Let's Talk Money

Here is WG wise financial analyst Steven Bouche or one of his capable colleagues. Well, good morning, and thank you for tuning in to Let's Talk Money on eight ten WGY. I'm John Malay and I'm going to be your host for the next hour. I'm a certified public accountant. I'm the CFO and chief operating officer and a wealth advisor at Bouchet Financial Group. I want to thank you for tuning in with us this morning. Here we are on this

almost mid July morning and listening to the weathery board. It's gonna be a hot one, I tell you. It seems like since we turned the calendar from June to July, it's been in the nineties every single day. So certainly not complaining. You know, it's summer. We want this weather, but certainly hot out there. So if you're going to be out there enjoying the sunshine, you know, be careful, uh, stay hydrated, put sunscreen on, protect yourself, but certainly get out there and enjoy. Uh.

Yeah. I always like to say, you know, this time of year such a special time, uh in upstate New York. You know, we've got so many great treasures to enjoy, you know, including the Adirondacks, the Lake George region, you know, Saratoga, which if you follow the track, the track had opening day this past week, and although with the Belmont coming in June, it's kind of felt like the track's been open

for a while. But uh, you know, Bellmont was here for a week then closed down and then the track season is now officially open and we'll continue on through the end of August. I hope everybody gets a chance to check that out. And you know, also you know here we are, we're close to the Berkshire. Actually works worked in the Berkshires for a number of years, and you know you got Tanglewood and Stockbridge and a lot of just great natural resources right over in the Berkshires too, So you know,

just a great time of year to get out and joy. And you know, as Steve has in our tagline, it is health, wealth for life. And certainly you know, getting outside, exercising, enjoying that fresh air, whether it's just going for a walk, hike, and just enjoying that sunshine, soaking in some vitamin D. It's all good for the health and really important, you know, is again one of the reasons we've built that into our tagline is you know, managing wealth is very important, but you

know it's important to have your health so you can enjoy that. So hopefully everybody gets a chance to get out there and enjoy the day. And you know, I encourage any listeners to call in this morning. You can reach me at eight hundred talk WGY that's eight hundred eight two five five nine four nine. You know, this morning we're going to talk about the markets and some recent economic news. A lot to talk about there. Also we'll touch

on maybe some financial planning topics and any other questions you call with. So certainly, you know, reach out if you have anything on your mind, don't hesitate, pick up the phone again. You can reach me at eight hundred talk WGI. That's eight hundred eight two five five nine four nine.

You know, we'll start off, you know, jumping right into an update on the markets, and certainly this past week was action pack week in the markets, both with some CPI inflation data coming out on Thursday and you know, just the markets reacting very positively and you know it's interesting, you know, the first part of the week, the NASDAC, the tech having NASDAK went on a nice tear, and then when the CPI news came out, you actually saw you know, almost you know, a rotation of investors,

you know, maybe taking some profits in the tech side and really going more in the mid cap small cap. So definitely a lot of activity and positive signs across all the indexes. And you know Friday, you know, markets closed higher, actually the sm P five hundred and the Dow hit intra day record highs UH and all that coming on bets. You know, with all this good inflation news, you know what is going to happen with the fed.

Uh FED will be meeting in July and then again in September. We'll talk a little bit more about that a little bit later in the show. But you know, on Friday, we saw continuation of really what we experienced heavily on on Thursday, and that's really our rotation uh of investors really you know, maybe taking profits, uh maybe deresting a little bit in the tech side and moving into small and midcalf size, which you know certainly was triggered

by the positive CPI read that came out on Thursday. And I'll talk a lot more about that a little bit later in the show, but certainly certain delivering the slow down and inflation that the FED has uh. Chairman full has made very clear, uh, some of the signs he's looking for. So the Sea delivered on that. And so what we saw was, you know,

really a broadening of the market strength. And we've talked a lot so far this year about the Magnificent seven and how concentrated the returns of the S and P five hundred event, and you know, it's good and it's healthy to see a broadening and certainly, you know, with that positive CPI news, you know, the our thoughts go right too, when is the Fed going to start lowering rates? And certainly that'll have broad, broad positive impacts

across the board. And we saw that with really the strength and of the small cap MidCap market. So great signs there. So for the week, you know, the SMP was up just under one percent, so point nine percent, Nasdak Tech having Nasdak for the reasons I just talked about, you know, only rows too point two percent. It was actually you know, midway through the week was up over a point and a half, but gave up some of that at the latter part of the week. The Dow climbed

one point six percent. Uh as I mentioned, capitalizing on some of the growth in mid cap small cap in the Russell two thousand index up a strong six percent, so clearly showing with that rotation out of tech the positive impact it's had on small caps. So the Russell two thousand going up six percent for the week, just a great week overall. At the end of the week, you know, we did get uh So CPI came out on Thursday. Uh, PPI came out on Friday. PPI not quite as strong as

CPI, and I'll talk more about that. So there was you know, a little bit of you know, choppiness on that front. And the other thing is, you know, earning season kicked off and we had you know, big banks really start the earnings reporting, and you know, the financial sector has had a tough go so far this year, and and uh you know, I think what we saw on Friday with some of the earnings release

is a continuation of that. And you know, you think about banks and where they make their money, and you know the majority of their income, their net income is coming from their their net interest income. So that's you know, that's the spread the difference between you know, what they charge on loans or make on investments, and what they give to borrows in their deposits.

And so we've all, you know, we've all heard very clearly about you know, deposit costs, and you know, a lot many consumers have benefited from that. Right. You know, remember only three years ago you might have been receiving point one point oh one percent point oh three percent on a money market deposit, now yielding over five percent and great for the consumer. Right, So it's it's been allowed consumers to really get some yield on

their cash. And uh, one of the downsides of that, and which I'm going to talk a little bit about, is you know, you know, many investors are finding themselves a little bit in a cash trap where they've got a significant amount of money in cash yielding you know, maybe a good rate right now, but certainly as the Fed starts to take action, that's

going to put that at risk. But that action, So what's happened here is with for the banks that's spread so right, the difference between the interest they're receiving on their loans and the interest they're paying deposit holders, that has narrowed, that is compressed, and that certainly is hurting bank earnings. You know, with the large national banks, you know, sometimes they can offset that. We've seen that with some of the reporting, you know, with

with other fee based income, whether it's investment banking income or others. But certainly, you know this is a concern, you know, with the regional banks, and you know we'll see that through the reporting cycle. Certainly saw in the first quarter earnings reporting saw compression of regional banks net interest income, and that's expected to see that, you know, continuing in the second order.

And you know what's interesting is, you know, as rates as the FED does start to cut rates, you know you will have banks start to cut deposit yields and you know that will give some positive relief to their net interist income. However, you know, there the interest that they're charging on their loans, you know, may go down as well. So and that's where you know, as a bank's primary responsibilities, right is really to manage that interest rate risk. And you know, not always do your assets your

loans reprice the same way your your liabilities, your deposits do. So, uh, certainly that's going to be something to be keep our eyes out on for the financial sector. And I think what we've seen early in the reporting cycle is uh, certainly have seen that continuation of that pressure on the net

interest income of banks for the first quarter. But you know, again some are able to balance that with some some service income, some some interest income related activity, but others are not able to And certainly, you know, as we look at more through the second quarter earnings, you know, certainly we feel the regional banks are going to feel some pressure on that as well.

But overall, you know, great week, you know last week again s and P up just undred percent year to date, almost eighteen percent, so seventeen point seven three percent. The NASDAK as I mentioned, just two point two percent for the week, but almost twenty three percent year to date, so some great returns of the tech heavy NASDAK. The Dow, uh, great week, as I mentioned, return of one point six percent,

and then you know now year to date six point one to three. And so this is where you know, we're starting to see that broadening of the market strength, and certainly, you know the Dow is a reflection of that. And Russell two thousand again great week for the Russell two thousand six up six percent for the week, which really is also matches the year to date

return. So certainly seeing the small cap stocks starting to pick up some some steam there, which is again we've had so much conversation and concern about, you know, the concentration of the mag seven uh and so good to see as certainly we're starting to tick off more of the data items that the FED is asking for to show that inflation is under control. Certainly see that broadening,

which is a good thing. And on the bond side, you know, we are starting to see treasury yields ticked down, so ten year treasury fell down to four point eight percent on Friday. So overall, again good week, some positive signs across really every index still at almost all time highs on every single you know, the major indexes, the S and P, than ASDAK and Dow. So great weekend. And I mentioned the broadening which is of the of the strength, which is certainly something we want to see.

Certainly very healthy and you know, getting to you know, what's driving a lot of this, and you know, I definitely want to talk to some of the economic factors. You know, after the recent FED meeting, Powell came out and said, hey, you know they're starting to see inflation heading in the right direction, but they're going to be slow. They want they want to see more data, and uh so let's just talk about some of the data they've asked for and some that they saw. We've seen,

you know, giving the results that they've asked for. And so on Thursday, we had the June CPI numbers come out, and you know, this is important reading. You know, this is one certainly markets we're all looking at, and the Fed is certainly was looking hard at the CPI, and so it definitely a CPI showed a general a broad cooling of inflation really to its slowest pace since twenty twenty one. And the good thing is it's really driven by what we've all been longer waiting for, and that's a slow down

in housing costs. You know, housing costs has been you know, very persistent, very difficult to get under control, and although it still is rising, it's coming down at a slower pace. So that is a very good sign. And the so called you know, core consumer price index, so the core CPI, which excludes food and energy costs, climbed only point one

percent in May, so it's the smallest advance in three years. So and overall, so the overall CPI you know, month over month, fell point one percent and that was, you know, again versus an estimate of an increase in point one percent. So again, markets, what do we react to. We react to surprises, and so this was a positive surprise, right, we came in. CPI came in month over month better than State

made it. Year over year CPI came in at an even three percent year over year increase versus a forecast to three point one So again CPI starting to inch down, get closer to that FED target of two percent. And the core number also, you know, increased slightly point one percent. It was expected to increase by point two percent. So again positive surprise there. We

like to see of an estimate, and that happened. And also year over year core CPI came in slightly below the estimate, so great signs there. And again this is what the FED is. They've been very vocal this is they want to look at the CPI reads. They want to see that it's going in the right direction. And so certainly this CPI print viewed to be very positive from the Fed's point of view. You know, in just a

on shelter costs. You know, so shelter, which is the largest category within services, it did climb slightly, but it was the smallest gain since you know, mid twenty twenty one, and so some very positive news there. And that is an area where again it's it's been stubborn. Shelter costs have been very stubborn in inflation. And it's probably the most significant aspect coming

out of the June report is the downshift in housing inflation. So that's certainly something that's gonna be good news to the FED as they're contemplating what to do with rates. The other cost of services like airfare, hotels, hospital care stays also all declined from the month earlier. So you know, so excluding housing and energy, service prices fell for a second month. So this is the kind of not one off data, but kind of consistent data that the

Fed is one to see with inflation. And you know, we all, we all gave the Fed a hard time when they were very slow to react to inflation when inflation was going up. You might recall the FED using the word transitory, you know, thinking that when we were seeing inflation and we were feeling it right, consumers were feeling across the board. You know, the FED was not viewing it as here to stay or they're viewing it really

as you know transitory. Well, they were wrong, and you know that slowness to react, you know, they took a lot of heat for what you can clearly see on this side is there not. They're gonna be They're

gonna make sure that they don't overreact and overreact quickly. I mean, when they look at the economy, markets are doing great, the economy is still doing well, is slowing down, and we're seeing several signs that we'll talk about that, but certainly they're seeing signs, but nothing drastic, nothing showing you know, a you know red alert that we're heading into strong recessionary time. So they're gonna be patient. And you really can't fault them for being

patient, you know. And so I will say FED FED Chair Powell after the recent meeting, came out in his conference and said, you know, he's gonna be looking at the June CPI and and you know, at the end of end of July, the PCEE inflation numbers will be out. That's kind of their preferred gauge, and they're gonna be looking at that closely. But one of the things that that Powell also said is that they're not singlely, you know, focused just on inflation, right, They're also now that

inflation is clearly showing signs of coming down. You know, there's an equal waiting between you know, maximum employment and making sure that we're unemployment is not creeping up too high and also inflation. So certainly that is the Fed's dual main day and and now that inflation is starting to show signs that it is clearly on a sustained path to coming down, that they're also making it clear that they're not just singlely focused on inflation that they're they're they're also looking very

closely at what it's happening on the unemployment side. Uh So, so again, great numbers on the CPI. Again Friday, we had the PPI, which is the producer's price index, and so the difference there is, you know, that's what's what producers are feeling in terms of their cost and you know, in some ways you could say it's it's kind of a reflection of downstream inflation, right because producers, as they're producing goods and services, ultimately

when they hit the consumer, either two things are going to happen. You know, the producers either gonna you know, maybe increase prices which could pass along some inflation, or they might take some margin compression right and eat some of those costs. So certainly, you know, the PPI a little bit different type of reading, but certainly an important measure too. And it did, you know, slow, it did certainly show you know, a slight

increase more than forecasts. So uh again, I think you know, we're all in this camp where inflation, the fighting inflation is going to be a little bumpy, and the PPI showing, you know, the slight uptick in a little bit more than forecasts year over year. Again, the PPI rose to two point six percent, which was a little bit higher than the forecast at two point three. So but overall the CPI was such a positive indicator.

You know, the next next inflation data coming out is going to be at month end with the PCE, and the Fed will certainly be be looking very closely at that. So so we think of you know, just end of June, you know, we had the chairman Powell come out with a press conference and some of the data he wanted to see was a positive CPI read check. I think we can all say we checked. We've got that. The other and I talked about the dual mandate is the jobs report.

And so not this past Friday, but the friday before, you know, right after the fourth of July, the Jobs report came out and you know, again that showed a cooling of the US labor market, and you know, that's what the Fed's looking for. So that was a positive, a positive report as well in terms of the FED looking for the data that they're

they're looking for to show that things are cooling down. So that report showed, you know, a solid creation of like two hundred and six thousand, which was jobs, which is slightly above the forecast but pretty much rate in line, but it was slightly above, but it did show a very very narrow growth, which was interesting. So of those two hundred thousand, two hundred and six thousand jobs, the majority were in healthcare by by far,

the majority were in healthcare and government. That represented about one hundred and fifty o one hundred and fifty thousand jobs created. So it's interesting. Many categories, you know, including professional business services saw a contract and so we did see you know, job growth you know, close to forecasts, but very

very narrow. The other thing that we saw was, you know, with these jobs reports, there's always revisions of prior releases, and so part of what in this report, they reduced the April and May jobs that were originally reported by about about one hundred and ten thousand, so signs showing clearly that the labor market is cooling. The unemployment rate did take an unexpected tick up.

I mean, the FED had forecast four percent and the unemployment rate actually came in at four point one percent, so a slight uptick, but certainly you know, again is the FED is chairman Poul has come up very strong in his press conference and saying, you know it, they are very much sticking to their dual mandate and inflation is really important, but so isn't making

sure that unemployment is in line with with their mandate. And so, you know, so job so slightly above their their forecast at four point one. The other positive that the report showed is, you know, wages did rise again in June, but the increase slowed down from the prior year, so slowed down to three point nine percent. So so wage growth is still there. But the the rate at which it's growing is slowing down. So again

another you think about the Fed and what they've asked for. Okay, inflation check, and now they want to see that the labor market is cooling down, so check and they're gonna you know that that inflation or that unemployment rate tick up. That got their attention because you know, certainly that is a concern they don't want. The Fed does not want the inflate the unemployment rate to climb too high. So certainly that showing sign that the economy is slowing

and certainly being felt in the job creation side. So again in terms of what the Fed and Chairman Powell is asked for, you got the CPI check, Now you've got the Junes you know, jobs report check. So you know, two out of three signs there, and certainly you know, and as we head into the break, you know, when we come back, I'll talk about some other signs are looking at and now, really what does

all that mean? Right? And so as the Fed is asking for data, you know they're they're getting data and so certainly showing that prices, inflation's under control, jobs are under control. So we are almost halfway through today's show, and we're going to be taking a break. I want to thank you for tuning in with us today. I hope you were enjoying this show. I hope you're going to rejoin us after the break. We encourage any

listeners to call in with questions. You can reach me at eight under TALKWGY. That's eight hundred eight two five five nine four nine. You've been listening to Let's Talk Money, brought to you by Bouchet Financial Group, where we help our clients prioritize their health well we manage their wealth for life. Thank you for tuning in and please stay with us through the break. Thank you very much. Here is wgi's financial analyst, Steven Bouche or one of his

capable colleagues. Well, thank you for staying with us through the break. I wanna thank you for tuning in with me this morning. I am John Malay. I am CPA and chief financial Officer, chief operating officer and a wealth advisor at Bouchet Financial Group. As I listened to that weather report,

that sounds like some scorching heat that we're in for over this weekend. So again, stay safe if you're out there in the in that heat, be sure to stay safe, stay hydrated, but don't keep you don't keep it, you know, make it stay you stay inside, get out there and enjoy this this great time of year. So we're starting off, you know, really talking about the markets. And and again this the market was an action pack, had an action pack week and and you know, largely driven

by the inflation data that came out. But we saw, you know, I think what I think universally everyone say, are very positive signs with a with the broadening of the market really capitalizing on gains. So we saw really mid cap, small cap and that's really driven by you know, investors now stepping back and saying, okay, we're seeing the positive data that the FED is looking for. And now there's uh, you know there there's belief that

the FED may start cutting rates sooner than later. And so right before the breakout was kind of going through the data and just you know, highlight. You know. So after the June FED meeting, Chairman Powell had his press conference and said, you know, we're very we're seeing positive things with inflation.

We want to see a continuation, and namely now we've seen the CPI come out positive, the jobs report positive, and rate at the end of June, the Fed's preferred inflation gauge, the PCE, came in very positive, so you know, showing you know, just a really it was the smallest increase that we've seen since March of twenty twenty one, up just zero point one percent from the prior month and two point six percent year over year, so you know, getting very close to the FED targeted two percent.

So PCE report kind of checked three. That was that was the first check. But that was, you know, three major data points that the FED is seen. So now you know what's going to happen. You know, Fed's going to be meeting later this month, right at the end of July. And you know, believe it or not, it was a year ago that the FED took their last rate increase. So it's back in July twenty twenty three, FED increased the rate by twenty five basis points and that was

the last. They've been held steady since then. So you know, here we are July. They're going to meet again and you know, they've certainly seen They've asked for positive data, they want more data, and they're certainly seeing it on inflation front, jobs front, they're seeing a cooling of the economy, but still you know, strength of the consumer, which is really important. So certainly, you know, FEDS are seeing all the signs they've

asked for. You know, will they in July? You know, I think many think it's maybe too soon that they want to see, you know, July's CPI numbers come out, and so you know, many people are targeting, many economics are targeting September really as the the first time where they

may really actually you know, bring rates down. So but it'll be interesting because so certainly they've they've they'll have a lot to talk about in July because the data they've asked for is showing in and including, you know, on the job side, an uptick in the unemployment rate, which is something that FED said they're they are not singlely focused on on just inflation right that it's there. They've come now that things are back in line, right, neither

neither inflation is or jobs is taking priority priority over the other. They're really it's a dual mayei, they're looking at both. So uh so we'll we'll they'll be getting together in July and we'll certainly, uh you know, I know, you know, some economists are saying they could have a rate action

in July. I think that is the minority. I think, if you most of the percentages is pointing towards September, and so does that leave room if if they start cutting rates in September, is that room for one cut this year? You know? Or possibly two? You know, certainly with the election happening in November, could that cause you know, some pause in

November? Uh, you know, even if warranted. You know, there's again a lot of debate about that, but certainly, I think most economists believe, you know, September is likely to be the action, and I think obviously it'll be important to see that the the you know, the inflation numbers that come out between now and then, you know, still reflect things coming down and under control. So so you know, we've It's interesting because you know, the FED can also is I talked about be patient because what's

happened with the economy. You know, they've been patient. There's been calls for you know, the Fed is start reducing rates and they haven't. And and what's happened. The markets have done phenomenal. You know, I talked about the year to day increases, you know, how can you argue with the S and P up eighteen percent year to date, Nasdaq up you know, twenty three percent, even the Dial up six percent year to date. Right, So the Fed is looking markets have responded well. The job market

is still solid. It is slowing down, but still you know, we're not there's not huge recessionary concerns, recessionary flags. So they've you know, in their eyes, they've got the luxury of being patient. You know, Now, if things start to turn negatively quickly, you know, certainly that sentiment will change. But you know, I certainly I think expectations will continue to be patient. And you know, so okay, you know we start, let's say September, we start to see some rate decreases. You know

what's going to happen from that? And you know, in earlier in the show, you know, I talked about just the you know, I was

talking about bank earnings and bank interest net interest income. And you know, one of the things, one of the phenomenons that has happened is there's been a huge uptick of investment of money market funds almost now to six trillion dollars, and so you know, many investors have parked cash there now, unfortunately, some have you know, gotten frustrated with fixed income returns and maybe taking some of their fixed income portfolio and moved it out of bonds and moved it

into cash. And you know, if you're looking in the rear view mirror, you might say and feel good about that move and say, hey, I've I've been yielding five five and a quarter percent on those money market funds. The bond funds have not been doing well this first half of the year. But you know, in many individuals who made that move where they not really just took their their cash that they would typically hold for emergency or kind

of cash manage stratege. But really if they if they really read a hated their fixed income, you know, they're gonna be in a bit of a bind. And you just kind of being referred to as this cash trap because you know, as rates go down, and you know, I think without question, the FED is going to reduce rates. I don't think there's any debate about that at this point. It's just about when and how quickly.

But as they do that, you know, those yields on those you know, money market rates are going to go down, and so individuals you know who maybe have fled the bond funds because of you know, let's face it, bond funds have not produced well for the first part of the year, but they're positioned in it greatly right now to do well as rates go down.

And this is where patience is a virtue. And you know, historically, you know, there's data that shows that institutional investors really perform much better on their fixed income sleeve of their portfolios. And part of that is just because of the discipline, right, non institutional investors, you and I, you know, human nature sometimes take over and we get frustrated and we're seeing

the equity part of our portfolio. You know, maybe I'm in a balanced sixty forty portfolio or eighty twenty, and I'm looking at the fixed income part of my portfolio, and you know, my equities are up fifteen percent, thirteen percent, and but my fixed income, you know, maybe is languishing a little bit. And you know, one of the things we got to remember as a diversified portfolio. You know, the different parts of our portfolio serve different purposes, right, and so there is a purpose for cash,

no question. We tend to use cash. And when I say cash, you know, you know, short term money market funds, where again we are yielding you know, over five percent and have been. We tend to use that more when we have portfolios and we've got you know, cash needs within the next two years, and that could be you know, somebody who's in retirement and they're taking monthly or quarterly distributions right or they've got a big

event coming. Maybe maybe it's funding a child's wedding or buying a house, and so we know there's a need to pull money out of the portfolio. You know, we'll set that aside, we'll pull that out of the portfolio, put it into more of our cash manager strategy. And and our cash manager strategy has benefited by what's been going on with with money market money mark type yields. You know, so they've been yielding five percent. But what we haven't done is given up on bonds, you know, and you know,

we have in our fixed income sleeve. We have you know, used treasuries a lot, and we've also used some alternatives, but still, you know, bonds. You know, we're believers in bonds and you know, believe they have a role to play in our fixed income sleeve. And right now their position to do well is as remember is there's an inverse relationship between bond prices and interest rates. So as the Fed starts to cut rates and rates come down, you know you're going to see an inverse relationship in bond

prices. So you're going to see bonds gain from that. And so certainly, you know, if you look just at the first half of the year, you know you could say, well, bonds have have underproduced. They have based on you know, what's been going on in the rate interest rate environment. But where we see rates going from here, you know, we've we do believe it's a great time to be in bonds and and uh,

you know, we feel we're well positioned within our portfolios. And just I would urge you know, investors that if you've if you've gotten patient and you took your fixed income and moved it all into you know, short term money market rates, you know you should reevaluate that because what's going to happen is, you know, you only have to think back just a few years ago,

and those money markets we're yielding pretty much next to nothing. And I'm not saying it's going to go with media there, but you know, there's going to be. You know, as soon as the FED starts cutting, that's the direction it's going to go in. And so certainly, you know, market timing is is impossible, right, it is impossible. It doesn't mean you can't time some things and get it right, but to do it

consistently and beat the markets, it's it's impossible. And so you know, rebalancing your portfolio it is hard for pros and so as individual consumers and investors, you know, knowing when to rebalance, you know, can be can be challenging. But certainly, you know, waiting too long, right,

you're going to miss the opportunity on bonds. And I think you know, historically we're an environment that's going to set up where we you know, historically where we're at the end of a rate cycle and we're in a pause and coming to the end of a pause where we expect to see rate decreases. You know, bonds have performed extremely well and so certainly we feel we're in

that position right now. And you know, when you think about you know, as long term investors, and again you know, as when we're managing client's portfolios, we are thinking long term, right, and so you know, even just you can pick many different horizons. But if you look over the last forty years, you know, bonds have averaged, you know, almost six and a half percent, you know, almost one and a half

times higher than cash. And so you know, we certainly you know, and again we know looking in the rear view mirror, you could look and say, you know, having some some of my portfolio sitting in money markets has done well, and that's true. But now you've got to look forward and say, is that you can't continue to look at that rear view miror

as you look forward, is that where you want to be? Are You're going to miss the opportunity for a strong bond rally, which is I think what many of us believe is going to happen, and certainly with the interest environment certainly set up to support that. We're gonna take a quick commercial break, so please stay tuned and we'll be right back with Let's Talk Money on eight ten WGY. If you want to learn more about Bouchet Financial Group,

visit their website Bouche dot com. That's bou cch ey dot com. Sign up for their blog, which is updated every week Stephenbouche 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 eight two five five nine four nine. Here is Stephen Bouche. Well, thank you for staying with me through that quick commercial break. Just needed to get a quick drink of

water here on this lovely July morning. I appreciate you tuning into the show. And again, I know we're coming close to the end, but courage any listeners if they have had have any questions, you can reach me at eight hundred talk WGY. That's eight hundred eight two five five nine four nine.

So, you know, talked a lot about the markets, talked a lot about FED and what they're going to do, and you know, it was wrapping up a conversation really about you know, cash in this so called cash trap, and that's really, you know, a situation that you know, money market yields have been great and many investors have taken advantage of that. But now we have to look you know, where things is going to go from here, right, We can't we can't be focused on that rear

view mirror. Got to look ahead. So certainly, as the interest rate environment is certainly set up for the FED to start reducing rates, and whether that's in September or not, it's going to we we're certainly headed towards that. All signs are pointed that the Fed is seeing the slow down inflation, they're seeing the jobs starting to slow down, the economy in general starting to

slow down. Certain the all signs are pointing to the Fed maybe as early as September to start to reduce rates, and you know that will have an impact on short term money market yields. UH. And again, I think what's important as a diversified investor is you know, there's a reason we have different asset classes and we expect different things out of you know, the different

UH classes. And certainly you know some investors have have gotten UH impatient, I'll say with with bonds and and and I'm not saying stay with bonds when it's not a good time. We certainly were opportunistic and with our fixed income,

we'll make moves where where we feel fit. You know, we've used a lot of treasures and treasury ladders, but also use some alternatives that really functioned you know, as a fixed income, providing some stability but also providing some some income but in this case where where we're at the you know, close to the end of a pause cycle, you know, we certainly feel yields are high with the bonds. We feel that we're set up well for

a nice bond rally here. So certainly I would say it's a time to reevaluate your cash position, make sure you haven't sacrificed your ability to to really take advantage of some of the bond rally that's likely to occur. So, uh, you know, just wrapping up that part of the conversation, you know, one of the things you know, I want to touch on too, and you know, this is unfortunately becoming a bigger and bigger part of

our conversation with clients is just about cybersecurity. And you know, I don't know if you saw the recent news about you know, an AT and T had a massive data breach, and it certainly is cybersecurity and fraud is just becoming, you know, a really important part of you know, really protecting your financial assets. And you know you may think, you know, as a registered investment advisory firm, financial planning firm, you know, how does

cybersecurity fit in. Well, it's just as our clients as as they're impacted. You know, it's just become a bigger part of our conversation and making sure you know that that to clients are aware. And I would just say in general, everybody should be aware that there are threats out there and and you know, really this is not something that you should take lightly, and

it's also not something you should be embarrassed about. I mean, one of the things that is probably one of the best protections against cybersecurity is really sharing information if concerned about scams or someone has tried to scam you, right, you know, sometimes people are ashamed and whether they fall fell victim to it and don't want to talk about it. And you know, the reality is

this is an area where anyone can be a victim. And it doesn't matter how smart you are, how financially uh you know, secure you are, it can happen to anyone. And you know, we're all potential victims. And one of the things that you know we're seeing is so much of us live, including you know, uh, you know, the elderly population, live by our cell phones. It's a it's a huge connection device with our

friends and family members in a great way of getting information. But it's also become one of the number one ways that fraudsters are connecting with individuals, and so definitely, you know, be be cognitiant of that, and definitely, you know, one of the things that the frausters typically try to do is create a sense of urgency and whether it's uh, you know, if if you may have gotten notification from your banks about fraudsters, you know, contacting

you whether through your through text messaging or through calling your cell phone, you know, purporting to be from your bank and indicating that you've had some fraud on your account and they need to jump in with you right away and maybe

get on your computer or have you share sensitive information. And certainly with something like that, you know, first thing you should do is, you know, ask for a number you can call back, but then go, you know, go to a trusted source, whether it's that bank's website, and call back their main number. And don't you don't use a number that that

fraudster provided. Go to a known number that you could either obtain from their website or if you have statements and and UH and connect with the fraud department that you know, fraudsters like to create this sense of urgency, this concern that you have to act right away, and you know, you just have to slow things down and say, you know, ask again, collect information on that individual and what number they're on, but then go to another trusted

source to really Uh So if it's your bank, go to their website, go to a statement, get their number, call and back. And this is happening not only with banks, it's happening with you know, other financial institutions. We've had clients where individuals have purported to be from the I R S or the Social Security Administration. So again, uh, those entities will not typically call you. So again, uh, call back at a trusted

number. And it it is one where if you believe you have been a victim of fraud, talk to somebody, whether it's a family member or your financial advisor. Is one of the things you want to do is you want to make sure your your other accounts are protected, if you have to increase security measures on your other accounts to protect, but also just sharing that information, knowing what you know, what you experienced really so you can help others.

So uh. Again, the unfortunate thing is, uh, with the uptick in our use of technology and cell phones, being a huge part of that. You know, fraudsters are getting more creative in how they're doing it, and certainly, you know, we've talked a lot about AI and the positive side sides of artificial intelligence, and there are many and you know, we're seeing that, you know, with certainly the Max seven have certainly benefited from that, and I think in general, you know, most companies are

looking at how they can benefit and utilize AI. Also from a consumer point of view, the companies we do business with, whether it's Amazon and others, are also looking to use AI to make our experience better. But with every advancement in technology, right, there can also be some downsides of that, and certainly with AI, there's also an increase in the use of AI for fraud, and so certainly just be aware of that, be cognizant.

And if you do feel you've fallen victim, right, it's don't feel embarrassed. And you know, all too often people do feel embarrassed and they think, you know, it may be a sign that their cognitive skills may be declining, and they don't want to alert family members to cause concern. But really this is something that anybody can fall victim to and it definitely should be

shared. So just I'll say a little announcement there that really you might say, how does this have anything to do with investing, But I will say protecting your assets is important, and it is just becoming a bigger and bigger part of our conversation with clients really just to make them aware and as we've had clients fall victim where we have to step in to help them and protect their assets and really give them advice on how to protect their other assets as

well. So just want to share that information. So we are coming close to the end of the show, so I want to appreciate everyone tuning in. Hopefully everyone's going to get a chance to get out there and enjoy that sunshine and heat today. You know, as we head into the week ahead, you know, we'll have more of the earning season, so we'll have really you know, I think this end of this week was the start of the earning season, so we we had big banks reporting they will have uptick

in earnings releases starting next week, so it'll be an interesting time. And certainly earnings have been strong this year, so hopefully we'll see a continuation of that. But more to come on that for sure. You know. I want to thank you for tuning in with me today. I've enjoyed this show and I hope you did as well. I hope you enjoy the rest of your weekend. Get out there, enjoy some of that sunshine and heat, and hope you have amazing week ahead. Be sure to tune in next week

to hear another great show and also tomorrow morning as well. Also check out our website Bouche dot com for great content and information. You have been listening to Let's Talk Money, brought to you by Bouchet Financial Group, where we help our clients prioritize their health well we manage their wealth for life. Thank you again for tuning in, and please enjoy the rest of your weekend and enjoy the week ahead. Thank you very much,