Climbing the Wall of Worry

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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, this is Something More with Chris Boyd.

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I'm here with team members, Jeff Perry and

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Russ Ball.

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We are all of the AMR team at

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Wealth Enhancement and glad to have you with

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us.

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Today, we're talking about the wall of worry.

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The market climbs a wall of worry is

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an ism that we hear about often and

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the market seems to be doing just that.

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So we thought we'd talk a little bit

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about some of the reasons and some of

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the issues and just give some thoughts around

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what's going on in the investment world around

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us.

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We got tariffs.

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We've got Middle East conflicts.

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We've got all these.

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Is Iran considered the Middle East, by the

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way?

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Yes.

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Okay, all of these kinds of issues.

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We can maybe go through some of why

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don't we start with that a little bit

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about what are some of the worries that

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people are facing?

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I feel like our clientele come in routinely

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and mention various concerns and are looking for

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reassurances along the way and thinking how are

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we handling these and how are we positioning

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for them?

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Well, I think you're right, Chris.

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The breadth of clients, we meet with clients

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practically every day, practically all day in some

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cases, some days, right?

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Right, it feels like it.

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And we meet with clients who are young,

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just starting out.

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We meet with clients who are in their

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accumulation years and we meet with clients who

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are retired.

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So we really get a, not purposely, but

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we really get a snapshot of what people

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are concerned about and worried about and there

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are very consistent patterns.

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And they tend to run with the news

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cycle, right?

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So a few weeks ago, a month ago,

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whatever it was, I lose track, it was

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the tariffs.

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What will be the impact on the economy

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and the market on the tariffs?

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Early April, right?

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What was the name?

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Liberation Day.

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Liberation Day, that's right.

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They coined the phrase.

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So, and then I was just going to

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run through them if you want.

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Yeah, go for it, run through them.

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We'll come back and talk about them all.

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Yep.

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Well, we can even go back before that.

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After President Trump took office, he was attempting

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to implement many of his campaign promises, etc.

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And so, depending on where you are politically

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or where you are in your employment, in

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some cases, you might have been worried about

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effects to the employment market.

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Immigration certainly was another, is and was another

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big one.

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And then we ran into the tariff wall,

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so to speak.

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And then we got this crisis in the

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Middle East where, as we well know, Israel

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made a preemptive strike because of the intelligence

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related to Iran having a nuclear weapon.

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Yeah, I mean, you could categorize it more

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broadly with wars because before that, we were

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dealing with still, you know, Israel dealing with

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Palestine's sort of Hamas, right?

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Yeah, and all of Iran's proxies.

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Yeah, yeah.

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So, broadly defined as Middle East.

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Yeah, I think that's accurate.

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And Russia, Ukraine continues to, you know, be

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an ongoing source of instability, let's say.

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That's right.

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Plenty of things to worry about there.

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And both of those wars, crises, whatever, conflicts

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have to do not just with security and

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potential terrorism, but have to do with the

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energy markets.

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And certainly that impacts the global economy.

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And in the middle of all this, we

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have a big, beautiful bill trying to work

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its way through Congress.

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And, you know, all the pros and cons

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of that, you know, the tax relief, the

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giveaways, I'll call them too many giveaways, the

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impacts to the national debt and deficit.

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And also in that big, beautiful bill deals

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with, temporarily, but deals with the debt ceiling,

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which is a common thing that the markets

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get in and nod in about.

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And then Moody's downgrades the national debt.

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That's a good point.

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So, I'm sure I'm not getting them all.

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And there might be more, yeah.

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All right, so there's all these variables that

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are of concern.

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Do you want to weigh in on this

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before I chime in?

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Things that you're hearing about?

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Well, I mean, I know recently, like just

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prior to the Iran conflict that's going on,

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the protests in California were a big topic

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in people's minds and immigration and all that.

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Civil unrest, right?

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Sent over to California.

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So, it seems like there's an endless stream

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of headlines that are making waves and making

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people worried, I would say.

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Good points, yeah.

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So, let's kind of pick at some of

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these things and dig into them a little.

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And then let's come back to some of

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the context of all this.

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Because again, a lot of this, what's relevant

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is how it fits into an individual's financial

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plan.

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But we still spend a lot of time

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thinking about these issues.

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And as advisors, we spend a lot of

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time thinking about how it should impact one's

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portfolio or not.

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So, you know, you talked about the immigration

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maybe as the starting point or earliest in

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the sequence of events.

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There definitely has been some adjustment of the

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positioning as it relates to the deportation of

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certain types of workers that might be here

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illegally.

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Seems like there's been some rhetoric around maybe

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not as much focus on farm workers or

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people who are workers.

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But right now, there hasn't been much discernment

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between people here illegally in one form or

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another.

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It seems like there's been an effort to

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just get anyone out who's not here illegally.

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I think that's accurate.

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And if we haven't made this realization yet,

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I think we really need to.

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And maybe the market has.

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Maybe the market has before we have.

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And that is a policy statement or a

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position of the Trump administration when announced is

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probably going to change.

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Right.

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So, you know, all whether it's the immigration

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thing or whether it's the big, beautiful bill

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or whatever these policies are, they do tend

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to change.

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They're not as they're not as grand at

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the end of the story.

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Right.

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So traditionally, you would expect what the president

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says to be intended to be taken at

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its face value.

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Literally.

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President would say what he means and that

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that would be policy.

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Or at least efforts to continue to get

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to that policy.

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Yeah.

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Whereas with the Trump administration, the notion of

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deal making and the art of the deal

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or whatever the book was that maybe that's

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not always the case.

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Is that where you're going with that?

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Exactly.

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Exactly on that.

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Well, the initial stance we were on immigration,

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but we can make the same tariff comment

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to terrorists.

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Right.

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You know, this is what it's going to

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be.

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This is it.

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This is it.

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And then change it and sometimes seemingly change

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it for no purpose that we know about

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anyway, but just a different adjustment in the

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strategy.

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And initially, we had a lot of market

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turmoil based upon some of these statements.

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Well, for a week, they were like, there's

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not going to be any postponement of this.

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This is it.

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We're going to need deals right away.

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And then bond market reacted.

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And, well, we're going to push this off

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90 days.

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Right.

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So maybe that I know maybe a month

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later, we're going to push this off for

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90 days.

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So maybe the market has figured this out

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because it does not appear to be responding

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as it normally would or previously would based

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upon any given crisis.

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I would put it a different way.

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You can't believe what's being told, you know,

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I mean, that's part of the frustration of

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this is that, you know, on the one

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hand, you take at face value what's being

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said and then it turns out, no, that's

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not really what's being what's intended.

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And you discern what's really meant and what's

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not really meant.

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That's that's it's such a frustrating way to

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deal with things.

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And, you know, this notion that in foreign

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affairs that, well, people, you know, keeps people

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on their toes, but also means people don't

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know what to expect.

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So sometimes they're going to do there's a

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there's a danger that you're going to have

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misfire of what one person's thinking and versus

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what one person is saying and what it's

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what's going to actually be the case, you

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know, how it's going to play out.

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I think it's scary.

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But personally, I think it's a bad, bad

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way to do business.

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But and as as a leader of of

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a nation, I hope that that can change.

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But I don't think it is.

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I agree.

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I think you're right that that's the that's

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that's the modus operandi of this administration, that

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it's a little bit of keep you guessing,

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keep you on your toes and trying to

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navigate with like, oh, we'll put something really

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outlandish on and see how much we can

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get.

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And then we'll get something and we'll feel

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good about that.

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And then it's better than where we started

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kind of mindset when it comes to tariffs.

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That was kind of the essence of what

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you were saying to me yesterday about some

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of this.

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Yep.

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Generally.

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And whether or not you are a supporter

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of the president or not a supporter, you

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know, even if you believe this is the

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art of the deal and you like what

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he's doing, you still should have the position

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where you can't rely on it.

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00:10:55,960 --> 00:10:56,100
Right.

277
00:10:56,960 --> 00:10:58,720
Or if you're a critic of the president

278
00:10:58,720 --> 00:11:01,560
and you don't like what he's doing, you

279
00:11:01,560 --> 00:11:02,680
would have the same position.

280
00:11:02,940 --> 00:11:06,200
And so under the theme of climbing the

281
00:11:06,200 --> 00:11:08,200
wall of worry, as the market has been,

282
00:11:08,360 --> 00:11:12,920
you know, down from that correction or whatever,

283
00:11:12,940 --> 00:11:16,000
however we want to characterize it, whatever that

284
00:11:16,000 --> 00:11:19,520
reaction to the tariffs, you know, Both in

285
00:11:19,520 --> 00:11:22,320
anticipation and then at the announcement, the market

286
00:11:22,320 --> 00:11:25,400
was starting to decline, but then it declined

287
00:11:25,400 --> 00:11:28,640
more precipitously, close to 20%, not quite from

288
00:11:28,640 --> 00:11:29,180
its peak.

289
00:11:29,800 --> 00:11:32,500
So you wonder like, if the president, Right

290
00:11:32,500 --> 00:11:33,640
back to where we were, right?

291
00:11:33,680 --> 00:11:33,900
Right.

292
00:11:34,160 --> 00:11:36,420
Or in some cases higher.

293
00:11:36,600 --> 00:11:37,020
Maybe higher.

294
00:11:37,320 --> 00:11:37,460
Yeah.

295
00:11:38,040 --> 00:11:40,320
So you wonder what the market, would have

296
00:11:40,320 --> 00:11:44,000
the market responded basically the same way in

297
00:11:44,000 --> 00:11:46,640
April if the president said, we're going to

298
00:11:46,640 --> 00:11:49,200
have a 30% tariff across the board

299
00:11:49,200 --> 00:11:50,900
unless we make another deal.

300
00:11:51,820 --> 00:11:51,960
Yeah.

301
00:11:52,100 --> 00:11:54,640
Would, would the market be saying, Oh, that's

302
00:11:54,640 --> 00:11:54,900
great.

303
00:11:54,980 --> 00:11:56,280
Look at, look at where we are today.

304
00:11:56,520 --> 00:11:57,220
You know that.

305
00:11:57,360 --> 00:11:57,760
Okay.

306
00:11:57,840 --> 00:12:00,060
You know, we're at, at highs or near

307
00:12:00,060 --> 00:12:00,420
highs.

308
00:12:01,040 --> 00:12:04,420
We're recording on June 26th.

309
00:12:05,600 --> 00:12:07,140
Happy anniversary, Kristen.

310
00:12:09,360 --> 00:12:10,320
Happy anniversary.

311
00:12:10,700 --> 00:12:18,440
So, so we're, we're, we're, things can change.

312
00:12:18,480 --> 00:12:20,420
So, but, but as far as this tariff

313
00:12:20,420 --> 00:12:22,660
element is concerned, I think you make a

314
00:12:22,660 --> 00:12:23,120
good point.

315
00:12:23,120 --> 00:12:24,960
If you just came out and said 30

316
00:12:24,960 --> 00:12:27,540
% across the board, there's a 30 plus

317
00:12:27,540 --> 00:12:31,000
10, maybe or whatever it is, you know,

318
00:12:31,000 --> 00:12:34,060
that it might have been received in a

319
00:12:34,060 --> 00:12:34,600
different way.

320
00:12:34,600 --> 00:12:37,840
Where it'd be, you know, where, as opposed

321
00:12:37,840 --> 00:12:39,900
to, Oh, we're not going to have 145

322
00:12:39,900 --> 00:12:41,080
% tariff on China.

323
00:12:41,200 --> 00:12:42,000
Well, maybe that's good.

324
00:12:42,340 --> 00:12:43,740
We don't know that that's the case though.

325
00:12:43,820 --> 00:12:45,320
That's the thing that I keep coming back

326
00:12:45,320 --> 00:12:45,560
to.

327
00:12:45,980 --> 00:12:50,340
We are assuming that the, there will be

328
00:12:50,340 --> 00:12:50,760
deals.

329
00:12:50,900 --> 00:12:52,980
I mean, it seems like we're moving in

330
00:12:52,980 --> 00:12:53,580
that direction.

331
00:12:54,300 --> 00:12:57,160
But right now it's just been, we've delayed,

332
00:12:57,360 --> 00:12:58,780
we've postponed.

333
00:12:58,780 --> 00:13:00,620
Now, what happens in July?

334
00:13:00,800 --> 00:13:02,360
I think it's the 9th when the 30,

335
00:13:02,440 --> 00:13:06,460
the 90 days expires from the time that

336
00:13:06,460 --> 00:13:11,180
this delay was postponed to some time.

337
00:13:11,500 --> 00:13:15,300
Well, the date doesn't even mean anything.

338
00:13:15,460 --> 00:13:16,960
I mean, if you, if you announce this

339
00:13:16,960 --> 00:13:19,240
to the TikTok, will it be, will it

340
00:13:19,240 --> 00:13:20,580
be extended again?

341
00:13:21,500 --> 00:13:26,580
Or, or will it be more rattling the

342
00:13:26,580 --> 00:13:27,040
cage?

343
00:13:27,280 --> 00:13:29,260
Oh, we're going to be, you know, sticking

344
00:13:29,260 --> 00:13:31,440
it to everyone who doesn't meet, you know,

345
00:13:31,440 --> 00:13:34,200
get an agreement or right away or something,

346
00:13:34,360 --> 00:13:36,960
you know, again, is it really what's going

347
00:13:36,960 --> 00:13:37,360
to happen?

348
00:13:37,560 --> 00:13:39,600
Or is it just sort of intended to

349
00:13:39,600 --> 00:13:43,420
move people to some kind of intended objective

350
00:13:43,420 --> 00:13:45,320
you were going to say about TikTok?

351
00:13:46,340 --> 00:13:49,680
Well, TikTok is an analogy because we had

352
00:13:49,680 --> 00:13:50,020
a date.

353
00:13:50,240 --> 00:13:51,960
This is the third extension to the TikTok

354
00:13:51,960 --> 00:13:52,400
deal.

355
00:13:53,140 --> 00:13:54,660
And so that just gets pushed down the

356
00:13:54,660 --> 00:13:54,920
road.

357
00:13:55,220 --> 00:13:58,880
And I'm not trying to be critical of

358
00:13:58,880 --> 00:13:59,500
President Trump.

359
00:13:59,580 --> 00:14:01,060
I think he's had some good successes.

360
00:14:02,400 --> 00:14:04,940
But he does do this in many times.

361
00:14:04,940 --> 00:14:10,000
When, when he gave Iran up to two

362
00:14:10,000 --> 00:14:14,460
weeks to respond, the news media correctly pointed

363
00:14:14,460 --> 00:14:16,400
out that he says two weeks a lot.

364
00:14:17,340 --> 00:14:18,660
Yeah, you know, he puts it out there

365
00:14:18,660 --> 00:14:20,720
two weeks over and over again.

366
00:14:20,860 --> 00:14:23,240
So you can't rely on not just the

367
00:14:23,240 --> 00:14:25,900
policy, but you can't rely on the date

368
00:14:25,900 --> 00:14:26,340
either.

369
00:14:26,340 --> 00:14:33,680
So let's talk about the Iran action, the

370
00:14:33,680 --> 00:14:42,760
decision to drop bunker busters and so forth

371
00:14:42,760 --> 00:14:45,660
on the Iranian nuclear sites.

372
00:14:45,660 --> 00:14:51,580
On the plus side, you know, hopefully this

373
00:14:51,580 --> 00:14:56,280
has material consequence to limit Iran's ability to

374
00:14:56,280 --> 00:15:00,620
actually create a nuclear weapon, which I think

375
00:15:00,620 --> 00:15:03,240
everybody is concerned would not be a good

376
00:15:03,240 --> 00:15:06,340
thing for the world order, whether it's because

377
00:15:06,340 --> 00:15:11,620
of escalation of a nuclear arms race in

378
00:15:11,620 --> 00:15:14,340
the Middle East, or because of the concerns

379
00:15:14,340 --> 00:15:15,640
of what would, you know, what would be

380
00:15:15,640 --> 00:15:15,740
the consequences of that.

381
00:15:15,740 --> 00:15:18,760
Iran actually do, whether through proxies or, or

382
00:15:18,760 --> 00:15:19,680
whatever, right?

383
00:15:21,900 --> 00:15:23,860
Israel security, all that.

384
00:15:24,880 --> 00:15:29,560
My issue with the whole process was procedural

385
00:15:29,560 --> 00:15:30,360
in a sense.

386
00:15:31,900 --> 00:15:35,740
You know, I do think that's essentially an

387
00:15:35,740 --> 00:15:36,400
act of war.

388
00:15:38,680 --> 00:15:41,240
Whether it's been declared as a war or

389
00:15:41,240 --> 00:15:43,160
not, that's essentially an act of war.

390
00:15:43,160 --> 00:15:45,420
I think, I don't recall, I'm sure there

391
00:15:45,420 --> 00:15:47,900
are instances, but I don't recall instances where

392
00:15:47,900 --> 00:15:56,860
we did something similar, where we had

393
00:15:56,860 --> 00:16:05,120
this kind of action without congressional consent, or

394
00:16:05,120 --> 00:16:07,860
what's the right term?

395
00:16:07,860 --> 00:16:14,580
Not consent, giving the four leaders of Congress

396
00:16:14,580 --> 00:16:17,460
a heads up on this kind of thing.

397
00:16:19,860 --> 00:16:22,060
And whether or not, you know, you can

398
00:16:22,060 --> 00:16:26,540
point to some instances where we've struck back

399
00:16:26,540 --> 00:16:31,600
at people who, when there's been some kind

400
00:16:31,600 --> 00:16:34,120
of a retaliatory strike.

401
00:16:34,120 --> 00:16:38,160
I think, you know, that's not uncommon, I

402
00:16:38,160 --> 00:16:41,660
think, but this was, I would argue it's

403
00:16:41,660 --> 00:16:42,180
preemptive.

404
00:16:42,240 --> 00:16:43,680
I think you and I were kind of,

405
00:16:43,860 --> 00:16:45,680
would be willing to argue that point a

406
00:16:45,680 --> 00:16:49,260
little bit, but because of all the proxy

407
00:16:49,260 --> 00:16:54,660
activities and so forth that Iran uses, but

408
00:16:54,660 --> 00:16:58,840
I don't know, this just seemed pretty substantial

409
00:16:58,840 --> 00:17:03,099
to me as a military action.

410
00:17:03,099 --> 00:17:05,960
You know, at this point, it's a celebrated

411
00:17:05,960 --> 00:17:13,640
military action and, you know, no critique of

412
00:17:13,640 --> 00:17:19,040
the military and the way things were exercised

413
00:17:19,040 --> 00:17:19,819
or anything like that.

414
00:17:19,819 --> 00:17:22,700
I just look at it as thinking from

415
00:17:22,700 --> 00:17:24,900
a governance point of view, is this really

416
00:17:24,900 --> 00:17:29,080
the way we want to potentially engage in

417
00:17:29,080 --> 00:17:32,560
a war without some congressional engagement, you know,

418
00:17:32,580 --> 00:17:33,280
that kind of thing?

419
00:17:34,080 --> 00:17:36,140
You and I do disagree on this and,

420
00:17:36,180 --> 00:17:39,280
you know, we could, I could point to

421
00:17:39,280 --> 00:17:42,960
many examples and many presidents, including Thomas Jefferson,

422
00:17:42,960 --> 00:17:46,220
who had a military action against the Barbary

423
00:17:46,220 --> 00:17:50,120
pirates without congressional action all the way through

424
00:17:50,120 --> 00:17:54,260
Syria and Libya and et cetera.

425
00:17:54,840 --> 00:17:57,580
And I think this is a real issue

426
00:17:57,580 --> 00:17:59,700
that Congress needs to deal with.

427
00:17:59,940 --> 00:18:01,420
And I don't mean because of the actions

428
00:18:01,420 --> 00:18:03,020
of President Trump, I mean, because of the

429
00:18:03,020 --> 00:18:04,700
actions of numerous presidents.

430
00:18:05,520 --> 00:18:06,980
Well, that may be the right answer.

431
00:18:06,980 --> 00:18:09,460
It may not be specific to President Trump,

432
00:18:10,160 --> 00:18:12,820
but just that notion of where do you

433
00:18:12,820 --> 00:18:15,480
draw that line as to what is permissible

434
00:18:15,480 --> 00:18:20,840
within presidential power as an office without the

435
00:18:20,840 --> 00:18:25,020
consent of Congress, who actually is empowered to

436
00:18:25,020 --> 00:18:25,700
declare war.

437
00:18:26,220 --> 00:18:26,540
Right.

438
00:18:26,760 --> 00:18:29,100
And Article Two, where the president has the

439
00:18:29,100 --> 00:18:31,860
authority to defend the country and be the

440
00:18:31,860 --> 00:18:32,760
commander in chief.

441
00:18:33,360 --> 00:18:36,220
And it's tough to reconcile those two if

442
00:18:36,220 --> 00:18:38,720
you have a, just for sake of discussion,

443
00:18:38,860 --> 00:18:42,360
without talking specifically about this case, but if

444
00:18:42,360 --> 00:18:44,040
you have a credible threat to the United

445
00:18:44,040 --> 00:18:48,780
States that is imminent, that intelligence shows is

446
00:18:48,780 --> 00:18:52,880
imminent, and we have threats to our country,

447
00:18:53,040 --> 00:18:54,480
our bases, our allies.

448
00:18:55,780 --> 00:18:57,960
Should the president be able to act without

449
00:18:57,960 --> 00:19:02,160
telling members of Congress who may or may

450
00:19:02,160 --> 00:19:04,240
not, you know, keep it to themselves, so

451
00:19:04,240 --> 00:19:04,620
to speak?

452
00:19:04,640 --> 00:19:04,740
Yeah.

453
00:19:05,220 --> 00:19:07,900
Would you consider this one of those occasions?

454
00:19:09,720 --> 00:19:13,320
I do, because I have to, because I

455
00:19:13,320 --> 00:19:15,460
don't have any other evidence, although, you know,

456
00:19:15,480 --> 00:19:18,020
we can be skeptics and say, you know,

457
00:19:18,060 --> 00:19:19,120
question the intelligence.

458
00:19:19,120 --> 00:19:23,720
But I am told through our government that

459
00:19:23,720 --> 00:19:27,180
they had credible evidence that Iran was on

460
00:19:27,180 --> 00:19:30,280
the edge or about to have nuclear weapon

461
00:19:30,280 --> 00:19:31,220
capability.

462
00:19:31,760 --> 00:19:33,560
And in fact, they went over at the

463
00:19:33,560 --> 00:19:35,740
Pentagon briefing this morning.

464
00:19:36,360 --> 00:19:37,480
It was very enlightening.

465
00:19:37,620 --> 00:19:39,000
If people haven't seen it, I would encourage

466
00:19:39,000 --> 00:19:39,800
you to look at it.

467
00:19:39,800 --> 00:19:42,780
They talk about that this, this particular process

468
00:19:42,780 --> 00:19:45,120
of this particular site, the monitoring of it,

469
00:19:45,180 --> 00:19:49,940
and the strategy in the government started 15

470
00:19:49,940 --> 00:19:52,800
years ago when they saw what was being

471
00:19:52,800 --> 00:19:54,760
built, and they actually built these bunker bombs

472
00:19:54,760 --> 00:19:55,800
for this site.

473
00:19:57,420 --> 00:20:00,120
So if I believe my government, which I

474
00:20:00,120 --> 00:20:05,400
tend to do, but open minded, and it's

475
00:20:05,400 --> 00:20:07,280
a credible threat, I want my president to

476
00:20:07,280 --> 00:20:09,500
have the ability to eliminate a threat.

477
00:20:09,800 --> 00:20:12,560
To our bases, our military service members overseas,

478
00:20:12,580 --> 00:20:16,320
and our allies, without having to go to

479
00:20:16,320 --> 00:20:19,460
Congress to tell them, you know, what the

480
00:20:19,460 --> 00:20:20,480
plan is, basically.

481
00:20:20,700 --> 00:20:23,100
And I guess the notion of imminent is

482
00:20:23,100 --> 00:20:25,540
maybe probably relevant in that.

483
00:20:26,340 --> 00:20:27,900
Well, let's say it's not imminent.

484
00:20:28,000 --> 00:20:29,320
Let's say it's within the next month.

485
00:20:29,320 --> 00:20:33,000
I still struggle with telling members of Congress

486
00:20:33,000 --> 00:20:35,980
what we're asking permission to do this and

487
00:20:35,980 --> 00:20:38,580
giving our enemies time to listen to the

488
00:20:38,580 --> 00:20:41,660
public debate in Congress about that.

489
00:20:41,840 --> 00:20:43,760
The War Powers Act doesn't require it.

490
00:20:43,820 --> 00:20:48,140
It requires notification within 48 hours of Congress

491
00:20:48,140 --> 00:20:50,460
and a limit of 60 days to hostilities.

492
00:20:50,800 --> 00:20:52,740
So is that the right balance?

493
00:20:52,780 --> 00:20:53,380
I don't know.

494
00:20:53,380 --> 00:20:55,180
But if this is an issue that Congress

495
00:20:55,180 --> 00:20:57,740
is worried about, I mean, one thing that

496
00:20:57,740 --> 00:21:00,200
you and I agree on is Congress has

497
00:21:00,200 --> 00:21:04,860
delegated, is negligent, whatever it is, on all

498
00:21:04,860 --> 00:21:06,660
these things that they end up complaining about

499
00:21:06,660 --> 00:21:07,240
afterwards.

500
00:21:08,220 --> 00:21:09,920
Congress has the power to change the War

501
00:21:09,920 --> 00:21:12,940
Powers Act if they choose to, and I

502
00:21:12,940 --> 00:21:13,500
doubt they will.

503
00:21:13,600 --> 00:21:14,520
I doubt they'll complain.

504
00:21:14,640 --> 00:21:16,440
And if it was a Democratic president doing

505
00:21:16,440 --> 00:21:17,740
it, as it has been in the past,

506
00:21:17,820 --> 00:21:19,400
the Republicans complain about it.

507
00:21:20,020 --> 00:21:22,080
And then the Republicans get in power, and

508
00:21:22,080 --> 00:21:23,860
they don't do anything about it, and vice

509
00:21:23,860 --> 00:21:24,240
versa.

510
00:21:24,900 --> 00:21:26,540
I don't want the limitation on there.

511
00:21:26,900 --> 00:21:27,460
Yeah, I gotcha.

512
00:21:27,740 --> 00:21:31,240
But, well, in any case, I think this

513
00:21:31,240 --> 00:21:32,720
is a really interesting discussion.

514
00:21:32,880 --> 00:21:33,780
I'm kind of into it.

515
00:21:33,920 --> 00:21:35,520
But I want to bring it back to

516
00:21:35,520 --> 00:21:38,060
what we were originally talking about was the

517
00:21:38,060 --> 00:21:41,100
idea of the wall of worry and markets'

518
00:21:41,540 --> 00:21:42,560
reaction to it.

519
00:21:44,180 --> 00:21:46,700
And I think there are other things besides

520
00:21:46,700 --> 00:21:47,040
this.

521
00:21:47,040 --> 00:21:49,720
Now, this seems to be presently in a

522
00:21:49,720 --> 00:21:50,300
ceasefire.

523
00:21:50,680 --> 00:21:52,640
I think there's a question, like, will it

524
00:21:52,640 --> 00:21:53,260
last?

525
00:21:54,280 --> 00:21:55,840
What is the end of it?

526
00:21:56,540 --> 00:21:57,040
Yeah, right.

527
00:21:57,480 --> 00:22:00,000
Is that the end of hostilities?

528
00:22:00,320 --> 00:22:03,640
Or will there be more of a retaliatory

529
00:22:03,640 --> 00:22:04,340
response?

530
00:22:04,500 --> 00:22:08,220
You know, there was a modest retaliatory response

531
00:22:08,220 --> 00:22:09,640
on one of our bases.

532
00:22:09,860 --> 00:22:10,260
Was it Qatar?

533
00:22:11,680 --> 00:22:13,280
Qatar, how do you say that properly?

534
00:22:14,320 --> 00:22:15,260
Telegraphed and planned.

535
00:22:15,260 --> 00:22:17,560
Yeah, it's pretty widely known.

536
00:22:17,780 --> 00:22:23,340
So, in any case, it seems surprising to

537
00:22:23,340 --> 00:22:25,800
me that that would be the extent of

538
00:22:25,800 --> 00:22:29,460
the retaliation.

539
00:22:30,980 --> 00:22:34,100
But fingers crossed that it is, right?

540
00:22:34,440 --> 00:22:34,840
Absolutely.

541
00:22:35,880 --> 00:22:39,760
But, you know, at the same time, my

542
00:22:39,760 --> 00:22:41,520
worry would be like, oh, what if there's

543
00:22:41,520 --> 00:22:45,240
some kind of cyber attack?

544
00:22:45,240 --> 00:22:46,760
Or, you know, that kind of thing.

545
00:22:47,040 --> 00:22:48,100
Terrorist attack, sure.

546
00:22:48,400 --> 00:22:49,440
Yeah, terrorist attacks.

547
00:22:49,560 --> 00:22:51,680
What kind of response might there be in

548
00:22:51,680 --> 00:22:58,220
a way that's less militarily defendable?

549
00:22:58,640 --> 00:22:59,220
You know what I mean?

550
00:22:59,260 --> 00:23:03,680
But maybe more disruptive to our economy, I

551
00:23:03,680 --> 00:23:03,880
guess.

552
00:23:05,240 --> 00:23:06,220
But you wanted to comment?

553
00:23:06,340 --> 00:23:08,580
Yeah, I think another one of my concerns

554
00:23:08,580 --> 00:23:11,420
with this specifically is, I was reading it.

555
00:23:11,420 --> 00:23:13,440
It sounds like we didn't do that much

556
00:23:13,440 --> 00:23:15,880
damage to the nuclear capabilities.

557
00:23:16,140 --> 00:23:17,360
I was reading something that said we set

558
00:23:17,360 --> 00:23:18,940
them back maybe a few months by hitting

559
00:23:18,940 --> 00:23:20,060
some of the tunnels.

560
00:23:21,080 --> 00:23:23,400
And if that is the case, then if

561
00:23:23,400 --> 00:23:26,480
we didn't really obliterate the nuclear facilities that

562
00:23:26,480 --> 00:23:29,060
are in Iran, then we just drop bombs

563
00:23:29,060 --> 00:23:31,960
on some that might have nuclear capabilities in

564
00:23:31,960 --> 00:23:33,180
the next several months.

565
00:23:33,620 --> 00:23:36,860
So, yeah, I feel like, you know, you're

566
00:23:36,860 --> 00:23:38,000
never going to know for sure if you're

567
00:23:38,000 --> 00:23:40,080
going to do the damage that you expected.

568
00:23:40,080 --> 00:23:42,920
But it is just a looming thought.

569
00:23:43,320 --> 00:23:45,900
Yeah, and that whole issue seems to be

570
00:23:45,900 --> 00:23:47,780
one that's in flux, you know, because they're

571
00:23:47,780 --> 00:23:52,220
still getting the data on how much damage

572
00:23:52,220 --> 00:23:53,260
really was done.

573
00:23:53,560 --> 00:23:56,560
And that was some of the conversation this

574
00:23:56,560 --> 00:23:56,960
morning.

575
00:23:57,720 --> 00:24:01,560
It was, and I agree with the general.

576
00:24:01,940 --> 00:24:04,760
It was, you know, it was disappointing.

577
00:24:04,760 --> 00:24:07,360
In the Secretary of Defense, I think it's

578
00:24:07,360 --> 00:24:11,140
disappointing that that story was released.

579
00:24:11,300 --> 00:24:14,700
It was based upon just the initial internal

580
00:24:14,700 --> 00:24:17,420
data that someone leaked and it had a

581
00:24:17,420 --> 00:24:20,440
low confidence, etc.

582
00:24:21,000 --> 00:24:23,880
No one's going to know until somebody's actually

583
00:24:23,880 --> 00:24:24,380
there.

584
00:24:24,820 --> 00:24:26,440
Yeah, because it's all underground.

585
00:24:27,260 --> 00:24:30,220
I, based upon the presentation made this morning,

586
00:24:30,540 --> 00:24:33,500
I have greater confidence that it was destroyed.

587
00:24:34,080 --> 00:24:35,140
And they didn't say that.

588
00:24:35,240 --> 00:24:37,280
I just, on the presentation that they made

589
00:24:37,280 --> 00:24:39,500
about the weapons and about the plan and

590
00:24:39,500 --> 00:24:41,220
about the execution of it.

591
00:24:42,300 --> 00:24:44,620
It seems, it seems like it would have

592
00:24:44,620 --> 00:24:46,020
to be, but we'll have to, we'll have

593
00:24:46,020 --> 00:24:46,380
to wait.

594
00:24:46,960 --> 00:24:48,840
Some positive things that came out of the

595
00:24:48,840 --> 00:24:54,340
conflict, though, is that North Korea, China, Russia,

596
00:24:55,200 --> 00:24:57,140
the axis of evil, however you want to

597
00:24:57,140 --> 00:24:57,800
describe it.

598
00:24:58,140 --> 00:24:59,340
Yeah, what we used to, yeah.

599
00:24:59,340 --> 00:24:59,800
Right.

600
00:24:59,880 --> 00:25:03,280
None of them, none of their, Iran's allies

601
00:25:03,280 --> 00:25:06,040
did anything to support them.

602
00:25:06,520 --> 00:25:06,640
Yeah.

603
00:25:06,820 --> 00:25:09,260
In fact, they did the opposite, at least

604
00:25:09,260 --> 00:25:10,480
with their public statements.

605
00:25:10,780 --> 00:25:13,040
And they didn't seem to even rattle their

606
00:25:13,040 --> 00:25:14,840
swords, so to speak.

607
00:25:15,540 --> 00:25:18,280
Well, and Russia seemed to say, we'll, we'll,

608
00:25:18,340 --> 00:25:22,080
we'll help Iran get nuclear capabilities, didn't they?

609
00:25:22,800 --> 00:25:25,540
I, if they did, I didn't, I didn't

610
00:25:25,540 --> 00:25:28,020
see that, but they, no one did anything

611
00:25:28,020 --> 00:25:28,560
meaningful.

612
00:25:29,340 --> 00:25:30,880
Which I think is a positive for the

613
00:25:30,880 --> 00:25:32,300
region itself.

614
00:25:33,280 --> 00:25:34,500
And so at the end of the day,

615
00:25:35,040 --> 00:25:37,880
if the ability of Iran and their proxies

616
00:25:37,880 --> 00:25:41,580
to be disruptive in the Middle East or

617
00:25:41,580 --> 00:25:44,260
have a nuclear program, whether it, whether it's

618
00:25:44,260 --> 00:25:46,380
set by six months, six years or forever,

619
00:25:46,380 --> 00:25:48,520
I think is a positive thing.

620
00:25:48,520 --> 00:25:50,320
And then at the same time, the NATO

621
00:25:50,320 --> 00:25:53,420
conference was going on and it seemed like,

622
00:25:53,860 --> 00:25:55,800
based upon the news reports, that it was

623
00:25:55,800 --> 00:25:59,480
a very productive NATO conference with President Trump

624
00:25:59,480 --> 00:26:02,040
reassuring NATO that we are a part of

625
00:26:02,040 --> 00:26:04,220
NATO and we would defend any NATO country.

626
00:26:05,060 --> 00:26:06,720
And all but one, I believe, of the

627
00:26:06,720 --> 00:26:10,400
NATO countries agreeing to that 5% of

628
00:26:10,400 --> 00:26:13,120
GDP, their GDP spending.

629
00:26:13,280 --> 00:26:15,080
And that's, you know, by itself, if we

630
00:26:15,080 --> 00:26:16,280
didn't have all this other stuff in the

631
00:26:16,280 --> 00:26:17,400
news, I think that would be.

632
00:26:18,520 --> 00:26:21,560
The headline news about NATO getting along so

633
00:26:21,560 --> 00:26:23,640
well and making these commitments to being a

634
00:26:23,640 --> 00:26:25,840
strong and vibrant partnership.

635
00:26:26,220 --> 00:26:28,000
So at the end of the day, if

636
00:26:28,000 --> 00:26:31,340
this holds and I, I share your potential

637
00:26:31,340 --> 00:26:34,220
concerns, Chris, but if this holds as it

638
00:26:34,220 --> 00:26:36,420
is today, it's, it's the world is a

639
00:26:36,420 --> 00:26:39,400
better place because the United States acted to

640
00:26:39,400 --> 00:26:42,120
take a, to deter a threat or eliminate

641
00:26:42,120 --> 00:26:44,640
a threat or however we want to characterize

642
00:26:44,640 --> 00:26:45,020
it.

643
00:26:45,020 --> 00:26:45,400
Yeah.

644
00:26:45,600 --> 00:26:49,060
So, um, the, I think we'll know more

645
00:26:49,060 --> 00:26:51,360
within a short time, you know, a couple

646
00:26:51,360 --> 00:26:53,560
of weeks, we'll probably have a better sense

647
00:26:53,560 --> 00:26:56,360
of what's the real damage that was done,

648
00:26:56,440 --> 00:26:59,260
whether or not there'll be more retaliatory response.

649
00:26:59,580 --> 00:27:00,840
So I think this is one of those,

650
00:27:00,900 --> 00:27:03,640
um, let's give it a little time and

651
00:27:03,640 --> 00:27:04,480
see where we're at.

652
00:27:05,300 --> 00:27:08,360
Similarly with the tariffs, uh, we've got, uh,

653
00:27:08,360 --> 00:27:11,480
June 9th looming about a month after that

654
00:27:11,480 --> 00:27:13,480
is the, um, China.

655
00:27:13,480 --> 00:27:16,240
I think we'll get a sense of, uh,

656
00:27:16,380 --> 00:27:19,820
you know, from the extension that was originally

657
00:27:19,820 --> 00:27:23,760
done in April for most countries, uh, where

658
00:27:23,760 --> 00:27:27,080
we stand with, will the, uh, administration kind

659
00:27:27,080 --> 00:27:29,180
of kick the can another 90 days or

660
00:27:29,180 --> 00:27:32,600
something like that, um, to bide time for

661
00:27:32,600 --> 00:27:37,040
finalizing some of these negotiations that may be

662
00:27:37,040 --> 00:27:37,560
in place.

663
00:27:38,060 --> 00:27:40,020
Um, and then that might give us an

664
00:27:40,020 --> 00:27:41,580
indication of, oh, well, that's probably what would

665
00:27:41,580 --> 00:27:43,120
happen with China as well.

666
00:27:43,120 --> 00:27:43,440
Right.

667
00:27:43,540 --> 00:27:46,840
So presumably, um, it was, we'll have maybe

668
00:27:46,840 --> 00:27:48,900
within a few weeks, have a sense of

669
00:27:48,900 --> 00:27:49,800
what's coming there.

670
00:27:50,280 --> 00:27:53,080
Additionally, this tax bill is in the thick

671
00:27:53,080 --> 00:27:55,220
of it, perhaps even by the time our

672
00:27:55,220 --> 00:27:58,660
episode airs, there could be movement on this.

673
00:27:58,740 --> 00:28:01,060
We don't know whether it's going to succeed

674
00:28:01,060 --> 00:28:01,800
or fail.

675
00:28:02,360 --> 00:28:05,040
Uh, essentially the, uh, the house passed a

676
00:28:05,040 --> 00:28:07,080
version of the bill, the one big, beautiful

677
00:28:07,080 --> 00:28:07,420
bill.

678
00:28:07,420 --> 00:28:08,980
We talked about that in a prior episode.

679
00:28:09,140 --> 00:28:12,240
Some of the, uh, features of that, uh,

680
00:28:12,340 --> 00:28:15,060
that the Senate is in the throes of

681
00:28:15,060 --> 00:28:17,500
its negotiations as it relates to this.

682
00:28:18,560 --> 00:28:21,920
Um, there are discrepancies of, uh, how these

683
00:28:21,920 --> 00:28:23,620
will be dealt with.

684
00:28:23,620 --> 00:28:26,700
Um, and that's the nature of how the

685
00:28:26,700 --> 00:28:27,700
process works.

686
00:28:28,260 --> 00:28:30,100
Uh, the Senate will have to pass its

687
00:28:30,100 --> 00:28:32,420
version of the bill that will bring it

688
00:28:32,420 --> 00:28:36,180
back to the house to, uh, vote, I

689
00:28:36,180 --> 00:28:36,780
guess, on.

690
00:28:36,780 --> 00:28:37,740
Reconciling.

691
00:28:38,020 --> 00:28:41,600
Reconciling whether they, you know, can live with

692
00:28:41,600 --> 00:28:43,420
something that comes out of that.

693
00:28:43,540 --> 00:28:50,420
Uh, it's a tenuous process and, um, it,

694
00:28:50,540 --> 00:28:51,880
it, it's on unknown.

695
00:28:52,160 --> 00:28:53,940
And I gather there's features in the bill

696
00:28:53,940 --> 00:28:57,540
that go far beyond just a tax bill,

697
00:28:57,540 --> 00:28:59,140
a budget deal.

698
00:28:59,140 --> 00:29:05,580
Um, but essentially, uh, it seems that, uh,

699
00:29:05,620 --> 00:29:10,020
as if they can keep the Republican, um,

700
00:29:10,560 --> 00:29:11,880
numbers in line.

701
00:29:11,880 --> 00:29:13,180
I mean, I think we've got, was it

702
00:29:13,180 --> 00:29:16,800
one Senator who clearly indicated he's not going

703
00:29:16,800 --> 00:29:17,740
to vote for this?

704
00:29:17,840 --> 00:29:21,140
That leaves them maybe two that, uh, and

705
00:29:21,140 --> 00:29:23,600
then you've got the vice president as a

706
00:29:23,600 --> 00:29:25,580
tie, you know, if there's a tie, but

707
00:29:25,580 --> 00:29:26,660
is that what it is?

708
00:29:26,660 --> 00:29:29,100
There's like 52, maybe then that would be

709
00:29:29,100 --> 00:29:31,080
in favor, uh, if they can keep it

710
00:29:31,080 --> 00:29:31,440
together.

711
00:29:31,660 --> 00:29:33,260
I think the bill passes the Senate.

712
00:29:33,560 --> 00:29:35,820
And as you've said before, um, the house

713
00:29:35,820 --> 00:29:37,840
vote when it went to the Senate passed

714
00:29:37,840 --> 00:29:41,120
by one vote, uh, one, one vote.

715
00:29:42,360 --> 00:29:45,340
I think, I think that the Senators are

716
00:29:45,340 --> 00:29:46,200
working this weekend.

717
00:29:46,300 --> 00:29:47,780
I think they're going to get it out

718
00:29:47,780 --> 00:29:50,480
past, uh, whether or not J.D. Vance

719
00:29:50,480 --> 00:29:51,340
has to be the tying vote.

720
00:29:51,420 --> 00:29:51,880
I don't know.

721
00:29:51,880 --> 00:29:54,620
I think probably not, but I think the

722
00:29:54,620 --> 00:29:56,520
real challenge to the bill is when it

723
00:29:56,520 --> 00:29:57,920
comes back into the house.

724
00:29:58,080 --> 00:30:01,860
There's a lot of, um, renegade Republicans and

725
00:30:01,860 --> 00:30:04,280
maybe that's not a derogatory term for some

726
00:30:04,280 --> 00:30:04,580
people.

727
00:30:04,620 --> 00:30:05,300
It's a good thing.

728
00:30:05,680 --> 00:30:08,080
Um, there's been, and there's like been more

729
00:30:08,080 --> 00:30:10,740
attention to some of the details in the

730
00:30:10,740 --> 00:30:11,840
meantime, right?

731
00:30:11,940 --> 00:30:14,040
That could cause some people to say, I

732
00:30:14,040 --> 00:30:15,440
don't really like this or that.

733
00:30:16,020 --> 00:30:18,380
Uh, you got that group who are focused

734
00:30:18,380 --> 00:30:20,840
on the salt, uh, tax component of it.

735
00:30:20,940 --> 00:30:21,920
That's not coming back.

736
00:30:21,960 --> 00:30:23,120
It seems the way they want.

737
00:30:23,640 --> 00:30:23,740
Right.

738
00:30:23,960 --> 00:30:26,300
Um, there's all different elements that, you know,

739
00:30:26,320 --> 00:30:27,460
you can say, I don't want this.

740
00:30:27,560 --> 00:30:28,380
Not only that, right.

741
00:30:28,600 --> 00:30:31,220
Not enough spending cuts to money, spending cuts,

742
00:30:31,220 --> 00:30:33,440
uh, Medicaid or Medicare rather.

743
00:30:33,980 --> 00:30:35,980
Uh, you know, you've got these different schools

744
00:30:35,980 --> 00:30:36,500
of thought.

745
00:30:36,700 --> 00:30:38,780
So, uh, I think it's going to be

746
00:30:38,780 --> 00:30:41,500
challenging to see how that gets resolved, but

747
00:30:41,500 --> 00:30:43,120
there's a lot of political pressure.

748
00:30:43,660 --> 00:30:44,060
Sure.

749
00:30:44,300 --> 00:30:46,620
Within, you know, a party to, to move

750
00:30:46,620 --> 00:30:46,960
things.

751
00:30:47,140 --> 00:30:49,400
So, uh, but again, we should probably have

752
00:30:49,400 --> 00:30:51,540
a better sense of this uncertainty within a

753
00:30:51,540 --> 00:30:54,460
week or two as to, you know, whether

754
00:30:54,460 --> 00:30:56,500
this is likely to pass or not.

755
00:30:56,900 --> 00:30:59,040
Um, and that's even an unofficial date.

756
00:30:59,260 --> 00:31:00,540
I mean, it's a date, it's a date

757
00:31:00,540 --> 00:31:01,740
set, but this is the bill.

758
00:31:01,940 --> 00:31:03,260
This is the bill for October.

759
00:31:04,020 --> 00:31:04,260
Yeah.

760
00:31:04,260 --> 00:31:04,920
It's a good point.

761
00:31:05,060 --> 00:31:07,620
Uh, that being said, there's a debt ceiling

762
00:31:07,620 --> 00:31:08,520
date.

763
00:31:08,580 --> 00:31:10,140
I want to say August.

764
00:31:10,140 --> 00:31:12,000
I mean, we're in the, we're already past

765
00:31:12,000 --> 00:31:14,800
the, uh, point at which they're doing the

766
00:31:14,800 --> 00:31:16,620
emergency measures and all that.

767
00:31:16,700 --> 00:31:18,320
But we've got a, you know, a drop

768
00:31:18,320 --> 00:31:20,300
dead date, so to speak of somewhere in

769
00:31:20,300 --> 00:31:24,240
August that, uh, if this didn't get passed,

770
00:31:24,240 --> 00:31:26,300
well, now we've got a whole new debt

771
00:31:26,300 --> 00:31:30,240
ceiling, uh, challenge to deal with and strong

772
00:31:30,240 --> 00:31:32,160
views about whether or not to raise the

773
00:31:32,160 --> 00:31:35,700
debt ceiling, which is essentially, uh, the willingness

774
00:31:35,700 --> 00:31:38,260
to pay the debts we owe because our

775
00:31:38,260 --> 00:31:42,400
interest costs keep pushing the debt higher, uh,

776
00:31:42,400 --> 00:31:44,720
in addition to, even if we keep everything

777
00:31:44,720 --> 00:31:46,260
else the same, you know, essentially.

778
00:31:46,400 --> 00:31:46,580
Right.

779
00:31:46,640 --> 00:31:51,160
So, um, we've got a challenge that, uh,

780
00:31:51,400 --> 00:31:53,360
either the debt ceiling needs to be increased

781
00:31:53,360 --> 00:31:57,160
or we might have defaults, um, in some

782
00:31:57,160 --> 00:31:58,040
form or fashion.

783
00:31:58,040 --> 00:32:00,680
And as the treasury secretaries in the past

784
00:32:00,680 --> 00:32:04,420
have said, uh, they don't have the authority

785
00:32:04,420 --> 00:32:09,740
to, uh, prioritize some of these, uh, obligations

786
00:32:09,740 --> 00:32:11,500
that may exist.

787
00:32:12,000 --> 00:32:15,080
So you'd have some real issues of who

788
00:32:15,080 --> 00:32:16,520
gets paid.

789
00:32:16,860 --> 00:32:19,300
I don't think the market could climb that

790
00:32:19,300 --> 00:32:22,040
wall if that actually happened.

791
00:32:22,140 --> 00:32:23,400
That would be, I think that's a good

792
00:32:23,400 --> 00:32:23,680
point.

793
00:32:23,800 --> 00:32:23,960
Yeah.

794
00:32:23,960 --> 00:32:29,100
That would be, uh, devastating to our, uh,

795
00:32:29,100 --> 00:32:31,780
credibility as a nation, our credit as a

796
00:32:31,780 --> 00:32:33,560
nation and the market itself.

797
00:32:34,620 --> 00:32:38,760
Add to that right now, valuations, uh, I,

798
00:32:38,840 --> 00:32:40,580
I would look, I point to PEs.

799
00:32:40,580 --> 00:32:42,800
I know Brian's not a big fan of,

800
00:32:42,800 --> 00:32:44,400
uh, PE, uh, ratios.

801
00:32:44,400 --> 00:32:47,260
When we talked to Brian Regan, our, our,

802
00:32:47,340 --> 00:32:50,540
uh, teams, um, senior portfolio manager.

803
00:32:51,020 --> 00:32:54,920
Um, but it's a commonly utilized, uh, reference

804
00:32:54,920 --> 00:32:57,540
point for talking about, you know, whether the

805
00:32:57,540 --> 00:33:01,400
market is, uh, value how it's valued.

806
00:33:01,880 --> 00:33:05,400
And, uh, in relative terms at, uh, 21,

807
00:33:05,580 --> 00:33:08,540
almost 22 times forward earnings.

808
00:33:08,840 --> 00:33:12,820
Um, uh, the market arguably is a little

809
00:33:12,820 --> 00:33:13,720
bit expensive.

810
00:33:14,080 --> 00:33:17,700
Um, you could, um, make a case for

811
00:33:17,700 --> 00:33:20,100
interest rates and, you know, all these variables

812
00:33:20,100 --> 00:33:22,440
that could justify some of that.

813
00:33:22,820 --> 00:33:26,840
Um, uh, growing, uh, you know, artificial intelligence

814
00:33:26,840 --> 00:33:28,280
and all the rest of there's things to

815
00:33:28,280 --> 00:33:30,320
look to and say, oh, isn't this, you

816
00:33:30,320 --> 00:33:30,820
know, positive.

817
00:33:30,820 --> 00:33:33,660
But there are, uh, you know, a lot

818
00:33:33,660 --> 00:33:34,440
of uncertainties.

819
00:33:34,560 --> 00:33:36,640
It's kind of a, it's, it's priced for

820
00:33:36,640 --> 00:33:38,420
perfection, I guess you might say.

821
00:33:38,660 --> 00:33:39,720
And I think that's a good way to

822
00:33:39,720 --> 00:33:40,060
say it.

823
00:33:40,140 --> 00:33:42,040
We have a lot of these variables that

824
00:33:42,040 --> 00:33:46,760
are in the mix that may, um, go

825
00:33:46,760 --> 00:33:48,000
the way we expect or the way the

826
00:33:48,000 --> 00:33:50,660
market likes is, uh, we had a conversation

827
00:33:50,660 --> 00:33:51,300
internally.

828
00:33:51,300 --> 00:33:53,100
We're talking with Brian about this and we'll

829
00:33:53,100 --> 00:33:54,820
talk about some of this with him next

830
00:33:54,820 --> 00:33:56,240
week as well.

831
00:33:56,240 --> 00:33:58,040
For those who would be interested in listening,

832
00:33:58,300 --> 00:34:00,460
we'll be talking about some market related topics

833
00:34:00,460 --> 00:34:01,860
with Brian Regan next week.

834
00:34:02,200 --> 00:34:04,240
The trend for the, as you were talking

835
00:34:04,240 --> 00:34:05,780
about with tariffs is favorable.

836
00:34:05,940 --> 00:34:07,100
There's a lot of these things you look

837
00:34:07,100 --> 00:34:08,780
at the way they seem to be shaping

838
00:34:08,780 --> 00:34:10,480
up is encouraging.

839
00:34:11,159 --> 00:34:14,620
Uh, but, uh, I think there's still some

840
00:34:14,620 --> 00:34:17,639
will earnings increase to the point to cause

841
00:34:17,639 --> 00:34:19,239
the PE to come down.

842
00:34:19,780 --> 00:34:22,780
Um, well, you know, tariffs could be a

843
00:34:22,780 --> 00:34:25,199
factor in that and so forth.

844
00:34:25,280 --> 00:34:25,699
You know what I mean?

845
00:34:25,699 --> 00:34:27,639
There's some variables that we don't know the

846
00:34:27,639 --> 00:34:28,420
answers to yet.

847
00:34:28,780 --> 00:34:31,179
In any market, the market can be irrationally

848
00:34:31,179 --> 00:34:34,980
exuberant is a quote from Alan Greenspan or

849
00:34:34,980 --> 00:34:36,480
it can be too pessimistic.

850
00:34:36,960 --> 00:34:39,199
So, and I think in this case, it's,

851
00:34:39,239 --> 00:34:42,820
you know, it's exuberant whether it's irrational or

852
00:34:42,820 --> 00:34:43,040
not.

853
00:34:43,219 --> 00:34:44,980
Well, we'll reserve judgment.

854
00:34:45,300 --> 00:34:47,080
Time will tell, but it is a bit

855
00:34:47,080 --> 00:34:47,739
precarious.

856
00:34:47,780 --> 00:34:49,659
I think at times, um, when the market

857
00:34:49,659 --> 00:34:51,820
gets ahead of itself and, you know, we

858
00:34:51,820 --> 00:34:54,400
assume that it's always going to be that

859
00:34:54,400 --> 00:34:54,620
way.

860
00:34:55,060 --> 00:34:57,280
So let's turn our attention to, you know,

861
00:34:57,380 --> 00:34:58,540
the, as we wrap up.

862
00:34:58,640 --> 00:34:59,480
I mean, I know we're going a little

863
00:34:59,480 --> 00:34:59,760
long.

864
00:34:59,880 --> 00:35:01,080
We'll try to wrap this up quickly.

865
00:35:01,520 --> 00:35:03,260
You know, so what's an investor to do?

866
00:35:03,460 --> 00:35:05,000
How do I plan for this?

867
00:35:05,040 --> 00:35:06,180
How do I think about it?

868
00:35:06,680 --> 00:35:09,420
Um, you know, big picture, control the controllables.

869
00:35:09,900 --> 00:35:10,980
What are the controllables?

870
00:35:11,080 --> 00:35:12,720
Well, one of those is your asset allocation.

871
00:35:13,360 --> 00:35:16,900
Uh, if you're concerned about volatility, um, you

872
00:35:16,900 --> 00:35:18,560
know, if you're not a longterm investor in

873
00:35:18,560 --> 00:35:20,960
one sense, you know, that, that is different

874
00:35:20,960 --> 00:35:22,420
from someone who's a longterm investor.

875
00:35:22,420 --> 00:35:28,700
If, uh, I'm Russ here, uh, yeah, I

876
00:35:28,700 --> 00:35:31,420
got a long time to invest, right?

877
00:35:31,740 --> 00:35:34,640
Uh, if I'm, uh, someone in my eighties,

878
00:35:34,640 --> 00:35:37,120
I might be more concerned about how long

879
00:35:37,120 --> 00:35:38,620
it takes for markets to recover.

880
00:35:39,260 --> 00:35:43,280
Um, we had markets decline, uh, by 20

881
00:35:43,280 --> 00:35:44,980
% almost earlier this year.

882
00:35:44,980 --> 00:35:46,840
And we're already talking about their back to

883
00:35:46,840 --> 00:35:47,140
highs.

884
00:35:47,480 --> 00:35:49,860
Things can happen quickly, but they don't always

885
00:35:49,860 --> 00:35:50,680
happen quickly.

886
00:35:51,280 --> 00:35:54,040
And sometimes it takes years for markets to

887
00:35:54,040 --> 00:35:56,200
recover, if you will.

888
00:35:56,340 --> 00:35:58,820
So we get more concerned about that as

889
00:35:58,820 --> 00:35:59,800
we age naturally.

890
00:36:00,020 --> 00:36:01,280
So one of the things we might want

891
00:36:01,280 --> 00:36:03,680
to think about is one, do we have

892
00:36:03,680 --> 00:36:08,200
our liquidity, uh, sufficient reserves, um, in place

893
00:36:08,200 --> 00:36:09,620
too?

894
00:36:09,760 --> 00:36:11,320
So we like to think in terms of

895
00:36:11,320 --> 00:36:13,660
buckets, we've talked about this a lot, but

896
00:36:13,660 --> 00:36:15,820
you know, graduated levels of risk.

897
00:36:15,820 --> 00:36:18,040
And for the portion of our portfolio, that's

898
00:36:18,040 --> 00:36:19,320
longer term in nature.

899
00:36:19,600 --> 00:36:22,040
That's where we want more risk, depending on

900
00:36:22,040 --> 00:36:25,040
your particular temperament for how much you can

901
00:36:25,040 --> 00:36:25,400
tolerate.

902
00:36:26,100 --> 00:36:28,780
But this is a good time to reassess

903
00:36:28,780 --> 00:36:31,140
what's my tolerance for volatility.

904
00:36:31,820 --> 00:36:33,680
And if I say I can, I can

905
00:36:33,680 --> 00:36:35,780
tolerate a bear market, that's a 20%

906
00:36:35,780 --> 00:36:36,300
decline.

907
00:36:36,540 --> 00:36:39,640
Turn it from a percentage number to a

908
00:36:39,640 --> 00:36:40,440
dollar number.

909
00:36:40,440 --> 00:36:42,740
Oh, if my mark, if my account went

910
00:36:42,740 --> 00:36:46,800
down by X dollars, 20%, but do the

911
00:36:46,800 --> 00:36:49,380
math, how do I feel about that?

912
00:36:49,440 --> 00:36:51,180
Can I tolerate, can I stomach that?

913
00:36:51,500 --> 00:36:53,160
If the answer is no, and, and just

914
00:36:53,160 --> 00:36:54,980
because we say a bear market is 20%,

915
00:36:54,980 --> 00:36:56,420
doesn't mean it can't go down 30%

916
00:36:56,420 --> 00:36:56,900
or whatever.

917
00:36:56,900 --> 00:36:57,220
Right.

918
00:36:57,480 --> 00:36:59,960
So, you know, be, be doing a little

919
00:36:59,960 --> 00:37:01,820
bit of the forethought of how much can

920
00:37:01,820 --> 00:37:02,640
I really stomach?

921
00:37:02,640 --> 00:37:06,640
And if that answer to that is that

922
00:37:06,640 --> 00:37:10,060
really makes me uncomfortable, maybe you want to

923
00:37:10,060 --> 00:37:12,620
address your allocation a little bit.

924
00:37:12,760 --> 00:37:13,080
Yeah, yeah.

925
00:37:13,080 --> 00:37:14,480
There can be tax events and all of

926
00:37:14,480 --> 00:37:16,760
that, and that's true, but better to capture

927
00:37:16,760 --> 00:37:19,260
something and have a gain and a tax

928
00:37:19,260 --> 00:37:22,180
event than to have it go down if

929
00:37:22,180 --> 00:37:23,640
you can't stomach it going down.

930
00:37:23,820 --> 00:37:24,040
Right.

931
00:37:24,040 --> 00:37:28,620
So now's when markets are at or near

932
00:37:28,620 --> 00:37:31,800
highs, now's a great time to be revisiting

933
00:37:31,800 --> 00:37:33,960
what's my allocation comfort zone.

934
00:37:34,900 --> 00:37:37,400
And so control the controllables.

935
00:37:37,560 --> 00:37:38,940
We can't control everything.

936
00:37:39,360 --> 00:37:40,640
We can't control what's going to happen with

937
00:37:40,640 --> 00:37:41,160
tax bill.

938
00:37:41,280 --> 00:37:42,600
We can't control what's going to happen with

939
00:37:42,600 --> 00:37:44,960
tariffs and war in the Middle East.

940
00:37:45,600 --> 00:37:47,160
All of these are things that are a

941
00:37:47,160 --> 00:37:48,560
little bit outside our control.

942
00:37:48,880 --> 00:37:50,860
What we can control is how much risk

943
00:37:50,860 --> 00:37:52,360
are we comfortable with?

944
00:37:52,780 --> 00:37:54,880
Do we have the cash flows we need?

945
00:37:55,360 --> 00:37:57,460
Do we have liquidity to meet our needs

946
00:37:57,460 --> 00:37:58,960
for the next couple of years?

947
00:37:59,020 --> 00:38:01,660
If we're retired, maybe six months.

948
00:38:01,880 --> 00:38:05,220
If we're not retired, you know, do we

949
00:38:05,220 --> 00:38:09,420
have things in place to give us the

950
00:38:09,420 --> 00:38:13,180
willingness and ability to stay the course on

951
00:38:13,180 --> 00:38:14,940
our intended objective?

952
00:38:15,480 --> 00:38:18,100
Put it all into a financial plan to

953
00:38:18,100 --> 00:38:19,780
help you navigate this.

954
00:38:20,240 --> 00:38:21,740
You need help with a financial plan.

955
00:38:21,740 --> 00:38:22,760
That's where we come in.

956
00:38:23,420 --> 00:38:24,740
What did you guys want to say?

957
00:38:24,840 --> 00:38:25,980
Because I tried to throw a lot in

958
00:38:25,980 --> 00:38:26,620
there quickly.

959
00:38:27,300 --> 00:38:28,820
Well, this is a financial planning topic.

960
00:38:29,000 --> 00:38:31,220
I feel like I've talked about this before,

961
00:38:31,740 --> 00:38:33,500
the stress testing of the financial plan.

962
00:38:33,700 --> 00:38:35,340
So a lot of people are worried about

963
00:38:35,340 --> 00:38:36,120
the market right now.

964
00:38:36,260 --> 00:38:37,720
So we're talking about what if the market

965
00:38:37,720 --> 00:38:39,800
went down 20% rather than looking at

966
00:38:39,800 --> 00:38:41,700
it on an account to account basis.

967
00:38:41,820 --> 00:38:43,760
You can take it all into one picture

968
00:38:43,760 --> 00:38:44,640
in your financial plan.

969
00:38:44,760 --> 00:38:46,360
See what would happen if the market went

970
00:38:46,360 --> 00:38:47,500
down 20% tomorrow.

971
00:38:47,780 --> 00:38:50,920
Is your plan compromised or does it still

972
00:38:50,920 --> 00:38:51,280
work?

973
00:38:51,280 --> 00:38:51,560
Right.

974
00:38:52,100 --> 00:38:54,380
And big picture, yes, there's a lot of

975
00:38:54,380 --> 00:38:56,040
uncertainty in the near term.

976
00:38:56,300 --> 00:38:58,340
Big picture over your lifetime.

977
00:38:59,020 --> 00:39:00,540
How does this shape out even if the

978
00:39:00,540 --> 00:39:03,180
market does drop 20, 30% in the

979
00:39:03,180 --> 00:39:04,060
next few days?

980
00:39:04,500 --> 00:39:06,240
And we can model that out and see

981
00:39:06,240 --> 00:39:07,060
what that would look like.

982
00:39:07,760 --> 00:39:08,440
Yeah, good point.

983
00:39:09,140 --> 00:39:12,260
So financial plan stress test can really make

984
00:39:12,260 --> 00:39:18,160
a difference in your sense of peace, peace

985
00:39:18,160 --> 00:39:20,560
of mind as you're dealing with your plan.

986
00:39:20,560 --> 00:39:22,920
Because in most cases, a lot of cases

987
00:39:22,920 --> 00:39:26,660
anyway, when we work with our clientele, we

988
00:39:26,660 --> 00:39:28,040
do this stress test.

989
00:39:28,060 --> 00:39:29,560
And we see, yes, it has an effect,

990
00:39:29,660 --> 00:39:32,920
but not so great that it should be

991
00:39:32,920 --> 00:39:35,300
so concerning, you know, or if it is,

992
00:39:35,540 --> 00:39:36,460
well, that's educational.

993
00:39:36,500 --> 00:39:37,140
That's informative.

994
00:39:37,300 --> 00:39:40,100
Maybe we should make some accommodation to plan

995
00:39:40,100 --> 00:39:40,600
for that.

996
00:39:40,960 --> 00:39:44,660
Jeff, speaking about the uncontrollables, I think that's

997
00:39:44,660 --> 00:39:48,000
what drives our emotion sometimes, especially in these

998
00:39:48,000 --> 00:39:51,220
times of high stakes and high interest news

999
00:39:51,220 --> 00:39:51,660
items.

1000
00:39:52,040 --> 00:39:54,460
People tend to get more focused in on

1001
00:39:54,460 --> 00:39:56,500
the news and sit there and watch it

1002
00:39:56,500 --> 00:39:57,840
and worry about it.

1003
00:39:58,140 --> 00:40:00,000
And, you know, one of the best things

1004
00:40:00,000 --> 00:40:02,760
about having a financial advisor and you talk

1005
00:40:02,760 --> 00:40:04,960
about the Vanguard studying a lot, Chris, is

1006
00:40:04,960 --> 00:40:10,460
that a financial advisor can assist you when

1007
00:40:10,460 --> 00:40:12,900
you're having those urges that you feel you

1008
00:40:12,900 --> 00:40:13,920
need to do something.

1009
00:40:14,080 --> 00:40:15,480
Sometimes the best thing to do is nothing.

1010
00:40:15,660 --> 00:40:18,040
As you said correctly, sometimes the best thing

1011
00:40:18,040 --> 00:40:18,740
to do is something.

1012
00:40:19,320 --> 00:40:22,380
But it can help you to do anything.

1013
00:40:22,560 --> 00:40:23,540
It's a great point.

1014
00:40:23,680 --> 00:40:26,180
Sometimes your best bet is just stay the

1015
00:40:26,180 --> 00:40:29,160
course, you know, because you have a plan

1016
00:40:29,160 --> 00:40:29,720
that works.

1017
00:40:30,080 --> 00:40:31,680
But left to our own devices.

1018
00:40:31,820 --> 00:40:33,860
Sometimes if you're not working in the field,

1019
00:40:33,860 --> 00:40:36,120
then you don't understand the, you know, the

1020
00:40:36,120 --> 00:40:37,000
history of it all.

1021
00:40:37,120 --> 00:40:40,140
And your own financial plan that's created by

1022
00:40:40,140 --> 00:40:41,860
your trusted financial advisor.

1023
00:40:42,500 --> 00:40:45,160
Sometimes your behavior is driven by these emotions

1024
00:40:45,160 --> 00:40:48,580
and you make decisions that are wholesale decisions.

1025
00:40:48,580 --> 00:40:49,820
I have to get out of this.

1026
00:40:50,220 --> 00:40:51,800
Yeah, we can overreact, right?

1027
00:40:51,840 --> 00:40:55,540
We can overreact, which has devastating impacts to

1028
00:40:55,540 --> 00:40:57,880
your plan long term in many cases.

1029
00:40:58,200 --> 00:41:00,300
So, you know, that behavioral stuff that maybe

1030
00:41:00,300 --> 00:41:03,060
you didn't walk into your financial advisor when

1031
00:41:03,060 --> 00:41:05,140
you met with them and hired them and

1032
00:41:05,140 --> 00:41:05,940
been working with them.

1033
00:41:06,000 --> 00:41:07,540
Maybe that wasn't top of mind.

1034
00:41:07,580 --> 00:41:09,420
Like, oh, I need this because I could

1035
00:41:09,420 --> 00:41:11,120
have some worries that would be irrational at

1036
00:41:11,120 --> 00:41:11,560
some point.

1037
00:41:11,560 --> 00:41:14,680
But having that check and that person to

1038
00:41:14,680 --> 00:41:16,980
sit down as Russ indicated and go over

1039
00:41:16,980 --> 00:41:18,600
your plan and review it and say, does

1040
00:41:18,600 --> 00:41:19,160
this matter?

1041
00:41:20,660 --> 00:41:23,280
That's where the super amount of value comes

1042
00:41:23,280 --> 00:41:25,540
in from having a fiduciary that you're working

1043
00:41:25,540 --> 00:41:25,900
with.

1044
00:41:26,400 --> 00:41:28,520
Yeah, well, and when it comes to some

1045
00:41:28,520 --> 00:41:30,340
of these things, when it comes to the

1046
00:41:30,340 --> 00:41:33,640
worries of the moment, you know, that can

1047
00:41:33,640 --> 00:41:35,860
be part of the value where your financial

1048
00:41:35,860 --> 00:41:38,800
advisor, your portfolio manager.

1049
00:41:38,800 --> 00:41:42,780
When the way they navigate that looking for

1050
00:41:42,780 --> 00:41:47,780
opportunities can benefit you or risks, but they

1051
00:41:47,780 --> 00:41:50,420
can be positioning the portfolio.

1052
00:41:50,540 --> 00:41:52,980
Maybe that's where you say, I control the

1053
00:41:52,980 --> 00:41:56,000
things I can control, but I'm having professional

1054
00:41:56,000 --> 00:41:58,500
management to help me navigate some of these

1055
00:41:58,500 --> 00:42:00,880
other things to identify when there's risks or

1056
00:42:00,880 --> 00:42:04,480
opportunities that they can position things so that

1057
00:42:04,480 --> 00:42:07,380
we benefit from those possibilities.

1058
00:42:07,380 --> 00:42:10,460
Yeah, some tactical things that there are different

1059
00:42:10,460 --> 00:42:13,320
times that Brian has been very successful at

1060
00:42:13,320 --> 00:42:17,100
seeing these opportunities and not making wholesale changes

1061
00:42:17,100 --> 00:42:19,480
to the base case, but to take advantage

1062
00:42:19,480 --> 00:42:21,520
of some opportunities that may be short-lived

1063
00:42:21,520 --> 00:42:22,860
or long-term.

1064
00:42:23,020 --> 00:42:25,040
Yeah, particularly when there is disruption in the

1065
00:42:25,040 --> 00:42:28,900
market, that's when it's least likely that we're

1066
00:42:28,900 --> 00:42:30,240
going to want to, but there could be

1067
00:42:30,240 --> 00:42:33,800
some significant opportunities to take advantage of.

1068
00:42:34,000 --> 00:42:34,460
Absolutely.

1069
00:42:34,460 --> 00:42:36,060
Well, in any case, if we can be

1070
00:42:36,060 --> 00:42:38,140
a resource to you along the way, don't

1071
00:42:38,140 --> 00:42:39,460
hesitate to reach out to us.

1072
00:42:40,160 --> 00:42:43,340
Our team is here to help with a

1073
00:42:43,340 --> 00:42:46,920
financial plan and when desired portfolio management.

1074
00:42:47,980 --> 00:42:50,040
Until next time, everybody keeps driving for something

1075
00:42:50,040 --> 00:42:50,380
more.

1076
00:42:52,120 --> 00:42:53,980
Thank you for listening to something more with

1077
00:42:53,980 --> 00:42:54,700
Chris Boyd.

1078
00:42:55,020 --> 00:42:57,160
Call us for help, whether it's for financial

1079
00:42:57,160 --> 00:43:01,080
planning or portfolio management, insurance concerns, or those

1080
00:43:01,080 --> 00:43:03,120
quality of life issues that make the money

1081
00:43:03,120 --> 00:43:04,220
matters matter.

1082
00:43:04,460 --> 00:43:07,840
Whatever's on your mind, visit us at somethingmorewithchrisboyd

1083
00:43:07,840 --> 00:43:11,040
.com or call us toll free at 866

1084
00:43:11,040 --> 00:43:16,580
-771-8901 or send us your questions to

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00:43:16,580 --> 00:43:20,540
amr-info at wealthenhancement.com.

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00:43:20,660 --> 00:43:22,660
You're listening to something more with Chris Boyd

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00:43:22,660 --> 00:43:23,500
Financial Talk Show.

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00:43:23,680 --> 00:43:26,120
Wealth Enhancement Advisory Services and Jay Christopher Boyd

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00:43:26,120 --> 00:43:28,420
provide investment advice on an individual basis to

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00:43:28,420 --> 00:43:29,000
clients only.

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00:43:29,160 --> 00:43:31,120
Proper advice depends on a complete analysis of

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all facts and circumstances.

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00:43:32,340 --> 00:43:34,400
The information given on this program is general

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00:43:34,400 --> 00:43:36,420
financial comments and cannot be relied upon as

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00:43:36,420 --> 00:43:38,020
pertaining to your specific situation.

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00:43:38,220 --> 00:43:40,200
Wealth Enhancement Group cannot guarantee that using the

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00:43:40,200 --> 00:43:42,200
information from this show will generate profits or

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00:43:42,200 --> 00:43:43,300
ensure freedom from loss.

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00:43:43,520 --> 00:43:45,660
Listeners should consult their own financial advisors or

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00:43:45,660 --> 00:43:47,780
conduct their own due diligence before making any

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00:43:47,780 --> 00:43:48,520
financial decisions.