Let's Talk Money

with us on this cool but sunny Sunday morning. I'm our chief investment officer and also work as an advisor to our client, so you know, oftentimes a lot of my focus for these shows will be market related, but we can get into you know, some financial planning topics, retirement planning topics, anything that is of interest to you. If you do have questions, give me a call. You

can reach us at one eight hundred Talk WGY. That's one eight hundred eight two five five nine four nine, and I know recently if you've been listening for the last few weeks or newer to the show, we also uh if maybe giving a call and asking a question that way, isn't you know something that you may be most comfortable with? You can send us an email. Email me at ask Bouche at Bouche dot com. That's ask ask Bouche at Bouche dot com UH and you can

send me an email. I will be watching that as the show goes on over these next UH sixty minutes or so, and so we'll try to answer any questions that come through the email chain. And again, if you do have questions, you want to give me a call one eight hundred talk wgu I one eight hundred eight two five, five, nine four nine. So what can we talk about this week? Well, I think, you know, interesting dynamics in the mark market. I think I was was scheduled to be on last weekend and had to change

plans last minute. There was a lot to talk about. From two weeks ago between the election the Fed announcement, we saw a you know, great rally within the markets. In this past week, you know, probably not as many headlines per se, but a much different sort of feel to the market. We had a not as great of a week as the week before as the election week. And we'll talk a little bit about what's driving that,

what was impacting the market the most. Like I said, there wasn't a whole lot from a headline perspective that really drove what we're seeing, but certainly the markets kind of pulled back from where they were, and maybe some of the excitement that we saw the week prior to that, but you know, we take a step back. It's it's not all bad or shouldn't really change us to or

drive us to make any major changes. We can talk about, you know, given the election, given that we're going to have a new administration as we enter twenty twenty five, what does that, what does that look like for the markets? What's the what's the Trump two point zero playbook? If you will. And you know, the one thing I never understood is we were going through the election cycle was especially from the headlines, right, we always talk about headlines,

and I talked a little bit about this. I sent a newsletter out to our clients last week just with some thoughts on the election, where we're at in the market cycle, kind of some final thoughts as we enter kind of the last half of the fourth quarter, which is hard to even fathom that we're midway through November already this year, but talking about what the expectation should be and what we should be looking at. And you know, one of the themes was obviously trying to it's write

with the headlines. And talked just briefly about we entered twenty twenty three, and all it was was conversations about impending recession and the economy couldn't stay at this pace, and that goes back now almost two years. Heading into this year, it was all the negativity around the election. The market doesn't like uncertainty, and I never understood. I think, you know, it's easy to come out and create those headlines about uncertainty of elections and what lies ahead. But

between the two options. Now, things did change with Biden and Kamala coming in for replacing Biden, but we essentially had these two administrations before, right, we had been in almost four years of a Biden administration and we've already had a Trump administration for four years. I didn't really understand the full extent of the uncertainty argument seeing that we've already you know, had election site or you know, presidential cycles with both of the candidates, and so you know,

again just another more headlines. And as we enter sort of this last stage of the year and looking at the markets up, most of the major indices up over twenty percent between the S and P, the Nasdaq had some some strength in the Dow and the Russell, and again it all goes back to sometimes you got to tune out that noise and look ahead and what's really

going on. And so, you know, having another great year in the markets, and like I said, we'll talk a little bit about what that Trump two point zero playbook looks like because we've had four years, right, may not be exactly what we saw, you know, the four years going back four years ago from today, but I think we could certainly see some similar themes and you know, market dynamics that we're at play, just given you know, the administration, what we've seen, and what the expectations are

moving forward. Like I said, we had the Federal Reserve came out lowered interest rates a week and a half ago by a quarter percentage point. That was pretty much expected across the board. But I would say in the last week we've seen pretty big change and kind of what expectations are for December. For quite some time, there was heavy, heavy expectations that they were going to cut another twenty five percent its points as we entered December and get to the end of the year. But those

expectations have shifted pretty dramatically over the last year. We could talk about what's driving that, what we're looking at and what's making up that change. You know, we can talk about interest rates, what we're seeing there. It's been rather fascinating given that the Federal Reserve is lowering interest rates, but at the same time, we're seeing the longer end of the curve interest rates continue to rise. You know,

where many people expecting that, I don't know. I think, you know, talking to clients, I think their expectations where rates had to come down, But we're kind of seeing the opposite of that over the last six or seven weeks. So interesting dynamic there and where are we finding opportunities in today's market? Right It could be a little bit about that Trump two point zero playbook, could be having

to do with the interest rate environment. That's where we're actually seeing some opportunities and seeing some you know, tactical shifts in our portfolios, in what we're doing with our clients, and you know, as our chief investment officer, the work that we're doing with our investment committee week in week out, you know, getting towards the end of this year, not only just planning for you know, things that we can get ahead of and help plan for clients for twenty

twenty four but also looking at the opportunities that are presenting themselves right now in today's market dynamics. So we'll talk about that, and like you said, we can get into any sort of planning topics that you want to dive into. Interesting article today in the Wall Street Journal really kind of piggybacks on something that we've been working with our clients a lot on over the last few

years as roth conversions. We actually, you know, even as we talk to prospects, they come in and are much more familiar with this concept than looking to see how that could play into their overall financial plan. And it's become more and more popular, I think for a number of reasons. Right We're kind of had a little bit of a tax cut going back to Trump's first presidency when some of the tax brackets came down a little bit, and so maybe a little bit of a opportunity to

do this at a quote unquot quote sale. But also with some of the changes in estate planning and how we view estate planning, and you know, as much as the portfolios in the investment management and something that like I said, I focus a lot of my time and efforts on and energy on our portfolios and managing and rebouncing and everything that comes with our portfolio management approach.

But on top of that is all the work we do with our clients, whether it's taxes and tax planning, helping with the state planning, it's all those other planning areas and avenues that you know, I think we add some of the most value to our clients and help them not only sleep better at night, but look for opportunities to help save money and help save their family men money over whether this generation or the next generation

and generations to come. So, you know, a lot of what our work is doing is looking at these areas and you know, doing a lot of work within the you know, Roth conversions, you know that tax planning approach, some of the estate planning that comes along with that as well, and so we can jump into that and like I said, anything else that may be of interest. As we you know, near the end of the year, this is a great time to start thinking about that.

You know, it's not the best time to start thinking about twenty twenty four taxes, but certainly a great time to start planning and thinking ahead. If there's things that you can do for the end of the year, it's not a bad time to do that, but even better time to start thinking about what lies ahead for twenty twenty five. We're actually doing a I'll give a little plug for it. I will have a webinar this week

for clients. It's on Wednesday at noon, and it's a tax planning webinar Year end tax Planning, and some of our folks from our tax team will be presenting. That always a great opportunity to kind of just focus, you know, as we got you know, five or six weeks left to the end of the year, really focus in on how we can take advantage of where we're at in the year and again not only taking advantage of this year, but thinking of what is ahead for twenty twenty five.

And so any of the listeners that are interested in that, you know, feel free to give us an email too. I gave that email address out earlier. Ask Bouche at Bouche dot com. Ask Bouchet at Bouche dot com. And if you're interested in attending that webinar, please let us know. And as we always say, whether it's a webinars, you know, we did a quarterly market update a few weeks back. That's up on our website as well. You can check

out our website Bouche dot com. That's Bouche dot com, check in under our insights tab, and a number of blogs right we Like I said, I put out a newsletter last week after the Trump election win, just talking about what that means for the markets, what that may mean for investors. A colleague, Pollo La Pietro, put out a nice one about crypto this week, and like I said, there's a lot of different topics and areas that you can check out and look to. Again, that's at bouche

dot com. Full lines are open. Give me a call one eight hundred TALKWGY. That's one eight hundred eight two five five nine four nine. So as we you know, jumped into or talked a little bit about at the start of the show, we had a little bit of a shift in the market dynamics this week, right Probably there was a ton of I think optism enthusiasm following

the election. That was you know, for the most part, I would say, you know, when you think of kind of that pro growth, pro business, I would say you probably are generally thinking more of the you know, Republican candidate, the Trump candidacy, you know, a little bit less regulation, probably a little bit more growth prospects. And you know, we saw up until COVID, with Trump's first term in office,

we saw really great growth in the overall markets. We saw strong economy, you know, strong labor force right up until again as we entered the beginning of twenty twenty, and COVID really impacted us starting in about mid February, especially from a market perspective, That first Trump presidency was pretty solid from a again markets and economic standpoint, So I think we saw a lot of enthusiasm there. Right.

We saw the markets were up, had their best week of the year two weeks ago, most of the markets were up over four and a half five percent. But we saw a little bit of a pullback this week. And when you look at the different indices, especially the different major US in disease, you see a real sort of discrepancy just in a one week period. But it was pretty interesting to see. We saw the Russell two thousand, which is you know, US small cap companies fell by

four percent for the week. They were the biggest drop. Nasdaq came in second largest drop, down by a little bit more than three percent. The Dow or the SMP was down about two percent, with the Dow down a little over one percent. So we kind of saw this with the four major indices, one down four percent, one down three percent, another two another one percent. So we did see some differing sort of impact by the volatility

we had this week. And I think when you when you think when you look at what really drove that volatility and really kind of where you saw the the biggest impact. It came from comments from the FED, It came from other FED board members and what they're saying, and it it also came from some strong economic data and strong economic figures, And to me, I think that's a good thing. Even though the markets were down, even though we did get a little bit of a pullback.

To me, at this point in the market cycle, you know, we have to we have to think about lesser of two evils, right. I think the market was a little volatile because economic data came back strong and that may not be as good for lowering interest rates. But at the same time, right, don't we want this strong economy?

Don't we want? You know, we had strong retail sales on Friday that wasn't viewed by the market as a good thing for whatever reason, right, I think it's you know a little bit of that fear and concern of inflation, fear and concern of higher interest rates. Right. But on the flip side, don't we want a strong economy. Don't we want this sort of economic cycle that we're in, in the trajectory that we've been on for the last few years to continue. To me, that is really at

this point, what's going to drive the market? Right? Last year was certainly all about interest rates, and when we saw especially the huge swings in volatility with interest rates, that that really created some panic, That really created some uncertainty and concern within the market. So we saw, you know, big swings, and really I think what was driving the market was some of those interest rate movements from the Fed, comments from the Fed, what's the Fed going to do next?

But I you know, this part of the cycle, at this sort of mid stage of a growth slash bull market cycle, you know, more than anything, we need to look at what's driving the economy, what's driving earnings, what can really drive this market forward? Because to me, a strong economy is going to do that. On the flip side, if we started seeing a slowing economy, you know, maybe it comes with the benefit of lower inflation, maybe it comes with the benefit of lower interest rates. But is

that what's best for what lies ahead? Is that what's best for again, growing earnings, growing strength in in corporate America. I'm not really sure. And I think what we really want is strengthened the economy. So, you know, we saw the initial unemployment claims came below the last three years average. We had a really low number there midweek. That was a good thing. Of course, CPI came out on Wednesday, that was right in line with what expectations were and

where expectations have been. You know, to me, that's that's a good thing. You know, nothing too too hot. It wasn't cool, it wasn't below expectations, but right out expectations. I think that's all fine and well. And then you know, we had it talked about retail sales coming in on Friday coming in very hot, and they actually had a update to the numbers of September which were even hotter. And I think that sort of we saw a big

impact to the market from that. And again, you know, maybe that does keep inflation a little bit, you know, higher than than where the Fed wants it. Maybe that does keep interest rates a little bit higher than what you know, especially if you're a borrow especially you know, whether you're looking to buy a home, car, taking out you know, maybe necessary loans that that you're looking for.

Maybe it's not the best environment for that. But at the same time, a strong economy, uh, with the strong market is can be a really good thing as well on the flip side, So I think we have to view that as what's the lesser of two evils, and uh, you know, one way or the other, we're gonna we're gonna be impacted. And so it's kind of you know,

thinking of what's best moving forward. And we've kind of gotten into this position now where we've talked about the soft landing for so long, right that that expectation that maybe the FED could bring us into this quote unquote soft landing environment where you know, lowered inflation, maybe a little bit slower growth in the economy, but could kind

of land that plane. But you know, the more we move forward and the more we're seeing some of this economic data, you know, the more we're kind of getting into this no landing environment and you know, maybe we don't even get the soft landing because the economy is still on such solid ground. And that was one of the big points that I was trying to make when I sent a newsletter to our clients was Listen, this economy continues to know just chug along. It continues to

hold up pretty well. Unemployment rate is still historically low. Job openings come down, but they're still pretty good. Consumer spending continues to be strong. There's no doubt that there's elements in the economy that may be concerning. Right there's increased debt load, especially on credit cards. We're seeing that the housing market. If you're in that position where you're looking for a home or maybe a first time home purchaser, there is no question that this is a bad environment

for that. This has been a really, really difficult environment for folks that are looking to purchase home, especially if it may be your first home. From an ability perspective, right, we have high interest rate, we have high price, we have very low inventory, low supply. I think that's what's been the key driver to a lot of the price momentum that has been going up in the housing market. So some of those areas may be viewed as concerning and having issues but overall, like I said, the economy

is in really good place right now. And when you think about the US consumer making up over two thirds of our GDP, and you get good data like strong retail sales, and you know, you look at consumer confidence. We've talked about at our quarterly webinar Market update and webinar last month about the surprise indecks where most of the economic data is actually coming in better than expected,

better than what people's expectations are. These are all good things as we enter the end of the year to uh, you know, continue this momentum forward, to continue what we've been seeing in the markets, and continue what we've been seeing in the economy. And again I think, uh, you know, two weeks ago, our our election results brought even more optimism into the discourse, into the conversation as to what

lies ahead. And you know, in an environment for businesses in corporate America to continue to do well, not to say there's no concerns out there, and we can we can certainly get into that. You know, I get a lot of questions from clients. I think probably the two biggest areas of concern from a market perspective now, especially now that Trump is won. Right, Probably the biggest one has been you know what lies ahead with inflation and

tariffs more specifically, that's been a real area concern. We'll talk about that on the other side of the news break, and we can talk about just overall market valuations, right. Valuations are high right now, we have a very concentrated stock market, and so we can talk about some of the concerns that that may lie with those two areas of the market today. So with that, we are coming

up to our news break. When we come back on the other side, we'll talk a little bit more about the Fed interest rates, opportunities in the market, and we'll talk about some planning topics that may be of interest to you. Give me a call if you have questions. One eight hundred talk WGY. That's one eight hundred, eight

two five, five, nine four nine. You're listening to Let's Talk Money here in eight ten and one oh three one WGY Potcam and welcome back to let Talk Money here on eight ten and one oh three one WGY. I'm Ryan Bouche and glad to be here with all of you. Appreciate you tuning in. If you do have any questions, If you want to be a part of the show today, give me a call one eight hundred talk WGY. That's one eight hundred eight two five five nine four nine. And as I shared earlier, you can

also join the show. If you're not comfortable maybe making that phone call or asking your question by phone, you can send us an email at ask Bouche at Bouche dot com. That's ask Bouche at Bouche dot com. I'll be watching the email inbox, so if you do send an email, I will try to answer your questions on today's call or today's show. So I got about twenty

five minutes left. We talked about the markets, a little bit of a shift in uh maybe some of the optimism went away a little bit from two weeks ago, but you know, I don't think that should really concern us as investors. Are you are you doing anything different? Have you made any changes to your portfolio? Have you made any you know, changes to your outlook to your

strategy moving forward? We can talk about where we're seeing opportunities right now in the markets, and you know, I think some of what we've seen change over the last I don't know, quarter and a half since about the end of July or end of June, end of the second quarter, beginning of the third quarter in July. We have seen a change in market dynamics, right, There's no

question about it. We've seen we haven't seen the leadership from some of those large cap growth companies, right, the mag seven that was really driving the market for so long as rates the prospect of rates coming down, uh, really went up last year, you know, the AI revolution, the AI driver of optimism and growth for a lot of these companies. We saw just such a driving force in those large cap growth companies. It was, you know, really fascinating to see kind of that dynamic play out.

And you know, it's not to say that those companies aren't still going to be leaders moving forward and still do well moving forward, but we have seen sort of a catching up process with other areas of the market, especially as we entered the third quarter of this year. And now with Trump in office or Trump you know coming into office next year, does that change things? Is it Is it still going to be sort of that

shifting dynamics that we saw. I would say probably the you know original Trump one point oh right, his first four years in office, we saw you know, areas of the market to do really well. Technology did great that time of the market. You know, other sectors in the market up until you know, let's look up until COVID. Right, let's remove some of the you know those last I don't know, nine or ten months of office when so much of the market was disrupted by COVID, but be

pre COVID sort of that Trump one point. Oh, we saw consumer discretionary, so again just consumer, you know, strength of the consumer. That area of the market did incredibly well. Financials, healthcare all did really well. Some you know, more defensive areas in the market didn't hold up as well, right, Staples, real estate didn't do as well. We did have some rising interest rate. Environment not always the best place for you know, real estate and energy was the worst performer

really during that entire period. And you know, I think two ways to look at it. Obviously, you know, maybe on one hand, you would think that energy companies would do well with a you know, more pro energy or more traditional energy type administration. But you know, prices also

were coming down. Right, we had a an environment to produce oil and grow the reserves in inventory in the price of oil came down, price of gas came down and that has a big impact on energy companies, So that was an area that didn't hold up as well. But you know, we're seeing right now in the market again that little bit of a shift. Technology companies in the last you know, quarter quarter and a half have not held up as well as they did before the

end of June. Right the eighteen months before that, like you said, with the mag seven and growth in that sector was just outperforming the rest of the market by so much that you know, at some point you would expect a catchup. And we've seen, like I said, that shift in the market dynamics over the last four or five months, and you know, will that continue to play out. I do think it's important. We went through we did a rebalancing for our clients a couple of weeks back.

We just felt that, you know, as the market is shifting, as we're kind of getting more clarity as to what's going on with the economy, where we're at in this market cycle, we felt, hey, we feel really good with where our target allocation is, where clients where we want clients to be from a portfolio standpoint, that you know, with the strength that we had seen over the last eighteen nineteen twenty months that it was a great time

to rebounce. Those are some opportunities that that you can look to right now in this market cycle, this market environment. You know, think about what makes sense from your target allocation, where you want to be, if you do need distributions, if you're living off of your portfolio, is now maybe a good time to look to raise some cash or

cash alternatives in your portfolio to withstand any volatility. Not saying that you know volatility is on the horizon, but we have had two years in a row now with twenty plus percent equity returns in the S and P and the major indices, so you know, is now a good time to look to maybe do a cash raise. It's something that we do as we go through the

rebalancing period in rebalancing portfolios for our clients. The other thing where we're looking at opportunities, and this kind of goes back to conversation about the Federal Reserve interest rates and where investors' expectations were. But in the period since September when the Fed has lowered now their overnight federal funds rate by seventy five basis points, so by point seventy five percent. Right, we had the September cut of point five percentage points and then last week's cut of

point twenty five percentage point. So we're down now about seventy five basis points in the Federal reserve rate, but interest rates on the long end of the curve have gone up over that period. We've actually seen rates for the ten year treasury go up about seventy go up seventy five basis points since the Fed started cutting by seventy five basis points, So a real change in dynamics

in interest rates. And I would say, you know, those those ten year treasury rates have much bigger impact or more aligned with what us as consumers again, whether it's mortgages, car loans, credit card debt payments, whatever it may be, consumer loans and consumer interest rates probably tied more to what that ten year treasury is doing. We've seen that come up. We've seen those kind of intermediate to longer term interest rates start normalizing versus the shorter term rates.

We're getting a more normalized yield curve, if you will. Right, we've talked about that inversion of the yield curve. That was a real driver why everyone thought we must be coming up to a recession with an inverted yeal curve. How you know, how could things continue to be strong. Every time we've had an inverted yell curve, the market has gone down. And so now we're seeing a flip there. We're seeing kind of more of a normalization in the

yield curve, and it's a really really interesting dynamic. And so for us, we found opportunities there for you know, part of our portfolio for clients, in a certain portfolio that we're managing for them, we found you know, over the last couple of weeks, we've been we've actually been you know, buying up some seven to ten year treasuries for clients because we've gotten to, you know, a point where they're very attractive from where they were just four

or five weeks ago. You know, the seven to ten year have gone from about three five three point six percent last month to now they're trading over four point three five over four point four percent. That's a big, big shift, and you know, to us, that's a great opportunity.

You know, as as much as we don't you know, obviously we don't want inflation, but as hard of as high interest rates have been for a lot of people, for a big segment of our population, savers, retirees, these higher interest rates can actually be a good thing, right, We're actually getting some return on that part of our portfolio that we haven't seen in close to twenty years. So they're are opportunities in this market. You just have to know and be patient and know where to look

for those opportunities. And that's what we're trying to do and that's what we're talking a lot about as an investment committee. Again, for those listeners out there that have any questions, give me a call. One eight hundred talk WGY. That's one eight hundred eight two five five nine four nine. We're gonna go, I'm gonna take a quick commercial break, but when we come back, we'll talk a little bit more about some of the opportunities that we're seeing in

the market today. We'll talk about dynamics in the market, and we'll talk about some planning opportunities that may be out there. So again, if you have questions when we come back, one eight hundred Talk WGY one eight hundred eight two five five nine four nine. You're listening to Let's talk money here on eight ten in one o three one WGY Kid, Welcome back to Let's Talk Money here on eight ten and one oh three one WGY. We're nearing the you know, the final stretch of today's show.

Appreciate all you listeners tuning in and joining me today. If you do you have any questions, we have some time left, give me a call. One eight hundred talk WGY one eight hundred, eight two five, five, nine four nine. I was talking about opportunities we're seeing in the market, and like I said, I mean, you know, it's been it's been kind of fascinating. Uh. You know, typically when we talk to clients or prospects, right, we're we're long term investors.

We're not day traders. That's not what we're trying to do. We talk about, you know, our our trade frequencies maybe you know, three to five times a year, we're making changes, tactical changes to our portfolios. Uh. And historically, you know, a lot of those changes have come from the equity side, but the last year or two, you know, most of our tactical changes have actually been coming in from fixed income. Right.

There's just been so much I don't want to necessarily say volatility, but so many changing market dynamics in the fixed income space with interest rates. What the FED has been doing, uh, finding opportunities on that side of the portfolio that you know, that' scenario where we've been able to be really you know, tactical talking about you know,

taking advantage of these higher interest rates. Now you know, whether it's buying individual bonds, whether it's buying bond funds really doesn't matter as you you know, go out over time. You know, being able to enter use an entry point at a higher interest rate is what's key. And we're seeing a lot of value right now in that intermediate you know, that five to ten year term because again

we're getting a more normalization of the yield curve. We're seeing even though the FED is lowering rates, we're seeing at the longer end of the curve rates actually go up, which you know, I don't think a lot of people expected. I think when you know FED was lowering rates, many folks you know, thought hey, this would be a great time to refinance my mortgage and to look at opportunities to borrow. But we're seeing interest rates continue to stay high.

And I think you know, our our position and our sort of commentary and conversations with clients has been you know, I think there is a chance for rates to continue to go down on the longer end, but I'm not sure we're going to get to a point pre COVID, you know, post global financial crisis, pre COVID, where rates were as low as they were. Right, I do think we may have been into a very low interest rate environment, you know, through that period with you know, where the

FED was at. And I think we have to be aware and you know, have some expectations that rates may stay a little bit higher, maybe not as as they are today, but certainly, you know, higher than they were pre COVID, and I think we have to wrap our heads around that and be aware of it and like I said, find opportunities. And so I'm actually we had a great question coming through our email channel, and again

that email addresses ask Bouche at Bouche dot com. We had Dan send in an email and you know, it goes along with what we're talking about here. His question is where do you put short term money? You recommend two years of expenses to live off of you know, they have He says he likes Vanguard mutual funds. They have new York State municipal bond funds. They have a money market. Where do you put that short term money? And it's a really great question, and it varies, right,

it varies depending on the interest rate environment. And for a long time, we had a little bit of a you know, laddered approach with how we're using that. So depending on you know, that timeframe, we try to hold about eighteen to twenty four months of cash. Given where interest rates were and where the Fed had interest rates,

we've been using money markets recently. I mean, we were getting great yields, you know, for a long time, we're getting five and a quarter a little bit more than five and a quarter, and that's a great, great opportunity, especially to withstand the volatility for your cash flow needs. As those are coming down, we're still utilizing that, but you know, we know that next year rates will probably continue to come down, so you know, it may be a blend of some money market for really short term

cash needs. May be a laddered treasury approach if that makes sense as well to kind of have them mature as time goes on, depending on where yields are, you know, money or not money market, but municipal funds, whether municipal individual municipal bonds or municipal bond funds. I mean, this is where you really need to take a step back and look at your tax situation, right because we need to come up with a tax equivalent yield for you to understand, you know, where it makes sense to utilize

muni funds. And again, you know, we're seeing in the munifund space right now, a lot of the best opportunities for yield are kind of on either end of the spectrum, really on the short short end of the curve or you know, even a little bit longer, you know, at a twelve to fifteen year believe it or not, timeframe.

So you kind of have to look at where you can enter where you can get exposure in a municipal bond again, whether it's individual bond or a bond fund, and then go back into your what's my tax equivalent yield?

And for many situations, in many cases, it really does it make a whole lot of sense to do commaunty bonds unless you are in that highest tax bracket as well as potentially you know, being in a high tax state like a you know, New York Massachusetts, right where now all of a sudden, your your total marginal what you're paying on every new dollar of income is you know, somewhere between forty five and fifty percent in some cases depending on Again, if there's other UH surch art, you know,

the old Obamacare surchar UH Obamacare sur tax, there's a lot to kind of weigh there, and so we really need to factor in what that tax equivalent yield is and then look at what that difference is between you know, more of a you know, taxable bond allocation, you know, whether you want to use the Barclay's aggregate as your benchmark to see where rates are there versus what you can get in a muni bond fund tax equivalent yield, and so it all comes down to your what you're

paying in taxes. And again, Dan most more times than not, what we're seeing is that unless you're in that highest tax bracket, you may not be getting as much yield as you need from those municipal bonds to make the because you're gonna get paid, you're gonna get lower yield from a muni bond. But again, the trade off is that they're tax free, especially if you live in the state where those muni bonds derived from now you're not paying federal or state income taxes, so they become very,

very attractive. But again it really comes down to what your tax bracket is and what that tax equivalent yield is on those muni funds versus what a you know, taxable bond allocation may look like. So you got to do a little bit of an analysis. But yeah, general rule of thumb, we really see opportunities there if you're in the highest tax bracket. So appreciate the question, Dan,

and hopefully that helps answer it. And like I said, depending on the interest rate environment, that's where it'll vary what we're doing with those eighteen to twenty four months worth of cash needs that our clients have for distributions and what they live off of, so that can change.

And like I said, as we probably enter next year, that may be more conversations that we're having as a investment committee as we start seeing you know, the great money market yields that we've been getting for the last year or two, you know, start to maybe come down a little bit. And it's a good question for you know, other folks that you know, we've had this conversation, right you've you've been able to get the most yield on the short end of the curve for the last year,

and that goes with that inverted yield curve. We've been trying to push more out into the yield curve right go a little bit longer. Even if we give up yield, even if we take a lower interest rate. The benefit of that is that we know the Fed is going to lower rates over these next one or two years. We know that that federal funds rate is going to come down, So you're not going to be getting the same yield on the lower shorter end of the curve

even though you're getting more today. You know, do you want to take more today that may only last three months, six months a year versus locking in some good yield over the next five, seven, ten years. And I think the argument can be had, and I think it's it's makes much more sense to be able to lock in you know, maybe a little bit less yield, but again twenty year highs that we're seeing right around now, to lock that yield in for a more intermediate to long

term time horizon. So just something to consider, right this is the questions in conversations we're having all the time right now with clients because again, we are in such a changing interest rate environment that it makes it it makes a really really big, you know deal, and it makes a big difference in how you're going about and approaching your fixed incomes out of the portfolio, especially if you're you know, retiree or a more conservative investor. Again,

we have a few minutes left. One eight hundred talk wg By. That's one eight hundred and eight two five, five, nine four nine. So we are one more question that actually came through our email line. This is from Tom. Just briefly read it. My wife and I are planning to gift somewhere in the two hundred and three hundred thousand towards the purchase of a home. Question is do we have to file a federal gift tax return this year in subsequent years? And what are the pros and

cons of doing this? And so you know, this really comes down to your individual situation, you know, gifting over the UH this that would be a gift that would be over the annual exemption, so it would require a gift tax return, although it still falls under the lifetime exemption, so you wouldn't have to pay taxes on it. There would be no taxes involved, but you would have to file a gift tax return for that particular year if you were to make a gift in that sort of range.

Like I said, that goes above the annual exemption, but like I said, it still falls under the lifetime exemption, so there's no taxes that would be owed. So I would say, you know, to me, that's that's the prose of doing it. You know, to me, when we talk about gifting and helping kids with our clients, you know, to me, it's all about the conversations that you're having.

It's all about you know, what type of relationship do you have there, and you know how this can help them, but also maybe not have them rely on you know, future gifts or doing that as time goes on, so you know, without knowing the full situation. That's how I think about kind of the pros and cons to doing something like that. And yeah, no, I mean I think it can can certainly be a big help. And we know how unaffordable homes are today, So we are up against the end of the show. Again, Thank you so

much for tuning in. You can catch us every Saturday at ten am and every Sunday at eight am here on eight ten in one O three one wgo, have a great rest of your weekend. Thank you for tuning in, and take care by now