Episode Transcript
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Speaker 1 (00:01):
Good morning, and welcome to the Capital District's Money and
an Investment program. You're listening to the Fagan Financial Report.
I'm Dennis Fagan, sitting here with my son Aaron, as
we do every Sunday right here in News Talk eight
ten and one oh three one w G y. Uh.
You know, actually we just goes to tape for about
Friday and around eleven o'clock, so we got most of
the all the all the news in pretty much for
(00:22):
the market. Uh. Right now, the Dow is up a bit,
a couple hundred points. It's been a rough week for
the market. Yeah, nonetheless over the past you know, five
trading days to have on one point six percent. And
I was ask you how you're doing first and foremost,
how are you into uh the market?
Speaker 2 (00:39):
You know, how are you doing?
Speaker 1 (00:40):
I'm doing good. I can't complain it. So the eclipse
the other night.
Speaker 2 (00:44):
Yeah, mister path to totality.
Speaker 1 (00:46):
Path to totality, that's what Doug who works with us,
and asking me in regarding the clips. Of course I am,
of course I am.
Speaker 2 (00:56):
And you've in your in the last five years or so,
you've really kind of embraced space and.
Speaker 1 (01:02):
I'm a huge, huge, as don't know any I don't
know anything about it.
Speaker 2 (01:08):
It's a hobby, you know.
Speaker 1 (01:10):
Yeah, well, actually I feel good about it too. I
feel like, you know, some people get weirded out by
the size of the universe, and this I don't. I
don't do you.
Speaker 2 (01:22):
No, I don't. I find it more comforting than anything. Yeah,
you know, you know what's you know, your pressures in life.
Maybe they really aren't as important as and they're not
as space they take up in your head, right, you know,
this is important stuff.
Speaker 1 (01:38):
This is important stuff. I often say if you look
at look at your life and like a stool and
you have you know, your family, your health, your financial situation,
and your spiritual nature. You know, and uh, you know
this this is one of the foremost important things in
your life. And and let's let's hit the economic data
that came out this week. How that influenced the market?
(01:59):
If it did, you know, as I look at it,
as I look at this week, you know, the economic
data wasn't that important. I think the tariff policies are important.
You know, foreign policy is important. Responses by other countries
that kind of trumped, for lack of a better word,
(02:19):
the direction of the consumer and producer personities that came out,
and I was surprised because they both were table will
get into it in a second and so, but they didn't.
That did not dictate with the market. I also think
what was a big thing for the market this past
week was the continuing Resolution and it hasn't gone to
vote yet, it'll go vote this afternoon, but I think
(02:41):
there was there was a specter of a shutdown because
of the budget, and I think that that also hit
the market this week. So I'm not going to call
it extraneous data, but certainly not data that three or
four months ago you would have thought, okay, PPI, CPI,
(03:01):
that's what's going to drive the market.
Speaker 2 (03:03):
Yeah, all right, we're going to start cutting rates or yeah.
Speaker 1 (03:05):
I think I took a back seat. But anyways, why
don't we get into the economic data and get get
the ball rolling. And we also have a couple earnings
this week, so yeah, just this.
Speaker 2 (03:14):
Week, even you know, minutes ago, half an hour ago
or so, consumer sentiment came out University of Michigan. The
the more like you know, we're in this country, I
guess is involved with social media, the less the less
importance I really put on consumer sentiment because it's tied
(03:36):
so closely to politics. But it did slid another eleven
percent this month, with declines seen consistently across all groups
by age, education, income, wealth, political affiliation, geographic regions. You know,
it has fallen now for three consecutive months, and it's
currently down twenty two percent from December twenty twenty four highs.
I mean, I think it's it's hard pressed not to
(03:57):
believe that that is fueled by policies. He even came out,
I think this week and said, hey, you know, these
these this is going to happen. These things are going
to happen. There's no coming back from them now. And
I think now we're seeing you know, even with clients
people being like, okay, you know this could be inflationary
for the time being, which you know would definitely drag
(04:20):
consumer sentiment down.
Speaker 1 (04:25):
Yeah.
Speaker 2 (04:25):
I mean, but I don't know, No, you can you
go ahead.
Speaker 1 (04:28):
No, I think that you know, it's all relative, you
know what I mean, sixty degrees out today, it's supposed
to be sixty something on you know, this is Fridays
supposed to be sixty something on Sunday. It's all relative,
and I think the numbers that I'm looking looking at
and what's impacting the market. First of all, the market
hates uncertainty. We had consumed. We had a small business
(04:49):
survey released right after the election, and businesses were very optimistic,
some of the most optimistic they've ever been. Because of deregulation.
As as the tariff issue has has dragged on, I
think businesses are beginning to wonder, uh and and that
now it's reflected in the survey of consumers. Consumers are
(05:12):
wondering is this going to be something that's going to
be settled in the during the first half of the
first half of this year. Is is it going to
be a policy of the administration to use tariffs as
a measure? Uh? So? Is this going to continue through
throughout his entire administration presidency? You know? You know what?
(05:33):
What what's the whole thing with Canada? Is that ever
going to be reconciled? You know? So, I think that's
what's impacting the market right now. And uh and so
I think I think we're just taking some of the
the fraud out of the market evaluation for us and
pulling it back and and and so and and so
so what I look at and if I look at
the survey consumer sentiment, if I look at the small
(05:54):
business survey, you know, look at CEO surveys, they've come
down quite a bit. Sentiment has come down quite a bit.
You know, So that's so you know, you know, I
think it does mean. It just means that, you know,
maybe valuations come down. They have come down, you know,
SMP's down ten percent over the past month or something.
Speaker 2 (06:14):
And you know, and you hear a lot of people say,
you know, it's just Trump, it's just rhetoric, it's just rhetoric.
But you know, my fear in I guess inward large
cap tech spending industrials, things like that, is, you know,
all this rhetoric reduces the chance of these companies to
to spend on capital expenditures. You know, why would someone
(06:36):
put a large plant somewhere where they don't even know
where the rules and regulations will be six months from now.
So I think you're seeing a lot from you know,
business leaders being like, you know, we're kind of going
to sit on the sidelines until we actually see what
happens here.
Speaker 1 (06:51):
Right, And the longer this goes on, right, less predictable
look predictable predictable. It becomes that capital expenditure is gonna
be like, well, I don't know. We so President Trump,
I think he's got to kind of have a plan
stick to it. And you could say he is, but
that's not being perceived by Wall Street and Main Street.
The fact that if you look at just the tariffs,
(07:12):
implement tariffs, roll them back, implement them, rolling back, now
extend the date. So it's got to come to a
head before the market can can move substantially forward. And
if it doesn't come to a head, if it is
part of the administration, I think you have a chopping
market until, you know, until something in the nature changes.
Speaker 2 (07:27):
Yeah, you know, I do think eventually we'll see I
guess a storyline, let's say, of the American stock market
and companies in the in the American economy being much
more resilient to a lot of these policies. Then we're
giving them credit for, you know, especially large cap tech.
You know, I think large cap tech is very very
(07:49):
fairly valued in here. You know, I think we're going
to see in the next couple earnings quarters, if we
don't see a declining you know, consumer that hey, these
companies can still do well in all types of environments.
They're they're very diverse. Uh, they're very innovative, and I
think that could be a story that we see to
play out. You know, you have Apple with you know,
(08:10):
hundreds of billion dollars in cash. You know, you have
even Microsoft, Amazon, not as much Amazon, but you know Microsoft,
all these large cap tech companies with tons of cash
that I think you'll eventually start to see, Hey, you know,
they they can you know, withstand a lot of different
types of political environments.
Speaker 1 (08:27):
And you have been saying that, and I think that
makes sense that there may be a divergence between the
political environment and and perhaps the economic environment and in
some of the and the fame and fortune these these companies.
Let's take a look at the data that did come
out this week. You had the on Tuesday, the job opening.
(08:49):
So one of the things Americans are concerned about is
the labor market. The Grier of Labor Statistics reported their
job openings in Labor Turnover Summary the Jolts Report and
seven point seven four million job openings down five hundred
twenty three thousand from eight point twenty six three million
one month prior. Job openings have fallen from a high
of twelve point one eighty two million a couple of
(09:12):
years ago. Total hires up nineteen thousand, job separations up
one hundred and seventy thousand, quits up one hundred and
seventy thousand. So if you look at job openings compared
to total hires, there's still a gap of two point three
four seven million between job openings and those available to work.
So the labor market is still pretty strong, and that
(09:35):
bodes well for the economy. And I think that kind
of what you were saying earlier, Aaron with with with
you know, social media consumer sentiment may not be as
important as it was and and I, you know, may
not agree totally, but I think the jobs market Trump's
you know, will will will take precedence over a lot
(09:55):
of other pieces of data that come out because eventually,
you know, if you have have a job, if you
have a good paying job, you are going to end
up spending money and be Okay, Wednesday, what do we
have to come out on Wednesday?
Speaker 2 (10:10):
Wednesday CPI rose point two percent. And I think that's
where you were saying that, you know, you're seeing a
little nervousness in the market, you know, two three months ago,
this would have been taken as extremely good news in
my opinion. It was by two point two percent, fallen
from a year over year high nine point one percent
during June twenty twenty two. And I think it was
below expectations of point three percent because the shelter rose
(10:34):
by point three percent excluding food and energy. Course, CPIS
rose point two percent after rising four percent during January.
So like, get my head too, is you know you're
you know, this is obviously all we would think, this
was all good news with CPI you know now at
three point one percent year over year, but the market
didn't take it as so, which I would call a
(10:58):
little bit concerning.
Speaker 1 (11:00):
Market's concerned about tariffs. Yeah, and I think, you know,
we're gonna get out. We're gonna get on every week
and for quite some time and talk about similar about
similar things, you know, and every week's gonna have a
little bit of a twist to it. You know, maybe
we'll get some positive news this week out of out
of the Ukraine.
Speaker 2 (11:18):
And I think now more than ever is uh, you know,
excuse I'm sitting near my phone emails in the computer
on the weekend, waiting for something to come out to
jolt the market up or down on Monday. So you know,
there's no safe space really right now right from the news.
Speaker 1 (11:37):
No, no, there's not, and I don't think there's going
to be. But but you're right, and last week was
it was a quiet news week. Let's see what else
we have come out? Initial claims roun employment benefits. Yeah, again,
attesting to the strength of the labor market. Down around
around two hundred and twenty thousand. I got up to
two forty. Most of the time you see initial clams
from umployment benefits. Above two fifty, you start to worry
(11:59):
about the labor market. We haven't gotten there ever, I
don't think in the last year or two. So we
we are still well below that number again at two
twenty and finally on Thursday. Prices at the wholesale level,
as measured by the Producer Price Index WAS were unchanged
during February. They are up six tents of a percent
(12:19):
in January. Over the past year, the PPI has fallen
has risen three point two percent, down from a peak
of eleven point seven percent. During March of twenty three,
energy prices dropped, Finish food prices jumped. Something to be
something to keep an eye on a core PPI which
excludes food and energy up two tens of a percent.
Prices for intermediate goods, you know, pipeline goods up five
(12:40):
tents of a percent. They're one percent in December. So
you have economic data that came out pretty much in
line with a little better than consensus. The market did
not rally, and like you were saying, there and that's
that's was was an issue a couple of things. Well,
the consumer survey we just went through, yet we out.
Speaker 2 (13:00):
I think, I think, what is you know, happening in
the market this week as well? Is Monday Delta Head
poor earnings on top of Booking had poor earnings last
last week, last week, yeah, Brooking dot Com. So I
think although it's only two companies, you know, two small companies,
relative to you know, the overall economy, I think it's
a little bit of a signal that maybe the consumer
(13:22):
is slowing down a little bit. So, you know, I
think at the beginning of the week we saw some
pullbacks based on oh, you know what if we do
have a slowing consumer with a stock market that has
done just so good over the past ten to fifteen years,
you know, I think a lot of these policies have
have affected the stock market, let's say, but you know,
(13:44):
I think they're affecting the stock market a little bit
more than normal because we were coming from all time
highs as well. You know, I know, usually when you're
investing in the stock market, you're near or at around
at or around all time highs. But you know, things
have been fairly valued. There was a lot of artificial
intelligence talk. So I think I think, you know, with
the unknowns and artificial intelligence and the revenue would bring,
you know, coupled with the unknowns of this you know
(14:05):
political uh, you know, this administration, the political climate that
you know. I think when you're investing, you're investing with probabilities,
with risk and reward, and you know the risk is
there right now, uh, and you can't really see, you know,
what the reward will be, I guess in six to
twelve months. And now that you have an alternative four percent,
and I think people are taking some risk off the
(14:27):
table and raising cash. And we are doing the same thing.
Speaker 1 (14:32):
We have done this stand you kind of finished it
a little while back, you know.
Speaker 2 (14:35):
And so now you know, three weeks ago, so even
right now we're sitting at about you know, thirteen and
a half percent cash, and a lot of that cash
is uh, you know, we're waiting to see where to
put it. And a lot of times, you know, when
we're investing, we have a watch list of five ten
stocks that you know, we're following pretty closely. So you know,
(14:56):
when we do sell something, a lot of times we
hop right back in. But and we're just not doing
it as fast as we normally would. When you get
on the sideline with four four and a half percent.
Speaker 1 (15:05):
Right, that degree of uncertainty, yeah, and you know, and
if you think about it too, for the listeners out there,
you know, like Johnson and Johnson's down on Friday, the XLV,
which is the ETF that deals with healthcare, you know,
up point four percent, where the SPY is up one
and a half percent. So what you've seen alternating days
(15:27):
almost is when the market's down, consumer on durables and
healthcare does well. When the market's up, consumer on durables
and healthcare do poorly. So investors are kaim kind of confused,
and they're kind of rotating back and forth. There's some
belief out there, and I subscribe to a bit that
there's been you know, hedge funds that have had to
(15:49):
do a lot of repositioning over the past two or
three weeks, and then that's kind of pulled the market down.
But this has been, you know, a pretty quick drawdown.
In fact, if you look back to go ahead.
Speaker 2 (15:59):
Now, yeah, it has has been a very quick jart
out and NASZAK fell eight point two percent from February
eighteenth to March fourth, for its largest two week drops
since since you know, twenty twenty four. Right, well, but
also you know, you saw the S and P trailing
twelve month go from twenty seven point seven to twenty
(16:20):
four point seven. You know, it's still above its long
term average of twenty point two. But you know, I
think that's pretty fair. And how much more of a
service based economy we are as opposed to you know,
twenty years ago.
Speaker 1 (16:34):
If you look at if you look at just the
last month or so so from February nineteenth, which ironically
is about the same day in twenty twenty when the
stock market began to tumble due to COVID. But from
February nineteenth through this past Thursday, March thirteenth, the S
and P five point it was down ten percent, the
(16:55):
Nazdak down thirteen point six percent, the US total market
down ten point foury percent, the Russell two thousand, which
is the second, third, third thousand largest American stocks down
twelve point five seven percent. So you had, if you
go back to nineteen twenty nine, that's the seventh fastest
correction you know, since then, so three of the seven
(17:17):
fastest have twenty eighteen, twenty twenty and now under President Trump.
So the level of volatility has you know, increased during
his presidency to a certain extent, some may say, and
we again believe it to a certain extent that that
has to do which is the faster pace of the
market in the news being released, but others has to
(17:37):
do with his again a wider range of potential outcomes.
So you have that, you have a couple of the
things that that also would go along with that, and
that is that, you know, should the market, you know, rebound,
(17:59):
you know, should the market go into a bear market,
that would be quite unusual. And the reason is very
rarely does the market have three bear markets during the
course of a space of five years. You know, according
to a report published by Fred Embert, if the market
did move into a bear market again it's already down
(18:20):
ten That would be three bear markets in five years,
something we've never seen before. The previous closest three bears
was six point nine years between nineteen sixty six and
nineteen seventy three. You know, a period of you know,
social unrest, period of stagflation, and it's not something we've
seen in quite some time. So there's a good chance
(18:40):
that the market will will recover. On average, the markets
after it goes down ten percent, it returns an average
of three point one percent one month later, I guess
the question that I would have to you, and then
three and six months and twelve months later it does
even a lot better. So if this is a correction,
you the market will tend to rebound and rebound strong
(19:03):
and get back to where it was within you know,
two or three months. I don't, you know, my opinion
is and again were we have to have an opinion
because that's how we manage money, you know, in accordance
with those opinions and research that we do. In my opinion,
we are going to fall between you know, ten and
(19:25):
twenty percent. You know, I think there's some downside left.
I think, uh, you know you you stay the course,
you but I do think you know, there's opportunities that
that uh that that are that appear and.
Speaker 2 (19:39):
A yeah, And I think that's what you know, if
someone were to call, and I think they'll be like, well,
you know, why stay the course if you think the
market's going to go down between ten and twenty percent,
which should be another ten percent.
Speaker 1 (19:48):
Right at the worst, it's already down ten It could
turn around, I'm.
Speaker 2 (19:51):
Saying another ten percent. I think you always have to
invest if you're wrong. Also on both ways, you know,
that's why you don't put too much money in one
single stock, because you could be wrong. Why don't you,
you know, jump in and all out of the market
when you think the market's going to go down another
five ten percent? You know, And that's because you know
you could be wrong. And you know, we wrote an
(20:11):
article this week, you know the call. It was called
the cost of time in the Market and it's a
it's a a chart by JP Morgan Wealth Management and
basically that's kind of what it says.
Speaker 3 (20:21):
You know.
Speaker 2 (20:21):
I know it's annoying probably sometimes for people be like, oh,
stay the course, stay the course, stay the course, but
you know it does work out over time, And if
you know, you look at it was a chart that says,
you know, if you invested ten thousand dollars in the
SMP in January twenty twenty three, by December of January
two thousand and three, so by December of twenty twenty two,
twenty years later, that ten thousand would have been sixty
(20:43):
four thousand and eight forty four. If you missed the
ten best days in the market, that ten thousand would
only be twenty nine thousand, seven oh eight, some more
than less than half of what what you would get
if you just stayed fully in the market the entire time,
and if in even of those ten best days that
you missed were during a bear market, so psychologically the
(21:06):
highest percentage chance that you would do the incorrect thing.
So now I think, I think when you're investing, and
it's all about the correct asset allocation and not over
allocating to you know, to one single stock, and you know,
knowing that most of the time these are these are
blips on the radar of your of your long term
(21:28):
you know objectives.
Speaker 1 (21:30):
Well, stay the course does not mean stay put either, Yeah,
I mean stay the course means work within the parameters
that are conducive to reaching your objectives. You know, it
does not mean you know, so if you're those parameters
are sixty to seventy five percent in the market, stay
within those parameters. If you're and we say it every week,
if you're a little if you're concerned about the market,
(21:51):
work towards the lower rim. If you're bullish on the market,
you know, as the market moves down, work towards the
higher enm. But what you don't want to do is
get out of the market, because which you can't quantify
is human human responses to input, data input, you know,
human responses to emotional input. You just can't. You can't,
you can't quantify that. So with that, and in fact,
(22:14):
the pandemic was probably the classic example of that. The
market went down thirty percent, the fastest decline like that
ever and turned on a dime and went right back
up and finished finished. Yeah. I don't know, you know,
as I know is it recouped that loss pretty quickly
by the August or September, and maybe it did finish up.
But the bottom line is is that you know, let
(22:34):
your longer term objectives dictate your asset allocation. Not your
not your emotions. And so what you can do right
now say, okay, so what what what? What? What do
you see coming out of this market? You know, I
don't like you can't say that the mag seven is
the mag seven with Tesla down fifty percent, you know,
(22:54):
so so that that is that that something changed for Tesla,
like it or not. Elon Musk is polarizing. I think
a lot of his people who owned Tesla's with a
left of center politically, and if they're left of center politically,
they're not too happy with them. Now you also have
(23:15):
a tariff situation. You also have Donald Trump, who basically
was buying a Tesla but a little while back said,
you know, why would anyone want to, you know, electric
car because it doesn't do what a combustion engine does.
And you also have you know, China's BYD you know,
really making inroad. So so Tesla's struggling right now. We
do own some A lot of it has been at
(23:36):
the behest of our client bequest, of our clients bees
to bequest and we go from there. So so but
let's talk a little bit coming out of that break there.
You know, what should people be doing right now? More
than just staying put. Right now, it's ten thirty on
the station depend Upon for News, Whether and Information News
took A ten and one O three one w g Y,
(23:59):
Good morning, and welcome back to the second half hour
of the Capitol District's Money and Investment Programing. Listening to
the Fagan financial Report. Saint Patrick's Day weekend tomorrow, well Saturday,
going over to Schenectady to see Uncle Mike, to Frog Alley,
going Uncle Ben's Kopecky. I wonder when you say has
(24:21):
a bagpiper, usually maybe we'll go over to see that.
Probably that's probably Saint Patrick's Day.
Speaker 2 (24:27):
Yeah, we allthough, Mom and I guess you by the formulation,
got jud and has made some nice pjst's days.
Speaker 1 (24:36):
Yeah. Mom gets all the credit for that too, by
the way.
Speaker 2 (24:39):
The deserve credit. We were just talking about.
Speaker 1 (24:41):
She does not what were we talking about? Something I
did for for your kids?
Speaker 2 (24:45):
And she got the Valentine's Day card.
Speaker 1 (24:47):
I got Judah Valentine's Day card.
Speaker 2 (24:48):
I don't believe you.
Speaker 1 (24:49):
I did. I got in the brows about books and
Marhobeth Delaware, Mom and I picked both of them out.
Speaker 2 (24:54):
What was it?
Speaker 1 (24:56):
It was? There was a game on the front, and
I think stickers maybe for Jude and something else for Esme.
Once said love on it, something said with some animals
on it. I think for one of them. Correct correct,
correct correct, Okay, I know your MIC's not on. I
don't think correct. So I got those and yeah, so
that's what happens too. It was like Mom gets all
(25:16):
the credit.
Speaker 2 (25:17):
She definitely gets the time. I appreciate everything that you
do for Jude and Esme. I'm not trying to give
you a hard time here, but from a materialistic standpoint,
is Mom not the one who usually is putting in
the sweat equity?
Speaker 1 (25:32):
She is sweat equity. She's on Amazon called sweat equity.
You know that's not sweat equity, she's sweat online equity. No,
she does. She does a great job.
Speaker 2 (25:42):
And she she loves getting cards. I know you got
these cards, but you guys are really great at gang.
There's like a pop up penguin one for Christmas.
Speaker 1 (25:50):
An oh yeah, yeah, I didn't do that.
Speaker 2 (25:52):
You're honest usually at least.
Speaker 1 (25:54):
Though you know, most of the time, I don't know
whatever's in there, like if there's gifts in there. But Mom, Mom,
Mom peppers me too. She'll be like, oh what before
the kids even open. What's in there? Poppy?
Speaker 2 (26:06):
You know what I mean?
Speaker 1 (26:07):
Thanks?
Speaker 2 (26:08):
Wants the credit? Did you help with she got you? Guys,
got you to Wooly Mammoth.
Speaker 1 (26:13):
That was in the brows about books?
Speaker 2 (26:16):
Yeah, I thought it was at Michael's.
Speaker 1 (26:18):
Oh maybe it was.
Speaker 4 (26:19):
Yeah, No, I was not in Michaels, not at all,
so anyways, but yeah, okay, So you know, we were
talking a little bit in the before the break as
to what to do now, and it's gonna be a
combination of what we're not gonna do now and and
and then some things that we're going.
Speaker 1 (26:35):
To do now. So what we always what we always do,
unless it's at the specific direction of the client, is
stay within mutually greet upon acid allocation parameters. For example,
a growth and income portfolio is gonna have between fifty
and seventy five percent in the stock market and the
(26:56):
balance and bonds and cash. A growth portfolio is gonna
have at least seventy five percent in the stock market
and the balance and bonds and cash. An income portfolio
is going to have no more than fifty percent in
the stock market and with the balance and bonds and cash.
You know, we'll work within those parameters, but we're not
going to zero. You know, we are not a lot
(27:16):
of a lot of the greatest bull markets come from
sentiment where it is now, you know what I mean.
So we don't you know, we may have like think that, Okay,
the market's going to turn around here. You know, we're
you know, having been in this business forty years and
you airin for now fourteen years or so. You know,
(27:36):
one thing we do know, you know, we've been humbled
many times by this market. So we're not going to
go all in or all out because the market does
not like nothing more than you know, providing you you know,
a big slice of humble pie. And we're not going
to do that. And like I said, it's it's impossible
to quantify human behavior, and we're going to try. So
(28:00):
we're going to stay within those those parameters. Never call
for armageddon, and.
Speaker 2 (28:05):
I think too. At the end of the day, you
have you know, I think you do have some options
elsewhere outside the United States, but you know, all that's
going on politically, you don't like it or not, you know,
I think it's really yeah, you have to remember, you know,
currently the United States still is the most capitalistic country
in the world. You could say other countries are are
(28:27):
changing a little bit, becoming more capitalists. But I think
we still have the most innovative companies in America, and
I think we will continue to do so.
Speaker 1 (28:38):
So outside outside you know, you know, the ten years,
a decade or so after World War Two, we've been
twenty five or thirty percent of the global GDP and
we're there now. Yeah, you know, so we've got a
lot going for us. You know, we've also got, like
I said, sentiment down. A lot of presidents do try
to get the hard stuff out of the way. First.
(28:58):
We have unemployment at four percent, so we've got the
America's got a lot of good things going for it,
you know, and like I said, the market, you know,
dishes a big slice of humble pie. You know. Perhaps
people around President Trump are saying, hey, let's let's start
writing this ship here. From a sentiment perspective and also
(29:19):
from a tariff perspective, let's round these corners. Yeah, uh,
terror tariffs with a scalpel rather than you know, a
machete or a chainsaw would would be a better idea. Yeah,
what do you think about international investing right now, as
far as I come too far too fast, still has
a lot of opportunity.
Speaker 2 (29:38):
I think there's still a lot of opportunity. I think
that you could see some you know, capac spending in Europe.
I think you could see unification of EU leaders. You're
seeing Macron really uh kind of becoming a leader of
that area of the world. I think they could pass
some policies that are maybe a little bit more you know,
corporate friendly. I think they have, you know, the backing
(30:00):
of their citizens and constituents now more than ever at
the behest of the United States. But I do think
you could see some solidarity within the EU that could
you know, you could continue to see companies and write
in policies benefit international so.
Speaker 1 (30:20):
Be good when to play. That went to the Vanguard
European Stock Index Funds and ETF symbol v as in
Victor g As and George k.
Speaker 2 (30:27):
As A Shrov International is fifty six percent greater Europe
and thirty four percent and what's the symbol of that
SCHF thirty four percent Asia and twenty one percent of
that thirty four percent is Japan, which is starting to
get their their economy rolling a little bit too. So
now I think in anything, you know, especially with investing,
(30:48):
diversification as key, you know, sitting down with a client
Friday morning and just talking about that, those themes and that.
You know, I think that having a diverse portfolio and
sacrificing uh maybe some performance for for less volatility is
the way to go in in your in your retirement.
Speaker 1 (31:10):
And you know, I think, and you just want to
nibble at these, you know when the market. I wanna
do it today with the market up, but with then
when the market's down, nibble at them, you know, buy
a little VGK, bought a little by a little s HF,
always again staying within your asset allocation model, you.
Speaker 2 (31:27):
Know, and like again, you know, it's like what some
things you can do in the market. You know, I
got an email talking about you know, is this a
good time to maybe, uh not do my dollar cost
dollar cost averaging into the market this this month? And
it's like, no, this is the month to do it.
Speaker 1 (31:42):
You know.
Speaker 2 (31:42):
So you know, the the good habits that you that
you formed, you know, continue on those, uh, continue to
dollar cost average into the market. And I think I
do think we'll we'll get through this. I think we
could see some volatilty, some choppiness in around here. But
I think, I think think will continue to see the
the innovation that the United States and the United States
(32:05):
stock market has.
Speaker 1 (32:07):
That will drive that'll drive productivity, It drives drives per
capita income higher, you know what I mean? So, uh,
I would agree with that. So so you want to
continue to uh work to keep your portfolio intact. UH,
perhaps rebounce on the other side again with depending upon
(32:27):
what your securities are, and then uh and then then
you know, move forward than there. So so as you're
waiting for it's time to pass, you know, there are
areas that are working as well. Utilities seem to be working,
healthcare seems to be working. In international seems to be working.
(32:49):
But but you also got to be careful because you know,
we were saying earlier today that you know, if you
buy things, you know, sometimes like energy, I don't like
to buy energy when it's working. We like to buy
it when it's not working because that tends to you know,
bottom fishing tends to be you know, contrary and indicator, right,
And I think you see the same thing a little bit.
I think we have like a Johnson and Johnson unless
(33:12):
we go into a you know, a serious recession. Johnson
and Johnson on a year to date basis, you know,
has risen by thirteen point six percent, and we own
Johnson and Johnson for our customers. Another healthcare company, Vertex Pharmaceuticals,
thus far this year is up twenty five percent. On
the flip side, you have like an Amazon thus for
(33:33):
a year to date, you know that stock, you know,
you know again through midday Fridays down eleven point six percent.
You know a company like you know a Meta, which
rose for twenty straight days. You know, now as we
traced all of that game is now flat for the year.
You know, you buy the j T e K an ETF,
you buy the XLK, you buy the SMH, which is
(33:55):
a semiconductor ETF. You know, after these stocks have already
taken on the chin and uh, I don't think it's
going to be across the board. Uh, you know across
the board that all these mag seven are coming back.
But you know, I like, I like, I like Alphabet,
you know, I like you know, I do like Meta.
Speaker 2 (34:14):
I like Amazon a lot like Amazon.
Speaker 1 (34:17):
Amazon's a proxy for the economy. Google. You know, we're
not big fans of Tesla right now. It's not a
political statement. It's basically saying that, you know, uh, musk,
you know, Musk has uh you know, basically you know,
And what Michael Georgan said Republicans by sneakers. So I
think he's kind of made angry, you know.
Speaker 2 (34:36):
As as much as I do think Test is one
of the most innovative companies in the world, it's still
only a car company right now. So maybe it's an
AI company, maybe it's a robotics company, but most of
the revenue right now is from cars. So until uh,
you know, we see a little bit more proof that
their sales aren't just going to continue to decline or
they're going to make money from different areas of the market,
(34:58):
I think it's kind of on investable.
Speaker 1 (35:00):
Right now and nothing right right and I put this
that putting that into the two hard pile pile.
Speaker 2 (35:07):
What did Uncle Chris used to say, what do you
think about this? You would say, I don't, I don't.
I think that's I think that's the key to be
a good investor is, you know, some things are just
too hard to evaluate and just in life. In life,
you don't need an opinion about everything. You'll be talking
to someone who has an opinion about everything.
Speaker 1 (35:23):
And also like if you want to put one, one
or two percent of your portfolio and tesla at this point,
giving yourself room for a little more. I don't have
a problem with that either, you know, but consider it
much more speculative than it was towards the end of
the year. And the other the other thing too, And
I was I don't want to I don't want to
forget this. That could turn the market around in a
heartbeat if the FED cut by a quarter point. Yeah,
(35:44):
you know, the Fed says they're data dependent. It all
depends upon what they're what data their way, you.
Speaker 2 (35:50):
Know, to what extend that's you know, On one hand,
they say they're data dependent, and so if they if
they cut sooner rather than later, that would be that
wouldn't be on data. That would be in my opinion,
based on you know, theories and hypotheses. Yeah, yeah, I
mean I could be on I guess you know, Yeah,
(36:12):
I don't think that's firm enough data. But it'd have
to be on the their thought on the implications of
Trump's policies before we actually know the implication of Trump's policy.
So that's that would be against what they've been saying
they're going to do. But it's possible.
Speaker 1 (36:29):
It's possible. You know. The other thing too is I
think they are just like they were reluctant to raise rates,
they might be a little bit more. They might be
reluctant to cut rates, as you just suggested, because you know,
you had said that's the they would be cutting on
the implication. But if we.
Speaker 2 (36:48):
See yeah, and then what if we see an uptick
in inflation and then stagnation and GDP right, that's stagflation. Stagflation,
So that's I think that's quite a big fear right
now too. If I were the FED with cutting.
Speaker 1 (37:02):
I think they I think I think they take a
wait and see.
Speaker 3 (37:04):
Still Trump's going to be really ticked off about that.
I'm sure you know he probably will be. You know,
that's why.
Speaker 2 (37:10):
They act independently, be interested to see who the next
FED chair is.
Speaker 1 (37:16):
Yeah, I don't know, I don't know who that would be.
Speaker 2 (37:18):
How is done a good job? I think he has
started off not great, you know, with intilly should be
in a little bit too transitory, but I think he
really righted the ship, you know, a soft land landing
essentially I guess, you know, we'll see in the next
few months if we are in a recession, if we're
going to be in a recession based on these policies.
But you know, I think I think Powell did a
(37:39):
pretty good job the past two years having the economy
be where it is.
Speaker 1 (37:45):
I think to certain extent too, it's about it's about
fiscal policy and tariffs really going forward, you know, what
was going to kind of dictate, you know, what Pole does.
And also when you when you take a look at
the tariffs is going to be you know and again,
you know, saying the same thing over and over again.
But this is the dominant, uh dominant type of thing.
Speaker 2 (38:05):
I think the Democrats did a really bad job with
explaining last year how good the economy actually was. Yeah,
and I think you know, everyone said the oh, the
price of eggs, the price of eggs, the price of food.
And I don't think they did a really good job saying, hey,
you want the price of eggs to go down, a
lot of other things would have to happen, which would
be way worse than seven dollars eggs.
Speaker 1 (38:25):
And they blew it on the border, yeah, a big time,
you know, and a lot of just average America, you know,
felt that hey, they had lost touch with really what
their base was, and their base was was the uh
union worker, you know, right, And I think that that
had a lot to do with it. But but right now,
and you know, kind of what we said, I've been
(38:47):
saying the potential range of outcomes is much broader with
the President Trump. But I think we're seeing that right now.
And I also say that, you know, you know, if
you take a shortcut home, you know, without a map,
at some point in time, we're going to be like,
oh my gosh, you ever do that when you're driving around,
you know, you're driving with you know, you check the
gas and as long as you have enough gas, no
begin I think we go this way and then you
(39:08):
go that way like I don't know, I don't know,
and then you come out and oh, thank god, it
was great. But along the way there's a little bit
of doubt there. And I think that's kind of what's
going on right now. So you know, I don't think
it's it's I don't think it's I think it's gonna
be a while. I don't think it's gonna turn on
a dime. We have raised as Aaron mentioned about thirteen
percent cash or so we did. We we bet rebounced.
(39:31):
We stopped that two or three weeks ago before the
last couple of weeks, which I'm happy. We're happy about.
We feel people are in good position. We've we've nibbled
that some stocks over the past an ETFs. So I
think as an investor, I kind of feel pretty well positioned.
New money comes in, we kind of put that to
work judiciously, uh, and then we got to take them there,
(39:56):
and then we just sit back and see the will
the President Trump's policies on tariffs continue as a policy
tool throughout the Trump administration or kind of see how
that develops to then see, you know, what courses of
action we take. But as an investor out there, you know,
look through your portfolio, see what's kind of hanging in there,
and then see what's getting crushed if it's getting crushed.
(40:19):
And we're not a big fan of that right now either.
I think bitcoin merits a look in here down around eighty.
Speaker 3 (40:24):
Two or eighty two thousand, now, yeah, I mean, yeah,
you're kind of well, you know, I think like anything
anything with speculation, you know, you put one or two
percent of your portfolio in it.
Speaker 2 (40:35):
Yeah, if you believe in it.
Speaker 1 (40:36):
Yeah, And then there's the correct thing to do. And
there's also the thing you wish you'd done with with
better hindsight, with more hindsight. Yeah, what do you got
for us over there in the in the in the
in the control seat now?
Speaker 2 (40:47):
And I think, you know, we're talking about consumer sentiment,
and I just have my laptop open, and I think,
I think it's it's just when you're in the midst
of something like this, you know, it's very confusing, and
I think it's easy to run to the sidelines when
when things are confusing and unpredictable. But you know, Howard
Mark said, basically, you know, the safest and potentially the
(41:12):
most profitable thing to do is to buy something when
no one likes it. And I do believe that in
large cap tech, and I do believe that in the
US market. You know, I do think that, you know,
we could see some of these tariff policies obviously impact
a lot of our companies. But I do think that,
you know, with four or five companies making up twenty
(41:35):
thirty percent of our of the S and P five hundred,
I do think those five companies have the power to
stabilize this market and earn money no matter no matter
the political climate and environment. That's not to say if
the consumer starts to get hit, I think you could
see these companies, you know, struggle. But I do think
(41:59):
that these companies have a wide enough net enough diversification. Now,
you know, if you look at the top ten companies
back in the nineties eighties, you know, I have a
chart here. You know, you're looking at Exon Mobile, You're
looking at you know, ge companies that are extremely impacted
by the consumer and you and very undiverse. Let's say
(42:23):
now you're seeing you know, Amazon itself, have you know,
three or four segments that are in ten billion dollars
a year at least more than that, even way more
than that. So you know, I think that, you know,
as long as the consumer stays in good shape, I
think that these larger companies will be an overall buy. Yeah,
(42:43):
you got them right here. You know IBM in nineteen
eighty IBM, IBM, ge AT and T General Electric, you know,
DuPont Mobile, Exon, Mirk, Bristol Myers. You know, you know,
thirty forty years ago, they're revenue pipelines were thin you
know now you're seeing Apple, Microsoft, Amazon, Google, Meta, Berkshire,
(43:07):
the largest companies of twenty twenty, you know, be very
diverse as opposed to other companies, way more ways to
to make uh, to make some revenue.
Speaker 1 (43:19):
Well, I think when you talk about you know, some
of those companies, you're talking about lines of business for
retail the individual consumer and lines of business for technology
to enhance their productivity. Yeah, and so technology is just
become that much more pervasive in our society that that
(43:40):
they made. Okay, and there and there's that, that whole,
that whole mag seven, that whole you know is Tesla
about here, is Google about here. But you know, to
broaden it out for our audience, we do think you know,
J T e K is a good investment. But but
you buy these, you know, you buy these on week
and says you don't you know, you don't go in today,
(44:02):
Like right now Bristol Myers is down a buck, you know,
steping in by a little bit. You know, a Java
JP Morgan Active Value Fund is run up a long way.
You know, don't buy that now, wait for that way
for way for those to get out of favor. So
continue to work on what you're doing, and uh, you
have a plan, and make sure your asset allocation model
(44:23):
conforms to your plan, conforms to your objectives. Don't let
politics kind of get involved with what your what you
don't don't respond to the political current political environment too much.
You know, if if you believe in what President Trump
is doing, skew that way. If you don't believe in
(44:43):
what he's doing, skew the other way. But don't kind
of don't don't don't count him out and don't go
all in. And I think that I think that just
makes a lot of sense. Work incrementally in your portfolio
and that'll work well over time.
Speaker 2 (44:58):
Yeah, you know, I I actually have you know, just
like my work journalote and you know Howard Marks he's from,
you know, oak Tree Capital Management. He specializes in more
distressed securities worldwide, and you know, we don't do anything
like that. But he comes out with a memo he
calls it, and user in a few books. And I
do love a lot of the things that he says.
And you know, he have his quotes up in front
of me that I like. And you know, you can't
(45:19):
predict a lot of these things, but you can prepare
and that's kind of what we talk about. Is you know,
if a client calls and they're like, you know, I
think the market's going to you know, let's say, even
if you think there's a twenty thirty percent pullback, you know,
you don't go to all cash, but you do prepare
your portfolio to withstand that and get out to your
side because you will be at all time highs again. Right,
So you know, if you are in retirement, you just
(45:41):
make sure that and you need distributions from your account,
you just make sure that. Hey, you know, I can
go through two three four years of distributions from safer assets,
money markets and fixed income to let this other side
of my portfolio, you know, you know take comes back
and rise over time. You know, if if you're if
you're supposed to be seventy five percent and fifty to
(46:03):
seventy five, go back to fifty. You know, I think
there's a lot of things that you can do to uh,
you know, ease your mind mentally to help get you
through this, right, to get you through the harder periods.
Speaker 1 (46:12):
And even so he what did he say?
Speaker 2 (46:14):
Is that a quote you can't predict, you can prepare.
Speaker 1 (46:16):
So you know, managing hundreds of millions of dollars billions
of dollars. Most likely anyone who manages money well is
going to say the same thing. And it's not just
kind of what we talked about earlier asset al cachmeils.
Speaker 2 (46:30):
Yeah.
Speaker 1 (46:30):
But you know, so when you when you when you
hear from somebody who says, well, why do we have
anything in the market? Let's going on? Just keep that
in mind. If you're somebody with that, that's more an
emotional response than it is an intellectual response to the
situation that that you find yourself.
Speaker 2 (46:47):
And you know, you would love these quotes, but the
book is you're gonna share what the book is called.
But this is a good one. The correctness of a
decision can't be judged from the outcome. I was going
to say that all the time, you know, just because
you to this, I think he listens to you. Just
because you drove, you know, ninety miles going to Montreal
doesn't mean it was the right thing. Just because you
(47:07):
had to get seventy five percent of your money and
palanteer doesn't mean it was the right thing to do,
you know. So I think you always have to do
the right thing. Right, the right thing with the available
knowledge that you have and history as an indicator, right,
you know, Beau, what if it doesn't things tend to
be cyclical and I think that's true.
Speaker 1 (47:24):
What if it doesn't go right, what happens to me? Yeah?
Speaker 2 (47:27):
So you know, we do a lot of money. Color
analysis is for people, and that will show people, Hey,
this is what your portfolio looks like. Now, this is
what would have happened in two thousand and eight to
your portfolio. This would have happened in you know, during
COVID to your portfolio in nineteen eighty seven, you know,
on Black Monday. So you know, if you're not comfortable
with that draw down your portfolio, then you know, maybe
(47:48):
it's a little bit time to adjust it to where
you can say, Okay, you know I would be comfortable
losing that And this is what happens all right in
nineteen eighty seven. But look at look look where it
was in nineteen ninety five.
Speaker 1 (47:58):
But I'd tell you more go of markets past, ghosts
of markets past run more portfolios than anything else. Greed,
you know this, and that there are other things, but
fighting the last battle is going to ruin your portfolio
more than anything else is that that planning for armageddon
(48:19):
will is going to do you in. And I think
that's what you can do right now, So have a plan,
stick with it. We hope we gave you some ideas
as to what you can do to stick with it.
We gave you some names, we individual securities, we gave
you some ETFs. So there's a lot of different things
you can do if you need to get a hold
of us five one, eight, two seven four. We have
a website. It's faganasset dot com. You can inquire through there,
(48:45):
check us out on Facebook, but otherwise, have a great day.
He too,
Good morning, and welcome to the Capital District's Money and
an Investment program. You're listening to the Fagan Financial Report.
I'm Dennis Fagan, sitting here with my son Aaron, as
we do every Sunday right here in News Talk eight
ten and one oh three one w G y. Uh.
You know, actually we just goes to tape for about
Friday and around eleven o'clock, so we got most of
the all the all the news in pretty much for
(00:22):
the market. Uh. Right now, the Dow is up a bit,
a couple hundred points. It's been a rough week for
the market. Yeah, nonetheless over the past you know, five
trading days to have on one point six percent. And
I was ask you how you're doing first and foremost,
how are you into uh the market?
Speaker 2 (00:39):
You know, how are you doing?
Speaker 1 (00:40):
I'm doing good. I can't complain it. So the eclipse
the other night.
Speaker 2 (00:44):
Yeah, mister path to totality.
Speaker 1 (00:46):
Path to totality, that's what Doug who works with us,
and asking me in regarding the clips. Of course I am,
of course I am.
Speaker 2 (00:56):
And you've in your in the last five years or so,
you've really kind of embraced space and.
Speaker 1 (01:02):
I'm a huge, huge, as don't know any I don't
know anything about it.
Speaker 2 (01:08):
It's a hobby, you know.
Speaker 1 (01:10):
Yeah, well, actually I feel good about it too. I
feel like, you know, some people get weirded out by
the size of the universe, and this I don't. I
don't do you.
Speaker 2 (01:22):
No, I don't. I find it more comforting than anything. Yeah,
you know, you know what's you know, your pressures in life.
Maybe they really aren't as important as and they're not
as space they take up in your head, right, you know,
this is important stuff.
Speaker 1 (01:38):
This is important stuff. I often say if you look
at look at your life and like a stool and
you have you know, your family, your health, your financial situation,
and your spiritual nature. You know, and uh, you know
this this is one of the foremost important things in
your life. And and let's let's hit the economic data
that came out this week. How that influenced the market?
(01:59):
If it did, you know, as I look at it,
as I look at this week, you know, the economic
data wasn't that important. I think the tariff policies are important.
You know, foreign policy is important. Responses by other countries
that kind of trumped, for lack of a better word,
(02:19):
the direction of the consumer and producer personities that came out,
and I was surprised because they both were table will
get into it in a second and so, but they didn't.
That did not dictate with the market. I also think
what was a big thing for the market this past
week was the continuing Resolution and it hasn't gone to
vote yet, it'll go vote this afternoon, but I think
(02:41):
there was there was a specter of a shutdown because
of the budget, and I think that that also hit
the market this week. So I'm not going to call
it extraneous data, but certainly not data that three or
four months ago you would have thought, okay, PPI, CPI,
(03:01):
that's what's going to drive the market.
Speaker 2 (03:03):
Yeah, all right, we're going to start cutting rates or yeah.
Speaker 1 (03:05):
I think I took a back seat. But anyways, why
don't we get into the economic data and get get
the ball rolling. And we also have a couple earnings
this week, so yeah, just this.
Speaker 2 (03:14):
Week, even you know, minutes ago, half an hour ago
or so, consumer sentiment came out University of Michigan. The
the more like you know, we're in this country, I
guess is involved with social media, the less the less
importance I really put on consumer sentiment because it's tied
(03:36):
so closely to politics. But it did slid another eleven
percent this month, with declines seen consistently across all groups
by age, education, income, wealth, political affiliation, geographic regions. You know,
it has fallen now for three consecutive months, and it's
currently down twenty two percent from December twenty twenty four highs.
I mean, I think it's it's hard pressed not to
(03:57):
believe that that is fueled by policies. He even came out,
I think this week and said, hey, you know, these
these this is going to happen. These things are going
to happen. There's no coming back from them now. And
I think now we're seeing you know, even with clients
people being like, okay, you know this could be inflationary
for the time being, which you know would definitely drag
(04:20):
consumer sentiment down.
Speaker 1 (04:25):
Yeah.
Speaker 2 (04:25):
I mean, but I don't know, No, you can you
go ahead.
Speaker 1 (04:28):
No, I think that you know, it's all relative, you
know what I mean, sixty degrees out today, it's supposed
to be sixty something on you know, this is Fridays
supposed to be sixty something on Sunday. It's all relative,
and I think the numbers that I'm looking looking at
and what's impacting the market. First of all, the market
hates uncertainty. We had consumed. We had a small business
(04:49):
survey released right after the election, and businesses were very optimistic,
some of the most optimistic they've ever been. Because of deregulation.
As as the tariff issue has has dragged on, I
think businesses are beginning to wonder, uh and and that
now it's reflected in the survey of consumers. Consumers are
(05:12):
wondering is this going to be something that's going to
be settled in the during the first half of the
first half of this year. Is is it going to
be a policy of the administration to use tariffs as
a measure? Uh? So? Is this going to continue through
throughout his entire administration presidency? You know? You know what?
(05:33):
What what's the whole thing with Canada? Is that ever
going to be reconciled? You know? So, I think that's
what's impacting the market right now. And uh and so
I think I think we're just taking some of the
the fraud out of the market evaluation for us and
pulling it back and and and so and and so
so what I look at and if I look at
the survey consumer sentiment, if I look at the small
(05:54):
business survey, you know, look at CEO surveys, they've come
down quite a bit. Sentiment has come down quite a bit.
You know, So that's so you know, you know, I
think it does mean. It just means that, you know,
maybe valuations come down. They have come down, you know,
SMP's down ten percent over the past month or something.
Speaker 2 (06:14):
And you know, and you hear a lot of people say,
you know, it's just Trump, it's just rhetoric, it's just rhetoric.
But you know, my fear in I guess inward large
cap tech spending industrials, things like that, is, you know,
all this rhetoric reduces the chance of these companies to
to spend on capital expenditures. You know, why would someone
(06:36):
put a large plant somewhere where they don't even know
where the rules and regulations will be six months from now.
So I think you're seeing a lot from you know,
business leaders being like, you know, we're kind of going
to sit on the sidelines until we actually see what
happens here.
Speaker 1 (06:51):
Right, And the longer this goes on, right, less predictable
look predictable predictable. It becomes that capital expenditure is gonna
be like, well, I don't know. We so President Trump,
I think he's got to kind of have a plan
stick to it. And you could say he is, but
that's not being perceived by Wall Street and Main Street.
The fact that if you look at just the tariffs,
(07:12):
implement tariffs, roll them back, implement them, rolling back, now
extend the date. So it's got to come to a
head before the market can can move substantially forward. And
if it doesn't come to a head, if it is
part of the administration, I think you have a chopping
market until, you know, until something in the nature changes.
Speaker 2 (07:27):
Yeah, you know, I do think eventually we'll see I
guess a storyline, let's say, of the American stock market
and companies in the in the American economy being much
more resilient to a lot of these policies. Then we're
giving them credit for, you know, especially large cap tech.
You know, I think large cap tech is very very
(07:49):
fairly valued in here. You know, I think we're going
to see in the next couple earnings quarters, if we
don't see a declining you know, consumer that hey, these
companies can still do well in all types of environments.
They're they're very diverse. Uh, they're very innovative, and I
think that could be a story that we see to
play out. You know, you have Apple with you know,
(08:10):
hundreds of billion dollars in cash. You know, you have
even Microsoft, Amazon, not as much Amazon, but you know Microsoft,
all these large cap tech companies with tons of cash
that I think you'll eventually start to see, Hey, you know,
they they can you know, withstand a lot of different
types of political environments.
Speaker 1 (08:27):
And you have been saying that, and I think that
makes sense that there may be a divergence between the
political environment and and perhaps the economic environment and in
some of the and the fame and fortune these these companies.
Let's take a look at the data that did come
out this week. You had the on Tuesday, the job opening.
(08:49):
So one of the things Americans are concerned about is
the labor market. The Grier of Labor Statistics reported their
job openings in Labor Turnover Summary the Jolts Report and
seven point seven four million job openings down five hundred
twenty three thousand from eight point twenty six three million
one month prior. Job openings have fallen from a high
of twelve point one eighty two million a couple of
(09:12):
years ago. Total hires up nineteen thousand, job separations up
one hundred and seventy thousand, quits up one hundred and
seventy thousand. So if you look at job openings compared
to total hires, there's still a gap of two point three
four seven million between job openings and those available to work.
So the labor market is still pretty strong, and that
(09:35):
bodes well for the economy. And I think that kind
of what you were saying earlier, Aaron with with with
you know, social media consumer sentiment may not be as
important as it was and and I, you know, may
not agree totally, but I think the jobs market Trump's
you know, will will will take precedence over a lot
(09:55):
of other pieces of data that come out because eventually,
you know, if you have have a job, if you
have a good paying job, you are going to end
up spending money and be Okay, Wednesday, what do we
have to come out on Wednesday?
Speaker 2 (10:10):
Wednesday CPI rose point two percent. And I think that's
where you were saying that, you know, you're seeing a
little nervousness in the market, you know, two three months ago,
this would have been taken as extremely good news in
my opinion. It was by two point two percent, fallen
from a year over year high nine point one percent
during June twenty twenty two. And I think it was
below expectations of point three percent because the shelter rose
(10:34):
by point three percent excluding food and energy. Course, CPIS
rose point two percent after rising four percent during January.
So like, get my head too, is you know you're
you know, this is obviously all we would think, this
was all good news with CPI you know now at
three point one percent year over year, but the market
didn't take it as so, which I would call a
(10:58):
little bit concerning.
Speaker 1 (11:00):
Market's concerned about tariffs. Yeah, and I think, you know,
we're gonna get out. We're gonna get on every week
and for quite some time and talk about similar about
similar things, you know, and every week's gonna have a
little bit of a twist to it. You know, maybe
we'll get some positive news this week out of out
of the Ukraine.
Speaker 2 (11:18):
And I think now more than ever is uh, you know,
excuse I'm sitting near my phone emails in the computer
on the weekend, waiting for something to come out to
jolt the market up or down on Monday. So you know,
there's no safe space really right now right from the news.
Speaker 1 (11:37):
No, no, there's not, and I don't think there's going
to be. But but you're right, and last week was
it was a quiet news week. Let's see what else
we have come out? Initial claims roun employment benefits. Yeah, again,
attesting to the strength of the labor market. Down around
around two hundred and twenty thousand. I got up to
two forty. Most of the time you see initial clams
from umployment benefits. Above two fifty, you start to worry
(11:59):
about the labor market. We haven't gotten there ever, I
don't think in the last year or two. So we
we are still well below that number again at two
twenty and finally on Thursday. Prices at the wholesale level,
as measured by the Producer Price Index WAS were unchanged
during February. They are up six tents of a percent
(12:19):
in January. Over the past year, the PPI has fallen
has risen three point two percent, down from a peak
of eleven point seven percent. During March of twenty three,
energy prices dropped, Finish food prices jumped. Something to be
something to keep an eye on a core PPI which
excludes food and energy up two tens of a percent.
Prices for intermediate goods, you know, pipeline goods up five
(12:40):
tents of a percent. They're one percent in December. So
you have economic data that came out pretty much in
line with a little better than consensus. The market did
not rally, and like you were saying, there and that's
that's was was an issue a couple of things. Well,
the consumer survey we just went through, yet we out.
Speaker 2 (13:00):
I think, I think, what is you know, happening in
the market this week as well? Is Monday Delta Head
poor earnings on top of Booking had poor earnings last
last week, last week, yeah, Brooking dot Com. So I
think although it's only two companies, you know, two small companies,
relative to you know, the overall economy, I think it's
a little bit of a signal that maybe the consumer
(13:22):
is slowing down a little bit. So, you know, I
think at the beginning of the week we saw some
pullbacks based on oh, you know what if we do
have a slowing consumer with a stock market that has
done just so good over the past ten to fifteen years,
you know, I think a lot of these policies have
have affected the stock market, let's say, but you know,
(13:44):
I think they're affecting the stock market a little bit
more than normal because we were coming from all time
highs as well. You know, I know, usually when you're
investing in the stock market, you're near or at around
at or around all time highs. But you know, things
have been fairly valued. There was a lot of artificial
intelligence talk. So I think I think, you know, with
the unknowns and artificial intelligence and the revenue would bring,
you know, coupled with the unknowns of this you know
(14:05):
political uh, you know, this administration, the political climate that
you know. I think when you're investing, you're investing with probabilities,
with risk and reward, and you know the risk is
there right now, uh, and you can't really see, you know,
what the reward will be, I guess in six to
twelve months. And now that you have an alternative four percent,
and I think people are taking some risk off the
(14:27):
table and raising cash. And we are doing the same thing.
Speaker 1 (14:32):
We have done this stand you kind of finished it
a little while back, you know.
Speaker 2 (14:35):
And so now you know, three weeks ago, so even
right now we're sitting at about you know, thirteen and
a half percent cash, and a lot of that cash
is uh, you know, we're waiting to see where to
put it. And a lot of times, you know, when
we're investing, we have a watch list of five ten
stocks that you know, we're following pretty closely. So you know,
(14:56):
when we do sell something, a lot of times we
hop right back in. But and we're just not doing
it as fast as we normally would. When you get
on the sideline with four four and a half percent.
Speaker 1 (15:05):
Right, that degree of uncertainty, yeah, and you know, and
if you think about it too, for the listeners out there,
you know, like Johnson and Johnson's down on Friday, the XLV,
which is the ETF that deals with healthcare, you know,
up point four percent, where the SPY is up one
and a half percent. So what you've seen alternating days
(15:27):
almost is when the market's down, consumer on durables and
healthcare does well. When the market's up, consumer on durables
and healthcare do poorly. So investors are kaim kind of confused,
and they're kind of rotating back and forth. There's some
belief out there, and I subscribe to a bit that
there's been you know, hedge funds that have had to
(15:49):
do a lot of repositioning over the past two or
three weeks, and then that's kind of pulled the market down.
But this has been, you know, a pretty quick drawdown.
In fact, if you look back to go ahead.
Speaker 2 (15:59):
Now, yeah, it has has been a very quick jart
out and NASZAK fell eight point two percent from February
eighteenth to March fourth, for its largest two week drops
since since you know, twenty twenty four. Right, well, but
also you know, you saw the S and P trailing
twelve month go from twenty seven point seven to twenty
(16:20):
four point seven. You know, it's still above its long
term average of twenty point two. But you know, I
think that's pretty fair. And how much more of a
service based economy we are as opposed to you know,
twenty years ago.
Speaker 1 (16:34):
If you look at if you look at just the
last month or so so from February nineteenth, which ironically
is about the same day in twenty twenty when the
stock market began to tumble due to COVID. But from
February nineteenth through this past Thursday, March thirteenth, the S
and P five point it was down ten percent, the
(16:55):
Nazdak down thirteen point six percent, the US total market
down ten point foury percent, the Russell two thousand, which
is the second, third, third thousand largest American stocks down
twelve point five seven percent. So you had, if you
go back to nineteen twenty nine, that's the seventh fastest
correction you know, since then, so three of the seven
(17:17):
fastest have twenty eighteen, twenty twenty and now under President Trump.
So the level of volatility has you know, increased during
his presidency to a certain extent, some may say, and
we again believe it to a certain extent that that
has to do which is the faster pace of the
market in the news being released, but others has to
(17:37):
do with his again a wider range of potential outcomes.
So you have that, you have a couple of the
things that that also would go along with that, and
that is that, you know, should the market, you know, rebound,
(17:59):
you know, should the market go into a bear market,
that would be quite unusual. And the reason is very
rarely does the market have three bear markets during the
course of a space of five years. You know, according
to a report published by Fred Embert, if the market
did move into a bear market again it's already down
(18:20):
ten That would be three bear markets in five years,
something we've never seen before. The previous closest three bears
was six point nine years between nineteen sixty six and
nineteen seventy three. You know, a period of you know,
social unrest, period of stagflation, and it's not something we've
seen in quite some time. So there's a good chance
(18:40):
that the market will will recover. On average, the markets
after it goes down ten percent, it returns an average
of three point one percent one month later, I guess
the question that I would have to you, and then
three and six months and twelve months later it does
even a lot better. So if this is a correction,
you the market will tend to rebound and rebound strong
(19:03):
and get back to where it was within you know,
two or three months. I don't, you know, my opinion
is and again were we have to have an opinion
because that's how we manage money, you know, in accordance
with those opinions and research that we do. In my opinion,
we are going to fall between you know, ten and
(19:25):
twenty percent. You know, I think there's some downside left.
I think, uh, you know you you stay the course,
you but I do think you know, there's opportunities that
that uh that that are that appear and.
Speaker 2 (19:39):
A yeah, And I think that's what you know, if
someone were to call, and I think they'll be like, well,
you know, why stay the course if you think the
market's going to go down between ten and twenty percent,
which should be another ten percent.
Speaker 1 (19:48):
Right at the worst, it's already down ten It could
turn around, I'm.
Speaker 2 (19:51):
Saying another ten percent. I think you always have to
invest if you're wrong. Also on both ways, you know,
that's why you don't put too much money in one
single stock, because you could be wrong. Why don't you,
you know, jump in and all out of the market
when you think the market's going to go down another
five ten percent? You know, And that's because you know
you could be wrong. And you know, we wrote an
(20:11):
article this week, you know the call. It was called
the cost of time in the Market and it's a
it's a a chart by JP Morgan Wealth Management and
basically that's kind of what it says.
Speaker 3 (20:21):
You know.
Speaker 2 (20:21):
I know it's annoying probably sometimes for people be like, oh,
stay the course, stay the course, stay the course, but
you know it does work out over time, And if
you know, you look at it was a chart that says,
you know, if you invested ten thousand dollars in the
SMP in January twenty twenty three, by December of January
two thousand and three, so by December of twenty twenty two,
twenty years later, that ten thousand would have been sixty
(20:43):
four thousand and eight forty four. If you missed the
ten best days in the market, that ten thousand would
only be twenty nine thousand, seven oh eight, some more
than less than half of what what you would get
if you just stayed fully in the market the entire time,
and if in even of those ten best days that
you missed were during a bear market, so psychologically the
(21:06):
highest percentage chance that you would do the incorrect thing.
So now I think, I think when you're investing, and
it's all about the correct asset allocation and not over
allocating to you know, to one single stock, and you know,
knowing that most of the time these are these are
blips on the radar of your of your long term
(21:28):
you know objectives.
Speaker 1 (21:30):
Well, stay the course does not mean stay put either, Yeah,
I mean stay the course means work within the parameters
that are conducive to reaching your objectives. You know, it
does not mean you know, so if you're those parameters
are sixty to seventy five percent in the market, stay
within those parameters. If you're and we say it every week,
if you're a little if you're concerned about the market,
(21:51):
work towards the lower rim. If you're bullish on the market,
you know, as the market moves down, work towards the
higher enm. But what you don't want to do is
get out of the market, because which you can't quantify
is human human responses to input, data input, you know,
human responses to emotional input. You just can't. You can't,
you can't quantify that. So with that, and in fact,
(22:14):
the pandemic was probably the classic example of that. The
market went down thirty percent, the fastest decline like that
ever and turned on a dime and went right back
up and finished finished. Yeah. I don't know, you know,
as I know is it recouped that loss pretty quickly
by the August or September, and maybe it did finish up.
But the bottom line is is that you know, let
(22:34):
your longer term objectives dictate your asset allocation. Not your
not your emotions. And so what you can do right
now say, okay, so what what what? What? What do
you see coming out of this market? You know, I
don't like you can't say that the mag seven is
the mag seven with Tesla down fifty percent, you know,
(22:54):
so so that that is that that something changed for Tesla,
like it or not. Elon Musk is polarizing. I think
a lot of his people who owned Tesla's with a
left of center politically, and if they're left of center politically,
they're not too happy with them. Now you also have
(23:15):
a tariff situation. You also have Donald Trump, who basically
was buying a Tesla but a little while back said,
you know, why would anyone want to, you know, electric
car because it doesn't do what a combustion engine does.
And you also have you know, China's BYD you know,
really making inroad. So so Tesla's struggling right now. We
do own some A lot of it has been at
(23:36):
the behest of our client bequest, of our clients bees
to bequest and we go from there. So so but
let's talk a little bit coming out of that break there.
You know, what should people be doing right now? More
than just staying put. Right now, it's ten thirty on
the station depend Upon for News, Whether and Information News
took A ten and one O three one w g Y,
(23:59):
Good morning, and welcome back to the second half hour
of the Capitol District's Money and Investment Programing. Listening to
the Fagan financial Report. Saint Patrick's Day weekend tomorrow, well Saturday,
going over to Schenectady to see Uncle Mike, to Frog Alley,
going Uncle Ben's Kopecky. I wonder when you say has
(24:21):
a bagpiper, usually maybe we'll go over to see that.
Probably that's probably Saint Patrick's Day.
Speaker 2 (24:27):
Yeah, we allthough, Mom and I guess you by the formulation,
got jud and has made some nice pjst's days.
Speaker 1 (24:36):
Yeah. Mom gets all the credit for that too, by
the way.
Speaker 2 (24:39):
The deserve credit. We were just talking about.
Speaker 1 (24:41):
She does not what were we talking about? Something I
did for for your kids?
Speaker 2 (24:45):
And she got the Valentine's Day card.
Speaker 1 (24:47):
I got Judah Valentine's Day card.
Speaker 2 (24:48):
I don't believe you.
Speaker 1 (24:49):
I did. I got in the brows about books and
Marhobeth Delaware, Mom and I picked both of them out.
Speaker 2 (24:54):
What was it?
Speaker 1 (24:56):
It was? There was a game on the front, and
I think stickers maybe for Jude and something else for Esme.
Once said love on it, something said with some animals
on it. I think for one of them. Correct correct,
correct correct, Okay, I know your MIC's not on. I
don't think correct. So I got those and yeah, so
that's what happens too. It was like Mom gets all
(25:16):
the credit.
Speaker 2 (25:17):
She definitely gets the time. I appreciate everything that you
do for Jude and Esme. I'm not trying to give
you a hard time here, but from a materialistic standpoint,
is Mom not the one who usually is putting in
the sweat equity?
Speaker 1 (25:32):
She is sweat equity. She's on Amazon called sweat equity.
You know that's not sweat equity, she's sweat online equity. No,
she does. She does a great job.
Speaker 2 (25:42):
And she she loves getting cards. I know you got
these cards, but you guys are really great at gang.
There's like a pop up penguin one for Christmas.
Speaker 1 (25:50):
An oh yeah, yeah, I didn't do that.
Speaker 2 (25:52):
You're honest usually at least.
Speaker 1 (25:54):
Though you know, most of the time, I don't know
whatever's in there, like if there's gifts in there. But Mom, Mom,
Mom peppers me too. She'll be like, oh what before
the kids even open. What's in there? Poppy?
Speaker 2 (26:06):
You know what I mean?
Speaker 1 (26:07):
Thanks?
Speaker 2 (26:08):
Wants the credit? Did you help with she got you? Guys,
got you to Wooly Mammoth.
Speaker 1 (26:13):
That was in the brows about books?
Speaker 2 (26:16):
Yeah, I thought it was at Michael's.
Speaker 1 (26:18):
Oh maybe it was.
Speaker 4 (26:19):
Yeah, No, I was not in Michaels, not at all,
so anyways, but yeah, okay, So you know, we were
talking a little bit in the before the break as
to what to do now, and it's gonna be a
combination of what we're not gonna do now and and
and then some things that we're going.
Speaker 1 (26:35):
To do now. So what we always what we always do,
unless it's at the specific direction of the client, is
stay within mutually greet upon acid allocation parameters. For example,
a growth and income portfolio is gonna have between fifty
and seventy five percent in the stock market and the
(26:56):
balance and bonds and cash. A growth portfolio is gonna
have at least seventy five percent in the stock market
and the balance and bonds and cash. An income portfolio
is going to have no more than fifty percent in
the stock market and with the balance and bonds and cash.
You know, we'll work within those parameters, but we're not
going to zero. You know, we are not a lot
(27:16):
of a lot of the greatest bull markets come from
sentiment where it is now, you know what I mean.
So we don't you know, we may have like think that, Okay,
the market's going to turn around here. You know, we're
you know, having been in this business forty years and
you airin for now fourteen years or so. You know,
(27:36):
one thing we do know, you know, we've been humbled
many times by this market. So we're not going to
go all in or all out because the market does
not like nothing more than you know, providing you you know,
a big slice of humble pie. And we're not going
to do that. And like I said, it's it's impossible
to quantify human behavior, and we're going to try. So
(28:00):
we're going to stay within those those parameters. Never call
for armageddon, and.
Speaker 2 (28:05):
I think too. At the end of the day, you
have you know, I think you do have some options
elsewhere outside the United States, but you know, all that's
going on politically, you don't like it or not, you know,
I think it's really yeah, you have to remember, you know,
currently the United States still is the most capitalistic country
in the world. You could say other countries are are
(28:27):
changing a little bit, becoming more capitalists. But I think
we still have the most innovative companies in America, and
I think we will continue to do so.
Speaker 1 (28:38):
So outside outside you know, you know, the ten years,
a decade or so after World War Two, we've been
twenty five or thirty percent of the global GDP and
we're there now. Yeah, you know, so we've got a
lot going for us. You know, we've also got, like
I said, sentiment down. A lot of presidents do try
to get the hard stuff out of the way. First.
(28:58):
We have unemployment at four percent, so we've got the
America's got a lot of good things going for it,
you know, and like I said, the market, you know,
dishes a big slice of humble pie. You know. Perhaps
people around President Trump are saying, hey, let's let's start
writing this ship here. From a sentiment perspective and also
(29:19):
from a tariff perspective, let's round these corners. Yeah, uh,
terror tariffs with a scalpel rather than you know, a
machete or a chainsaw would would be a better idea. Yeah,
what do you think about international investing right now, as
far as I come too far too fast, still has
a lot of opportunity.
Speaker 2 (29:38):
I think there's still a lot of opportunity. I think
that you could see some you know, capac spending in Europe.
I think you could see unification of EU leaders. You're
seeing Macron really uh kind of becoming a leader of
that area of the world. I think they could pass
some policies that are maybe a little bit more you know,
corporate friendly. I think they have, you know, the backing
(30:00):
of their citizens and constituents now more than ever at
the behest of the United States. But I do think
you could see some solidarity within the EU that could
you know, you could continue to see companies and write
in policies benefit international so.
Speaker 1 (30:20):
Be good when to play. That went to the Vanguard
European Stock Index Funds and ETF symbol v as in
Victor g As and George k.
Speaker 2 (30:27):
As A Shrov International is fifty six percent greater Europe
and thirty four percent and what's the symbol of that
SCHF thirty four percent Asia and twenty one percent of
that thirty four percent is Japan, which is starting to
get their their economy rolling a little bit too. So
now I think in anything, you know, especially with investing,
(30:48):
diversification as key, you know, sitting down with a client
Friday morning and just talking about that, those themes and that.
You know, I think that having a diverse portfolio and
sacrificing uh maybe some performance for for less volatility is
the way to go in in your in your retirement.
Speaker 1 (31:10):
And you know, I think, and you just want to
nibble at these, you know when the market. I wanna
do it today with the market up, but with then
when the market's down, nibble at them, you know, buy
a little VGK, bought a little by a little s HF,
always again staying within your asset allocation model, you.
Speaker 2 (31:27):
Know, and like again, you know, it's like what some
things you can do in the market. You know, I
got an email talking about you know, is this a
good time to maybe, uh not do my dollar cost
dollar cost averaging into the market this this month? And
it's like, no, this is the month to do it.
Speaker 1 (31:42):
You know.
Speaker 2 (31:42):
So you know, the the good habits that you that
you formed, you know, continue on those, uh, continue to
dollar cost average into the market. And I think I
do think we'll we'll get through this. I think we
could see some volatilty, some choppiness in around here. But
I think, I think think will continue to see the
the innovation that the United States and the United States
(32:05):
stock market has.
Speaker 1 (32:07):
That will drive that'll drive productivity, It drives drives per
capita income higher, you know what I mean? So, uh,
I would agree with that. So so you want to
continue to uh work to keep your portfolio intact. UH,
perhaps rebounce on the other side again with depending upon
(32:27):
what your securities are, and then uh and then then
you know, move forward than there. So so as you're
waiting for it's time to pass, you know, there are
areas that are working as well. Utilities seem to be working,
healthcare seems to be working. In international seems to be working.
(32:49):
But but you also got to be careful because you know,
we were saying earlier today that you know, if you
buy things, you know, sometimes like energy, I don't like
to buy energy when it's working. We like to buy
it when it's not working because that tends to you know,
bottom fishing tends to be you know, contrary and indicator, right,
And I think you see the same thing a little bit.
I think we have like a Johnson and Johnson unless
(33:12):
we go into a you know, a serious recession. Johnson
and Johnson on a year to date basis, you know,
has risen by thirteen point six percent, and we own
Johnson and Johnson for our customers. Another healthcare company, Vertex Pharmaceuticals,
thus far this year is up twenty five percent. On
the flip side, you have like an Amazon thus for
(33:33):
a year to date, you know that stock, you know,
you know again through midday Fridays down eleven point six percent.
You know a company like you know a Meta, which
rose for twenty straight days. You know, now as we
traced all of that game is now flat for the year.
You know, you buy the j T e K an ETF,
you buy the XLK, you buy the SMH, which is
(33:55):
a semiconductor ETF. You know, after these stocks have already
taken on the chin and uh, I don't think it's
going to be across the board. Uh, you know across
the board that all these mag seven are coming back.
But you know, I like, I like, I like Alphabet,
you know, I like you know, I do like Meta.
Speaker 2 (34:14):
I like Amazon a lot like Amazon.
Speaker 1 (34:17):
Amazon's a proxy for the economy. Google. You know, we're
not big fans of Tesla right now. It's not a
political statement. It's basically saying that, you know, uh, musk,
you know, Musk has uh you know, basically you know,
And what Michael Georgan said Republicans by sneakers. So I
think he's kind of made angry, you know.
Speaker 2 (34:36):
As as much as I do think Test is one
of the most innovative companies in the world, it's still
only a car company right now. So maybe it's an
AI company, maybe it's a robotics company, but most of
the revenue right now is from cars. So until uh,
you know, we see a little bit more proof that
their sales aren't just going to continue to decline or
they're going to make money from different areas of the market,
(34:58):
I think it's kind of on investable.
Speaker 1 (35:00):
Right now and nothing right right and I put this
that putting that into the two hard pile pile.
Speaker 2 (35:07):
What did Uncle Chris used to say, what do you
think about this? You would say, I don't, I don't.
I think that's I think that's the key to be
a good investor is, you know, some things are just
too hard to evaluate and just in life. In life,
you don't need an opinion about everything. You'll be talking
to someone who has an opinion about everything.
Speaker 1 (35:23):
And also like if you want to put one, one
or two percent of your portfolio and tesla at this point,
giving yourself room for a little more. I don't have
a problem with that either, you know, but consider it
much more speculative than it was towards the end of
the year. And the other the other thing too, And
I was I don't want to I don't want to
forget this. That could turn the market around in a
heartbeat if the FED cut by a quarter point. Yeah,
(35:44):
you know, the Fed says they're data dependent. It all
depends upon what they're what data their way, you.
Speaker 2 (35:50):
Know, to what extend that's you know, On one hand,
they say they're data dependent, and so if they if
they cut sooner rather than later, that would be that
wouldn't be on data. That would be in my opinion,
based on you know, theories and hypotheses. Yeah, yeah, I
mean I could be on I guess you know, Yeah,
(36:12):
I don't think that's firm enough data. But it'd have
to be on the their thought on the implications of
Trump's policies before we actually know the implication of Trump's policy.
So that's that would be against what they've been saying
they're going to do. But it's possible.
Speaker 1 (36:29):
It's possible. You know. The other thing too is I
think they are just like they were reluctant to raise rates,
they might be a little bit more. They might be
reluctant to cut rates, as you just suggested, because you know,
you had said that's the they would be cutting on
the implication. But if we.
Speaker 2 (36:48):
See yeah, and then what if we see an uptick
in inflation and then stagnation and GDP right, that's stagflation. Stagflation,
So that's I think that's quite a big fear right
now too. If I were the FED with cutting.
Speaker 1 (37:02):
I think they I think I think they take a
wait and see.
Speaker 3 (37:04):
Still Trump's going to be really ticked off about that.
I'm sure you know he probably will be. You know,
that's why.
Speaker 2 (37:10):
They act independently, be interested to see who the next
FED chair is.
Speaker 1 (37:16):
Yeah, I don't know, I don't know who that would be.
Speaker 2 (37:18):
How is done a good job? I think he has
started off not great, you know, with intilly should be
in a little bit too transitory, but I think he
really righted the ship, you know, a soft land landing
essentially I guess, you know, we'll see in the next
few months if we are in a recession, if we're
going to be in a recession based on these policies.
But you know, I think I think Powell did a
(37:39):
pretty good job the past two years having the economy
be where it is.
Speaker 1 (37:45):
I think to certain extent too, it's about it's about
fiscal policy and tariffs really going forward, you know, what
was going to kind of dictate, you know, what Pole does.
And also when you when you take a look at
the tariffs is going to be you know and again,
you know, saying the same thing over and over again.
But this is the dominant, uh dominant type of thing.
Speaker 2 (38:05):
I think the Democrats did a really bad job with
explaining last year how good the economy actually was. Yeah,
and I think you know, everyone said the oh, the
price of eggs, the price of eggs, the price of food.
And I don't think they did a really good job saying, hey,
you want the price of eggs to go down, a
lot of other things would have to happen, which would
be way worse than seven dollars eggs.
Speaker 1 (38:25):
And they blew it on the border, yeah, a big time,
you know, and a lot of just average America, you know,
felt that hey, they had lost touch with really what
their base was, and their base was was the uh
union worker, you know, right, And I think that that
had a lot to do with it. But but right now,
and you know, kind of what we said, I've been
(38:47):
saying the potential range of outcomes is much broader with
the President Trump. But I think we're seeing that right now.
And I also say that, you know, you know, if
you take a shortcut home, you know, without a map,
at some point in time, we're going to be like,
oh my gosh, you ever do that when you're driving around,
you know, you're driving with you know, you check the
gas and as long as you have enough gas, no
begin I think we go this way and then you
(39:08):
go that way like I don't know, I don't know,
and then you come out and oh, thank god, it
was great. But along the way there's a little bit
of doubt there. And I think that's kind of what's
going on right now. So you know, I don't think
it's it's I don't think it's I think it's gonna
be a while. I don't think it's gonna turn on
a dime. We have raised as Aaron mentioned about thirteen
percent cash or so we did. We we bet rebounced.
(39:31):
We stopped that two or three weeks ago before the
last couple of weeks, which I'm happy. We're happy about.
We feel people are in good position. We've we've nibbled
that some stocks over the past an ETFs. So I
think as an investor, I kind of feel pretty well positioned.
New money comes in, we kind of put that to
work judiciously, uh, and then we got to take them there,
(39:56):
and then we just sit back and see the will
the President Trump's policies on tariffs continue as a policy
tool throughout the Trump administration or kind of see how
that develops to then see, you know, what courses of
action we take. But as an investor out there, you know,
look through your portfolio, see what's kind of hanging in there,
and then see what's getting crushed if it's getting crushed.
(40:19):
And we're not a big fan of that right now either.
I think bitcoin merits a look in here down around eighty.
Speaker 3 (40:24):
Two or eighty two thousand, now, yeah, I mean, yeah,
you're kind of well, you know, I think like anything
anything with speculation, you know, you put one or two
percent of your portfolio in it.
Speaker 2 (40:35):
Yeah, if you believe in it.
Speaker 1 (40:36):
Yeah, And then there's the correct thing to do. And
there's also the thing you wish you'd done with with
better hindsight, with more hindsight. Yeah, what do you got
for us over there in the in the in the
in the control seat now?
Speaker 2 (40:47):
And I think, you know, we're talking about consumer sentiment,
and I just have my laptop open, and I think,
I think it's it's just when you're in the midst
of something like this, you know, it's very confusing, and
I think it's easy to run to the sidelines when
when things are confusing and unpredictable. But you know, Howard
Mark said, basically, you know, the safest and potentially the
(41:12):
most profitable thing to do is to buy something when
no one likes it. And I do believe that in
large cap tech, and I do believe that in the
US market. You know, I do think that, you know,
we could see some of these tariff policies obviously impact
a lot of our companies. But I do think that,
you know, with four or five companies making up twenty
(41:35):
thirty percent of our of the S and P five hundred,
I do think those five companies have the power to
stabilize this market and earn money no matter no matter
the political climate and environment. That's not to say if
the consumer starts to get hit, I think you could
see these companies, you know, struggle. But I do think
(41:59):
that these companies have a wide enough net enough diversification. Now,
you know, if you look at the top ten companies
back in the nineties eighties, you know, I have a
chart here. You know, you're looking at Exon Mobile, You're
looking at you know, ge companies that are extremely impacted
by the consumer and you and very undiverse. Let's say
(42:23):
now you're seeing you know, Amazon itself, have you know,
three or four segments that are in ten billion dollars
a year at least more than that, even way more
than that. So you know, I think that, you know,
as long as the consumer stays in good shape, I
think that these larger companies will be an overall buy. Yeah,
(42:43):
you got them right here. You know IBM in nineteen
eighty IBM, IBM, ge AT and T General Electric, you know,
DuPont Mobile, Exon, Mirk, Bristol Myers. You know, you know,
thirty forty years ago, they're revenue pipelines were thin you
know now you're seeing Apple, Microsoft, Amazon, Google, Meta, Berkshire,
(43:07):
the largest companies of twenty twenty, you know, be very
diverse as opposed to other companies, way more ways to
to make uh, to make some revenue.
Speaker 1 (43:19):
Well, I think when you talk about you know, some
of those companies, you're talking about lines of business for
retail the individual consumer and lines of business for technology
to enhance their productivity. Yeah, and so technology is just
become that much more pervasive in our society that that
(43:40):
they made. Okay, and there and there's that, that whole,
that whole mag seven, that whole you know is Tesla
about here, is Google about here. But you know, to
broaden it out for our audience, we do think you know,
J T e K is a good investment. But but
you buy these, you know, you buy these on week
and says you don't you know, you don't go in today,
(44:02):
Like right now Bristol Myers is down a buck, you know,
steping in by a little bit. You know, a Java
JP Morgan Active Value Fund is run up a long way.
You know, don't buy that now, wait for that way
for way for those to get out of favor. So
continue to work on what you're doing, and uh, you
have a plan, and make sure your asset allocation model
(44:23):
conforms to your plan, conforms to your objectives. Don't let
politics kind of get involved with what your what you
don't don't respond to the political current political environment too much.
You know, if if you believe in what President Trump
is doing, skew that way. If you don't believe in
(44:43):
what he's doing, skew the other way. But don't kind
of don't don't don't count him out and don't go
all in. And I think that I think that just
makes a lot of sense. Work incrementally in your portfolio
and that'll work well over time.
Speaker 2 (44:58):
Yeah, you know, I I actually have you know, just
like my work journalote and you know Howard Marks he's from,
you know, oak Tree Capital Management. He specializes in more
distressed securities worldwide, and you know, we don't do anything
like that. But he comes out with a memo he
calls it, and user in a few books. And I
do love a lot of the things that he says.
And you know, he have his quotes up in front
of me that I like. And you know, you can't
(45:19):
predict a lot of these things, but you can prepare
and that's kind of what we talk about. Is you know,
if a client calls and they're like, you know, I
think the market's going to you know, let's say, even
if you think there's a twenty thirty percent pullback, you know,
you don't go to all cash, but you do prepare
your portfolio to withstand that and get out to your
side because you will be at all time highs again. Right,
So you know, if you are in retirement, you just
(45:41):
make sure that and you need distributions from your account,
you just make sure that. Hey, you know, I can
go through two three four years of distributions from safer assets,
money markets and fixed income to let this other side
of my portfolio, you know, you know take comes back
and rise over time. You know, if if you're if
you're supposed to be seventy five percent and fifty to
(46:03):
seventy five, go back to fifty. You know, I think
there's a lot of things that you can do to uh,
you know, ease your mind mentally to help get you
through this, right, to get you through the harder periods.
Speaker 1 (46:12):
And even so he what did he say?
Speaker 2 (46:14):
Is that a quote you can't predict, you can prepare.
Speaker 1 (46:16):
So you know, managing hundreds of millions of dollars billions
of dollars. Most likely anyone who manages money well is
going to say the same thing. And it's not just
kind of what we talked about earlier asset al cachmeils.
Speaker 2 (46:30):
Yeah.
Speaker 1 (46:30):
But you know, so when you when you when you
hear from somebody who says, well, why do we have
anything in the market? Let's going on? Just keep that
in mind. If you're somebody with that, that's more an
emotional response than it is an intellectual response to the
situation that that you find yourself.
Speaker 2 (46:47):
And you know, you would love these quotes, but the
book is you're gonna share what the book is called.
But this is a good one. The correctness of a
decision can't be judged from the outcome. I was going
to say that all the time, you know, just because
you to this, I think he listens to you. Just
because you drove, you know, ninety miles going to Montreal
doesn't mean it was the right thing. Just because you
(47:07):
had to get seventy five percent of your money and
palanteer doesn't mean it was the right thing to do,
you know. So I think you always have to do
the right thing. Right, the right thing with the available
knowledge that you have and history as an indicator, right,
you know, Beau, what if it doesn't things tend to
be cyclical and I think that's true.
Speaker 1 (47:24):
What if it doesn't go right, what happens to me? Yeah?
Speaker 2 (47:27):
So you know, we do a lot of money. Color
analysis is for people, and that will show people, Hey,
this is what your portfolio looks like. Now, this is
what would have happened in two thousand and eight to
your portfolio. This would have happened in you know, during
COVID to your portfolio in nineteen eighty seven, you know,
on Black Monday. So you know, if you're not comfortable
with that draw down your portfolio, then you know, maybe
(47:48):
it's a little bit time to adjust it to where
you can say, Okay, you know I would be comfortable
losing that And this is what happens all right in
nineteen eighty seven. But look at look look where it
was in nineteen ninety five.
Speaker 1 (47:58):
But I'd tell you more go of markets past, ghosts
of markets past run more portfolios than anything else. Greed,
you know this, and that there are other things, but
fighting the last battle is going to ruin your portfolio
more than anything else is that that planning for armageddon
(48:19):
will is going to do you in. And I think
that's what you can do right now, So have a plan,
stick with it. We hope we gave you some ideas
as to what you can do to stick with it.
We gave you some names, we individual securities, we gave
you some ETFs. So there's a lot of different things
you can do if you need to get a hold
of us five one, eight, two seven four. We have
a website. It's faganasset dot com. You can inquire through there,
(48:45):
check us out on Facebook, but otherwise, have a great day.
He too,
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