Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
This is straight talk from the House with certified financial
planner Tracyanton right here on thirteen ten WU I B A.
Of course, Tracy comes to us from Tanton Investment House,
a fee only fiduciary. You can learn more online the
website Tantoninvestment House dot com. That's t A N T
O N Investment House dot com. Great opportunity to get
(00:24):
to know Tracy in the team. You can also listen
back to podcasts. There a little opportunity to contact Tracy
in the team as well. Again, that all available at
Tantoninvestment House dot com. Maybe you want to make contact
over the phone, you can always pick that up. Give
me a call six oh eight to five zero one,
fifteen forty nine. That's six oh eight five zero one,
fifteen forty nine. And joining us this morning is certified
(00:46):
financial planner Tracy Andton. Tracy, how you doing this week?
Speaker 2 (00:49):
I'm doing great, Sean, Good morning to you.
Speaker 1 (00:52):
Good morning, good to see you, Good to talk with you.
And we've got a I get to see a little preview.
So we've got a really timely conversation this week. What
are we going to be discussing today.
Speaker 2 (01:03):
Well, we're going to be talking about what everyone seems
to be talking about, which is the tariffs, as well
as the outlook for twenty twenty five. We'll be discussing Sean,
how the US really entered twenty twenty five with strong
economy and market optimism. So global conflicts, rising populism, and
potential policy shifts pose risks, of course, and of course
(01:23):
we have market volatility which remains a concern amongst high
equity valuations. And again this talk of tariffs and trade wars.
So we're going to talk about how this all fits together,
and we're going to discuss economist Jared France's outlook, and
he is the he's with the Capitol Group and he's
they manage the American funds and they're a good source.
(01:45):
I think, for you know, maybe calming some of our nerves.
Speaker 1 (01:49):
Right now should be an interesting show for sure. Don't
forget as we talk with certified financial planner Tracing Anton.
You can get to no tracing the team all on
the website tantoninvestment House dot com. That's e A N
T O N investment House dot com. So let's kick
off with tariffs. Tariffs, Tracy. That's a little bit of
a tongue twister tariffs.
Speaker 2 (02:09):
A lot of teas.
Speaker 1 (02:09):
Yeah, yes, let's let's talk about those.
Speaker 2 (02:14):
It's a great, it's it's great. It's important to talk
about it's tariff talk to and particularly looking through the
tariffs through the eyes of long term investing, because that's
how to be successful as a long term investor, you know,
you really need to look have that longer term view.
And so the question is is what are lasting impacts
of tariffs on the US and other countries and will
(02:37):
that really outweigh other factors that are driving the growth
of the US, which is the world's largest economy. So again,
Jared Frantz, who is an economist with the Capitol Group
and he manages they managed the American Funds. They he
was talking about tariffs and what the possible impacts are
on the economy, and he said that tariffs do not
change his overall positive view on the outlook for the economy.
(03:02):
He said that higher terriffs have actually been part of
his analysis for a number of years. Apparently, trade barriers
have been rising since the end of the global financial
crisis in two thousand and nine. So under both Biden
and Trump, trade barriers have risen sharply in recent years.
In fact, in March of twenty eighteen to September of
(03:22):
twenty nineteen, the Trump administration imposed sweeping tariffs on China,
and as of May of twenty twenty four, Biden administration
retained those Trump tariffs and then imposed higher rates on
additional products. Both presidents. So the initial tariff aimed at
Canada and Mexico are higher than what he had expected,
(03:43):
but those now have been delayed as everyone knows, and
maybe decreased or even disappeared. So again, the tariffs aimed
at China he thought were lower than he anticipated, So
that was interesting. And he thinks that Trump is more
concerned hot with how the US market reacts, right then
he is about the bond market, and that may reign
(04:03):
in his inclination to impose like very large trade barriers
or for very long periods of time, like extended periods
of time.
Speaker 1 (04:12):
So then as an economist, what is his view of
the of the economy.
Speaker 2 (04:15):
Then, yeah, he stands by his optimistic viewpoint and thinks
that the economy will continue to grow and his estimation
is about three percent GDP growth. And as we've talked
on last program, you know, he thinks that the US
economy is aging in reverse from going from a late
cycle phase back to a mid cycle and most importantly,
avoiding a recession. So a mid cycle sean is basically
(04:40):
characterized by rising corporate profits and increasing credit demand, easing
cost pressures, and a neutral monetary policy. So that was
evident in twenty twenty four, and it may signal up
basically a multi year expansion from here, potentially delaying a
recession until twenty twenty eight. So again, pharkly, mid cycle
(05:01):
periods have supported equities with an average annualrate of return
of fourteen percent since nineteen seventy three. Again, while past
performance doesn't guarantee future results, right, we all know that,
but Franz estimates such strong economic growth of two and
a half to three percent GDP again could create favorable
market conditions. So all this tariff talk does not change
(05:25):
his opinion of this positive outlook for the US economy.
Speaker 1 (05:29):
Really good to hear this morning as we talk with
certified financial planner Tracyanton right here on thirteen ten WIBA.
You heard Tracy mentioned we talked about some of this
stuff in the last program in some very great detail.
You can always listen back to this in previous shows,
whether it's at WIBA dot com or just head on
over to Tantoninvestmenthouse dot com. That's t A N t
(05:51):
O N investment House dot com. From there you can
learn more about Tracy and the team. You can also
schedule appointment right at tant On Investment House dot com
Telphy number six five zero one, fifteen forty nine. That's
sixh eight five zero one, fifteen forty nine. So Tracy,
let's talk rate cuts. So if they happen, how will
they affect the markets?
Speaker 2 (06:11):
Well, the Federal Reserve cycle of cutting interest rate could
give a strong boost to investors, creating a positive environment
for both the stocks and bonds. So with inflation slowing,
consumers spending staying strong currently, and corporate profits growing, the
US economy looks like it's set for a continued expansion.
So again, with the potential for new policies including regulatory reform,
(06:35):
tax cuts, and more defense spending, this could further support
this growth. Historically, sean rate cuts during economic growth have
been great for investors. So in three of the seven
rate cycle cutting cycles since nineteen eighty four that happened
outside of a recession, the S and P five hundred
averaged a twenty seven point nine percent return from the
(06:58):
first to the last cut, with more both sectors seeing
strong gains. Of course, you're right, no guarantees this will
happen again. However, when rate cuts happen before recession, stocks
typically struggle, but bonds have consistently delivered strong returns, you know,
all performing their typical numbers. So in general, you know,
(07:20):
markets do very well when the Fed cuts rates during
non recessionary periods, US stocks, international stocks, and bonds all
beat out cash compared to markets during recession, stocks tend
to struggle, while bonds all perform stocks and cash. So
you know, this bost positive outlook continuing into twenty twenty five.
Speaker 1 (07:40):
Really great stuff to hear as we talked about some
of the positivity and some of the reasons as we
look forward to be optimistic. Of course, as we talk
with certified financial planner Tracy Anton right here on thirteen
to ten WIBA. If you haven't had a chance to
get to know tracing the team, it's a great opportunity.
The website is a fantastic resource. Tantoninvestment House dot com.
That's t A N t O N investment House dot com.
(08:04):
You can learn more about Tracy. There's some great information
about t Anton Investment House on the website. Also an
opportunity to schedule appointment right on online at Tantoninvestment House
dot com. Links to podcasts as well, all up on
that website. Also, speaking of making contact with Tracing the team,
telephone number six oh eight five zero one, fifteen forty nine.
(08:24):
That's six oh eight five zero one, fifteen forty nine.
To do you our conversation with Tracey, we'll talk about
market leadership and kind of the outlook there. We'll get
the details from Tracy and we'll do that next as
Straight Talk from the House continues right here on thirteen
ten wui b A thirteen ten wui b A and
(08:46):
straight Talk from the House with certified financial planner Tracy Andton.
Of course, Tracy comes to us from Tanton Investment House,
a fee only fiduciary. You can get details, get more
information online the website Tanton Investment House dot com. That's
t A N t O N investment House dot com.
Again a great resource to learn more about the team
(09:08):
at Tanton Investment House. And of course a little nice
little welcome welcome story there from Tracy on the website
against t Anton Investment House dot Com telp number six
eight five zero one, fifteen forty nine. That's six oh
eight five zero one, fifteen forty nine. And Tracy, I'm
looking at the obviously visiting the website as everybody should,
and there's the picture of you, and I said, I
(09:29):
remember the day though some of those pictures were taken there.
Speaker 2 (09:34):
I know, right. I mean, every once in a while
my it pops up in my feed in Facebook about
you know, different photos we've taken in different studios, and
I'm like, Yep, time keeps marching on.
Speaker 1 (09:47):
It does it doesn't, it's and it's you knows. As
we talk about time and kind of where we where
we are and looking back to where we've been, it's
also important to get some insight into where we're going.
And as we're talking this week about twenty twenty five
and where we are right now, but also looking ahead,
Tracy will kind of go back to a normal economy
(10:08):
in twenty twenty five or what's what's kind of the
thinking there or the take there.
Speaker 2 (10:12):
Yeah, that's a good question. So Capital Group's president and
CEO Mike Gitlin says that the federal reserver has largely
met its goal with inflation easing in labor markets staying strong,
so he said, the next step is to fine tune
interest rates to maintain a stability in the economy. So
fiscal policies are adding uncertainty, of course to the Fed's outlook,
(10:33):
especially in the economy. Especially with the economy remaining resilient,
interest rates don't seem to be holding back growth. So
with the recession, the FED cuts rate cuts less than
are less than expected before the election, so he said,
Gitlin expects there to be only to be one or
two rate cuts in twenty twenty five and one in
(10:53):
twenty twenty six because unemployment and inflation has settled down,
he said. He also mentioned that the post global financial
crisis mindset of having a zero interest rate policy is
long gone and we will continue to see like a
three to four percent risk free rate is in his opinion.
Speaker 1 (11:11):
That is fascinating. And really, you know, we talk about
this stuff. I know a lot of people we tend
to put like with elections and things we get really work.
And I know we've talked on previous shows, you know,
as leading up to elections, people people and it's natural
get uneasy, and then you kind of get into the
next administration, and then it takes a little bit of time.
I feel just like, okay, things are I get this now,
and it kind of calm things down and make make
(11:34):
folks feel a little more comfortable and Tracy, as we're
working through this, I do want to ask you about
market leadership. I just want to mention too, for folks
that haven't a chance to check out the website Tanton
Investment House dot com, it's a really good data head
on over there. Make sure you bookmark the page as well.
A lot of stuff gets updated there. If you haven't
been back and checked back for a while, it's a
really good data head on over to Tanton Investment House
(11:56):
dot com. So, Tracy, and speaking of that market leadership,
do we expect the US to maintain kind of that
that leadership role through twenty twenty five?
Speaker 2 (12:03):
Yeah? I think so. So the US is really well
positioned to maintain its market leadership throughout twenty twenty five.
The economy remains strong with slowing inflation, resilient consumer spending,
and robust corporate profit growth. So fiscal policies such as
potential tax cuts and deregulation under the incoming administration may
further support economic expansion and risk assets. Right, So we're
(12:28):
in that now. We'll see what happens there with the
tax cuts, and they're talking about deregulation, which will help
you know, insurance companies, it will help banks, it will
help a lot of companies. So it will even help
you know, companies like me, you know, So it's it's
a big deal. So one other interesting point is since
the two thousand and eight financial crisis, the US MSCI
(12:48):
is up about one hundred and forty percent, whereas the
world outside the US is almost flat. So that's interesting.
So the US has had a lot very large recovery
since then, while the rest of the world world has
still struggled, although this comes with a downsize as US
valuations are at all time highs. We are currently at
an all time high for stock market cap to GDP,
(13:10):
so this is largely due to large increase in technology
secks and their increase in price, and this has caused
you know, market valuations to rise.
Speaker 1 (13:20):
And MSCI is Morgan Stanley's it's a track right right analytic. Yes, okay,
you mentioned that. I know you've talked about it before,
and I remember going into depth about him, like do
my rememory.
Speaker 3 (13:34):
Okay, perfect, you know it's basically the world economy, okay,
you know, and it's just it's saying that the US
has basically been the market cap and you know, because
we've really implemented these you know, changing the interest rates
so quickly.
Speaker 2 (13:48):
You know, Europe was slow to do these things, and
so they've suffered. But that doesn't mean that you don't
have good international stocks. And I think that's also important.
I mean, you're looking at countries, but then you should
really look at when when mutual funds do this shown
they are looking at specific companies and saying like, right now,
you know, we have this magnificent seven seven sex that
(14:08):
we all know, right, and but there's the magnificent seven
that are outside of the US as well, right, And
so international stocks, you know, did well last year, and
so hopefully when you're looking at your portfolio, don't just say, well,
I'm going to be only US, because I think that
is a mistake. Don't do just US, because especially because
(14:29):
US valuations are high, you should have both international and
US because you know there's a lot of you know,
I think over it used to be the figure was
like over fifty percent of the of the stocks that
you can invest in lie outside the US, and so
you know you've got great opportunities and they're less expensive.
You know. So if you can think of any any company,
(14:51):
you know, any car company, and it's comparable car company international,
and vice versus shoe company. It doesn't matter. You know,
there's great companies that are outside. It's just that you
don't want to be overly heavily weighted because the US
is expected to grow and is expected to do well,
so you know you've got to have a balance there.
Speaker 1 (15:09):
And Tracey, you mentioned the Magnificent seven made up of
a lot of tech, and I think a lot of
people wonder, then, is well is the tech sector? Is
that the only only sector that we're seeing strong growth?
Speaker 2 (15:19):
No, technology is not actually the only sector experiencing strong
growth right now, Sean, but it is one we all
talk about, right But sectors like healthcare, financials, and industrials
are also seeing faster earnings growth compared to their five
year historical averages. And while information technology stands out, other
sectors such as materials and consumer discretionaries are contributing to
(15:41):
growth as well, highlighting what's really good, a broader expansion
across the multiple areas of the economy. So when they
talk about the breath of the market, they're talking about,
you know, how other companies are doing well. It's not
so narrow as it had been with just seven stocks,
you know, basically keeping the S and P five up,
(16:02):
you know, SMP five hundred up. It's you know, it's
it's widened, and that's so good. It's really kind of
a relief for people to see, well, you know a
lot of companies are doing well. So again, there are
many expectations in these sectors, and investors need to be
careful about these high expectations, especially when you have really
high GDPs, because some are very high. But again, when
(16:25):
I try to look at portfolios, I show them, okay,
you know, how much are we in value versus growth?
And how much in blend, how much large gap, mid kept,
small cap, how much US and international? We take a
really deep dive. And I think that's really helpful because
then you can say, okay, actually I have less risk
than the S and P five hundred because I'm actually
higher value, but my returns look great, you know. So
(16:47):
that's the kind of stuff that you really want to
focus on and make sure you're well diversified.
Speaker 1 (16:51):
Right, Yes, talking this morning with certified financial planner Tracy
Anton right here on thirteen ten WIBA and talk to
you about I asked you about some of the differsifying
and I get some details on that and just a
moment from Tracy in the meantime, Really hope you get
a chance to head on over to Tanton investment House
dot com. That's t a N t o N investment
house dot com. You can learn more about Tracy and
(17:12):
the team all on the website and a lot of
other great information available to you at Tanton Investmenthouse dot com.
That's t A N t O N investment House dot com.
Delph ubbers six eight five zero one fifteen forty nine.
That's six h eight five zero one fifteen forty nine,
So Tracy along those lines, should investors then be diversifying more? Well?
Speaker 2 (17:33):
Again, I just think international stocks have really gained a
lot of attention lately, as some US investors think that
the US market is overvalued. So again, India and China,
which are two major emerging markets, have taken very different
paths over the last five years. Indian stocks have actually
significantly outperformed Chinese ones, and this has led to differing
(17:54):
market valuations, with each country offering unique investment opportunities and risks.
In India, for example, the rise of smartphones among its young,
large populations benefited telecon companies like Marti Airtel, and however,
with you know, these high valuations, investors again need to
be pretty selective. But China, China's large domestic market could
(18:18):
see growth with more government support, creating opportunities for leading
online companies like Tencent and net Ease. So again, these
companies have strong cash flows, dominant positions, and good management.
But investing in China comes with increased risk due to
tensions with the US and trade policies under the new
US administration. So again, I just believe it's really good
(18:38):
to have exposure in international stocks. I'm not I'm not
for you know, a lot of emerging markets. I just
think a lot of people who come to see me
are people who are about to retire. They're you know,
are a few years out from retirement and or they're
just retired, and they say, okay, you know, how does
my portfolio look? Am I prepared? You know? Can I
(19:00):
can I retire so again, I think, you know, if again,
you should have some international exposure because a lot of
the stock, a lot of high quality stocks are outside
the US. But I wouldn't be overly exposed. So I
know what everyone's thinking right now, Well, how much is that? Right?
Can you give me a number? Say? Oh, yeah, I
listen to people, I'm like, okay, can you just break
(19:21):
it down to a percentage so I can get a
sense of what you're talking about. So without looking at
your portfolio, I don't know your exact number, because how
much are you in stocks versus bonds? Are you eighty
percent stocks or seventy percent stocks or one hundred percent stocks?
Because you're aggressive and you have a pension or you know,
there's there's a lot of caveat here. There's a lot
of room for discussion. So but just a sense I
(19:45):
saw a portfolio recently that had about twenty five percent
in international. Now is that too much? Now? To me,
that's a bit high. That's a bit high, but it
could be okay. I mean international is poised to do
pretty well, did well last year, but I probably would
remain more like fifteen to.
Speaker 1 (20:03):
Twenty really, uh, really, insightful and that I think that's
one of the things too. We talk about the personalization
and everybody's situation is unique, everybody's investment mixes is different,
and that's one of the great things about working with
Tracy and the team at t Anton Investment House is
really getting to know you, your tolerances, your expectations, what your
goals are, and Tracy'd love to get to know. You
(20:24):
can learn more about everyone at t Anton Investment House
on the website Tanton investment House dot com. That's t
A N t O N investment House dot com. Great
website and great resource again to learn more about Tracy
and the team. You can also listen back to this
in previous shows, podcasts. More information and news and stuff
up at the website and the telephone number six oh
eight five zero one fifteen forty nine. That's six oh
(20:46):
eight five zero one fifteen forty nine. Tracy, it's always
great chatting with you. Have a fantastic day and we'll
do it all again real soon.
Speaker 2 (20:53):
Okay, great, thank you.
Speaker 1 (20:54):
Take care. Tracy Anton certified you do the same certified
financial planner at t Anton and Investment House. Again that
website Tanton investmenthouse dot com. That's t A N t
O N investment house dot com.
Speaker 2 (21:13):
MHM,
This is straight talk from the House with certified financial
planner Tracyanton right here on thirteen ten WU I B A.
Of course, Tracy comes to us from Tanton Investment House,
a fee only fiduciary. You can learn more online the
website Tantoninvestment House dot com. That's t A N T
O N Investment House dot com. Great opportunity to get
(00:24):
to know Tracy in the team. You can also listen
back to podcasts. There a little opportunity to contact Tracy
in the team as well. Again, that all available at
Tantoninvestment House dot com. Maybe you want to make contact
over the phone, you can always pick that up. Give
me a call six oh eight to five zero one,
fifteen forty nine. That's six oh eight five zero one,
fifteen forty nine. And joining us this morning is certified
(00:46):
financial planner Tracy Andton. Tracy, how you doing this week?
Speaker 2 (00:49):
I'm doing great, Sean, Good morning to you.
Speaker 1 (00:52):
Good morning, good to see you, Good to talk with you.
And we've got a I get to see a little preview.
So we've got a really timely conversation this week. What
are we going to be discussing today.
Speaker 2 (01:03):
Well, we're going to be talking about what everyone seems
to be talking about, which is the tariffs, as well
as the outlook for twenty twenty five. We'll be discussing Sean,
how the US really entered twenty twenty five with strong
economy and market optimism. So global conflicts, rising populism, and
potential policy shifts pose risks, of course, and of course
(01:23):
we have market volatility which remains a concern amongst high
equity valuations. And again this talk of tariffs and trade wars.
So we're going to talk about how this all fits together,
and we're going to discuss economist Jared France's outlook, and
he is the he's with the Capitol Group and he's
they manage the American funds and they're a good source.
(01:45):
I think, for you know, maybe calming some of our nerves.
Speaker 1 (01:49):
Right now should be an interesting show for sure. Don't
forget as we talk with certified financial planner Tracing Anton.
You can get to no tracing the team all on
the website tantoninvestment House dot com. That's e A N
T O N investment House dot com. So let's kick
off with tariffs. Tariffs, Tracy. That's a little bit of
a tongue twister tariffs.
Speaker 2 (02:09):
A lot of teas.
Speaker 1 (02:09):
Yeah, yes, let's let's talk about those.
Speaker 2 (02:14):
It's a great, it's it's great. It's important to talk
about it's tariff talk to and particularly looking through the
tariffs through the eyes of long term investing, because that's
how to be successful as a long term investor, you know,
you really need to look have that longer term view.
And so the question is is what are lasting impacts
of tariffs on the US and other countries and will
(02:37):
that really outweigh other factors that are driving the growth
of the US, which is the world's largest economy. So again,
Jared Frantz, who is an economist with the Capitol Group
and he manages they managed the American Funds. They he
was talking about tariffs and what the possible impacts are
on the economy, and he said that tariffs do not
change his overall positive view on the outlook for the economy.
(03:02):
He said that higher terriffs have actually been part of
his analysis for a number of years. Apparently, trade barriers
have been rising since the end of the global financial
crisis in two thousand and nine. So under both Biden
and Trump, trade barriers have risen sharply in recent years.
In fact, in March of twenty eighteen to September of
(03:22):
twenty nineteen, the Trump administration imposed sweeping tariffs on China,
and as of May of twenty twenty four, Biden administration
retained those Trump tariffs and then imposed higher rates on
additional products. Both presidents. So the initial tariff aimed at
Canada and Mexico are higher than what he had expected,
(03:43):
but those now have been delayed as everyone knows, and
maybe decreased or even disappeared. So again, the tariffs aimed
at China he thought were lower than he anticipated, So
that was interesting. And he thinks that Trump is more
concerned hot with how the US market reacts, right then
he is about the bond market, and that may reign
(04:03):
in his inclination to impose like very large trade barriers
or for very long periods of time, like extended periods
of time.
Speaker 1 (04:12):
So then as an economist, what is his view of
the of the economy.
Speaker 2 (04:15):
Then, yeah, he stands by his optimistic viewpoint and thinks
that the economy will continue to grow and his estimation
is about three percent GDP growth. And as we've talked
on last program, you know, he thinks that the US
economy is aging in reverse from going from a late
cycle phase back to a mid cycle and most importantly,
avoiding a recession. So a mid cycle sean is basically
(04:40):
characterized by rising corporate profits and increasing credit demand, easing
cost pressures, and a neutral monetary policy. So that was
evident in twenty twenty four, and it may signal up
basically a multi year expansion from here, potentially delaying a
recession until twenty twenty eight. So again, pharkly, mid cycle
(05:01):
periods have supported equities with an average annualrate of return
of fourteen percent since nineteen seventy three. Again, while past
performance doesn't guarantee future results, right, we all know that,
but Franz estimates such strong economic growth of two and
a half to three percent GDP again could create favorable
market conditions. So all this tariff talk does not change
(05:25):
his opinion of this positive outlook for the US economy.
Speaker 1 (05:29):
Really good to hear this morning as we talk with
certified financial planner Tracyanton right here on thirteen ten WIBA.
You heard Tracy mentioned we talked about some of this
stuff in the last program in some very great detail.
You can always listen back to this in previous shows,
whether it's at WIBA dot com or just head on
over to Tantoninvestmenthouse dot com. That's t A N t
(05:51):
O N investment House dot com. From there you can
learn more about Tracy and the team. You can also
schedule appointment right at tant On Investment House dot com
Telphy number six five zero one, fifteen forty nine. That's
sixh eight five zero one, fifteen forty nine. So Tracy,
let's talk rate cuts. So if they happen, how will
they affect the markets?
Speaker 2 (06:11):
Well, the Federal Reserve cycle of cutting interest rate could
give a strong boost to investors, creating a positive environment
for both the stocks and bonds. So with inflation slowing,
consumers spending staying strong currently, and corporate profits growing, the
US economy looks like it's set for a continued expansion.
So again, with the potential for new policies including regulatory reform,
(06:35):
tax cuts, and more defense spending, this could further support
this growth. Historically, sean rate cuts during economic growth have
been great for investors. So in three of the seven
rate cycle cutting cycles since nineteen eighty four that happened
outside of a recession, the S and P five hundred
averaged a twenty seven point nine percent return from the
(06:58):
first to the last cut, with more both sectors seeing
strong gains. Of course, you're right, no guarantees this will
happen again. However, when rate cuts happen before recession, stocks
typically struggle, but bonds have consistently delivered strong returns, you know,
all performing their typical numbers. So in general, you know,
(07:20):
markets do very well when the Fed cuts rates during
non recessionary periods, US stocks, international stocks, and bonds all
beat out cash compared to markets during recession, stocks tend
to struggle, while bonds all perform stocks and cash. So
you know, this bost positive outlook continuing into twenty twenty five.
Speaker 1 (07:40):
Really great stuff to hear as we talked about some
of the positivity and some of the reasons as we
look forward to be optimistic. Of course, as we talk
with certified financial planner Tracy Anton right here on thirteen
to ten WIBA. If you haven't had a chance to
get to know tracing the team, it's a great opportunity.
The website is a fantastic resource. Tantoninvestment House dot com.
That's t A N t O N investment House dot com.
(08:04):
You can learn more about Tracy. There's some great information
about t Anton Investment House on the website. Also an
opportunity to schedule appointment right on online at Tantoninvestment House
dot com. Links to podcasts as well, all up on
that website. Also, speaking of making contact with Tracing the team,
telephone number six oh eight five zero one, fifteen forty nine.
(08:24):
That's six oh eight five zero one, fifteen forty nine.
To do you our conversation with Tracey, we'll talk about
market leadership and kind of the outlook there. We'll get
the details from Tracy and we'll do that next as
Straight Talk from the House continues right here on thirteen
ten wui b A thirteen ten wui b A and
(08:46):
straight Talk from the House with certified financial planner Tracy Andton.
Of course, Tracy comes to us from Tanton Investment House,
a fee only fiduciary. You can get details, get more
information online the website Tanton Investment House dot com. That's
t A N t O N investment House dot com.
Again a great resource to learn more about the team
(09:08):
at Tanton Investment House. And of course a little nice
little welcome welcome story there from Tracy on the website
against t Anton Investment House dot Com telp number six
eight five zero one, fifteen forty nine. That's six oh
eight five zero one, fifteen forty nine. And Tracy, I'm
looking at the obviously visiting the website as everybody should,
and there's the picture of you, and I said, I
(09:29):
remember the day though some of those pictures were taken there.
Speaker 2 (09:34):
I know, right. I mean, every once in a while
my it pops up in my feed in Facebook about
you know, different photos we've taken in different studios, and
I'm like, Yep, time keeps marching on.
Speaker 1 (09:47):
It does it doesn't, it's and it's you knows. As
we talk about time and kind of where we where
we are and looking back to where we've been, it's
also important to get some insight into where we're going.
And as we're talking this week about twenty twenty five
and where we are right now, but also looking ahead,
Tracy will kind of go back to a normal economy
(10:08):
in twenty twenty five or what's what's kind of the
thinking there or the take there.
Speaker 2 (10:12):
Yeah, that's a good question. So Capital Group's president and
CEO Mike Gitlin says that the federal reserver has largely
met its goal with inflation easing in labor markets staying strong,
so he said, the next step is to fine tune
interest rates to maintain a stability in the economy. So
fiscal policies are adding uncertainty, of course to the Fed's outlook,
(10:33):
especially in the economy. Especially with the economy remaining resilient,
interest rates don't seem to be holding back growth. So
with the recession, the FED cuts rate cuts less than
are less than expected before the election, so he said,
Gitlin expects there to be only to be one or
two rate cuts in twenty twenty five and one in
(10:53):
twenty twenty six because unemployment and inflation has settled down,
he said. He also mentioned that the post global financial
crisis mindset of having a zero interest rate policy is
long gone and we will continue to see like a
three to four percent risk free rate is in his opinion.
Speaker 1 (11:11):
That is fascinating. And really, you know, we talk about
this stuff. I know a lot of people we tend
to put like with elections and things we get really work.
And I know we've talked on previous shows, you know,
as leading up to elections, people people and it's natural
get uneasy, and then you kind of get into the
next administration, and then it takes a little bit of time.
I feel just like, okay, things are I get this now,
and it kind of calm things down and make make
(11:34):
folks feel a little more comfortable and Tracy, as we're
working through this, I do want to ask you about
market leadership. I just want to mention too, for folks
that haven't a chance to check out the website Tanton
Investment House dot com, it's a really good data head
on over there. Make sure you bookmark the page as well.
A lot of stuff gets updated there. If you haven't
been back and checked back for a while, it's a
really good data head on over to Tanton Investment House
(11:56):
dot com. So, Tracy, and speaking of that market leadership,
do we expect the US to maintain kind of that
that leadership role through twenty twenty five?
Speaker 2 (12:03):
Yeah? I think so. So the US is really well
positioned to maintain its market leadership throughout twenty twenty five.
The economy remains strong with slowing inflation, resilient consumer spending,
and robust corporate profit growth. So fiscal policies such as
potential tax cuts and deregulation under the incoming administration may
further support economic expansion and risk assets. Right, So we're
(12:28):
in that now. We'll see what happens there with the
tax cuts, and they're talking about deregulation, which will help
you know, insurance companies, it will help banks, it will
help a lot of companies. So it will even help
you know, companies like me, you know, So it's it's
a big deal. So one other interesting point is since
the two thousand and eight financial crisis, the US MSCI
(12:48):
is up about one hundred and forty percent, whereas the
world outside the US is almost flat. So that's interesting.
So the US has had a lot very large recovery
since then, while the rest of the world world has
still struggled, although this comes with a downsize as US
valuations are at all time highs. We are currently at
an all time high for stock market cap to GDP,
(13:10):
so this is largely due to large increase in technology
secks and their increase in price, and this has caused
you know, market valuations to rise.
Speaker 1 (13:20):
And MSCI is Morgan Stanley's it's a track right right analytic. Yes, okay,
you mentioned that. I know you've talked about it before,
and I remember going into depth about him, like do
my rememory.
Speaker 3 (13:34):
Okay, perfect, you know it's basically the world economy, okay,
you know, and it's just it's saying that the US
has basically been the market cap and you know, because
we've really implemented these you know, changing the interest rates
so quickly.
Speaker 2 (13:48):
You know, Europe was slow to do these things, and
so they've suffered. But that doesn't mean that you don't
have good international stocks. And I think that's also important.
I mean, you're looking at countries, but then you should
really look at when when mutual funds do this shown
they are looking at specific companies and saying like, right now,
you know, we have this magnificent seven seven sex that
(14:08):
we all know, right, and but there's the magnificent seven
that are outside of the US as well, right, And
so international stocks, you know, did well last year, and
so hopefully when you're looking at your portfolio, don't just say, well,
I'm going to be only US, because I think that
is a mistake. Don't do just US, because especially because
(14:29):
US valuations are high, you should have both international and
US because you know there's a lot of you know,
I think over it used to be the figure was
like over fifty percent of the of the stocks that
you can invest in lie outside the US, and so
you know you've got great opportunities and they're less expensive.
You know. So if you can think of any any company,
(14:51):
you know, any car company, and it's comparable car company international,
and vice versus shoe company. It doesn't matter. You know,
there's great companies that are outside. It's just that you
don't want to be overly heavily weighted because the US
is expected to grow and is expected to do well,
so you know you've got to have a balance there.
Speaker 1 (15:09):
And Tracey, you mentioned the Magnificent seven made up of
a lot of tech, and I think a lot of
people wonder, then, is well is the tech sector? Is
that the only only sector that we're seeing strong growth?
Speaker 2 (15:19):
No, technology is not actually the only sector experiencing strong
growth right now, Sean, but it is one we all
talk about, right But sectors like healthcare, financials, and industrials
are also seeing faster earnings growth compared to their five
year historical averages. And while information technology stands out, other
sectors such as materials and consumer discretionaries are contributing to
(15:41):
growth as well, highlighting what's really good, a broader expansion
across the multiple areas of the economy. So when they
talk about the breath of the market, they're talking about,
you know, how other companies are doing well. It's not
so narrow as it had been with just seven stocks,
you know, basically keeping the S and P five up,
(16:02):
you know, SMP five hundred up. It's you know, it's
it's widened, and that's so good. It's really kind of
a relief for people to see, well, you know a
lot of companies are doing well. So again, there are
many expectations in these sectors, and investors need to be
careful about these high expectations, especially when you have really
high GDPs, because some are very high. But again, when
(16:25):
I try to look at portfolios, I show them, okay,
you know, how much are we in value versus growth?
And how much in blend, how much large gap, mid kept,
small cap, how much US and international? We take a
really deep dive. And I think that's really helpful because
then you can say, okay, actually I have less risk
than the S and P five hundred because I'm actually
higher value, but my returns look great, you know. So
(16:47):
that's the kind of stuff that you really want to
focus on and make sure you're well diversified.
Speaker 1 (16:51):
Right, Yes, talking this morning with certified financial planner Tracy
Anton right here on thirteen ten WIBA and talk to
you about I asked you about some of the differsifying
and I get some details on that and just a
moment from Tracy in the meantime, Really hope you get
a chance to head on over to Tanton investment House
dot com. That's t a N t o N investment
house dot com. You can learn more about Tracy and
(17:12):
the team all on the website and a lot of
other great information available to you at Tanton Investmenthouse dot com.
That's t A N t O N investment House dot com.
Delph ubbers six eight five zero one fifteen forty nine.
That's six h eight five zero one fifteen forty nine,
So Tracy along those lines, should investors then be diversifying more? Well?
Speaker 2 (17:33):
Again, I just think international stocks have really gained a
lot of attention lately, as some US investors think that
the US market is overvalued. So again, India and China,
which are two major emerging markets, have taken very different
paths over the last five years. Indian stocks have actually
significantly outperformed Chinese ones, and this has led to differing
(17:54):
market valuations, with each country offering unique investment opportunities and risks.
In India, for example, the rise of smartphones among its young,
large populations benefited telecon companies like Marti Airtel, and however,
with you know, these high valuations, investors again need to
be pretty selective. But China, China's large domestic market could
(18:18):
see growth with more government support, creating opportunities for leading
online companies like Tencent and net Ease. So again, these
companies have strong cash flows, dominant positions, and good management.
But investing in China comes with increased risk due to
tensions with the US and trade policies under the new
US administration. So again, I just believe it's really good
(18:38):
to have exposure in international stocks. I'm not I'm not
for you know, a lot of emerging markets. I just
think a lot of people who come to see me
are people who are about to retire. They're you know,
are a few years out from retirement and or they're
just retired, and they say, okay, you know, how does
my portfolio look? Am I prepared? You know? Can I
(19:00):
can I retire so again, I think, you know, if again,
you should have some international exposure because a lot of
the stock, a lot of high quality stocks are outside
the US. But I wouldn't be overly exposed. So I
know what everyone's thinking right now, Well, how much is that? Right?
Can you give me a number? Say? Oh, yeah, I
listen to people, I'm like, okay, can you just break
(19:21):
it down to a percentage so I can get a
sense of what you're talking about. So without looking at
your portfolio, I don't know your exact number, because how
much are you in stocks versus bonds? Are you eighty
percent stocks or seventy percent stocks or one hundred percent stocks?
Because you're aggressive and you have a pension or you know,
there's there's a lot of caveat here. There's a lot
of room for discussion. So but just a sense I
(19:45):
saw a portfolio recently that had about twenty five percent
in international. Now is that too much? Now? To me,
that's a bit high. That's a bit high, but it
could be okay. I mean international is poised to do
pretty well, did well last year, but I probably would
remain more like fifteen to.
Speaker 1 (20:03):
Twenty really, uh, really, insightful and that I think that's
one of the things too. We talk about the personalization
and everybody's situation is unique, everybody's investment mixes is different,
and that's one of the great things about working with
Tracy and the team at t Anton Investment House is
really getting to know you, your tolerances, your expectations, what your
goals are, and Tracy'd love to get to know. You
(20:24):
can learn more about everyone at t Anton Investment House
on the website Tanton investment House dot com. That's t
A N t O N investment House dot com. Great
website and great resource again to learn more about Tracy
and the team. You can also listen back to this
in previous shows, podcasts. More information and news and stuff
up at the website and the telephone number six oh
eight five zero one fifteen forty nine. That's six oh
(20:46):
eight five zero one fifteen forty nine. Tracy, it's always
great chatting with you. Have a fantastic day and we'll
do it all again real soon.
Speaker 2 (20:53):
Okay, great, thank you.
Speaker 1 (20:54):
Take care. Tracy Anton certified you do the same certified
financial planner at t Anton and Investment House. Again that
website Tanton investmenthouse dot com. That's t A N t
O N investment house dot com.
Speaker 2 (21:13):
MHM,
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