The Fagan Financial Report

March 30th, 2025

Episode Transcript

Speaker 1 (00:00):
Good morning, and welcome to the Capitol District's Money and
Investment Program. You're listening to the Fagan Financial Report on
Dennis Fagan. Sitting here with my son Aaron, as we
do every Sunday right here our news talk A ten
one O three one w g Y, Good morning eron.
How are you good?

Speaker 2 (00:13):
How are you?

Speaker 1 (00:13):
Can't complain? Can't complain a baseball season? You think you
would have planned it? Yeah, I'm looking forward to baseball
season this year.

Speaker 2 (00:22):
Yeah, me too. You know, Met's had a rough opening day,
but Mets don't play. They had a rough opening day
last year. They're usually actually pretty good on.

Speaker 1 (00:32):
It, and they're usually pretty bad in general.

Speaker 2 (00:36):
So I mean, yeah, little reverse. What's the difference in optimism?

Speaker 1 (00:41):
You're optimistic?

Speaker 2 (00:42):
Who's pitching today? It's Friday. Sure, I'm not playing today.

Speaker 1 (00:46):
Yes, they're playing Houston today.

Speaker 2 (00:47):
Sometimes they get like a day off.

Speaker 1 (00:49):
Many times I'm not sure. I'm not sure. But it
is baseball season. You've got a new fence. I got
a new Now what is that fence supposed to do?
Keep people in or keep people out? Both? Both? It's nice.

Speaker 2 (01:01):
Well, I was one of one out who would be
kept out.

Speaker 1 (01:03):
Well, I was well, I was, Yeah, I was wonder
when when it was an electrical you had to.

Speaker 2 (01:07):
Pick me up on Friday and you just went right
through the gate like now I have a gate now
that goes over my drive open.

Speaker 1 (01:14):
Yeah, probably have a camera too, don't you know.

Speaker 2 (01:16):
Yeah, and then all of a sudden, a sudden, your
car is just in my driveway in my backyard.

Speaker 1 (01:20):
I like the fence though. I like it a lot.

Speaker 2 (01:22):
It's nice. You know, I have a dog and a daughter, daughter, so.

Speaker 1 (01:26):
It was a daughter who was newly mobile, daughter who's trying. Yeah,
that's exciting, it is.

Speaker 2 (01:33):
But you know, I live on not a busy street,
but not a not busy street, and you know County road,
county or just take a couple seconds of you know,
child lumber or something working in the garden and run
into the into the road.

Speaker 1 (01:48):
It's gonna keep the keep the gate in the driveway
closed except for you. I don't know, you'll leave it
open when he goes out there, twelve year old fence
bulldo right, go go go.

Speaker 2 (02:00):
That's put treats in the road. Just that's horrible. Now
he's a great dog.

Speaker 1 (02:05):
He's yeah, he's good. You've you've done well by him.
Though we're supposed to live about eight years old. You've
got another. You got fifty percent more of the average
life of a French bulldog out of it.

Speaker 2 (02:16):
The vet said it was the oldest bulldog she's ever
taken care of.

Speaker 1 (02:20):
Really bull dog.

Speaker 2 (02:21):
Yeah, wow, I know.

Speaker 1 (02:23):
And now that bulldog is eating batteries.

Speaker 2 (02:26):
Batteries, a giant chocolate Santa, Chocolate Santa. This is gonna
make me sound like a bad pet owner. But it's
been twelve years. Parent, you're a pet parent one you know,
mistake every two or three years.

Speaker 1 (02:37):
There's form mistakes exactly exactly. So anyways, he goes a
good dog.

Speaker 2 (02:43):
And today is March thirtieth.

Speaker 1 (02:45):
Today is March thirty. Today is March. We're doing Friday Friday.

Speaker 2 (02:49):
But you should say happy birthday to my and they're
listening to so I'm March thirtieth. It's mom's birthday, sixty
four years old. Yeah, good person, great person.

Speaker 1 (02:58):
She is a great person. She's the light of my
life other than obviously along with you guys, you and
Sam and your kids and Sam's kids to be. Anyways,
let's get out on the market before we have before
a number of viewers goes from a million to five
hundred thousand. You know, a couple of things I was
thinking about as the years by and I looked back

(03:21):
on some of my times when I when I write
in a notebook May third of twenty twenty four, Warren
Buffett the ABC's of business decay, which are arrogance, bureaucracy,
and complacency. Couldn't we say that about the government though, arrogance, bureaucracy,
and complacency. I think in the aggregate, I think that

(03:44):
pretty much describes the government, you know. And this is
not a slam at the government, but its just And
that's Warren Buffet who wrote out about business decay. And
I bring it up because you know, we're conflicted. You know,
I think we're conflicted as people who the market that No,
we're not that bullish right now. We we we find
reasons where there's going to be uh, you know, it's

(04:06):
going to be a choppy environment, you know, plus or
minus five percent for the year. Uh, you know, perhaps
some stagflation, perhaps a little inflation. You know, you know,
who knows how this is going to turn out. Yes,
we have confidence in President Trump's intentions. I think, you know,
the design of it. It is hard to uh, it's
hard to fathom how this is going to work out,

(04:29):
these tariffs. And the reason is is that some of
what why global globalism started was to lift up a
lot of those that are not able to purchase our
goods and services bye bye by moving production overseas, so

(04:49):
lifting those people up out of poverty so that they
can by producing commodity, commoditized goods that we couldn't do
that because our capita income is four or five times
the amount of China's, so that they would produce the
goods that are commoditized and don't have a lot of
I guess and this is thirty years ago, didn't require

(05:11):
a lot of technology, and then and then we would
produce all the goods and services that did and I
think they got it, got carried away where a lot
of even are are because of the the uh, the
advancements too in technology broadly speaking, and also technology of
countries like China and Vietnam and Koreas Korea is that

(05:33):
they're they're you know, close to at par, if not
at par with the United States. So I think as
we as we shipped you know, uh, commoditized production overseas
and then shipped more and more overseas. We shipped too
much overseas. And yet it's going to be difficult to
get commoditized manufacturing back to the United States with our

(05:55):
per capita income where it is relative to the these
countries that that produce those goods. Now, certainly there's you know,
tariffs that are unfair, and they were designed to protect
like the champagne from France. They were designed to protect
you know, that industry which is critical to France, or

(06:16):
was it at the time. You know, So there's specific
reasons and maybe they have to be strained out of
no you know, trade policy expert. And yet I think
it's it's it's going to be difficult to really get
the type of manufacturing that President Trump wants back to
the United States because of some of the something I
just mentioned, you know.

Speaker 2 (06:35):
And then if if you have, if we're trying to
get goods produced back to the United States, while I
guess hurting some of our traditional trade partners and allies
I have have you know, so if the endgame is
you know, America first, making America buy in America, you know,

(06:56):
if we begin to start having a declining population what
happened intend to fifteen twenty years when we don't have
the consumers as we once had, as well as you know,
kind of breaking relationships that we've had for you know,
decades with reliable trading partners. You know, what if they

(07:16):
go elsewhere, and what if we don't have the number
of consumers here and the spenders that we need to
sufficiently grow the US economy. You know, that's I think
that that is as well as deporting a lot of people,
so you know, we don't have the traditional you know,
spenders that we might have had over the past decade

(07:39):
or two. And I was just don't know that what
the endgame really is. You know, we're going to be
like South Korea where we just have a Japan a
stagnating economy.

Speaker 1 (07:48):
Or just coming out of that. I would say that
so that someone would say, who's much more knowledgeable about this?
Then I am would have an answer for that. But calls,
I think is that there's unintended consequences here that is
difficult to ascertain the outcome, you know, and you know,

(08:09):
we say it every week on the show. We've been
saying that, I look back before the election, the Trump
administration has a wider range of potential outcomes than a
traditional political administration, and you better be ready for them.
And I think right now we're in the midst of that.
Is this going to work? Isn't it going to work?

(08:30):
You know? What about the Department of Government efficiency? Have
they gone too far? Is this constitutional? You know? Is
Trump pushing at you know, holes to see where from
a legal perspective you get. I think that's filtering down
to the investors sentiment. As we saw this week air,
that hard numbers are pretty good. You know, if you

(08:51):
look at the new home sales up five point one
percent year over year, up twelve thousand in February to
six hundred and seventy six thousand, down sharply from their peak,
but they're hanging in there. And certainly we have a
housing issue that we both believe is going to take
years to fix. But you know, new home sales are okay.

(09:13):
Durable goods orders up nine tenths of percent during February,
up three point three percent in January year up three
point four percent on however, So that's that's some hard data.
On Friday. Core inflation, if you look at personal income
and spending personally income up eight tenths of a percent,

(09:34):
personal spending up four tenths of a percent, and you
had the PC which measures inflation up three tenths of
a percent x food and energy up four tenths of
a percent. Year over year PC up two point eight percent.
So and then put the little bit little hot of
than expected the soft date of the consumer confidence in

(09:55):
next and you and I go back and forth on
the importance of this, I think, and it's hard to
measure the importance. Don't tell me what people are saying,
show me what they're spending. So the number seems solid,
but consumer confidence.

Speaker 2 (10:07):
Yes, And I think you know you have consumer confidence
leading to maybe a decline in spending as well as
tariffs which could be inflationary. I mean, that's kind of bagflation.
They saguflation. So I think that's the biggest concern in
the market right now, is uh, you know, slowing growth
as well as you know high inflation.

Speaker 1 (10:25):
Now. Chair Powell a week ago said it can be
the case that it's appropriate sometimes to look through inflation
if it's going to go away quickly without action by us.
If it's transitory, that can be the case of terraf inflation.
It's very well. The case, I think that would depend
on the teriff inflation moving through fairly quickly through the
you know, purchasing pipeline fairly quickly and critically as well,

(10:47):
and as inflation expectations being well anchored. And what's he's
saying is that, you know, if your inflation expectations are
well anchored to add around these levels, tariff inflation can
move through and we have a little bit of a bump,
but then inflation comes back down. What I think, though,
is that what you just mentioned is stagflation. I think
we could have transitory stagflation. It's possible either. You think

(11:12):
that if this moves too quickly, you have transitory stagflation
where it hurts the economy. And I think that's what
President Trump is hoping for in his administration, is that
the stagflation will be transitory rather than rather than permanent.

Speaker 2 (11:26):
Yeah, and sometimes, you know, consumer confidence and consumer surveys
are like a self fulfilling prophecy. Right, So if you
think prices will be cheaper, if you think, you know,
the economy might stumble a little bit, you might wait
on spending. So you know, if if while these tariffs
take into effect, because it seems like, you know, everyone
everyone knows what tariffs are now as opposed to a

(11:48):
year ago, and most people don't. So you know, you
could see some you know, hanging around on the sidelines
in terms of spending until we really know what these
tariffs mean, and then you know, that could be a
temporary bout of stagflation. Then if you know these tariffs
don't create too much inflation, I think you could see
the you know, consumer come off the sidelines and start
spending again, which could be positive for let's say, you know,

(12:12):
the second half of twenty twenty six.

Speaker 1 (12:15):
Now, I think any any you know, you listen to
a lot of experts and they'll say it is it's
difficult to kind of map out how this ends. And
I think justifiably so I think if you and I
think our clients, I think our clients, we're probably flat

(12:37):
year to date, you know, and as far as investments go,
markets maybe down a little bit.

Speaker 2 (12:42):
You know.

Speaker 1 (12:43):
That's that's my point is not that My My point
is more than that that we're flattening markets down a
little bit or up a little bit. My point is, hey,
it's been okay. So for this year, you know, we
we've hitt in some and I think that's what you're
going to see until some of these this uncertainty is
cleared up. That this even those that are you know,
right leaning politically, and there seems to be people who

(13:06):
either they're not right leaning or left leaning, they're toppled
to the left or right. It seems like I think
everybody is a little uncertain right now. People come in
that I know are are more right leaning are also
a little cautious right now, at least for the next
six months or so. And I think that was reflected
to in our newsletter that we sent out to all
of our clients, said, Hey, this is going to be this,

(13:27):
this uncertainty is going to hang around. The unpredictability of
President Trump, you know, is going to kind of like
filter through to consumer sentiment, consumer confidence, and that's going
to be, like you just said, maybe keep people on
the sidelines a little bit. You know. You also think
of you know, four or five thousand dollars at least
for a new car over the next year or so,

(13:48):
in three years to build a new plan.

Speaker 2 (13:51):
Yeah, and will people even build a new plant right
now or they just waited out, you know, wait out
to see maybe what happens in the midterms or the
next election. So, you know, as you were saying, there's
so much uncertainty out there in the economy, which I
think spills over into the stock market that you know,
I think it pays to be a little bit cautious
now onlike five or six years ago, seven years ago,

(14:13):
when you know, you your your your choices were, you know,
invest in the stock market or invest in one percent
ten year treasuries. Right now now you have you know,
and other another other options as you know, the five
years at about four percent. So I think that you're
seeing a lot of people say, hey, you know, I
think let's sit on the sidelines, get our four percent

(14:36):
for the time being, to see how this plays out.
And I'm not saying, you know, go all cash or
go don't all cash, but you know, I do agree
with that. You know, now it's a good time to
you know, diversify and you know, see how this plays out.

Speaker 1 (14:48):
I agree, just pick and choose your spots. Yeah, So
so that's that's something rare. I mean, if I'm listening
to this show, I'm saying, all right, you've told me
the problem. I know the problem. I know this is
an uncertain time. But what do I and I know
you just hit on one thing. I think you raise
a little bit of cash incrementally. We've done that. I
do think that international, uh, you can you can continue

(15:12):
to ramp up International.

Speaker 2 (15:15):
Yeah, And you know, I think even if I do
think we're at a point in this economic cycle that
you know, no matter the tariffs are not, it is
a good time to diversify. You know, the the S
and P five hundred PE ratio compared to you know,
you know, mid caps small caps International is is historically high,

(15:38):
you know, at almost twenty five percent, when you're seeing
mid caps around fifteen. So I think that it's it's
you know, yeah, growth stocks again, their Ford PE ratio
is you know, around where the must Russell MidCap growth are,
but you know, far above values from about you know
Ford PE for growth stocks at about thirty and you're

(16:01):
seeing value out about fifteen. So I think it's a
there's a lot of opportunity out there as long as
the consumer remains in good shape. I think the consumer
will put a floor on the market being in good shape.
And I think you've seen a lot of undervalue from
value in international over the past ten years, and I
think you saw that at the beginning of this year,

(16:21):
you know, some international funds up ten plus percent. I
think it's I think that people are running to opportunity
where they're with a little bit of speculation, you know.

Speaker 1 (16:33):
Right, Okay, so right, So the momentum side. So if
you look at investing as fundamental, technical and momentum, the
momentum side is running towards international a little bit as
well as fundamentally pretty good value. That a little bit
momentum on that side now, and then you look take

(16:57):
a look at it. You know, a company like Nvidia,
which is down substantially, and that's probably the poster child
for growth stocks right now. Year to date, it's down
about seventeen percent, one one hundred and eleven dollars or
so share down from one forty two or one forty three.
Is one of our largest holdings. We made probably five
six seven times our investment on that, and yet that's

(17:18):
that's the big debate right now. I think it's AI
meaning the maxim you know, some of the mag seven
or AI or or value, and I think.

Speaker 2 (17:27):
It can include both, you know, I think I do
still sc point that you know, these companies may be
a little bit overvalued here, you could argue, but they're
still the best, most innovative companies in the world, you know.
So I think if you see that the whole, you know,
us exceptionalism, we still have the best companies in the
world domiciled here, and they are the biggest part of

(17:48):
the S and P five hundred. So, you know, I
don't think it's time to go running from the doors,
from the running for the exits, for the things that
got us here as well. You know, I think I
think you hold on to these companies because they're good companies.
They're out run, they have tons of cash, they have
their foot in the door, and a lot of sectors
that you know, maybe with the leaders of yesterday, but
also tomorrow, cloud, uh cloud, cloud infrastructure, artificial intelligence, data storage.

(18:14):
So you know, I think it just pays to diversify here,
and I think a well diversified portfolio should do well
in the next you know, five ten years. Yeah I
do too, I think two yeah, yeah, I do too.

Speaker 1 (18:29):
You know, I was just thinking about just just with that,
like I always draw analogies like driving. You know, if
the speed limits sixty five, maybe you're going fifty right now.
You know, why are you going fifty? Maybe there's a
little snow on the ground, Maybe there's some heavy traffic,
maybe this, maybe that. Whatever. My point is that it's
not you're not north of Lake George on the north Way,
you know, and it can go you know, seventy five

(18:51):
and a sixty five because there's no traffic and it's
a clear day. I think there's enough out there. And
one of the things that just comes and look, we're
paid to worry, all right, We're paid to worry. That's
kind of you know, that's that's the nature of this business.
And and uh, you know we're verbalizing those worries now.
And every time a worry comes into my mind if
I'm on the air, I unfortunately blurted out. You know.

(19:14):
The worry is is that reciprocal tariffs begin to hurt,
a regulation begin to hurt. Our leading edge companies are leading,
we are leading edge country. We don't want to give
up our leading edge country to make socks, you know
what I mean. And that's that's that's that's the that's
the question right now. Yes, Automobiles has a ton of
technology in there, you know. I look, I don't know

(19:37):
enough to say, you know, I just know from the
industry experts it's going to add five to ten thousand
dollars on to the average car. I just know that
the the integration between US, Canada and Mexico is is very,
very deep, and it's going to be hard to unwind,
and certainly it's going to be hard to unwind over
one or two year period. The theory that the belief
is three, four, five years of dignant domestic auto sales

(20:02):
to get where President Trump wants to be. And and
what's the price of that. What's the price of that
versus the gains on a number of fronts, both from
a relationship relations basis and also from a you know,
a positive thrust to our to our to our GDP
in four or five years. It's just hard to figure.

Speaker 2 (20:21):
And I think that when you when when we're doing
something like this and such a big undertaking politically and economically.
You know, there's something in economics called the law of
unintended consequences, and it's basically just like, even with good
tensions can lead to unexpected or even negative outcomes, and
it just highlights the complexity of the economic system. You know,
for example, you know, uh, raising minimum wage sounds sounds

(20:44):
great in theory, but it can lead to mass layoffs, right,
and an adoption of artificial intelligence and robotics and things
like that. So I think that's kind of what we're saying,
in a roundabout way is you know, a lot of
these things can be good for the economy, but when
you deregulate, when you take on law large you know, experiments,
I guess from an economic and political point of view,

(21:05):
you know, there can be unintended consequences that I don't
even know what they are, but it opens the door
for the probability of something to happen.

Speaker 1 (21:13):
The probability is much higher. That's kind of what we've
been saying.

Speaker 2 (21:15):
The same thing with deregulation. So I think it's, uh,
it's I think it's it pays to diversify.

Speaker 1 (21:23):
Here, it does pay to diversify, and so so some ideas,
so on the equity side, diversify I would say diversified
to a certain extent away from the S and P
five hundred because that it's very heavily weighted in in technology,
consumer discretionary and communication services. Uh, but I would look
for some individual securities on weakness in that area, like
like a meta Amazon, and I think Google, you know,

(21:46):
almost all of them at some point in all of.

Speaker 2 (21:48):
Them, you know, really, you know, I just think some
other things can work for the time being as well.

Speaker 1 (21:52):
Look, international, I think you've got to kind of ladder
out some bonds. You know, we have a lot of
the b I L which is the short term Treasury
TF it's paying about four percent. We'll look to latterer
that out strategically and methodically rather than all at once,
because you know, I do think we're in a temporary

(22:13):
transitory stagflationary environment. Could be more permanent, could be longer,
could be shorter, could be secular stagflation, but right now
like a temporary transitory stagflationary environment until tariff moves through
the pipeline or we find that it's going to stay there.
So I think that's kind of you know, what you're

(22:33):
looking at. So and I think it can go down
the credit quality spectrum a little bit out.

Speaker 2 (22:39):
Of v c I T, which is Vanguard Intermediate corporate bonds.
I think they're two point five percent already year to date.
So I think you could, you know, I think there
that there's a good opportunity there. We're still seeing corporations,
you know, healthy, We're still seeing a healthy consumer. So
I think it's you can go on the risk spectrum
a little bit on the bond side.

Speaker 1 (22:58):
And if you want to hold some cash, just bumpet
cash position by you know. I think if you have
five hundred thousand dollars, you want to bump up your
cash position by five percent, then you move twenty five
thousand dollars from wherever you want to take it from.
And I think you do that, and I think you'll
be fine. No, we're not. We're not running for the hills.
We think we're just in a holding pattern for the

(23:19):
market for uh you say foreseeable future that implies forever.
But we're in a holding pattern, you know. I think
until we get some more hard data on what's going
on with the economy and the like, and with President
Trump is kind of like a moving target because you
know he can he changes on the fly and changes
changes his mind. So I think that's going to be
reflected in the market right now. Though it is ten

(23:42):
thirty on the station you depend upon for news, weather
and information, News Talk A ten and one O three
one w G Y good morning, Welcome back to the
second half hour of the Capitol District's Money and Investment program.
You're listening to the Fagan Financial Report on Dennis Fagan
sitting here with my son Aaron, as we do every
Sunday right here a new stock gate A ten and
one oh three one w GI. IF got a good

(24:06):
second half hour for you guys today, it's.

Speaker 2 (24:08):
It's broadening and out, broadening and out the topics a
little bit.

Speaker 1 (24:12):
Run out the topics for the second half as we
usually do. Yeah, unless it's a really crazy week in
the market, and with that in mind, we we usually
stick to the top.

Speaker 2 (24:21):
But you know, you know, it usually is a crazy
time in the market, especially recently, but it's the same
stuff over and over again. So you know, terroriffs, uh,
you know whatever taking over denmar or you know Greenland
taking over Canada. So you know, hopefully you know, broaden
it out a little bit. Talk more about, you know,

(24:43):
the philosophy behind investing, how to add value outside because
sometimes we talk about I don't know, the news and
individual stocks a lot, but you know what is it
more important in my opinion, is you know, the the
financial planning aspect of of of of what we do
to get people. You know, what are you financially independent? Right?

(25:03):
Financial freedom? Yeah?

Speaker 1 (25:05):
And I think you know when you when you when
you uh design an investment plan or financial plan, retirement
plan for somebody, and you know, constantly re evaluate that.
Most of the time, the investments get re evaluated, uh,
the financial plan or retirement plan as is needed, as

(25:26):
is the client lives change or as they get closer
to their goal.

Speaker 2 (25:30):
Uh.

Speaker 1 (25:30):
You do so with with not the emotional attachment that
you have during a period of volatility in the market.
And I think that's something I have to focus on,
is I you know, when the market is is gy
rating as it has been. And I think one of
the things that is, I know we talked a little
bit about in the first half, but I do think
that Uh, I don't I don't know if we go

(25:51):
anywhere this year as far as the stock market goes,
I certainly don't know. But my point is more like rhetorically,
it's like I think we could just chop around for one,
you know, you know, maybe drift a little lower, I
mean earning strong. You know, looking at news that came
out this way this past week, it was pretty good.
You know, generally speaking.

Speaker 2 (26:08):
Yeah, you know, it's still early on into the year.
And you know, we had a client come in last
uh yeah, this past week and saying, hey, you know,
you know, what do you think about the market here
and what do you think about all the policies that
the Trump administration is putting into place and how will
it affect the stock market? And I was like quite
quite frankly, I don't know. You know, it's a good point.

(26:28):
It's hard to back test what's going on right now.
A lot of times in uh, you know, investment management
in the stock market, you try to look at things
that happened in the past and draw some conclusions from that,
and you know, you take everything with a grain of salt,
but you try to see parallels in different things that
happened throughout history, and you know, hey, is this kind

(26:49):
of similar to that? And you know, with this administration, uh,
there's not much back testing that you can do other
than really the Smoot Hawley tariffs and those and I
think that's what Trump is trying to do. Hey, you know,
try to increase you know, the revenue that the United
States is bringing in. And you know that did not work.
That's the only parallel that we can draw is you know,

(27:10):
tariffs do not work as a source of reducing you know,
I guess our trade deficit.

Speaker 1 (27:18):
Well, I think that, you know, a fairness to President Trump,
though I think that was one hundred years ago. You know,
now now some may say that.

Speaker 2 (27:25):
I would say it would work even less now being
even more of a service based industry. You know, I
just don't know how. I'm just I just think that
would you know, yet work even less now than in
the past. But you know what I was kind of
getting at is, you know, this is a game of

(27:45):
not a game, but this is you know, when you're
investing people's money, you try to make parallels, and when
there's more uncertainties in the air and out there, you
have to reduce your risk, I think, right, And so
I think that, yeah, I think that is it's a
decent time to and I guess reduce the risk in

(28:05):
your portfolio a little bit, be diversified because you know
of the uncertainties and then unknown stout there in the market.

Speaker 1 (28:13):
Yeah. And I think we have where it has been
applicable and there's when appropriate for specific clients. We have
made changes to to climp or flos in one of
our weekly snapshots we sent out, you know, several weeks ago,
you know, just letting our giving our clients a heads up.
There's going to be probably more changes in your portfolio
this year than there's been over the past several years,

(28:35):
maybe since twenty two when interest rates went up, and
prior to that, probably twenty twenty when we're in the
midst of the pandemic and it was great, pretty much
a generational buying opportunity.

Speaker 2 (28:45):
And you know, I'm fully in the market as well too,
So you know, on one hand, you know, I'm saying, hey,
you know, it's with the uncertainties out there, it's a
decent time to you know, to maybe take some risk
off the table. At the same time, you know, I'm
in my mid thirties. I know that if a dollar
cost average into the market for the next twenty years,
I will you know, achieve it. Whatever, Yeah, I think again,

(29:08):
you can work at the peripheries, but you have to,
I guess, follow your your your your game plan and
stick to that, you know, right, you don't let the
you know, the fluctuations, the emotions and the emotions of
the market get in the way.

Speaker 1 (29:21):
And That's what will happen if you change your game
plan during stressful times, you know, meeting with clients, and
met with clients within the past couple of days. You know,
they were seventy percent in the stock market. They wanted
to potentially and they haven't gotten back to me. I said,
you know, bring it down incrementally. They had about six
hundred thousand dollars with us. You know, if so every
percent you want to bring down from this from the

(29:43):
equity component, you're you're selling six thousand dollars worth the securities.
You've got to think yourself, Okay, what does that mean?
Does it mean anything from a tax perspective, If it's
a non qualified account, can you do it within an IRA?
Maybe that would be better. All those different considerations have
to have to make know. And but you know, we
did say have been saying since I think probably before

(30:04):
the election, but certainly after the election, that you know,
president Trump, there's was a wider range of potential outcomes
with a with a with President Trump than there is
for a traditional politician. And I think we've we've seen
that will continue to see it. You know that you
know and I often say, look, if you if you're
taking a shortcut home. This is pre GPS. Even if

(30:27):
you end up home at some point in time, invariably
you're going to say, hey, was this the right way?
You know, if it's a new shortcut to you. So
I think that's the thing with with President Trump. This
is something that's that's we haven't experienced in a long
time in the United States as far as this attempt
to kind of bring a noble goal is to bring
you know, production back. It's a it's a noble goal.

(30:50):
A can it be achieved? And be what's the cost
of achieving that goal? You know, there's going to be
a cost. That cost could be unemployment, That cost could
be severing long term alliances. That cost could be so
the cost may outweigh the benefits and and that remains
to be seen, I think.

Speaker 2 (31:06):
And that's you've been introducing, as you said, you know,
maybe you know China and uh, you know, other other
countries India into the more global stage as well as
more of a you know, a leader in uh, you know,
the global economy.

Speaker 1 (31:20):
Right, there's going there's going to be there's going to
be a power if there's a power vacuum globally there's
going to be somebody who fills that vacuum. And we
may not like that, we may like it, you know,
I don't know, but certainly that's what that's what it brings.
And I think that's what the market is reflecting right
now now. At at some point in time, the market
reflects it. The market reflects the current news. It reflects

(31:44):
the uncertainty that that's that's surrounding us right now. And
that's why I think, you know, if I had a pen,
where where would be at the end of the year
if someone and we don't provide a long term or
we don't provide projections for the market, you know, uh,
you know direction only uh, you know, that's what we
work at. And I think it at the end of

(32:04):
last year, we said directionally the mark will be choppy
in the first half and then and then move a
little bit higher. I still think that's gonna be the case.
I think we're going to chop around for a while.
If we move substantially low, I think there will be
a Trump put meaning that I don't think he's gonna
let the market continue to go down because that would sacrifice,
certainly the midterms. So I think we're going. I think
we're just gonna and the economy is doing well, so

(32:26):
I think we're gonna chop around within you know, five
or ten percent of either side of these levels. But
I think do you pick up you can pick up
and you've been doing that. You pick up Uber when
it went down under seventy, you know oil when it
when it when it you know, Chevron an exile when
it's backed up. We bought some Robinhood for others, so
there's some certain you bought cow Z and obl We

(32:46):
We've increased our international exposure, you know, all the things
that we've done, you know, kind of pick and choose
your spots. I think you're gonna have I meany joan on,
but I think you're gonna have ample opportunities ahead of us.
You don't have to when the market's yah. Let's say
the market is down four or five percent of the
next two or three days, you don't have to go
all in. I think those opportunities going to represent themselves
numerous times throughout the year.

Speaker 2 (33:07):
Yeah, and I do think that, you know, chopping around
in here could be a good thing. Ultimately, I think it. Uh,
I think we had to pump the brakes on this
whole AI revolution. But I do think that, you know,
as time does pass, we will see uh the innovation
nests and the relentlessness really of like large cap tech
and their ability to create revenue, make revenue, be innovative

(33:29):
no matter what the political climate is. So I think
that's a narrative that could eventually, you know, take over also.
But I think we'll see, you know, just churning around
in here until uh, there's more clear data coming out
from the impact of what the administration has done has
done thus.

Speaker 1 (33:45):
Far, right, or if President Trump backs off of that
a little bit. I think if President Trump backs off
his stances as he as he's you know, has exhibited
over the past three or four months, you know, then
then maybe the market you know, takes like hi. And
I think if he, if he does, his administration does,

(34:05):
and then you don't want to be out of the market.
You want to be you want to err on the
side of question. I think I think you take President
Trump at his word in regard to tariffs. I think
you take President Trump mostly at his word with he's
not that concerned about the stock market, although you know,
he like anyone else, may become very concerned about the

(34:27):
stock market if it fell substantially from here. So I
think you take him at his word for that, and
then you, uh, you know pretty much let you know,
continue to focus on your long term rejective. And that's
kind of what you wanted to talk about the second
half hour there, Aaron talk to the our listeners about,
you know, there's this Vanguard piece, and then we can
we can pull in the rest of the half hour

(34:48):
talking about that. We got about probably another fourteen minutes
to go or something.

Speaker 2 (34:52):
And you know, it's a it's a great it's it's
a it's called the Advisor's Outfit Perspective, and it's you know,
put out by Van Guard and it says, putting a
value on your value, quantifying Vanguard's Vanguard Advisor's Alpha, and
you know, it basically talks about how, you know, a
lot of things in the financial investment world and the
investment management world will change and it will continue to

(35:14):
change and it will continue to evolve. You know, just
you know, from my own personal experience when we first
when I first started working here, it was twelve ninety
five a trade. Then if you went paperless, it was
four ninety five a trade. Then it was three ninety five,
two ninety five. Now it's free to trade. So you know,
there's a lot of innovation that will continue to happen
throughout that will continue into the future. But you know,

(35:41):
this article talks a lot about how, you know, as
an advisor and if you're doing your own you know,
asset management, something shouldn't change, you know when it goes
through different modules. And the first one I think is,
you know, obviously extremely important is you know, suitable asset
allocation using broadly diversed stocks, funds and ets. And I
think you know, if if you're managing your own money

(36:04):
or you're you're an investment professional, I think that is
you know, one of the most important things and important,
most difficult things to really stick by because you know,
if you're always watching CNBC or you're watching the news,
you know, it's easy to you know, uh, become over
allocating a specific sector. And I think we see that

(36:26):
all the time. Is you know, if we have a
client who calls, let's say we have a specific client
who calls a lot about individual stocks in their portfolio.
Not many do, but some do. And you know a
lot of times if if I see a number coming up,
I'll know that they'll ask about you know, let's say
the three stocks in their portfolio are down in an
up year, and those three stocks will be something like
Johnson and Johnson, you know, and two other names that

(36:50):
really don't fit in the you know, the tech sector.
So you know, I think correct asset allocation. And especially
I think for most of our listeners, who you know,
are are listening to this because you know, they want to,
you know, achieve financial independence or retire in the near
future or future. Your goal is to retire, you know,

(37:11):
sometimes it's not you know, to get the the the
best you know, returns possible. Because you know, something else
I have over here is you know Howard marks thing
and he says, you know, the correct decision isn't always
the most profitable one, and I think that's very true also.

Speaker 1 (37:29):
That that'll only be determined behindsight. I will say too, though,
and I think we're saying the same thing that you know,
and I know what you're saying. In the broadest sense,
the goal is retirement, but the goal is like the
financial independence that comes that then leads to retirement if
that's what you want to do. There's certainly lots of
individuals who want to keep their hand in doing what
they're doing, Like like myself, I mean, this is kind

(37:52):
of like I've loved the stock market for forty some years.
This is kind of like a hobby that's not a hobby,
you know what I'm saying. And the respect that I
enjoy coming forward to it, so you know, it's it's
it's it's it's creating enough wealth that if you wanted
to stop working or doing what you're doing, you could
work at sixty three years old.

Speaker 2 (38:10):
You know.

Speaker 1 (38:10):
What I'm trying to do is and still working. I'm
not going to be working for the next twenty five years,
but maybe not working six days a week. Great, maybe
working four days a week, you know, and scaling back
a little bit, still enough time to take care of
all the clients, but you know, maybe carving out enough
time to do what you know, your mom and I
want to do. And I think that's kind of what

(38:30):
most people they're they're aiming for.

Speaker 2 (38:33):
And I think when you have thirty forty years of
experience that is so valuable to our business. Really, you know,
you have perspective that I don't have, and you have
the you know, the relationships, and you know you've been
through things that yeah, I've never been through, so I
think that, yeah, well you'll be here for a long time.

(38:56):
You know.

Speaker 1 (38:56):
In one way, I think from a client's perspective, you're right.
Suitable asset allocation usually broadly diversified funds and ETFs, and
we use a combination of individual securities, ETFs and mutual
funds both on the equity side and the fixed income side.
We move along to you know, something that creates. But
you know, broadly diversified is always having to say you're sorry.

(39:20):
You know, it's always having to say because you was
you were saying that that I don't know if it
was at this specific topic, but you know, there's always
those two or three stocks that are you know, not
doing well or fund that's not doing well, and that
kind of comes to the territory.

Speaker 2 (39:33):
But then at times like this, you're seeing the S
and P Global Dow, ETF, d G, t F seven
point seven six percent year to date. So I think
you have to always remember in the back of your
head that these things are here for a reason.

Speaker 1 (39:45):
What's Johnson and Johnson doing here? Todate? It is.

Speaker 2 (39:52):
Of twelve point seven percent, So that don't work all
the time. I have a have a place in your
portfolio specific reason, and it's for times like this when
you see market pullbacks.

Speaker 1 (40:05):
Yeah, and you want to get to you want to
get to your goals with the underlying correlation to the market,
because you know that's going to take you where you
want to go, and taking shortcuts kind of I think
difficult to do.

Speaker 2 (40:17):
What else you got on the second one is cost
effective implementation, and I think that's extremely important as well. Uh,
you know, if you're working with an advisor, you know,
we have the technology now to you know, create a
customized portfolio really using individual stocks and low cost ETFs.
If you're not doing that, I think that that's a
major issue and could be a headwind to your portfolio.

Speaker 3 (40:40):
Uh.

Speaker 2 (40:40):
You know, we have a lot of great software that
you know, basically can create you know, a portfolio that
you know tracks the S and P sixty seven eighty
ninety percent with individual stocks in a really low cost manner.
You know that said ets are also very cheap nowadays,

(41:00):
you know. Uh, so we try to use some ets,
low cost ets that you know, can kind of hedge
against let's say you're underlying indocy like the S and
P five hundred.

Speaker 1 (41:12):
Right and and all that, all costs are friction to returns.

Speaker 2 (41:16):
And you know, on on one hand, I do I
agree with this. I do agree with this, but I
think when you're getting to retirement, I think you do
have to you know, you have to look at expense
ratios of funds. But I think you also have to
pay for I think I think you know, like, uh,
you know, c O w Z is a great fund,
cash Cow's et F, it's a Pacers, it's a great company.

(41:39):
Uh you know, it is a zero point four to
nine expense ratio. I'm okay paying that for some funds
and some fund managers that I think do a great job.
JP Morgan Active Value. You know, we're not traditionally you know,
value investors. So I think it really pays to, you know,
hire professionals to do that job for us in sectors

(42:01):
that were not as uh, you know, I guess competent
in as other ones well.

Speaker 1 (42:05):
And I think as you as you you know, move
towards close, like when you're thirty or forty or fifty,
you know you're looking at you know, the closer you
get to retirement, the more other other areas of financial
planning come into play. You know, when you're younger, maybe
it's your kids education and then you know, making sure
you're you're you're saving enough. But when you're when you're

(42:27):
you know, sixty years old, it's the social security question,
it's the medicare question, it's you know, uh, trusts, it's taxes, right,
it's you know, distribution, asset allocation as far as where
to take your money come from retirement in a to
keep your portfolio in balance, but also to make sure
you consider taxes and also down the road perhaps perhaps

(42:50):
required minimum distributions to look at the impact of your
taxes on at that point in time to see that, hey,
maybe I should begin to take money now. So thro
those all things that come into play. I will say
that we offer all of those. A listener might say, well,
I haven't met with the Fagins about this topic. Feel
free to call us. That's what we're here for five one, eight, two,
seven ninety four.

Speaker 2 (43:12):
Uh.

Speaker 1 (43:12):
You know, as your needs change, hey, let's meet push
out a retirement plan for you and talk about you know,
the different aspects of you know, you know, our services,
so you know, it's something you want to do. What
else you got in there?

Speaker 2 (43:26):
You know, rebalancing, We we do it every quarter. We
make sure that people are in their correct asset allocation.
And I think you should do it quarterly, especially if
you're if you're in retirement, you know, if you're still
thirty forty years old. I don't think rebalancing a quarterly
is necessary, but I think it's important maybe every year
to take a look at your your your allocation that

(43:48):
you have. And we do it quarterly. You know, we
we together, we work with you know, we work together
to look at accounts that maybe you have drifted out
at a balance because the market has done so well
that you know, only if you have a growth and
income account that should be a you know, max out
at seventy five percent addrifts to seventy six or seventy seven.
So we reallocate back down to your to your objective.

(44:12):
That said, you know, again the Howard Marks quote, the
correct decision isn't always the most profitable, and I think
that's a key one, especially in your in your retirement.
Is like when you're in retirement, like you just can't
take that risk because because there's just too much on
the line, right, and that's having to go back to
work or not be able to enjoy your retirement like

(44:33):
you thought you would so.

Speaker 1 (44:34):
Many That's what I can say. Once you pass through that, uh,
that gate or where do you want to call it?
The pearly gates of financial independence, not deep early dates,
you don't want to go back out.

Speaker 2 (44:45):
And it's hard too, especially like you know, I could
log onto my Schwab account and and sell every holding
that I had in less than a minute. You know,
you have to protect yourself against you know, yourself, you know,
going down a rabbit hole on whatever news you're listening
to and going to all cash or not. And that said,
you know, we were just talking about rebouncing. I saw

(45:06):
an article from Fidelity that said, like, you know, seventy
five percent of people that have an allocation within you know,
with what they start at and with that, and they're
four to one k. So you know, let's say you're
a little skeptical right now, and you're twenty five years old,
and you start in all cash because you hate Donald Trump, right,
and then ten years goes by and you're still in

(45:27):
all cash. Yeah, you're contributing to your portfolio, but you're
missing out on all those games. So you know, I
think it's really important to at least, you know, every
every every half a year, you know, a year, to
look at your investments, see how they're doing, and maybe
adjust that a little bit.

Speaker 1 (45:41):
Right, I think you stay within the asset allocation model
that conforms to your longer term objectives and let all
the surrounding noise be just that. I will say too
that if you say, you know, when you watch we
have CNBC on all day here and the people that
you know, it always appears that the people on the

(46:03):
air are right. They have their certain cast of characters,
for sure. But I can think of somebody specifically who
was bearish on the market. Bearish on the market. He's
just not on anymore. So they bring someone on and
they say, well, you've been bearish, Well he's not on
when the market is going well. Now they're bringing bearish

(46:24):
people back, and you think, oh my gosh, this guy's
person woman man knows what he's talking about. He's barishing.
The market's going down. Well, if the market turns around
and goes up, it's not that they're going to put
this person back on and say, hey, you were wrong.
Why why why?

Speaker 2 (46:40):
They'll get the side to their own right, and CNBC
as well.

Speaker 1 (46:45):
So you think everybody on there knows is omnipotent. They
know everything about the market. So if they say sell Tesler,
buy Testla, you're gonna do it because.

Speaker 3 (46:53):
They know everything, and they have people on that fit
the narrative for that day, correct, right, yes, exactly three
or four hundred point and they're going to have people
that are bearish on it, and they're going to sound
smart because in your mind you're like, oh, the market's
also down three hundred points to that exactly.

Speaker 1 (47:07):
So anyways, what have we got? We only have that
minute or two left. You got anything else for us?

Speaker 2 (47:12):
I think the last one would be behavioral coaching, and
I think that's where we, you know, really try to
help people. You know, what we do know a lot
about is investments, and we know a lot about past
market cycles. You know, you've been through tons of tons
of bonus since nineteen eighty. I've been trying to you know,
I've been through a few.

Speaker 1 (47:29):
But even its twenty eleven, that's fourteen years. You got
your MBA, you gave us palent.

Speaker 2 (47:33):
Here, thank thank you, but also try to you know,
study the things that you know past market cycles and
give people perspective on things that have happened in the past.

Speaker 1 (47:45):
True and make sure that they don't shoot themselves in
the foot during times like this, you know, and you know,
make you know. If you want to do something with
your portfolio, work at it incrementally.

Speaker 2 (47:54):
You know.

Speaker 1 (47:54):
One of the things that the last one in there
and we don't have time for it is this spending
strategy withdrawal order. That's it's very important when you retire.
You know, where do you want to take your money
from IRA roth taxable account? You know, what's that going
to do to your Medicare premium? What's that going to
do to your taxes? Is it going to make more
of your Social Security taxable? When should you take your

(48:16):
Social Security? So withdrawal strategies or spending strategy and retirement
works as well. Right if you want to give us
a call during the week five one, eight, two, seven four,
check us out on the webit, faganasset dot com, like
us on Facebook, but certainly work with all your portfolio incrementally.
Thanks Yer,