Brian Regan is Focused on the 2nd Half

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Welcome to Something More with Chris Boyd.

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Chris Boyd is a certified financial planner, practitioner,

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and senior vice president and financial advisor at

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Wealth Enhancement Group, one of the nation's largest

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registered investment advisors.

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We call it Something More because we'd like

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to talk not only about those important dollar

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and cents issues, but also the quality of

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life issues that make the money matters matter.

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Here he is, your fulfillment facilitator, your partner

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in prosperity, advising clients on Cape Cod and

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across the country.

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Here's your host, Jay Christopher Boyd.

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Welcome to Something More with Chris Boyd.

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I'm here with Jeff Perry and Brian Regan.

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All of us are with the AMR team

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at Wealth Enhancement, and glad to have you

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joining us for a segment.

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So glad to have you back.

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You each were on vacation last week.

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Not together.

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Fair enough.

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But I missed you both.

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Would it be that bad, Jeff?

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I don't know, based upon- You don't

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have the time of your life.

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Maybe for the first two days.

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After that, it would probably be downhill.

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I think we both feel that way, as

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previously discussed.

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It's that time of year, a great time

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of year to take a vacation.

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So you guys picked the perfect week, I

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think.

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I billed this previously, Brian, that we were

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going to talk to you about, hey, where

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are we at at the half, and how

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are things going?

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And then I forgot you were on vacation.

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So I billed it again last week for

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this week.

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So here we are.

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Lots to think about.

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So much going on in the world in

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terms of foreign policy issues.

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We've had issues with Iran that came up

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a month ago, maybe.

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We've had the looming question of what's happening

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with tariffs that's evolving and developing.

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We had this big legislation, which we'll talk

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about in another episode shortly.

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So there's so much going on.

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I think investors look at things and say,

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well, it seems like things are going well.

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How should I be thinking about the second

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half of the year?

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And so I just wanted to have an

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opportunity for you to talk a little bit

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about some of this, and maybe offer some

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insight and guidance for our listeners as to

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how do we think about all that's going

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on in the world, and how does that

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play into some of the thinking people might

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want to give consideration to with their portfolio

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as we look into the latter part of

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the year?

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So if you fell asleep on January 1st

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and you woke up on June 30th, you'd

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probably be pretty thrilled with your investment returns,

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or at least happy, would be my guess.

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Maybe not thrilled when you compare it to

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2024 and 2023.

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The reality is, for better or for worse,

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we don't go into a coma for six

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months at a time.

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I'll say that's better.

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But year to date through July 9th, the

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S&P 500 was up 7.16%

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total returns, so that includes dividends.

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The aggregate bond index was up 3.64%.

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So objectively, that's pretty nice.

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You're getting something from your fixed income.

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You're tracking at over 7% on your

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fixed income, which is much higher than the

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stated yields that you're going to get on

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investment grade fixed income right now.

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And you're tracking for close to 14%

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on the S&P 500, which is around

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the 10-year average.

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We've had a very good decade for stocks.

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So if you just fell asleep and woke

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up, that'd be nice.

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Of course, we all lived through the end

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of the first quarter though, and a quote

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unquote liberation day where we had some wild

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tariff policy that came into effect.

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And I have this interesting chart from JP

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Morgan.

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If you bear with me a second, I

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can just take a comment.

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So on April 8th, the effective tax rate

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on imports was going to be 30%, which

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is basically the highest it had ever been

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going back to the year 1900.

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I'm happy to say that as of June

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30th, it's down to 15%.

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So we've dialed back the tariff dramatically and

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we've started kicking the can down the road

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on tariffs.

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The reciprocal tariffs, the deadline was July 4th.

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I think we all know that was a

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soft deadline.

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Now it's going to be August 1st.

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We'll see what happens.

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There's been a lot of rhetoric and a

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lot of threats about copper and pharmaceutical tariffs

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as of late, but the general trend has

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been a softening of the tariffs from the

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peak issue that we were seeing.

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So there was a lot of investment considerations

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based on that.

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So we had a dramatic sell-off when

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the effective tariff rate was at 30%.

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And as we've ratcheted down to 15%, we've

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seen a recovery in the market.

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And last quarter, I said, if we have

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a continued tariff war with these outrageous rates,

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we're probably going to have a global recession.

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And the S&P 500 could be looking

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at 4,000.

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At the time, the S&P 500 was

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around 5,000.

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And as we've come down, we're back at

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all-time highs.

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It begs the question, what would have happened

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if we didn't have this friction in the

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economy and these additional tariffs?

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Would we be having even a better year?

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The other consequence of this is the dollar

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has fallen dramatically to the tune of around

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10%.

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This has been a direct tailwind for international

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stocks.

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If you look at international stocks on a

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dollar basis, you see that it's done about

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18%, 19% year-to-date, much better

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than the S&P 500.

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If you were to strip out the effects

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of the dollar, it's only about 8%, 9%.

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A little bit better than the S&P

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500, but not dramatically different.

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So the tariffs have had a negative effect

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on the dollar, where less exporting of dollar

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or less imports are devaluing the dollar.

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In addition to that, the confidence in the

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United States has likely gone down as well

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because of this.

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So this has been a tailwind to international

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stocks.

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This is interesting because it's really been an

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underperformer.

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International stocks have been underperforming against the S

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&P 500 for a very long time, as

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we've talked about.

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So if you maintained some diversification, some allocation

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to international stocks, you did very, very well

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relative to the S&P 500.

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So that's the good news, right?

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We've had a good year.

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International stocks have done well.

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If you've been diversified, you've done well.

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But the tough thing is there is some

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friction in the economy, and we can all

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hope that the progress we're seeing on the

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tariff front continues.

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Now, if the progress on the tariff front

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does continue, I would expect some strengthening in

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the dollar since the tariffs were the issue

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for the dollar in the first place.

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And then you might see some reversal in

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leadership in the second half.

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So when we think about the second half,

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and I've said this to my colleagues at

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Wealth Enhancement and our macro meeting, I would

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be very careful to chase international stocks because

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if we do have a continued reversal of

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this tariff policy, we could see some leadership

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from domestic stocks going forward.

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Now, if we're going to drill into, if

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we're going to double click or we're going

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to dig into whatever you want to use

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for your segue into domestic stocks, where do

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you want to be?

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We have been focused on a few areas.

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We've been focused on utilities and semiconductors.

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And why?

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Because there's, and mega cap growth themes.

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Why?

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Because there's been an enormous investment in the

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AI trend.

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That means for power generation, queue up utilities.

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That also means for semiconductors because you need

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computers to generate all this new content.

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You need GPUs, you need CPUs, you need

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inference chips, you need everybody's working on custom

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chips for inferencing, for example.

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So we keep seeing that spend grow.

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And even at faster rates from the quote

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unquote hyperscalers than we expected just six months

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ago, it keeps growing at a great, great

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clip.

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So, you know, I think that is going

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to lead to a competitive advantage for the

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mega cap growth names.

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It's going to be a competitive advantage for

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the semiconductor equipment and semiconductor design companies, most

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notably Nvidia and the design capabilities.

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And I think you've seen that.

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Now, what do you, what do I think

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is going to suffer or where you need

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to be less focused on?

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I think discretionary and cyclicals you need to

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be careful with.

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So why do I say that?

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Well, Ed Bastian, the CEO of Delta was

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on CNBC this morning after discussing his first

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quarter results.

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And what we're seeing is the front of

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the cabin is up 5% in revenue

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and the back of the cabin is down

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5% in revenue.

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So we do have this dichotomy of who's

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doing well in America and who's not doing

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well.

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And that's one interesting data point that's top

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of mind, but you could find this data

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basically anywhere, right?

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Credit card spend is higher, delinquencies on autos

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are higher, things of that nature.

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You're seeing the lower part of the consumer

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not doing as well as the upper end.

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So, you know, for me, that means that

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you kind of want to be careful around

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discretionary goods.

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We've generally seen a decline in discretionary spend.

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So, you know, let's just be careful.

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Let's not over-allocate there.

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When it comes to staples, well, to me,

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they're pretty expensive and you're not getting the

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growth.

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So they might be consistent, but they're not

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necessarily growing.

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You know, where am I, am I going

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to get any bang for my buck there?

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People have really liked industrials and that's basically

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because of the onshoring theme.

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That can be great, right?

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But there's different kinds of industrials, right?

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We can have industrials that tend to be

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cyclical and we can have industrials that are

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more consistent.

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And, you know, I'd be careful in ETF

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and mutual fund portfolio, for example, allocating to

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the whole sector, because I think as a

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sector as a whole, it can act more

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cyclically.

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But I think you could definitely find individual

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stocks that could be consistent and growing and

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take advantage of that trend.

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I just think you need to be more

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discerning.

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When it comes to interest rates, we just

273
00:11:22,500 --> 00:11:26,200
had the quote unquote big, beautiful bill passed.

274
00:11:26,800 --> 00:11:31,240
This is extending the previous Trump tax cuts

275
00:11:31,240 --> 00:11:34,660
and making them permanent, you know, permanent until

276
00:11:35,290 --> 00:11:38,020
we have a different government likely, but, you

277
00:11:38,020 --> 00:11:39,840
know, permanent for the foreseeable future.

278
00:11:40,780 --> 00:11:43,920
This is deficit spending, you know, it's adding

279
00:11:43,920 --> 00:11:44,500
to the debt.

280
00:11:45,160 --> 00:11:47,760
Typically that is stimulative and inflationary.

281
00:11:48,080 --> 00:11:50,800
So when you have stimulative and inflationary, likely

282
00:11:50,800 --> 00:11:53,080
you're going to have higher rates for longer.

283
00:11:53,540 --> 00:11:56,420
That might be frustrating to people, including the

284
00:11:56,420 --> 00:11:57,260
president of the United States.

285
00:11:57,580 --> 00:12:00,060
But typically that is what we're going to

286
00:12:00,060 --> 00:12:00,340
see.

287
00:12:01,000 --> 00:12:04,480
One caveat to that is I think it's

288
00:12:04,480 --> 00:12:07,880
the debatable, it's not debatable, you know, that

289
00:12:07,880 --> 00:12:09,960
this is going to add four or five

290
00:12:09,960 --> 00:12:13,120
trillion dollars in debt over 10 years, or,

291
00:12:13,140 --> 00:12:14,600
you know, maybe it is in some circles,

292
00:12:14,600 --> 00:12:16,240
but I think generally there's some agreement on

293
00:12:16,240 --> 00:12:16,500
that.

294
00:12:17,120 --> 00:12:19,080
But what I think is interesting is how

295
00:12:19,080 --> 00:12:21,400
stimulative and how inflationary the bill is going

296
00:12:21,400 --> 00:12:24,740
to be going forward.

297
00:12:25,000 --> 00:12:26,360
And the reason I say that is it's

298
00:12:26,360 --> 00:12:28,260
really building off of the tax rates that

299
00:12:28,260 --> 00:12:29,820
already existed in 2024, right?

300
00:12:29,820 --> 00:12:32,460
It just kind of extended them with certain

301
00:12:32,460 --> 00:12:33,140
caveats, right?

302
00:12:33,180 --> 00:12:34,540
And we can discuss that if you want.

303
00:12:35,820 --> 00:12:37,940
But if you're looking at the bulk of

304
00:12:37,940 --> 00:12:39,320
it and you're just comparing what's going to

305
00:12:39,320 --> 00:12:42,900
change between 2024, 2025 and 2026 based on

306
00:12:42,900 --> 00:12:44,820
the changes in the big beautiful bill, you're

307
00:12:44,820 --> 00:12:46,480
probably not going to see that big of

308
00:12:46,480 --> 00:12:46,900
a change.

309
00:12:47,020 --> 00:12:49,060
I mean, personally, my tax return might not

310
00:12:49,060 --> 00:12:52,600
change that much and Jeff and Chris, I

311
00:12:52,600 --> 00:12:55,220
imagine your tax returns might not change that

312
00:12:55,220 --> 00:12:55,500
much.

313
00:12:56,080 --> 00:12:58,700
But for certain folks, you know, it will.

314
00:12:59,260 --> 00:13:01,340
But in aggregate, you know, I think we're

315
00:13:01,340 --> 00:13:04,420
going to see some stimulus and some inflationary

316
00:13:04,420 --> 00:13:10,300
effects, but nothing hugely concerning, you know, that

317
00:13:10,300 --> 00:13:12,760
that I think would be a huge driver

318
00:13:12,760 --> 00:13:14,220
of of inflation.

319
00:13:14,500 --> 00:13:17,260
So, you know, all things equal, if we

320
00:13:17,260 --> 00:13:20,380
are a little tight right now on interest

321
00:13:20,380 --> 00:13:24,040
rates, maybe the big beautiful bill makes us

322
00:13:24,040 --> 00:13:27,380
more in equilibrium than where we previously were,

323
00:13:27,380 --> 00:13:29,940
and it makes it easier for the Fed

324
00:13:29,940 --> 00:13:33,560
to sit tight at the position they're in

325
00:13:33,560 --> 00:13:35,560
right now, which I think is going to

326
00:13:35,560 --> 00:13:36,120
be the case.

327
00:13:36,200 --> 00:13:37,940
At the very least, you know, there's a

328
00:13:37,940 --> 00:13:39,840
lot going on right now between tariffs and

329
00:13:39,840 --> 00:13:42,140
the new tax bill where they're likely going

330
00:13:42,140 --> 00:13:43,440
to want to continue to see some more

331
00:13:43,440 --> 00:13:43,700
data.

332
00:13:45,800 --> 00:13:50,280
Finally, we had another initial claims and another

333
00:13:50,280 --> 00:13:54,800
continuing claims data point this week, and they

334
00:13:54,800 --> 00:13:55,640
were very benign.

335
00:13:56,220 --> 00:13:57,980
So, you know, that's a good thing.

336
00:13:58,160 --> 00:13:59,200
Nobody wants a recession.

337
00:13:59,760 --> 00:14:02,800
But what we are seeing is slowly the

338
00:14:02,800 --> 00:14:06,900
continuing claims tick up, while initial claims basically

339
00:14:06,900 --> 00:14:09,260
kind of stay around the same area.

340
00:14:09,460 --> 00:14:11,920
So, you know, this is basically means that

341
00:14:11,920 --> 00:14:15,260
people aren't quitting, people aren't getting laid off.

342
00:14:15,680 --> 00:14:18,020
But it does seem like the people who

343
00:14:18,020 --> 00:14:19,820
do lose their jobs are having a lot

344
00:14:19,820 --> 00:14:20,880
of trouble finding a new one.

345
00:14:21,720 --> 00:14:26,200
A great analogy from Neil Dutta from Ren

346
00:14:26,200 --> 00:14:30,060
Mac Research, he's the macroeconomist there, he says

347
00:14:30,060 --> 00:14:32,320
it's like a bathtub that's dripping water.

348
00:14:33,120 --> 00:14:35,180
It's not a heavy flow, but it's dripping

349
00:14:35,180 --> 00:14:36,720
and the bathtub's filling up.

350
00:14:36,960 --> 00:14:38,520
So I think we do want to keep

351
00:14:38,520 --> 00:14:41,040
an eye on, you know, how heavy that

352
00:14:41,040 --> 00:14:43,100
flow is into the bathtub, which is initial

353
00:14:43,100 --> 00:14:45,000
claims and the water level in the bathtub,

354
00:14:45,140 --> 00:14:46,280
which is continuing claims.

355
00:14:46,500 --> 00:14:48,540
But so far, so good.

356
00:14:48,840 --> 00:14:53,100
So if you put all this together, you

357
00:14:53,100 --> 00:14:57,280
know, interest rate related sectors, I think, are

358
00:14:57,280 --> 00:14:59,440
going to struggle, I think, because I think

359
00:14:59,440 --> 00:15:01,040
we're going to be higher for longer, at

360
00:15:01,040 --> 00:15:01,700
least on the short end.

361
00:15:02,560 --> 00:15:05,580
I think discretionary names might struggle a little

362
00:15:05,580 --> 00:15:08,760
bit, but we don't have a crazy unemployment

363
00:15:08,760 --> 00:15:09,360
problem.

364
00:15:09,360 --> 00:15:11,260
So we might just get, you know, a

365
00:15:11,260 --> 00:15:14,000
muddling along in those types of areas.

366
00:15:14,260 --> 00:15:16,240
And I think we're going to have continued

367
00:15:16,240 --> 00:15:22,180
strength in the B2B onshoring and AI type

368
00:15:22,180 --> 00:15:24,720
themes in the second half of the year.

369
00:15:25,340 --> 00:15:27,480
So I gave you guys a lot of

370
00:15:27,480 --> 00:15:28,180
information there.

371
00:15:29,060 --> 00:15:30,840
Love to hear your thoughts or questions.

372
00:15:31,100 --> 00:15:33,020
And, you know, let's have an interesting conversation

373
00:15:33,020 --> 00:15:33,400
about this.

374
00:15:34,380 --> 00:15:35,900
So Brian, one area that you didn't talk

375
00:15:35,900 --> 00:15:38,900
about, it's implicit in all your comments, though,

376
00:15:39,160 --> 00:15:41,200
is earnings, corporate earnings.

377
00:15:41,400 --> 00:15:44,220
There was, you know, a lot of commentary

378
00:15:44,220 --> 00:15:48,180
about tariffs slowing down, movement of corporations, investments

379
00:15:48,180 --> 00:15:52,580
in different things, and consumers maybe taking a

380
00:15:52,580 --> 00:15:53,160
step back.

381
00:15:53,660 --> 00:15:55,860
What have you seen with consumer spending and

382
00:15:55,860 --> 00:15:58,300
how it has related to corporate earnings?

383
00:15:59,400 --> 00:16:02,680
Consumer spending, it's been very hard to tell,

384
00:16:02,740 --> 00:16:02,900
right?

385
00:16:02,960 --> 00:16:05,160
So Q1, earnings were very good.

386
00:16:06,160 --> 00:16:10,280
The some companies withdrew guidance, some gave guidance

387
00:16:10,280 --> 00:16:12,900
with tariffs, some gave without tariffs, but generally

388
00:16:12,900 --> 00:16:14,940
speaking, it was viewed as very good.

389
00:16:15,360 --> 00:16:17,720
The problem with that is it's very hard

390
00:16:17,720 --> 00:16:19,580
to tell how much was pulled forward.

391
00:16:19,940 --> 00:16:23,040
So, for example, if you're a company and

392
00:16:23,040 --> 00:16:25,640
you wanted to get inventory in before the

393
00:16:25,640 --> 00:16:28,160
tariffs hit, you might have overbought, which might

394
00:16:28,160 --> 00:16:30,140
have been stimulative to your vendors.

395
00:16:30,320 --> 00:16:32,460
If you're a consumer, you might want to

396
00:16:32,460 --> 00:16:37,360
get ahead of price increases or shortages, so

397
00:16:37,360 --> 00:16:40,300
you might have gone out and bought where

398
00:16:40,300 --> 00:16:42,860
you might not have otherwise, and that might

399
00:16:42,860 --> 00:16:45,460
have been stimulative for earnings there.

400
00:16:45,780 --> 00:16:47,600
So I think, you know, in the second

401
00:16:47,600 --> 00:16:48,960
and third quarters, people are going to be

402
00:16:48,960 --> 00:16:51,060
looking for drop-offs or possible drop-offs.

403
00:16:51,460 --> 00:16:53,720
If there's not drop-offs, then I think

404
00:16:53,720 --> 00:16:55,960
we're going to be in very good shape.

405
00:16:56,280 --> 00:16:59,060
If there is drop-offs, I think we

406
00:16:59,060 --> 00:17:02,260
could definitely see some additional volatility.

407
00:17:03,020 --> 00:17:05,640
On a personal note, if anecdotes mean too

408
00:17:05,640 --> 00:17:07,760
much to you, I certainly spent forward.

409
00:17:09,180 --> 00:17:11,040
I bought a car, a refrigerator, a washing

410
00:17:11,040 --> 00:17:11,500
machine.

411
00:17:12,319 --> 00:17:14,260
I went on a spending spree because I

412
00:17:14,260 --> 00:17:18,079
didn't want to be caught with a broken

413
00:17:18,079 --> 00:17:20,359
down car that I can't fix because I

414
00:17:20,359 --> 00:17:22,319
can't get the parts or because they're too

415
00:17:22,319 --> 00:17:22,720
expensive.

416
00:17:23,240 --> 00:17:25,880
So I remedied a situation with an old

417
00:17:25,880 --> 00:17:26,640
car, for example.

418
00:17:26,780 --> 00:17:27,720
I had an old refrigerator.

419
00:17:28,080 --> 00:17:29,160
I have two young kids.

420
00:17:29,320 --> 00:17:31,600
I need to have a working refrigerator, so

421
00:17:31,600 --> 00:17:34,600
I just got ahead of replacing my 20

422
00:17:34,600 --> 00:17:35,420
-year-old refrigerator.

423
00:17:35,720 --> 00:17:37,620
So that type of activity is what I

424
00:17:37,620 --> 00:17:38,420
mean by pull forward.

425
00:17:39,420 --> 00:17:41,200
So it'll be interesting to see what happens

426
00:17:41,200 --> 00:17:41,840
going forward.

427
00:17:42,040 --> 00:17:44,520
Now, on the biggest stocks in the market,

428
00:17:44,740 --> 00:17:45,880
right, if we're talking about the S&P

429
00:17:45,880 --> 00:17:47,480
500, the biggest stocks in the market, they

430
00:17:47,480 --> 00:17:49,100
don't necessarily have to worry about pull forward

431
00:17:49,100 --> 00:17:49,580
too much.

432
00:17:50,560 --> 00:17:55,920
Microsoft, Amazon, Amazon a little bit, but a

433
00:17:55,920 --> 00:17:58,100
lot of their revenue comes from Amazon Web

434
00:17:58,100 --> 00:18:00,960
Services just as much as retailing.

435
00:18:02,340 --> 00:18:07,200
They're not part of this inventory good cycle,

436
00:18:07,360 --> 00:18:07,460
right?

437
00:18:07,780 --> 00:18:09,920
A lot of it is subscription-based.

438
00:18:10,100 --> 00:18:12,660
A lot of it is considered, Windows, for

439
00:18:12,660 --> 00:18:14,720
example, I think would be considered a staple,

440
00:18:15,040 --> 00:18:15,400
right?

441
00:18:15,500 --> 00:18:17,940
It's a business-to-business type product, but

442
00:18:17,940 --> 00:18:18,500
it's a staple.

443
00:18:18,680 --> 00:18:19,180
We need it.

444
00:18:19,820 --> 00:18:22,340
And they're continuing to grow at a very,

445
00:18:22,400 --> 00:18:26,300
very rapid pace in a secular manner.

446
00:18:26,940 --> 00:18:28,620
So when we're talking about the overall market

447
00:18:28,620 --> 00:18:30,480
and we talk about concentration in the market,

448
00:18:30,800 --> 00:18:32,900
the concentration in the market might actually be

449
00:18:32,900 --> 00:18:35,700
helping us with this situation right now because

450
00:18:35,700 --> 00:18:38,000
those companies are less exposed to the potential

451
00:18:38,000 --> 00:18:38,900
effects of tariffs.

452
00:18:42,680 --> 00:18:45,860
Brian, you're probably tired of me asking about

453
00:18:45,860 --> 00:18:50,180
this because it's something I bring up routinely.

454
00:18:50,660 --> 00:18:51,620
I can ask him if you want.

455
00:18:51,700 --> 00:18:52,440
I know your question.

456
00:18:53,180 --> 00:18:54,520
I could just answer it.

457
00:18:56,620 --> 00:18:59,000
Maybe for the listeners, you should ask, Chris.

458
00:18:59,360 --> 00:18:59,680
Okay.

459
00:18:59,800 --> 00:19:03,580
Just to put it out there, why not

460
00:19:03,580 --> 00:19:06,780
be worried about valuation, the market valuation?

461
00:19:07,060 --> 00:19:10,260
The forward PE is near 22 times at

462
00:19:10,260 --> 00:19:10,800
the half.

463
00:19:12,640 --> 00:19:15,800
That's relatively high in historical terms.

464
00:19:16,720 --> 00:19:18,700
Why shouldn't we be concerned about that?

465
00:19:19,620 --> 00:19:21,540
I think you should be concerned about valuation.

466
00:19:21,660 --> 00:19:22,780
I think you should always be concerned about

467
00:19:22,780 --> 00:19:23,240
valuation.

468
00:19:23,360 --> 00:19:25,620
I want to buy good companies at good

469
00:19:25,620 --> 00:19:26,060
prices.

470
00:19:26,460 --> 00:19:28,000
I just think the PE ratio is a

471
00:19:28,000 --> 00:19:30,820
terrible way to measure valuation.

472
00:19:31,460 --> 00:19:33,660
The PE ratio on a trailing basis, if

473
00:19:33,660 --> 00:19:35,280
you look at a trailing PE, only takes

474
00:19:35,280 --> 00:19:39,520
into account companies' earnings versus the price today

475
00:19:39,520 --> 00:19:40,600
over the last 12 months.

476
00:19:41,000 --> 00:19:44,060
The forward PE ratio is arguably even worse.

477
00:19:44,180 --> 00:19:46,480
It only takes into account expected earnings in

478
00:19:46,480 --> 00:19:47,360
the next 12 months.

479
00:19:48,200 --> 00:19:51,060
There is a lot wrong with this.

480
00:19:51,300 --> 00:19:54,920
We don't think about stocks within a one

481
00:19:54,920 --> 00:19:56,080
year time period.

482
00:19:56,200 --> 00:19:58,900
We talk about how stocks are long-term

483
00:19:58,900 --> 00:19:59,340
assets.

484
00:20:00,100 --> 00:20:02,500
The fact that that doesn't take into growth

485
00:20:02,500 --> 00:20:04,340
at all is a problem for me.

486
00:20:05,900 --> 00:20:08,860
The Mag 7 names are expected to grow

487
00:20:08,860 --> 00:20:11,320
at 30%, and the total S&P 500

488
00:20:11,320 --> 00:20:12,800
is expected to grow at 9%.

489
00:20:12,800 --> 00:20:17,300
We have had historic growth for years now,

490
00:20:17,940 --> 00:20:19,640
and we're in a productivity boom.

491
00:20:21,040 --> 00:20:27,040
If you add on growth to the historical

492
00:20:27,040 --> 00:20:29,300
market just there, you should expect that you

493
00:20:29,300 --> 00:20:31,780
would pay a higher PE ratio for better

494
00:20:31,780 --> 00:20:32,920
expected growth in the future.

495
00:20:33,780 --> 00:20:35,540
Now it's true that if that better expected

496
00:20:35,540 --> 00:20:37,180
growth in the future does not pan out,

497
00:20:37,180 --> 00:20:42,180
then the valuation is definitely a big concern

498
00:20:42,180 --> 00:20:45,580
because the PE ratio is too high.

499
00:20:45,840 --> 00:20:48,080
Right now, that's the reason why it's pricing

500
00:20:48,080 --> 00:20:48,460
that in.

501
00:20:49,400 --> 00:20:51,120
Another reason why I think it's pricing in

502
00:20:51,120 --> 00:20:52,900
a high PE ratio is interest rates.

503
00:20:53,000 --> 00:20:54,540
We have interest rates at four and a

504
00:20:54,540 --> 00:20:56,800
quarter on the 10-year, which is historically

505
00:20:56,800 --> 00:20:57,380
very low.

506
00:20:57,520 --> 00:20:58,900
If we're going to look at historic PE

507
00:20:58,900 --> 00:21:01,680
ratios, we have to think about PE ratios

508
00:21:01,680 --> 00:21:02,760
in historic terms.

509
00:21:03,420 --> 00:21:06,520
The 10-year interest rate in the late

510
00:21:06,520 --> 00:21:08,420
90s was above 6%.

511
00:21:09,160 --> 00:21:12,040
So when we're comparing today's PE ratio to

512
00:21:12,040 --> 00:21:14,180
the PE ratio of the late 90s and

513
00:21:14,180 --> 00:21:15,580
you're saying, hey, look, we're in a similar

514
00:21:15,580 --> 00:21:17,660
ballpark of the dot-com bust, I would

515
00:21:17,660 --> 00:21:18,880
argue we're nowhere close.

516
00:21:22,100 --> 00:21:24,240
Those interest rates were 50% higher than

517
00:21:24,240 --> 00:21:24,740
they are today.

518
00:21:26,300 --> 00:21:29,960
I get comfort there as well.

519
00:21:31,600 --> 00:21:33,680
Finally, the economy is much different.

520
00:21:35,500 --> 00:21:37,620
Historically, if let's say we were around a

521
00:21:37,620 --> 00:21:41,540
14, 15, 16 PE ratio going back to

522
00:21:41,540 --> 00:21:46,620
the 50s, capital expenditures were enormous back then

523
00:21:46,620 --> 00:21:48,380
because we were a bits and bytes economy.

524
00:21:50,220 --> 00:21:52,680
The stock market was also, I would argue,

525
00:21:52,780 --> 00:21:53,300
less understood.

526
00:21:53,600 --> 00:21:55,400
People were very concentrated on dividend yields, for

527
00:21:55,400 --> 00:21:57,680
example, rather than things that we have today

528
00:21:57,680 --> 00:21:58,460
like buybacks.

529
00:21:58,800 --> 00:22:00,900
They weren't necessarily concerned about growth.

530
00:22:02,020 --> 00:22:05,180
Free cash flow yields were arguably lower or

531
00:22:05,180 --> 00:22:07,660
in future free cash flow yields were definitely

532
00:22:07,660 --> 00:22:08,140
lower.

533
00:22:08,400 --> 00:22:10,380
So this is what I call a difference

534
00:22:10,380 --> 00:22:12,560
between the bricks and mortar economy versus the

535
00:22:12,560 --> 00:22:13,400
bytes and bits economy.

536
00:22:14,540 --> 00:22:16,780
We have transitioned to a bytes and bits

537
00:22:16,780 --> 00:22:19,580
economy where we have everything is as a

538
00:22:19,580 --> 00:22:19,900
service.

539
00:22:20,060 --> 00:22:21,840
And as a service just means that it's

540
00:22:21,840 --> 00:22:22,480
a subscription.

541
00:22:22,880 --> 00:22:25,620
It's a lower cost that you can more

542
00:22:25,620 --> 00:22:26,820
predictably pay for.

543
00:22:26,980 --> 00:22:30,100
So your cash flows are more consistent, they're

544
00:22:30,100 --> 00:22:32,700
more predictable, and your margins are much higher

545
00:22:32,700 --> 00:22:36,900
because you can deliver software that's already been

546
00:22:36,900 --> 00:22:40,720
written without the use of another human being,

547
00:22:41,080 --> 00:22:43,440
without the use of another truck, without the

548
00:22:43,440 --> 00:22:44,580
reuse of a lot of other things.

549
00:22:47,920 --> 00:22:50,260
I've learned about this in college, CDs don't

550
00:22:50,260 --> 00:22:52,480
exist anymore, but it costs almost nothing to

551
00:22:52,480 --> 00:22:53,540
stamp out another CD.

552
00:22:54,540 --> 00:22:57,760
But it costs a lot more to make

553
00:22:57,760 --> 00:23:03,320
another movie, for example, or make another widget.

554
00:23:04,420 --> 00:23:06,340
So what we've seen is margins just continue

555
00:23:06,340 --> 00:23:07,000
to increase.

556
00:23:07,140 --> 00:23:08,900
And the bigger the company, the more the

557
00:23:08,900 --> 00:23:09,920
margins are increasing.

558
00:23:10,200 --> 00:23:12,060
So we have companies that are more profitable,

559
00:23:12,260 --> 00:23:13,820
we have companies that are more consistent, and

560
00:23:13,820 --> 00:23:15,080
we have companies that are growing at a

561
00:23:15,080 --> 00:23:15,900
much faster rate.

562
00:23:16,340 --> 00:23:17,800
And we have lower interest rates.

563
00:23:17,880 --> 00:23:19,700
You combine all those things together, and I

564
00:23:19,700 --> 00:23:22,180
think it's rational that we have a higher

565
00:23:22,180 --> 00:23:22,860
PE ratio.

566
00:23:23,360 --> 00:23:25,360
And if we did have a significant dip,

567
00:23:26,360 --> 00:23:28,000
it's likely a buying opportunity.

568
00:23:29,060 --> 00:23:31,460
So that's where I come out on that.

569
00:23:32,080 --> 00:23:34,040
It's not that I don't worry about valuation,

570
00:23:34,140 --> 00:23:34,900
I absolutely do.

571
00:23:35,900 --> 00:23:39,540
PE is not a very good indicator of

572
00:23:39,540 --> 00:23:39,660
it.

573
00:23:39,660 --> 00:23:42,520
Brian, how much does AI play into those

574
00:23:42,520 --> 00:23:47,500
previous comments about future expansions, future growth, accelerated

575
00:23:47,500 --> 00:23:48,720
growth, however you want to frame it?

576
00:23:49,220 --> 00:23:49,700
Significantly.

577
00:23:49,900 --> 00:23:51,440
I mean, the biggest names in the market

578
00:23:51,440 --> 00:23:52,880
are the biggest names in the market because

579
00:23:52,880 --> 00:23:53,820
they're AI names.

580
00:23:54,680 --> 00:23:56,840
And why are they growing at 30%

581
00:23:56,840 --> 00:23:57,200
a year?

582
00:23:57,540 --> 00:23:59,940
It's because they're the AI players.

583
00:24:00,260 --> 00:24:01,640
I mean, that's going to be the productivity

584
00:24:01,640 --> 00:24:02,760
boom of the future.

585
00:24:03,620 --> 00:24:05,160
There's consensus around that.

586
00:24:05,160 --> 00:24:06,540
I believe it to be true.

587
00:24:06,900 --> 00:24:08,480
I think we all use it and we're

588
00:24:08,480 --> 00:24:09,720
all getting better at it regularly.

589
00:24:10,320 --> 00:24:12,580
I don't think there's really any doubt in

590
00:24:12,580 --> 00:24:13,340
my mind.

591
00:24:13,580 --> 00:24:15,240
I do think there's overhype.

592
00:24:15,560 --> 00:24:18,480
I've talked about Tesla, for example, many times.

593
00:24:18,600 --> 00:24:19,980
I don't understand why it has a trillion

594
00:24:19,980 --> 00:24:20,760
dollar valuation.

595
00:24:22,240 --> 00:24:24,060
The reason why it has a trillion dollar

596
00:24:24,060 --> 00:24:26,040
valuation is because people think they're going to

597
00:24:26,040 --> 00:24:28,300
be able to build humanoid robots and have

598
00:24:28,300 --> 00:24:30,720
driverless taxis.

599
00:24:31,260 --> 00:24:34,120
And basically, they just believe that Elon Musk

600
00:24:34,120 --> 00:24:35,040
is going to be able to do it

601
00:24:35,040 --> 00:24:36,640
better and faster than anybody else.

602
00:24:37,600 --> 00:24:41,140
I think there's reason to believe that's wrong.

603
00:24:42,460 --> 00:24:43,780
And that's one of the biggest things in

604
00:24:43,780 --> 00:24:44,000
the market.

605
00:24:44,220 --> 00:24:45,700
So there's certainly risks, right?

606
00:24:47,080 --> 00:24:50,640
We jump from being able to write our

607
00:24:50,640 --> 00:24:54,320
emails better to having humanoid robots like the

608
00:24:54,320 --> 00:24:54,800
Jetsons.

609
00:24:56,380 --> 00:24:57,200
That idea- Rosie.

610
00:24:57,780 --> 00:24:58,220
Yeah.

611
00:24:59,120 --> 00:25:01,020
Rosie jumped in our head real quick inside

612
00:25:01,020 --> 00:25:03,280
of a year, I feel like, where I

613
00:25:03,280 --> 00:25:05,320
don't think people were giving Rosie too much

614
00:25:05,320 --> 00:25:06,240
credit.

615
00:25:06,640 --> 00:25:09,300
So I think there's going to be a

616
00:25:09,300 --> 00:25:09,800
hype cycle.

617
00:25:11,780 --> 00:25:15,800
But at the same time, these companies, they're

618
00:25:15,800 --> 00:25:16,940
not relatively inexpensive.

619
00:25:18,220 --> 00:25:19,760
They're not relatively expensive, right?

620
00:25:19,820 --> 00:25:21,220
So if you look at the dot-com

621
00:25:21,220 --> 00:25:23,500
as a comparison, we're companies that had zero

622
00:25:23,500 --> 00:25:23,860
revenue.

623
00:25:24,560 --> 00:25:26,200
These are the biggest companies in the world

624
00:25:26,200 --> 00:25:28,740
by revenue, by profit, by margins, by every

625
00:25:28,740 --> 00:25:33,320
statistical financial measurement you can think of.

626
00:25:33,540 --> 00:25:36,040
Given what you've said about the US economy

627
00:25:36,040 --> 00:25:39,800
and its valuations, and this year we've seen

628
00:25:39,800 --> 00:25:45,860
outperformance from international companies, some of that you

629
00:25:45,860 --> 00:25:48,040
talked about with reference to the dollar, but

630
00:25:48,040 --> 00:25:50,740
what's that tell us?

631
00:25:51,360 --> 00:25:52,680
What's your take then?

632
00:25:52,840 --> 00:25:55,880
How does that play into the consideration about

633
00:25:55,880 --> 00:26:01,040
foreign exposure and whether it should be cheaper

634
00:26:01,040 --> 00:26:04,700
valuations, but should it be an increasing part

635
00:26:04,700 --> 00:26:07,360
of the portfolio for people?

636
00:26:07,440 --> 00:26:09,820
Of course, you don't know what everyone's individual

637
00:26:09,820 --> 00:26:15,020
exposure is, but thematically speaking, what's your take

638
00:26:15,020 --> 00:26:18,320
as it relates to different kinds of economic

639
00:26:18,320 --> 00:26:24,460
drivers in terms of other economies?

640
00:26:24,460 --> 00:26:26,640
How does that play into the thoughts around

641
00:26:26,640 --> 00:26:27,040
foreign?

642
00:26:29,500 --> 00:26:33,080
So every investor has a home country bias.

643
00:26:33,820 --> 00:26:35,280
It's pretty interesting, right?

644
00:26:35,460 --> 00:26:37,160
So if you are an American, you're likely

645
00:26:37,160 --> 00:26:38,500
going to hold more American stocks.

646
00:26:38,720 --> 00:26:40,760
If you are German, you're going to have

647
00:26:40,760 --> 00:26:42,360
more German or whatever, yeah.

648
00:26:44,280 --> 00:26:46,440
But reality is when you look at the

649
00:26:46,440 --> 00:26:49,080
global stock market, the United States is more

650
00:26:49,080 --> 00:26:53,000
than 60% of the market and Nvidia

651
00:26:53,000 --> 00:26:54,940
is like the size of the UK alone.

652
00:26:55,340 --> 00:26:58,380
So the investable universe in the United States

653
00:26:58,380 --> 00:27:00,640
is bigger than it is internationally.

654
00:27:00,800 --> 00:27:02,480
So we just start there.

655
00:27:02,600 --> 00:27:05,580
You're probably going to have more US stock

656
00:27:05,580 --> 00:27:08,660
under most circumstances with any advisor.

657
00:27:09,020 --> 00:27:15,020
We've made the active decision that we always

658
00:27:15,020 --> 00:27:17,000
would like to have some international exposure in

659
00:27:17,000 --> 00:27:17,540
our portfolio.

660
00:27:18,320 --> 00:27:20,060
And I think there's good reason for that.

661
00:27:20,120 --> 00:27:23,980
I think it's helped diversify our clients this

662
00:27:23,980 --> 00:27:24,200
year.

663
00:27:24,480 --> 00:27:27,040
And I think it will in future years

664
00:27:27,040 --> 00:27:27,740
as well.

665
00:27:28,640 --> 00:27:30,680
So why have we done that?

666
00:27:30,680 --> 00:27:33,420
There's different types of companies in different parts

667
00:27:33,420 --> 00:27:34,240
of the world, right?

668
00:27:34,480 --> 00:27:38,540
So France, for example, is very good at

669
00:27:38,540 --> 00:27:41,320
luxury, much better than the United States is.

670
00:27:42,000 --> 00:27:46,780
LVMH has been around for hundreds of years.

671
00:27:47,840 --> 00:27:49,920
Hermes has been around for hundreds of years.

672
00:27:50,120 --> 00:27:52,860
They're not as good at technology.

673
00:27:53,380 --> 00:27:55,860
They have never generated a meta.

674
00:27:56,200 --> 00:28:00,640
They have never generated an Nvidia where the

675
00:28:00,640 --> 00:28:03,440
United States tends to do this fairly regularly,

676
00:28:03,540 --> 00:28:04,220
it seems like.

677
00:28:04,460 --> 00:28:06,260
Now that doesn't mean that there's not good

678
00:28:06,260 --> 00:28:08,580
companies in Europe that specialize in technology.

679
00:28:08,760 --> 00:28:09,060
There is.

680
00:28:09,640 --> 00:28:11,700
There's ASML, there's SAP.

681
00:28:12,820 --> 00:28:15,680
They historically have had some good car manufacturers.

682
00:28:16,240 --> 00:28:18,600
So Volvo is one of the biggest car

683
00:28:18,600 --> 00:28:21,160
manufacturers in the world by revenue.

684
00:28:21,540 --> 00:28:25,280
Ferrari has been a very good stock historically.

685
00:28:25,880 --> 00:28:28,620
So there are good stocks internationally.

686
00:28:29,260 --> 00:28:33,260
As an index, it hasn't done as well

687
00:28:33,260 --> 00:28:38,740
for what I think is cultural, structural, and

688
00:28:38,740 --> 00:28:39,720
structural reasons.

689
00:28:40,180 --> 00:28:44,960
The United States has one benefit where, it

690
00:28:44,960 --> 00:28:46,280
might not seem this way, but the 50

691
00:28:46,280 --> 00:28:49,120
states are much more united than the countries

692
00:28:49,120 --> 00:28:50,300
in the European Union.

693
00:28:52,880 --> 00:28:57,860
The European Union struggles to keep everybody in

694
00:28:57,860 --> 00:29:00,240
line with their rules, for example, which is

695
00:29:00,240 --> 00:29:01,420
part of the reason why we had a

696
00:29:01,420 --> 00:29:03,600
Greek tech crisis 12 years ago, for example.

697
00:29:05,220 --> 00:29:07,380
China is a huge economy.

698
00:29:07,840 --> 00:29:11,100
It's growing at a rapid rate, but there's

699
00:29:11,100 --> 00:29:13,000
good reason to be concerned about capital controls.

700
00:29:15,340 --> 00:29:18,820
Technically, in a lot of ways, it's illegal

701
00:29:18,820 --> 00:29:21,000
for foreigners to hold domestic stocks.

702
00:29:22,820 --> 00:29:26,180
There could be an adversary in some ways

703
00:29:26,180 --> 00:29:29,480
of thinking, which could bifurcate their economy and

704
00:29:29,480 --> 00:29:31,140
what are the impacts of that.

705
00:29:32,020 --> 00:29:34,080
Generally, I think we've made a decision that

706
00:29:34,080 --> 00:29:36,660
we'd like to avoid that area as much

707
00:29:36,660 --> 00:29:37,260
as possible.

708
00:29:38,100 --> 00:29:40,720
But that can be painful if China spikes

709
00:29:40,720 --> 00:29:43,940
as it has in the last six months.

710
00:29:44,320 --> 00:29:46,180
But over time, I don't think we've given

711
00:29:46,180 --> 00:29:48,940
anything back by not being allocated in China

712
00:29:48,940 --> 00:29:50,040
in any significant way.

713
00:29:51,000 --> 00:29:52,800
Chris, I'm not sure the answer- This

714
00:29:52,800 --> 00:29:55,520
relates to what you're describing there relates particularly

715
00:29:55,520 --> 00:30:00,020
to the AMR team strategies as differentiated from

716
00:30:00,020 --> 00:30:03,940
some of the other wealth enhancement strategies, just

717
00:30:03,940 --> 00:30:07,200
to be clear, our own discretionary accounts for

718
00:30:07,200 --> 00:30:08,000
our clientele.

719
00:30:08,220 --> 00:30:11,240
In any case, yeah, I think that answers

720
00:30:11,240 --> 00:30:15,060
my question, that notion that as much as

721
00:30:15,060 --> 00:30:18,860
there can be opportunities in economies around the

722
00:30:18,860 --> 00:30:24,940
world, you still lean toward a domestic bias

723
00:30:24,940 --> 00:30:28,400
because of the quality of the companies and

724
00:30:28,400 --> 00:30:30,680
the kind of profitability that they are generating,

725
00:30:31,000 --> 00:30:33,860
which doesn't mean we don't want some international

726
00:30:33,860 --> 00:30:39,740
exposure, but it still justifies perhaps our view

727
00:30:39,740 --> 00:30:42,320
of why we're benefited by having an overweight

728
00:30:42,320 --> 00:30:46,720
U.S. relative to perhaps a benchmark or

729
00:30:46,720 --> 00:30:49,880
some comparative perspective.

730
00:30:51,020 --> 00:30:52,840
I think it's a great way to sum

731
00:30:52,840 --> 00:30:53,260
it up, Chris.

732
00:30:53,460 --> 00:30:53,800
Thank you.

733
00:30:53,800 --> 00:30:55,100
All right.

734
00:30:55,880 --> 00:30:56,740
You summed up nicely.

735
00:30:57,160 --> 00:30:58,680
Well, you're the content.

736
00:31:00,820 --> 00:31:01,920
Well, terrific.

737
00:31:02,060 --> 00:31:02,560
That's great.

738
00:31:02,700 --> 00:31:04,740
So gives us a view of sort of

739
00:31:04,740 --> 00:31:06,660
where we're at, lots of possibilities.

740
00:31:06,940 --> 00:31:10,520
Seems I'd say fair to characterize your overall

741
00:31:10,520 --> 00:31:15,000
view as generally optimistic or maybe cautiously optimistic

742
00:31:15,000 --> 00:31:17,060
as we go into the second half of

743
00:31:17,060 --> 00:31:17,440
the year.

744
00:31:19,440 --> 00:31:21,940
Yeah, I'd say I'm neutral.

745
00:31:22,140 --> 00:31:23,260
I'm not pessimistic.

746
00:31:23,380 --> 00:31:25,400
I'm not optimistic and neutral is good, right?

747
00:31:25,420 --> 00:31:26,860
When I say neutral, I mean, I think

748
00:31:26,860 --> 00:31:28,460
we're going to have average returns in the

749
00:31:28,460 --> 00:31:29,220
next 12 months.

750
00:31:30,060 --> 00:31:31,100
And why do I say that?

751
00:31:31,160 --> 00:31:33,060
Well, if you want to strap some numbers

752
00:31:33,060 --> 00:31:36,640
to it, that chart you showed of the

753
00:31:36,640 --> 00:31:38,720
PE ratio, if you were invert that and

754
00:31:38,720 --> 00:31:40,140
get the earnings yield, you're going to get

755
00:31:40,140 --> 00:31:40,960
something around 5%.

756
00:31:42,260 --> 00:31:44,280
I think we're going to have 2.5

757
00:31:44,280 --> 00:31:45,020
% inflation.

758
00:31:45,460 --> 00:31:47,560
We're probably going to have some growth of

759
00:31:47,560 --> 00:31:48,480
2%.

760
00:31:48,480 --> 00:31:50,780
We're going to have margins expand by 1%.

761
00:31:50,780 --> 00:31:53,020
And just there, you get the 10%.

762
00:31:53,020 --> 00:31:55,720
And if we have growth in the S

763
00:31:55,720 --> 00:31:58,020
&P 500 beyond what I just described that

764
00:31:58,020 --> 00:31:59,260
we're probably going to see in the overall

765
00:31:59,260 --> 00:32:02,540
economy, then you could get beyond that 10%.

766
00:32:02,540 --> 00:32:05,320
You maybe track for the 14% that

767
00:32:05,320 --> 00:32:06,800
we're tracking for now.

768
00:32:08,260 --> 00:32:10,140
Certainly, we could get some curveballs.

769
00:32:10,280 --> 00:32:11,860
I mean, April 2nd was certainly a curveball.

770
00:32:11,860 --> 00:32:16,380
And that's why you need to be diversified

771
00:32:16,380 --> 00:32:19,580
into a portfolio that is reflective of the

772
00:32:19,580 --> 00:32:21,860
amount of volatility that you personally are willing

773
00:32:21,860 --> 00:32:23,320
to take and withstand.

774
00:32:23,780 --> 00:32:26,240
And that's personal to most people.

775
00:32:27,380 --> 00:32:30,240
One thing that we have a particular client

776
00:32:30,240 --> 00:32:33,720
that likes to ask a lot is, what

777
00:32:33,720 --> 00:32:36,560
do you think is going to happen in

778
00:32:36,560 --> 00:32:37,300
the next six months?

779
00:32:37,820 --> 00:32:40,460
And I'm always reluctant to answer the question

780
00:32:40,460 --> 00:32:42,940
because I just don't know.

781
00:32:43,260 --> 00:32:47,180
It's like asking me about Einstein's theory of

782
00:32:47,180 --> 00:32:47,580
relativity.

783
00:32:47,840 --> 00:32:49,200
I'm no expert on what's going to happen

784
00:32:49,200 --> 00:32:50,060
in the next six months.

785
00:32:50,260 --> 00:32:52,880
But I can survey the landscape and say,

786
00:32:53,000 --> 00:32:55,260
is this way off sides, on sides?

787
00:32:55,660 --> 00:32:57,380
Are we going to score a goal?

788
00:32:57,460 --> 00:32:59,740
Are we going to stay neutral and play

789
00:32:59,740 --> 00:33:00,320
the puck well?

790
00:33:01,200 --> 00:33:03,040
That's the kind of general thinking.

791
00:33:03,360 --> 00:33:04,680
And if you try to pinpoint it and

792
00:33:04,680 --> 00:33:07,680
you try to push your portfolio really far

793
00:33:07,680 --> 00:33:10,540
one way or another based on putting your

794
00:33:10,540 --> 00:33:12,120
finger in the air and feeling where the

795
00:33:12,120 --> 00:33:13,800
wind is blowing, I think you're going to

796
00:33:13,800 --> 00:33:14,540
get yourself in trouble.

797
00:33:15,040 --> 00:33:20,200
So reminders for listeners to one, be sure

798
00:33:20,200 --> 00:33:23,460
you have some liquidity reserves or a mechanism

799
00:33:23,460 --> 00:33:27,220
for the unexpected where you can get access

800
00:33:27,220 --> 00:33:28,440
to capital quickly.

801
00:33:29,040 --> 00:33:31,040
Generally, we like to see a reserve account

802
00:33:31,040 --> 00:33:33,480
as opposed to a loan, a home equity

803
00:33:33,480 --> 00:33:35,140
line of credit or something like that.

804
00:33:35,720 --> 00:33:38,100
We talk about buckets, have a strategy that

805
00:33:38,100 --> 00:33:40,620
has graduated levels of risk.

806
00:33:40,820 --> 00:33:43,040
So some portions are more long-term than

807
00:33:43,040 --> 00:33:43,440
others.

808
00:33:44,380 --> 00:33:47,000
And then make sure this is all put

809
00:33:47,000 --> 00:33:49,320
together in the context of a financial plan

810
00:33:49,320 --> 00:33:53,300
that's designed around your goals, your objectives, your

811
00:33:53,300 --> 00:33:56,180
cashflow demands, your resources.

812
00:33:56,960 --> 00:34:00,200
And get some help in that process to

813
00:34:00,200 --> 00:34:03,560
make sure you're thinking it through deliberately across

814
00:34:03,560 --> 00:34:06,700
a variety of integrated considerations.

815
00:34:07,540 --> 00:34:09,920
It's not just about the portfolio, though that's

816
00:34:09,920 --> 00:34:12,800
certainly an essential part of it, but it's

817
00:34:12,800 --> 00:34:14,580
also about tax planning.

818
00:34:14,780 --> 00:34:17,659
It's also about the cashflow design.

819
00:34:17,860 --> 00:34:20,580
It's also about the things that will bring

820
00:34:20,580 --> 00:34:22,620
you peace of mind when you put it

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00:34:22,620 --> 00:34:23,260
all together.

822
00:34:23,620 --> 00:34:25,260
Thanks, Brian, for your take today.

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00:34:25,540 --> 00:34:28,440
Until next time, everybody keeps striving for something

824
00:34:28,440 --> 00:34:28,760
more.

825
00:34:30,380 --> 00:34:32,320
Thank you for listening to Something More with

826
00:34:32,320 --> 00:34:33,000
Chris Boyd.

827
00:34:33,320 --> 00:34:35,500
Call us for help, whether it's for financial

828
00:34:35,500 --> 00:34:39,420
planning or portfolio management, insurance concerns, or those

829
00:34:39,420 --> 00:34:41,460
quality of life issues that make the money

830
00:34:41,460 --> 00:34:42,540
matters matter.

831
00:34:42,940 --> 00:34:46,199
Whatever's on your mind, visit us at somethingmorewithchrisboyd

832
00:34:46,199 --> 00:34:49,400
.com or call us toll free at 866

833
00:34:49,400 --> 00:34:54,900
-771-8901 or send us your questions to

834
00:34:54,900 --> 00:34:58,860
amr-info at wealthenhancement.com.

835
00:34:59,040 --> 00:35:01,000
You're listening to Something More with Chris Boyd

836
00:35:01,000 --> 00:35:01,840
Financial Talk Show.

837
00:35:02,000 --> 00:35:04,460
Wealth Enhancement Advisory Services and Jay Christopher Boyd

838
00:35:04,460 --> 00:35:06,760
provide investment advice on an individual basis to

839
00:35:06,760 --> 00:35:07,320
clients only.

840
00:35:07,500 --> 00:35:09,460
Proper advice depends on a complete analysis of

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00:35:09,460 --> 00:35:10,620
all facts and circumstances.

842
00:35:10,880 --> 00:35:12,720
The information given on this program is general

843
00:35:12,720 --> 00:35:14,780
financial comments and cannot be relied upon as

844
00:35:14,780 --> 00:35:16,360
to your specific situation.

845
00:35:16,540 --> 00:35:18,520
Wealth Enhancement Group cannot guarantee that using the

846
00:35:18,520 --> 00:35:20,540
information from this show will generate profits or

847
00:35:20,540 --> 00:35:21,660
ensure freedom from loss.

848
00:35:21,860 --> 00:35:24,020
Listeners should consult their own financial advisors or

849
00:35:24,020 --> 00:35:26,100
conduct their own due diligence before making any

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00:35:26,100 --> 00:35:26,880
financial decisions.