, get through it and get
to that, you know, because it usually goes like savings,

(46:11):
then it really does halt while your kids are you know,
sixteen a lot of times, and then you know, in
your in your fifties to retirement, you ramp up that savings.
And that's just what people see historically. Again, everyone has
different things in life. But you know, I guess the
last last question I have until you know, you got
about two and a half two and a half minutes left,

(46:31):
you know what you know an investing regard, like what's
kind of been your your personal philosophy with investing.

Speaker 4 (46:38):
Yeah, yeah, I think we hit on a little bit
in terms of balance, yeah, you know, and and and
some of that comes with like you know, tax treatment too,
in terms of you know, saving both in you know,
qualified plans certainly you know contributed to four one case
my whole life and yeah, uh and my wife as well,
but also having you know, some after tax investments, you know,

(46:59):
and then the different tax treatments because overloading in just
your qualified plans, you know, to me, when you get
to you know, uh, get to retirement, now all of
a sudden, all your eggs in one basket, you've got
to deal with the underlying tax and all that. And
if you have you know, to me, also having some
of the money outside of the market and the insurance product,
I think is something that you know that we've tried

(47:19):
to do so that you know, we've talked about a
little bit here.

Speaker 3 (47:22):
The market.

Speaker 4 (47:22):
You can't time marketing or you can't time the market.
If you retire and the market is down the first
three years, you know, that becomes a lot more challenging,
right if all your money is in in a qualified
plan versus you know, having some some assets outside of that,
whether that be real estate, whether that be you know,
just cash on hand, whether that be you know, products.

(47:43):
Having having lots of options is always important. It gives
you gives you a lot more ability to to create
the income that you want, you know, and without worrying
about running out of money on the back end.

Speaker 2 (47:53):
So yeah, you know, I think those were all good things.
You know, I think what we got about a minute
left and uh, you know, I think that was enjoy Well,
you did a great job. You really did it. You
might get Doug our shared in office right now. So
you know, we've talked about a lot of these things
in the you know, just kind of from day to
day conversations, and it's been a you know, it's been

(48:14):
great having you here. And I've I've learned a lot.

Speaker 3 (48:18):
If you've learned a lot, I've learned about that time.

Speaker 4 (48:20):
That's you know that when we when I first started
and talked to Dennis, I said, you know, I just
love to be a fly on the wall for a
while and really just listen to conversations that you guys
have and sitting on meetings and just kind of learn
how how you guys operate.

Speaker 3 (48:33):
And it's, uh, I'm very happy to be here.

Speaker 2 (48:36):
You're a Giants fan.

Speaker 3 (48:36):
I am a Giants fan.

Speaker 2 (48:38):
Yeah, but it was a Yankee fancer. He's not a
mess fan.

Speaker 4 (48:41):
Yankees, Giants, Nicks. Uh, you know, seeing a basketball so yeah,
that's my that's my go to So we gotta we
gotta check out Tommy DeVito here today and hopefully hopefully
he uh he knows, he knows his assignment this time.

Speaker 3 (48:55):
Don't don't go be a hero buddy.

Speaker 2 (48:56):
Right. Well, that's about it. Everyone, have a happy Thanksgiving.
Feel free to give us a call at five one
eight two seven nine one oh four four. You can
email emil Us at Investment at Fagan Faganassociates dot com
if you have any questions, if you want to schedule
a meeting. But thanks a lot for listening. We'll talk
to you next week