Eight, two, five, five, nine, four nine. Here is WG wise financial analyst Steven Bouche or one of his capable colleagues.
Good morning, and thank you for joining Let's Talk Money on news radio WGY. I'm going to be your host for today's show, Palo la Pietra, one of the wealth advisors along with portfolio strategists. I am a certified financial planner and sitting in for the one and only Stephen Bouchet, who is taking a very well deserved break. But thankfully, folks, I do have my colleague with me this morning, Edward Wilhelm, our head portfolio trader, ed how are we doing this morning.
I'm doing great, a little chili, but happy to be on the show.
A little chili is right.
I feel like we've been truly blessed this fall with the warmer weather. But you know, the last couple of days, certainly this week has really brought in the full focus that winter's coming and winter is probably most likely here. But we did have a great week this week. Great holiday, arguably my favorite holiday. Nobody can look at you the wrong way on Thursday when you eat.
Too much food, and boy do I love eating, so I.
Hope everybody that's listening on this morning show had a great Thanksgiving, And Ed I got to ask you, what's your favorite dish on Thanksgiving?
I'm a big stuffing guy, to be honest. I think it's pair as well with a lot of the other foods, and it's definitely something I can eat my weight in.
What about how about yourself? You know, I don't know how you can answer this. I love it all, I truly do. I'm a fat boy at heart. But I would also have to say either stuffing or mashed potatoes are going to bring me along bay on Thanksgiving Day. So nonetheless, again, I hope everybody had great Thanksgiving. But I'm sure everybody can enjoin today's show to talk about Thanksgiving.
But if you do call in, I would love to talk about it.
So let's talk markets. We did have a short week this week because of the holiday, we did still get some economic data, so we're gonna want to go through market returns, not only for the week, but what we saw so far this year, what we're doing in the portfolios. Let's talk about some year end you know, tax planning
and portfolio planning that you could be doing. And then I also wanted to bring head on today's show talk about some of the specific things that we're doing in the portfolio and honestly some projects that we're currently working on that we're hoping to be rolling out in the first quarter of twenty twenty five. So all good things, all good information, but as always, would love to hear from you.
And that number is one.
Eight hundred talk WGY. That is one eight hundred eight two five five nine four. So for this week, market performance wise, we had the Dow Jones Industrial average leading the way up two point three seven percent, and then the S and P five hundred up one point four one percent, and the tech heavy Nasdaq up only one point three zero percent. So the Dow Jones Industrial Average.
Outperforms the NASDAC again.
And it seems like the last couple of times that I've hosted the morning show that has been the theme. I think I'm trying to will into existence this circulation from growth to now more of that value and profitability stance. And that's what we've seen in the Dow, and that's how we've been positioning in the portfolios.
You know, we've been.
Trained over the last decade to really think market's doing well. That means technology is doing well and well. Certainly technology has gone very well this year. We are starting to some of the other areas of the market come into favor.
Yeah, I think.
Last couple of weeks when we did the show, we talked about how different types of style classes can now start coming into favor, and that was in the you know, the favor of maybe some small caps and mid paps. And we're starting to see market breadth there. And now, you know, when we look at the Dow Jones continuing to have some steams, and especially a week last week, we're thinking about good value companies, right, good profitability companies,
good dividend paying companies. So you know, these are the types of characteristics we want to be looking at, you know, through Q four and thinking about what the portfolio looks like ahead. And of course, you know, some of the more buzz investments that people are thinking about, as you know, bitcoin and cryptocurrency continuing to go out go near all time highs. We're seeing financials also do well, seeing.
Goal do well.
So it's been an interesting time in the markets, and it seems like you could almost throw with dart at the darkboard and do well in your portfolio. But our job right is to get more granular, really have the data support where we want to be in the markets, how we want that portfolio composition to look like. You know, as always, you know, there's a multitude of factors that we want to think about when you think about building
your portfolio. You know, how long you have to retire or how long you're currently in retirement, what type of cash flow you need, what your risk tolerance is, and those are things that we certainly want to get into and more so in the second half of the show. But I really want to start planning the seeds of what we want to talk about today. This is going to be a data heavy focused conversation. This is going to be an investment focused conversation, but again, I want
to hear from you. I want to hear the questions that you're thinking of, especially heading into your end and it doesn't just need to be investment questions. Could also be your end tax planning questions or you know, your end portfolio maintenance. What should I be doing again at being our head portfolio trader. He's very you know, I'm having a little bit of a technical difficulty on my MIC, so we are going to head for a quick break.
I hope you stay through us with a break, and on the way back, I hope I sound a little bit better on the mic. So again, the number if you want to call him is.
If you want to learn more about Bouchet Financial Group, visit their website Bouche dot com. That's b O U C h E y dot com. Sign up for their blog, which is updated every week stevenboucha dot com. Follow them on Twitter at Bouchet Group, Like them on Facebook. The phone lines are open eight hundred Talk WGY. That's eight hundred eighty two five four nine. Here is Steven Bouche.
Hello and welcome back. You were listening to Let's Talk Money on news Radio WGY. Again. My name is Paulo la Pietra. I am going to be the host of today's show for the next hour, but I do have my colleague Edward Wilhelm, who is our head portfolio trader on the line. Folks, it would never be a true show without some sort of technical difficulties, So my apologies through that I was hearing that my mic wasn't going through correctly, So I do really appreciate you sticking with
us through that. But what we were talking about with some just year end maintenance that you could be doing in the portfolio, and specifically, when you think about your ED maintenance, one of the things that you want to be really thinking about is tax lost harvesting. Now, in a year like this year, where the market's up as much as it is, you know, the S and P five hundreds up around twenty five percent, the opportunities may be a little bit limited to do some tax loss harvesting.
But one thing that we've implemented for our clients this year, and I know we've talked about it multitude of times on other shows, was our direct indexing solution that we've provided to our clients and how that exactly works so well for our clients and both up markets and down
markets and ED. I was wondering if you could just take a few moments and kind of talk about what our process was to find the direct indexing solution that we're looking for for our clients and how that's currently playing out so far this year.
Yeah, my pleasure, because it really is an exciting new strategy or somewhat new. It's been around in the industry for a while, but there have been some you know, developments in just the last couple of years or so with the explosion of tech that we've seen enhancing some of its capabilities. So direct indexing is just the replacement of a ETF or an index fund within your portfolio.
So it's kind of opening that up and instead of just owning that bucket, you're going to own a selection, normally a high number of the individual stocks within that fund. So if we're thinking about just the S and P five hundred, you know, we might own about three hundred two hundred of those names and to mimic the S and P five hundreds performance. But what owning those individual names lets us do is it's lets us take advantage
from a tax perspective on those individual names. So you know, it's any given week or any given month, you know, some names will be up and some names will be down, and normally the index.
As a whole would would be up.
But having those individual names, let's you sell those losses and replace with a like kind security. So you're not losing any market exposure, but you get to harvest those losses from a tax perspective and then offset gains potentially, or you know, use elsewhere in your planning. So it's a really powerful tool that has previously just been used on a normal core index like maybe the Dow or
the S and P five hundred. But with the advancement of tech, you know, it's opened up for more customization. So now rather than just being able to track something like the S and P five hundred, you're able to customize that portfolio. You know, maybe you want to overweight a sector like financials, or maybe you're an employee at Regeneron and you have a ton of exposure to the healthcare sector as a whole and you want to diversify
a bit. We can exclude that sector or just like kind securities to you a specific company, and then as well can customize around ESG concerns. So it's really really impressive all the capabilities we're able to do in the software and the advantage of being able to tax loss harvest continually throughout a year. Normally it's just a process that's done at the end of the year planning. Uh, but this direct indexing or i should say custom indexing.
Really lets you open up those capabilities.
So it's been awesome, and you know, when we were looking for a provider. Customization was one of the you know, most important things for us. That and then service. So you know, we were able to find a great partner for this and it's been super successful so far.
And those are those are great points, and those are exactly what we've been looking for. Right. It's not just the solution in and of itself where we have the ability to in any given day look for those tax laws harvesting opportunities, but it's the deep customization. You know, within our portfolios, we put a lot of thought and research and data into exactly how we want the composition to look within our portfolio. So to provide in a tax overlay solution that just gives us exposure to the
S and P five hundred is not suffice. So finding a solution where we could have the deep customization, where we could have the overweights of technology, specifically the queues top one hundred weighted companies and then NASDAC was something that was very important to our investment thesis. So, you know, again something that we've been very proud to be able to offer to our clients and something that's been bringing
a lot of value to our clients as well. But even if you don't have a direct indexing solution, do have ets. There are ways to look for tax loss harvesting opportunities, and not just simply looking at within your portfolio, seeing what your cost basis is, meaning how much money that you put into a specific fund, and seeing what
the fund is currently worth today. If it's in the red, meaning it's down, that's an opportunity to sell that investment for a loss and either right up to three thousand dollars worth of losses on this year's tax return, or use those losses to offset any gains that you want to take elsewhere in the portfolio. And that could be important specifically in an up year. So when we have an up year and you have companies like Navidia or currently in our portfolios, Amazon doing again very well, these
positions might be getting quite big. And while they've done very well, you don't want these positions to mushroom into ten, fifteen, twenty thirty percent of your portfolio. You want to start trimming them back to target. So taking losses in other areas of your portfolio allow you the capacity to take gains else when your portfolio to make sure you have that all around portfolio composition that you're looking for. So those are, you know, situations that you could be thinking
about heading into your end. Another area I always like to pick up and always like to talk about, and something that you should continuously be thinking about all throughout the year is what are your cash needs from your portfolio? So we deal with a lot of clients that you know, get into retirement and are looking for a monthly or quarterly or a yearly distribution out of their portfolio. And
I know Ste've talked about this many times. You know, Steve's been hosting the show for over twenty nine years and this has always been one of his stables is our two year cash distribution strategy. And what that means is what we find for clients is whether they're taking a monthly or quarterly or yearly distribution, we want to raise two years worth of that and put that to the side. And the reason why we do that is
for times the volatility. I hope we've all forgotten about twenty twenty two, but my job to not forget about years like that. In twenty twenty two was a challenging time in the markets. SMP five hundred was down about
twenty percent, bonds were down almost twenty percent. That allowed a lot of volatility within the portfolios, and that's the reason why we have the two year cash distribution strategies to weather the storm through that volatility, to ensure that you don't have to sell out of investments at a loss. You ride through the volatility, you allow the market to recover, which it has done every single time in history, and that type of time allows you to protect the portfolio.
Then when the markets get back to where they were before the selloff for our all time highs which we're at right now, that's when you replenish your cash buckets. So if you are currently taking distributions from your portfolio, you really need to start thinking about, Okay, how much cash do I need to have on the sidelines. And again our rule of thumb is two years. And cash doesn't mean just pure cash, right because if cash is just sitting there in your account, well you're losing the
battle to inflation. Right. So if inflation's around just slightly above three percent and you're sitting in cash earning nothing, then you're losing three percent. You're losing three percent purchase power you over year. So how do we go about fighting that well. Right now, money markets are still very attractive. The federal funds rate is between four point five percent and four point seventy five percent, and money markets are
yielding very similar to that. So those are the types of investment vehicles you could think about parking your cash in and for your two year cash distribution strategy. And while we're talking about the fential funds rate, we're going to have another Fed Funds decision come the next few weeks. I think it's at keep me on a here is a December seventeenth or eighteenth. It is eighteenth, eighteenth. That's that's what we have had on here. It keeps me honest.
So we're going to have another Fed Funds decision on the eighteenth. We've already cut twice by twenty five basis points, which again has brought us down to four point five to four point seventy five percent, and right now the market is expecting another twenty five basis points. Now will we get that again? The market thinks about sixty percent sixty six percent chance, So we're going to do it.
The data pretty much supports that inflation has come down now it's been relatively steady above three percent, labor's still in a healthy spot. The data supports a raycot. But the FED has been adamant in all their Fed speeches that the number one worry should I say, that they have is just cutting rates too quickly, and that is what has the market going from one hundred percent certainty that the Fed was going to cut another twenty five bass points, so only about a sixty to sixty six
percent chance. But regardless, what we're seeing is the theme of interest rates coming down right, interest rate easing, and that's important for a multitude of areas. One specifically on fixed income. We've talked about how your bonds have an inverse relationship to interest rates, meaning as interest rates go down, your bond prices go up. So this is a good environment to hold on to bonds, and it feels good to say that because you know, over the last decade
that certainly hasn't been the case. Interest rates have then you know, pretty close to Dorman, you know, near you know, one to two percent, so yields weren't there, and you know it just rates would fulctuate go up slightly down slightly. It just wasn't a good environment. You know, real yields were very low. Price appreciation is very low. But you know you rewind the last couple of years to currently that has led us to a good environment for fixed income.
If interest rates currently keep going down, that should and will be a good outlook for bonds. And not all bonds are the same. Currently. We have treasuries and corporates and some you know, municipals where it makes sense within taxable accounts, and those are the different types of acid classes that you need to be thinking about for bonds.
If you want something a little bit more risk off and not taking on risk, treasuries certainly makes sense to pick up a little bit of additional yield compared to CDs and treasuries, then you could start looking at corporates. And then of course if you're looking for tax free income, you know that's where you really want to be targeting muni bonds. But just like on the equity side of the equation, you don't want to put all your eggs
in one basket. Just because we're now talking about bonds doesn't mean that we're going to get away from diversification. Diversification is always going to be a core fundamental value in any sort of portfolio allocation. And we don't want to shy away from that when we look at bonds
as well. So, you know, when we talk about interest rates coming down, the other whip of the coin and certainly some questions that I got over the dinner table and through the holidays, is we're interest rates going with loans, specifically thirty year mortgage. And you know, the challenging part is I feel like people here when they look at the news or hear on the radio, the interest rates are coming down, but they're not really seeing the full
effect of that on their thirty year mortgage. They're still seeing mortgage rates around six and a half seven percent, you know, all depending on what your credit score is and what type of loan you're trying to apply for. But nonetheless they're still elevated. And what I would say is we need to be patient as interest rates come down. You know, Historically I was pulling some data on this
before this morning show. There's about one point seven percent to two percent higher on the thirty year mortgage than
what the current federal funds rate is. So again, on average, the thirty year mortgage is about one point seven percent to two percent higher than what the federal funds rate is and right now the federal funds rates four point five percent, so we factor in, you know, another two percent that brings us a six and a half That seems right in average of what we are to expect now is the Fed continues to cut rates and we
continue to see the federal funds rates come down. I think there could be opportunities in twenty twenty five for you know, refinancing. If you if you had to purchase a home in twenty twenty four and you had to lock in a higher rate, there could certainly be some opportunities.
Or maybe you're currently on the sideline right now, watch some cash and looking for an opportunity to buy a home, but still want to finance and we're looking, you know, right down six and a half percent, but you're thinking about what that timeline looks like maybe in twenty twenty five or twenty twenty six for those refinancing opportunities. And while those you know, refinancing opportunities certainly may come, you
just need to be smart about your finances. You still need to think about your cash float in the short term. You still need to think about the aspects of inflation potentially changing course right, and interest rates not coming down and maybe being in a higher for longer interest rate environment. You just don't want to be fully convicted that interest rates are definitely coming down and that you could absolutely
refinance at some point in twenty twenty five. You need to lay all the cards down on the table and work with your financial advisor to go through many different scenarios. That's what we do here at the Cliche Financial Group. We go through all scenarios. So, folks, on the first half of the show, we started to get in some portfolio basics and talk about some strategy. Second half of the show, there's going to be some more year end tax planning and investment planning. But as always would love
to hear from you. That's one eight hundred talk WGY. That's one eight hundred eight to two five five to nine four nine. So again we're going to be coming up to the second half of the show. I do hope you stick with us through through the break. You are listening to Let's Talk Money, brought to you by the Bouchet Financial Group, where we help our clients prioritize their health while we manage their wealth for life.
Eight two, five, five nine four nine, and without any further ado, here is WG wise financial analyst Steven Bouche or one of his capable colleagues.
Good morning, and thank you for staying with us through the break. My name's Paulo la Pietra. I am the portfolio strategist along with you know wealth advisor here at
the Bouchet Financial Group, Certified financial planner as well. And I do have my colleague this morning with me, Edward Wilhelm, who is the head portfolio trader, you know, so edw We're kind of talking about Thanksgiving at the beginning of the first half of the show, and now I get to ask you, you know, Christmas or Holloway Days coming up. You doing any traveling for the holiday season.
Now, I'm fortunate this year we are staying local. I've got some family here in the Capital region, so stayed local for Thanksgiving, and we plan to do the same for Christmas. Just get the family together and exchange some gifts and enjoy each other's company.
That sounds amazing, you know. For my side, my wife's family, a lot of them live in Buffalo, and every two years we rotate either a Buffalo Christmas or a Capital District Christmas, and this year is marks the second year. So we are headed out to Buffalo and just want to remind all those listeners two years ago when we had to go to Buffalo that was in the middle of that very very large snow storm that we got over about a foot and a half of snow, an
eighty mile per hour wind and lost electricity. And yeah, interesting holiday to say the least. And I actually have to head up to Rochester later today and I've just heard Governor Hokeel on the radio declaring a state of emergency for Buffalo where some areas of Buffalo getting up to four to sixty of snow, the good old Lake Effect snow. I got to tell you, if I lived in Buffalo full time getting some weather news like that,
I would be on the first flight to Florida. I am not a skier, I am not a snow guy. That is too much snow, but I'm sure that will make Sunday's Buffalo Bills game pretty pretty fun to watch. So folks, again, on the first half of the show, we talked about some portfolio composition, we talked about some year end planning things, but again, would love to hear from you that number is one eight hundred top WGY that's one eight hundred at eight two, five, five, nine,
four nine. You might have questions on what to do with your four oh one K, what you should be doing with your portfolio, what you should be looking at for cash flow, if you have social security questions, whatever the case may be, feel free to call in at and I would love to answer any questions that you
may have. But what I also touched upon on the first half of the show is some projects that we've added and I specifically have been working on and looking to be rolling out in the first quarter of next year. And one of those is an income based portfolio. So of course with our portfolios, we have five risk based portfolios, fully customizable, but they rank from being aggressive meaning more
stock exposure than the bond exposure. It's a more conservative where you're going to have more bond exposure alternative exposure than stock exposure. But we're looking to add some different flavors of those portfolios as well, and one of those is adding a income tilt to the portfolio. So its main objective is to also just enhance the amount of income that we could pull out of the portfolio. And there's a multitude of ways that you could go about it.
You know, obviously you could have a tilt towards more dividend you know paying companies, or maybe on the fixed income side you start looking at some private credit where you'd start looking at some preferreds or some high yields, or you know, on the bond side also looking at high yield and different types of collateralized loan obligations and specialized markets within the fixed income side too to enhance
that income. And just because I know you've had boots on the ground working very closely with me on this as well as hoping you could share some thoughts on how we've been looking at, you know, the potential portfolio, what are some of the different types of styles we've been looking to implement, and sharing any also you.
May have, Yeah, definitely, So when we're thinking about i mean really just any sort of model creation.
You know, what goes.
Into the portfolio composition, it's really comprised of, you know, two components. Just going into total return, you have capital appreciation and then you also have that income factor. So it's trying to find that that sweet spot between the two.
Just because you're.
Trying to build an income model does not mean you want to forego you know, all potential of capital appreciation. So on both the equity and the fixed income side, you do want to have some sort of beta component. So beta just being you know, you want to have some broad market exposure, you want to have exposure to you know, either like the AG or just the S and P five hundred, and then kind of tilting towards income off.
Of those bases.
So it's kind of like a hub and spoke approach, that's what we're looking at. So it's really just over those areas that you mentioned, you know, on the on the equity side, those dividend paying stocks or ETFs, and on the fixed income side, it's you know, maybe leaning into areas like high yield. But we're definitely seeing a new trend kind of emerge in the last couple of years,
and that is derivative based products. So it is you know, funds that keep that kind of beta exposure to maybe a core indicy and then using a derivative product to enhance income. So a very popular one. The most popular one would be JETPY. A lot of people may see that in their portfolios. If you're working with a wealth management advisor. It's a fund we use, and what that does is that's going to write covered calls on an
S and P five hundred like underlying exposure. It's closer to a mind vall for that fund specifically.
Sorry, I think I just had a hiccup on my mic. Do we have mic from watervlat Yes?
Hello, Happy holidays.
Hey Mike, how we doing this morning? Good?
Good?
I'm doing well and I'm a first time caller, so I apologize. I'm sure you've already spoken on this, but I was wondering, you know, given the recent outcome of the election, should I be thinking about making any adjustments to my portfolio?
Mike. That's that's a great question. And certainly any single time that we're dealing with a new administration or maybe even still a current administration, you might feel the need or the want to be making some changes within your portfolio.
But I would say at this point, as we close out you know, Q four of this year and we head into twenty twenty five, there should not be any sort of major changes as far as sector tilts or movement in the market where you think that this new administration would be more advantageous to you know, and specifically I'm talking about maybe you're thinking about fossil fuels, so energy,
or the deregulations and financials, or deregulations and healthcare. But I would say, right now, Mike, it makes sense to hold steady right right out through the you know, the remainder of this year and as we head into twenty twenty five, see if some trends continue. But the real point to this all though, is you really want to start looking at your portfolio now and how you're allocated, and just see if you need to have some more
broad base changes to your portfolio. You know, rather if you had a high concentration and technology, maybe bringing that back into more core exposure. But as far as trying to take any advantage of a new administration coming in, I would hold off on that at this time. Does that make sense, Mike?
Yeah, that makes sense, And I'm glad you're brought up. You know, we're so close to twenty twenty five. Now, do you what sectors or investment themes do you think have the most growth potential in the next say, I don't know, five to ten years. I keep hearing about AI.
Yeah, we've all heard about AI and Mike, I wish I had the crystal ball that would tell me exactly what's going to do best in five or ten years, because I would be sitting on a yacht somewhere and we all would and all of our clients would be enjoying those extra market performance returns that we would get from having that crystal ball. But when you do look out five to ten years, areas that you always want to have a larger tilt swords are the growth your
areas of the market. So that is going to be technology what is going to encapsulate AI. And you know you might be thinking when around AI, Okay, you have your Navidia, or you have any of your Semiconductors, or
maybe you have some of the Magnificent seven stocks. But I would really encourage you to shy away from single stock concentration, right just putting all of your eggs in one basket of AI, even if it is a stock like Navidia, because you don't want to have such a large percentage of your portfolio live and die on that company's earning quarter after quarter. Certainly, the video has done very well so far this year and the year before that, but who knows exactly who is going to be the
leader in AI five or ten years from now. It might be a name that we currently don't even know about because that's how new this space of AI is. So certainly want to again go back to diversification and get exposure multiple different AI companies, whether that's in a mutual fund, wrapper, etf rapper as such. But other areas
I would think about from historical standpoint is small calf companies. Right, so these are small companies with a market cap of say, you know, twenty to fifty million or one hundred million, that you know are looking to grow into mid cap and large calf companies, and over time, small calf companies tend to outperform the market. And even on top of that, over the last ten years or so, small cap companies have not done this, and they're severely priced at a discount.
So I think if you're looking to be a little bit more aggressive in the portfolio and take some opportunities here, maybe it makes sense to have a little bit higher small cap exposure in your portfolio as well.
Mike, that sounds great, you guys know what you're talking about. I I plan on retiring in the next couple of years. I would it would I be able to roll over my employer plan to you guys to have you manage and do you do financial planning?
Yeah, that's the Mike with that. That's certainly exactly what we do. That that's the core of one of our practices of how we work with clients financial planning, tax planning, and state planning, obviously investment management. So we always love the opportunity to to work with potential clients out there and certainly appreciate the call, Mike, and would love for you to uh to call in UH to our firm
on Monday. Our number is five one eight seven to zero three three three three, and Mike, you could ask specifically for me. I would love to chat with you and UH we could you know, continue the conversation from there.
Thank you you've been a great help. Happy holidays.
Happy holidays to you as well, Mike. Thank you, so ed Mike, Mike brought up Mike brought up a pretty interesting question. I like that a lot, he said, you know, looking out the next five to ten years, you know where you see the growthiest parts of the market, and you know, I kind of shared how technology over time is always going to give you that that flight out performance that you're looking for, and maybe even start thinking about some style caps and market caps like small caps
potentially you know, specifically on how undervalue they are. But I was wondering that if you have, you know, any thoughts on either in agreement with me, which I hope at some iteration you are, or maybe you're thinking about other areas too that that have some potential for outperformance the next five to ten years.
Yeah, I mean AI definitely that's been the story for about the last two years. A lot of hype there, but then also definitely small caps. We've seen it in the back half of this year, you know, front end of the year being driven by you know, mainly the Mag seven, but as we've headed into the back half of this year, we've seen an expansion in breath, so you know, the S and P five hundred starting to you know, track closer to the NASDAC and then as well, uh,
some pop in the Russell small caps. So seeing that breath come back to markets has certainly been nice. Another interesting area I've seen has been nuclear energy. You know, some of the mag Magnificent seven players have made some significant investments into the nuclear space, and when we're thinking about what is required to you know, kind of fuel that AI expansion, A lot of it is focusing now on the infrastructure and how we're going to supply the
energy for it. So an exciting area there is is definitely nuclear energy, you know, alternative to more traditional uh you know, fueling sources. So that's one interesting area I've kind of seen ed ed.
So sorrow, I've got to cut you off. It looks like we have a call coming in from Jim for schennected e Chim. How are we doing this morning? All right?
Good man, good man brother? You know, I want to ask the question, is DEFOURD comp the same as for one key?
Is the the third comp the same as the four one? K? Is that what you ask?
Is it the same thing or different?
Yeah?
So, in the most plain way of thinking about it, it is almost the same.
Right.
It is a way to put money away for your retirement, and you could put free tax dollars in. So while there are some slight nuanced differences to a Deferd company four to one carry, they are virtually the same thing.
Okay, So I'm not sure when it was implied if I applied for full one key, but that that would come automatically from the job, right with it?
Four one key It doesn't automatically come from any jobs, so that that is a benefit that an employer will provide to their employees. And you know, you might automatically be signed up for your company's retirement plan. But again there that could be you know, subject to change depending on you know, your employment situation and where you currently work.
Oh OKAYV thank you. That's what I want to really know, because I do put aside something on the fortcome. But you know, people are telling me maybe four one key automatically is there also? You know they could that will give me a little retirement smile a little bit more, you know what I mean?
Yeah, absolutely, Jim. And they might be referring to a non elective you know, safe harbor contribution, so where your company automatically puts in three percent of your salary into your four one K without you having to put anything in And and that certainly could be the case. I just wouldn't know without being able to see your four one K.
Okay. I appreciate this, my brother so much. Man, and you have a great day. And yes, what I'm looking at the pilot of snow right now. It's another unexpected snow that came doom for Thanksgiving morning, I know, but it's a great pleasure to listen to your wonderful program, and I thank you for enlightening me on this four one Kim, the fortcome thing, all right, I appreciate it.
Well, we appreciate you, Jim, and thank you so much for calling in. And Ed, I apologize to cut you off somewhere halfway through what you're saying. I'm hopeful that you could pick up where you kind of left off there.
Yeah, just kind of chatting a little bit about nuclear energy and how that is a potential catalyst in markets, looking at just what's needed to fuel the continuation in AI. You know, a lot of focus being on infrastructure and kind of the surrounding players that are needed to help keep that going. But then another area is also, you know, kind of ticking up. It's not as prevalent, but like flying vehicles aviation, we're seeing some buzz around there. There
have been some interesting developments. I know one company in particular, Archer, has been seeing some really strong performance in the recent couple of months. So that's also something we're kind of keeping our eye on. Definitely an exciting thought to think about, you know, flying cars and just how far we've we've come over the last you know, five years, and it's just really as as a world, the technology we're growth where that we're seeing is amazing.
Flying cars, you know, is the future really here that we're we're actually talking about the very real possibility of having flying cars out there? What a What a time to be an investor, What a time to be alive? Yeah, no, those are those are all great points. And again when we talk about going back to Mike's question, was you know, where are the potential opportunities five to ten years out right? So what we're doing is floating some growth your ideas
that you could implement in your portfolio. But what I need to highly highly emphasize here is that these are the more aggressive investments within your portfolio. So therefore they should have a smaller share, right, they should be a two or three percent waiting if we're talking about something as you know, as nuanced as flying cars, right, or you know, some other kind of more growth your areas. Maybe it's cryptocurrency. You've heard how bitcoins near all time
highs and now you want some exposure. Certainly, they could continue to go up, but those types of extremely volatile growth, your areas of your portfolio need to only be one or two or three percent, right because while there's so
much upside, also comes to territory of downside. And when you start to have five or ten or fifteen percent of your portfolio in these very volatile areas and then all of a sudden you see a sixty or seventy percent correction, that can be the change of your project of next year, your potential retirement of next year, your potential wedding, you're going to pay for the college fund for your you know, one of your children, certain nephews
or nieces, whatever the case may be. So that's where you want to make sure that you take these growthrough your you know, areas or your portfolio that are purely speculative and keep them to a smaller percentage. Again, the upside is certainly there, and I completely understand why you'd want it in your portfolio. I am somebody that is very comfortable with the RESK, just like Steve, whenever I see volatility, I like to double down and buy into
the market. Weakness. I also like to have some speculative investments in the portfolio, but I need to be cognizant of how much they're making up of my portfolio. They need to have a smaller share to make sure that you know, there we could insulate ourselves from any sort of volatility that we see on the horizon. So these are all great, great points. And again, as we come up to the last couple minutes of the show, I do want to just put it out there one more time.
We had two great calls so far this morning. But if you do have a late question you wanted to get answered before at and I hop off today's show in the next say five minutes or so, that number is one eight hundred talk WGY. That's one eight hundred eighty two five five nine four nine. But what I really want to leave us all with is what you should be thinking about going in to the month of Deceummer.
And then if you're proactive now and you take care of business in the next week or two, then you can enjoy your holiday season and into the new year and not stress about your finances. And that checklist should be in no particular order. Look at your retirement funds. Look at your four one K if you're currently working,
see how much you're contributing. We like to tell any four to one K participant, and again this is always subject to change, but you want to be contributing anywhere from ten to fifteen percent of your growth salary, and that's including the employer match. So take a look at your four one K, make sure that you're within that range, and if you're not, try to put a game plan together for the year twenty twenty five of how you could get there. Take a look at all your debt.
If you have any debt, if you have high interest rate debt, maybe credit card debt, veryblowne debt, take a look at that. See what your interest rate is, See how much interest you're paying. Put a game plan together on how we're going to pay it down. Right, that interest that you're paying is going to nobody but the bank. It's not beneficial to you. And I know it's not as easy as snapping your fingers and paying away debt.
But if you start now and you start developing a plan now, you're going to be able to pay off that debt sooner rather than later. You just need to be proactive. So think about debt. Think about your emergency fund, right and that's the fund that you want to put away of anywhere from three to six months of your fixed expenses. You know, some like to call it the rainy day fund, emergency fund, whatever you want to call it, doesn't matter. Three to six months of cash you on
on the sidelines. And that's for those unexpected life events and we all know that they happen. You know, the roof starts leaking, the carburetor breaks down, you know, the pool aligning craft, whatever the case may be. Those are the unexpected expenses and we need to be proactive about it. And then finally, what I would say is obviously what I've been talking about postly on today's show is take a look at your portfolio, take a look at how
you're allocated. These are all important. See if you need to raise cash for you know, your distributions for the next two years, these are the times to think about it and be proactive about it. And folks, that is bringing us up to the end of today's show. It's been such a pleasure talking with all of you this morning.
If you have any questions, please reach out to the firm like Mike was asking this morning, but again you are listening to Let's Talk Money, brought to you by the Bouchet Financial Group, where we help our clients prioritize their health while we manage their wealth for life. Thank you and have an amazing, amazing thing press your weekend