Let's Talk Money

Good morning. Thank you for joining Let's Talk Money on news radio WGY. I'll be your host for today's show. Paulo 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 I do have my colleague with me on today's show, Edward Wilhelm here is our portfolio analyst here at the firm, so very

pleased to have him on. Ed How are we doing this morning? Good? Happy to be here. Can't complain the sun of shining here in Saratoga. The sun is shining. And you know what's also nice about it. I don't know about the folks listening, but the last few weeks weather has been hot. It has been hot and humid. It almost feels like the Capitol District was South Florida. But what is so far this weekend has been great, low eighties, some nice breeze, and most importantly, the track

is open. In my eyes, you know, Ed, just like myself. We live up in Saratoga. I view is when the track opens, that means summer is officially here. I don't like, you know, kind of the theme of fourth of July is the end of summer and then we head into August. I like to think the start of track season is the start of summer. So happy summer to everybody that is listening. So, folks, as always, when I do the show, we like to keep

it very investment centric. We're going to be doing a market update for this week and so far this year, talk about some macro themes that we're seeing, some portfolio positioning, what you should be thinking about, you know, now that we're at all time hot, it's just slightly off all time highs. Ed's going to be sharing some some great information on you know, styles

of investing that we're implementing for clients. Uh, you know, with all the technology out there, really the ability to customize exactly what you want to get exposure to and how you want to get exposure to that is really important. So a lot of interesting and compelling information that we're going to be sharing with you this morning, but as always, would love to hear from you. The phone lines are going to be open all throughout today's show. That

number is one eight hundred eight two five five nine four nine. Again that is one eight hundred eight two five five nine four nine. So let's start off with a market recap for this week. Saw a little bit of volatility

this week. SMP five hundred was down about one point nine seven percent, the tech heavy Nasdaq was down about three point sixty five percent, and the Dow Jones Industrial Average was up up about three quarters of a percent, about point seven two percent, a little bit of a you know, different change

from what we've been experiencing this year. This year so far has been very much tech heavy, right the Navidio, the Google, the Microsoft, Apple, Amazon, those are been the industry leaders, the chip stocks really powering and supercharging the markets and what's led to you know, very good return so far this year. So although the Nasdaq's down, you know, three point sixty five percent this week, it's up eighteen percent on the year, the

SMP five hundred up about fifteen and a half percent. A lot of that has been fueled. But and when I say a lot of that, I mean most of it has been fueled by tech. But we're starting to see some some shifts to that this week. Now, this isn't a major regime change. I'm not saying that. Okay, now, value you know, and dividend stocks are going to be fully in flavor here, but it is showing the necessity and portfolio management for diversification. So what caused the tech volatility?

You know, you look at the data this week, nothing, nothing glaring that that really points to, hey, there's some major shifts here and you should be backing away from technology. Now that's not the case. We have been seeing some soft economic data on both jobs numbers inflation numbers. But this is what we've been talking about all year, you know, Ryan myself, you know, Steve. When you start to see the slowing economic data at this point in our economic cycle, it's still a positive. Right,

We've been running so hot in the economy. If we continue to run, you know hot, it's going to keep interest rates higher for longer, and that's going to put a lot of stress on the consumer. So seeing some slowing in the job market getting back closer to pre pandemic levels, what that is doing is normalizing the labor market, helping bring down wage inflation. What's helps bring down overall inflation and most importantly, helps the Fed have enough ammunition

to start cutting rates because right now we're at restrictive policy. I'm sure I don't need to tell you. I'm sure we all feel it. Right. The federal funds rate is five and a half percent. You go out, try to get a thirty year mortgage, You go out, try to get a car loan, you go out, try to finance furniture, you know, your roof, whatever the case might be. Interest rates are high.

It's causing a burden to the consumer. And we all know how important the US consumer me you, your family members, your friends, important they are to the US economy. Everybody thinks when you know, you look at the stock market, you know, you look at the overall US economy, you think, oh, if corporate America is doing well, then we're doing well. And certainly that is the case. But the biggest element to what defines if we are doing good as an economy in the stock market is US,

the US consumer. We make up seventy percent of our GDP our gross domestic product the way that we measure economic activity in the United States, So if we continue down the path a higher interest rate it's five and a half percent for a prolonged period of time, that is going to cause tremendous stress on the consumer. Now, so far, so good. Consumer has been doing

well. We cover that on our last economic update, our quarterly webinar, that we've seen some stress on the US consumer, but the US consumer spending and saving is still above oneter, still healthy. But what the point I'm trying to make is eventually we need to see some relief and that is going

to be in the form of interest rate cuts. Right now, the market's expecting almost one hundred percent certainty that we're going to see at least one ray cut in September, and there's about a forty percent chance when you look at the FED swaps market that there's going to be two ray cuts this year. And again, a lot of that has to go into the slowing of economic data that we've seen, most specifically in the labor market, but also in

the you know, overall inflation measures. That the FED has enough ammunition now to to cut rates, and that's good. That's going to give relief the consumer. The consumer then could go out service that at a much cheaper price, and we all, you know, we'll reap the benefits of that when you need to go out into the market and borrow, so very very important there. So what are we thinking with the overall portfolio management right now?

All right, we're at all time highs. The last year and seven months has been sunshine and rainbows. You threw money and technology and you did great. They didn't have to think twice about it. But it seems all of a sudden the sediment this week when you see the NASDAC pull back three point sixty five percent, you see na Vidio down almost ten percent in the week.

Oh, is the dynamic shifting? Is this the on start of you know a little bit of a market correction and again the economic data doesn't support that. That is certainly not our thesis. We think this market still has legs. But nonetheless it gets the mind thinking what should you be doing in

your portfolio? And I would say the first thing that should come to mind for investors that have a portfolio that they're taking systematic dishybutions out, So if they're taking out monthly amounts for retirement or supplementing their income, they should be thinking about raising cash in the portfolio. So what we do for our clients that are taking distributions, whether they are pre retirement or in retirement, what we'll do is we'll take twenty four months of that amount and put it into

cash like instruments. So let's let's use simple math here. So say you're taking a thousand, one of our clients is taking one thousand dollars a month. We're going to raise twenty four thousand dollars two years worth, and we're gonna put it into right now money markets. But we also use ultrashore bonds and treasuries, and the reason being is these instruments will have no market volatility. Right, so if the market goes up thirty percent, down, thirty

percent left, right, doesn't matter. We're gonna be protected. And we're clipping right now about a five and a quarter percent coupon, so it's not like you're on the sideidelines and not getting paid to do so. You are

on the sidelines, but you're still collecting five and a quarter percent. And the reason why we decide to do two years is for when that next market correction happens, right, the market goes down ten or fifteen percent, you don't have to worry about selling out of stocks or bonds or alternatives at a low. You know that you're protected for at least two years to allow the

market to recover before you replenishing that bucket. So very important, as you know we're just right off of all time highs, these are great opportunities to make sure that you were filling up those buckets. Now let's talk about the

flip side of that. So if you're not taking distributions, but you actually have money to put into your account, you're thinking about investing at this point, and Ryan actually had a great slide and I believe it's two quarter webinars ago about the data that shows what it's like in investing at all time highs, and the data supports over the long run, you look at a three or five, a ten year outlook, investing at all time highs, you

have great market performance. But nonetheless there is the concerns, right that the humanistic concerns as an investor of putting you know, all your money in at

all time highs. So that leaves you know a strategy that you can implement in these types of situations, and it's called a dollar cost averaging strategy at dcea strategy and again let's use some simple math here, but the way that a DCA strategy at dollar costs average averaging strategy works is you take your money that you have to invest and you break it up into different tranches, different

pieces. So if we had ten thousand dollars, we'll keep it simple, would break up the ten thousand dollars into four different pieces, which is called four different tranches, so twenty five hundred dollars apiece. And your thought process here might be I'm going to get my first tranch, my first twenty five hundred dollars invested, right away, and then I'll have three more tranches left and I'll space those out in monthly increments. And what this helps do is

helps insulate the portfolio around market volatility that we may see. So in an example of this is if I got my first tranch invested right away, and I have three more left for the next three consecutive months, and all of a sudden, the market corrects fifteen percent. Even though I only I still have three months, you know, ahead of me and investing, I can accelerate those tranches right. I could start getting that money invested right during that

correction, taking advantage of market volatility. So just like portfolio management one oh one, when you think about diversification, you could also versify around how you invest your cash back into the portfolio, and let's talk about diversification, right, So a week like this week really brings it back to the forefront of your mind because the last you know, eighteen months or so, the versification wasn't really your friend. Right. It was a concentration in technology that really

got you the blockbust of returns that you're looking for. But then you get a week like this week where the Nasdaq's down three point sixty five percent and the Dow Jones Industrial averages up three quarters of percent, and it kind of wakes you up, and you say, oh, okay, yeah, I can't just own technology, right, I need to have other areas of the market that can help counterbalance around volatility. Right. It's that correlation, right.

You don't want a perfectly correlated portfolio because that means if the you know, wherever your tracking goes down, your whole portfolio is going to go down. But on the flip side of the if whatever your tracking goes up,

everything in your portfolio is going to come up. But I think at all time highs it makes sense to have a more diversified portfolio for these exact reasons, right, so technology goes down, you have other areas of the portfolio that are going to hold up very well or even you know, outperform. And again, it doesn't always need to be just having different areas of the

market invested in your portfolio. So it's not just saying, oh, we're going to have some value in here, or we're just gonna have dividend stocks, or we're going to have small caps or mid caps. There's also in this day and age derivative products that you could introduce into your portfolio. You know, we we've been using defined outcome products in our portfolio over the last

three years and they've done our clients tremendously well. And as a reminder of what these defined outcome products are is these are positions that give us direct exposure to the SMP five hundred, but cap the amount that we can make on the upside and buffer the amount we could lose on the downside. So specifically, one position that we have in our portfolio gives us direct exposure to the SMP five hundred and we get fifteen percent on the upside fifteen percent on downside.

So if the s and P five hundred goes up, fifteen percent, we're up fifteen percent. S and P five hundred goes up twenty percent. Remember we're capped at that fifteen percent. And on the downside, SMP five hundred goes down fifteen percent, we go down zero, SMP five hundred goes down, say twenty percent, we're only down five percent of that buffer. So great way to get market exposure on a much more risk controlled basis. And oh, by the way, the position I'm talking about is also double

leveraged on the upside, So what's that mean? So if the sm P five hundred is up seven point five percent on the year, we're actually going to be up fifteen percent because it's double leverage on the upside. So diversification

could come in all forms and sizes. But at the end of the day, again portfolio management one oh one, you need to introduce diversification in the portfolio, so on the equity side, but it could also be asset class sized, right, so introducing some bonds depending on where you are in your

investment cycle, some alternatives. Like I just talked about the defined outcomes, it's important, but you know the other area of the market that actually started to outperform, and I kind of want to bring it into this conversation on this was with small caps, because small caps for this year and even last year have really been dragging the overall market, and you know, there's been

a lot of opportunity there, but it really hasn't pan out. So ed, you know, I love a Ropeian to this conversation, hoping you could, you know, share some thoughts on how you're looking at small caps right now and what you're seeing in the market. Yeah, it's definitely been nice to see you know, a little bit of expansion in breath and see small caps catch up over the last week. From what I've seen, it looks like small caps at least this year have really been tied to you said,

funds, rate expectations and how many cuts the markets have priced in. So you know, over this last week where we got a little bit softer inflation data and we saw jobless claims take a pretty large jump up, that boded well for rate cut expectations. So right now markets are pricing in two cuts for twenty twenty four, another three cuts for twenty twenty five, and if you look at the charts just between the correlation on how these expectations for cuts

have changed relative to small caps. They do line up, especially this week as we saw the rate cut four September take a serious jump in probability. I think it's over ninety percent now. That is, you know, kind of the same day that we saw small caps rally over ten percent. Yeah, and this makes sense, right, especially when we look at you know, areas in the market like smaller mid caps, so small let's think small cab company, you know, anywhere from a billion ten billion dollar company.

What is the primary focus of what they want to achieve. Well, they want to be large cab companies. They want to grow and in a higher interest rate environment, for these small cab companies to grow, they're going to need the service step, right, They're going to have to go out borrow in order to grow, and that makes it really challenging. So ED brings up a great point. Small caps are highly correlated to what the FED expectations

are for ray cut. So if ray cuts are coming down, that means, like I was talking about earlier, for the consumer bar and costs are going to be lower. That's going to provide relief and really give an attractive outlook for small caps and consumer So you know, we do like small caps and midcaps, so I think the outlook looks strong. Now. Can the water still be a little bit choppy in the short term, Sure, but

remember it's important to think long term as an investor. And when you look at valuations right especially for small and mid caps, they're trading at a major discount compared to their averages. I don't know about you, but I like to buy things at a discount. I don't like to overpay. And one of the prime examples of this is going to be small midcaps right now. They're at a heavy, heavy discount. So that's been you know, kind

of the thesis around small caps. But a I've never really got the chance to catch up on Friday, but I did see some of the headlines about CrowdStrike, and I know you're talking a little bit earlier about I was hoping you could share share some of the you know, kind of big points about what happened on Friday with CrowdStrike. Yeah. So I'm sure many of our listeners were affected, you know. I know here at you know, Bouchet, we were affected. You know, all across the United States. Major

companies had issues through using some Microsoft products. But the underlying issue was a

crowd Strike, which is a software defense company. The shares sank more than eleven percent on Friday in response to news where they put out an update, but the update had an issue, so the cybersecurity firm CrowdStrike caused millions of machines running that Microsoft software to craft and major companies and institutions across almost every industry were affected, especially you know, one area was travel, I think over you know, three thousand slights were grounded on Friday and a lot of

companies and businesses had to shut down for the day. So it just kind of goes to show how reliant we are on these these major companies and even you know, the partnerships that they use. You know, it was CrowdStrike

who had the issue. They put out a bad update, but it was really because you know, they work with Microsoft, and Microsoft is so in tune with companies across the US. Yeah, and now it was certainly shocking and I truly feel horrible for everybody that was traveling on Friday, which includes one of our colleagues, Marty Shields. He was here, was traveling and saw the delays like everybody else did. But you know, it did effect

across America. Thankfully here at the Bouchet Financial Group. You know, Steve has been absolutely adamant over the last three decades of investing in technology, has certainly been a forefront leader in that. And whether it was you know,

in the morning, there's some slow startups of the computers and such. You know, we were able to get up and running within you know, the first hour of the workday, where I know many businesses were actually out for the count and you know, and Schwab also did a tremendous job of getting back to speed as far as trading and such. But it is nonetheless a scary thing that, you know, technology, especially when so many companies can can use the same technology, how much that can affect So, you know,

certainly played into the volatility trade of this week. Again, as Ed pointed out, crowd shrike down eleven percent certainly did not help the Nasdaq as that felt, you know, falls right into the technology sector. But you know, that is going to be kind of really the overall wrap up of what we saw so far in the markets this week, and then also what we've seen so far this year, and again we'd love to share some more

thoughts on portfolio management and what you're thinking in the portfolio. And again that number to call in is one eight hundred eight two five five nine four nine. Again that is one eight hundred eight two five five nine four nine. So on the second half of the show, folks, we're going to keep it more a little bit more investment styles. We really want to talk about

direct indexing. That a new style of investing that we've been implementing for our clients that you know, really helps to maximize the amount of tax efficiency you have in your portfolio and also the amount of customization. Again, it's been great for our clients and you know we're going to be going through that a

lot. So we're coming up at the half half of the show. Hopefully stick through in the break and 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. Hello, and thank you for sticking with us through the break. My name is Paula Lafietra, one of

the wealth advisors here at the Bouchet Financial Group. You are listening to Let's Talk Money on news radio WGY I do have a co host today, Edward Wilhelm, our portfolio analyst Ed. You know, I was just looking outside seeing how beautiful it is. Both Ed and I are in our Saratoga office very close to the racetrack. So I got to ask ed, do you have any plans this week and heading over to the track? Yeah, definitely, I think I'm going to head over there today, get over there and

watch some of the horses run. I gotta tell you, I don't think there is a better weather day to do so looking outside the window on the main street right now, and Saratoga is certainly busy. But folks, let's get back to the money here. You know, the first half of the show we talked about, you know, a market recap for the week and for the year. We gave some market uh you know, commentary around that, and then also some portfolio management tips and tools and what you should be

thinking about. But as always, we would love to hear from you. The number is one eight hundred eight two five five nine four nine. That is one eight hundred eight two five five nine four nine. So we're I wanted to take the show next and it's something that we've been putting a lot of research and effort into something we've been very excited about and actually started implementing

for our clients this year. And Ed has really been instrument mental on, you know, getting this up and running and surfacing this for our clients. And it's called direct indexing. And rather than me continue to explain it, I'm going to kind of pass the baton over to Ed and he's going to walk us through exactly what direct indexing is and all the capabilities of it and

what we've been doing for our clients. So Ed, Yeah, so direct indexing, you know, it's been around for a few years now, but it's really taken off just over the last two with all the advancements we've seen on the technology side of things, and you know, part of that is being enabled through the growth in AI. But direct indexing allows investors to create a personalized portfolio by directly owning the individual stocks rather than investing in a mutual

fund or an ETF. Right with the mutual funder. In ETF, you're buying the basket. You're buying a basket that holds, you know, a certain selection of stocks, whether it tracks an index or maybe it's just exposure to a sector or some dividend stocks, you're able to, you know, take the same blend of whatever you're looking for and own the individual stocks rather

than the basket as a whole. And then what did the program is able to do on top of it is it's it's going to take that portfolio of stocks and it's going to look at it every single day, and it's going

to look for any losses. It's it's able to harvest. So in finance on a broader scale, and typically you see this done at the end of the year, but in a taxable account, you know, institutions and firms like Bouchet will engage in a practice called tax loss harvesting, and that's where we're going to look for, you know, any losers in a portfolio. So something that's down on the year, we're going to sell it, realize those losses, and then use those losses to offset gains elsewhere in the portfolio.

So even in a taxable account, this lets you stay neutral from a capital gain perspective on the year while also repositioning your portfolio. You know, either tactically or a very common strategy is essentially to sell out of something, realize the loss and then buy a essentially a substitute security. Substitute security that's going to track the same You know, there's quite a lot of overhead when

you're doing that by hand. So what these programs are able to do is it's able to do that on a daily basis, So it's going to consistently look for losses to harvest and offset gains, and then it's always just going to be buying substitute securities. And as this practice you know, engages over time, what you're able to do is you're able to add something called tax

alpha onto your account by using those losses and offsetting those gains. The tax advantage you get when using a strategy like this can actually add in theory a little bit of return to the account. And then when you're using all of these individual stocks, you're able to be a little bit more specific than if you're just buying a broader basket, so you can, you know, maybe you have some ESG concerns and you don't want to invest in any tobacco stocks,

so you're able to directly screen those out. And then also, you know, like here at Bouchet, when we're looking to engage this for our clients we were able to give our company we've partnered with, a replica of our normal investment model, and they're able to take that same mix of all the different baskets of ETFs, recreate it using individual stocks, and then put

this tax SACE harvesting algorithm over top. So you're still able to achieve, you know, the investment management exposure while also engaging in a consistent tax SAICCE harvesting solutions. And it really just leads to a very tax advantaged account that that it does ed and you know, when you think about how powerful this software is, the possibilities of what you could achieve with the directed next in portfolios are endless, and it's done a great job of hitting all the main

points right. So the first thing that does is it tax actively tax loss harvests throughout the year. As Ed pointed out, daily it's going in and it's looking for any individual stocks that are at at a loss. Now, why is that so important? We'll say you held the mutual funder ETF that you know track the S and P five hundred, Well, the S and P five hundred is up, you know, fifteen sixteen percent on the year, so you wouldn't be able to tax loss harvest at any point with that

ETF. Now, the fact of the matter is within the S and P five there's five hundred companies. There have been losers throughout that year, but the overall index, specifically because of technology that is, push the index up, but there has been losers within the index. So the if you actually had direct indexing right, you're holding those five hundred stocks, you're actively selling those losses throughout the year. So while you're up fifteen and a half percent

on the year, you're also actively realizing losses. Having that set aside for either the offset of future capital gains like d pointed out, or just writing off three thousand dollars worth of losses on your tax return. You know. The other thing here is is the customization piece that comes with it. And talked about how it could fully mimic exactly how we get exposure within our traditional portfolios, and they do. We're actually an industry leader on one of our

exposures. So traditionally with the direct indexing, you know, you got exposure to the major indices such as the Nasdaq or the S and P five hundred, or you know, potentially Dow Jones or Russell two thousand for small caps, whatever the case may be. But one of our largest holdings is QQQ, the top one hundred weighted companies in the Nasdaq. Now, no other directed nexting platform had this capability, and we actually ended up building out that

exposure within our direct in nexting software. So now clients could get direct exposure to the top one hundred weighted companies in the Nasdaq. And then, as Ed also talked about, is just the customization piece. Right, So if you have ESG considerations, great, you could just say no tobacco, firearms, you know, gambling, whatever the case may be. You could also, you know, talk about for clients that have large concentrations of stock.

Maybe you work for GE and now you have a large position in GE and you don't want to sell it because of the capital gains. Right, I have two hundred and fifty thousand of GE stock, but if I sell it, I'm going to realize one hundred and fifty thousand dollars of gains, and that my my CPA said, I can't do that. I'm going to pay too much in taxes. What you would what direct indexing would allow us to do is put that GE stock within the portfolio and then start building around it

to provide diversification. And over time, as as some of those individual stocks that get built around GE come to a loss, we'd be selling it for a loss and then using those losses to offset the gains of the GE stock. So eventually it would provide diversification more closer to the overall market without having that large tax burden that you would get if you just straight up sold GE. And the other thing I could do is just again overweight underweight specific stocks.

You know, it's your owning action individual stocks, so it just creates a little bit more of a unique aspect compared to just holding on to overall

ETFs or mutual funds. So it's something we've been very excited about, you know, as Ed also pointed out, it's been around for you know a few years, but just really over the last couple of years, with all the advancements of technology, we've just seen direct indexing really get supercharged and really add the customization, that deep customization that we were looking for here at the firm. And that process for us to find this direct indexing software was over

a year. It was extensive, a lot of meetings, a lot of thorough research, a lot of you know, beta testing and such to make sure that when we made this product available to clients, it was going to be the absolute best. So again, you know, if it's something that you're interested in want to know more about, think that potentially you have a situation that warrants direct indexing, give us a call, whether it's on today's show or during you know, just regular office hours during the week. We

would love either myself or Ed to talk to you about it. You know. Again, it's something that we've been very, very excited about, you know. So the the other thing, you know, I wanted to talk about was just really we talked about portfolio management earlier in the show. You know, how to have the perfect you know, right proper diversification or are you doing the right things. Are you're raising cash at market highs? Are

you setting it aside, you're putting in cash like instruments. Do you have the right you know, allocation right, the right mixture between stocks and bonds and alternatives. You know, if you're you still have many years before retirement, it makes sense to be more aggressive in your portfolio. Have more stocks than bonds, or alternatives, and as you get closer to retirement and in retirement, traditionally it makes sense to start adding some bonds and alternatives into portfolio.

But age is just one of the demographics that should go into just overall portfolio management. Right, you shouldn't have an advisor that just simply tells you, hey, you are sixty five, you're getting ready for retirement. Okay, that means you're in a sixty forty portfolio, no other conversation about it.

That's just one piece of the question. Right, You're not fully defined about by what your age is. You also need to talk about what your risk tolerance is, right, so how comfortable you are with taking on a certain amount of risk or when I say risk, I mean equity exposure. And again that is certainly a very big piece in the equation. But personally, what I think is the largest piece of the equation when you think about

what the proper allocation should be for you, is your risk capacity. And what that means is how much risk you need to be taking on to fund whatever goals that you may have, either the pre retirement or during retirement. So for instance, you know, if you only had one hundred thousand dollars and you needed forty thousand dollars a year from that portfolio in the next few

years. That means you have a very high risk capacity. It means you need to be taking on a lot of stock exposure to try to get that portfolio to a point where it could sustain forty thousand dollars a year. And on the flip side, if you had one hundred thousand dollars portfolio and you only needed four thousand dollars a year from that portfolio, you have a low risk capacity. I mean, you don't need to be taking on a lot

of risk because your portfolio could already withstand those withdrawals. So I think it's really important when you're thinking about, Hey, what is the right allocation for me, especially a week like this week in the markets where we saw some volatility. If that's making you uncomfortable, go back to your allocation. Have these you know, ask yourself these questions, ask your advisor these questions, am I is this the right allocation for me from a risk tolerance standpoint?

But most specifically, can you take a look at my financial plan. Is my risk capacity supporting the amount of stock exposure or bond exposure I have in my portfolio. Need to be proactive about these things, right. We don't want to get in a situation like we saw in twenty twenty two the market pulls back twenty percent and then you start asking yourself these questions because you're going to allow the emotions to get into investing. That's where you start to say,

hey, you know, market's down. I think I had too much stock exposure. I should probably get out now before it goes down more. That's what we like to call capitulation. You don't want to do that that is going to hurt you in the long run. So while the markets are just near all time highs, these are the times to be proactive about these conversations. Start to think about, you know, what your outlook looks like for your portfolio. And again, this could be in these conversations going to

happen no matter where you are in your investment life. Right So even if you're in your young you know, thirties or forties, and you know you're just really hitting the main earning years right now, you know you still need to ask yourself these questions, do we have the right allocation? And again, on the flip side if you're getting closer retirement and that retirement even more

so as well. You want to have these conversations. So you know, going back to some market data, I kind of want to just finish up with some more specifics. I know we talked about it a little bit earlier the show, but you know, we are in the middle of Q two, so we're starting to get some you know, earnings data coming in and you know, I know ed you were looking at some data before we hopped on the show this morning. I was wondering if you could kind of give

us a quick recap of earning so far. Yeah, definitely. Overall, I'd say that earnings are off to a pretty positive start. So we've had about thirteen percent of the S and P five hundred report overall, that's about sixty four companies, so just kind of some of those those headline, larger

cap names. This week, we had American Express on Friday and they came out they beat earnings for share and revenue while raising its full year profit forecast on Friday, and they cited that it's wealthy customers persisted in splurging on travel, dining, and entertainment, So you know, sometimes these financial companies, especially their earnings are interesting to watch as well because it gives us a little

bit of insight outside of just the normal macroeconomic data. Gives us some insight to consumer spending and you know, the financial health and balance sheet of retail. So that was definitely interesting to see. And then also we had Netflix this week. They beat on earnings for shar and revenue. They're starting to continue to focus on their advertising side of their business, but they saw like a thirty percent jump in subscriber growth and we're raising forecasts for the rest of

the year as well. Then moving over to the chip side, so Taiwan Semiconductor TSMC, they reported this week they beat expectations, incited a continued strong demand for the chips. They're in the position right now where they are having a hard time keeping up with demand, and they had actually slid quite hard

this week, you know. I mean, there was selling across the broader indices, but that was really focused in large cap tech and especially those semiconductor stocks, but that was more due to some negative news on the political side.

Divided administration discussed the possibility the possibility of a tougher restrictions on the sales of chip technology to China, and then also at the same time, former President Donald Trump casted doubts on the US military support for Taiwan if China would attempt an invasion, So that, I mean, that was really kind of the key catalyst for the tech fell off, just a little bit of fear in the markets because at the same time we did see an extremely strong earning

support from Taiwan Semiconductor and their customers are in Nvidia and a lot of those other large tech companies, so that can kind of be almost the leading indicator in a sense, but those were kind of the major major headlines. Like I said, you know, thirteen percent of smp have reported overall, and of that thirteen percent, eighty percent have beat earnings. So you know, it's only the start of the earning season and it's mostly been those large cap

financial companies that have reported. It's made up a majority when we break it down by sector, but certainly off to a strong start. And you do like to see companies raising guidance as well. You know, markets do tend to be forward looking. That they certainly do. And you know, the other thing I wanted to highlight, you know, as we kind of wrap up the show and talking about you know, single stocks was Amazon. So traditionally in our portfolios we hold on to ETFs, but we will have single

stocks within our portfolio. And currently right now, Apple and Amazon or those two single stocks, you know, and both have done tremendously well this year. But last week, you know, we had something that was very important with Amazon, and that was Prime Day. I'm sure everybody's very familiar. I'll tell you my wife is very familiar with Prime Day. But they released exactly what amount of money was spent from the consumer side, and they said

online sales over that two day event hit fourteen point two billion dollars. That the eleven percent increase from last year. Amazon is a juggernaut, you know. Again on the online retail side, they do great. But that's not the only thing that impresses us and the reason why we put it into our

portfolios. The other side of the equation is AWS Amazon Web Services. The AI implications with AWS, we think are drastically understated, and I think also provides some nice diversification away from you know, the traditional AI that you think and that's what Ed was talking about that the video is the Piwon said, my conductors, you know, a m D advanced micro devices with those potentially

could be a little bit run up. So we want to think a little bit outside the box on how we could continue to get you know, some nice overweights to artificial intelligence, and Amazon has certainly been one of them. On the Apple side of things, you know, you know, at the start of the year, they didn't have much to say about AI. Tim Cook was you know, kind of going back to the drawing board and thinking

about how they can make their AI play. And you know, when you can't build the best AI, you go out and you get the best. And they partnered with open Ai, which is you know, most famously known as chat GBT, and we'll be implementing that into their next uh you know, iteration of iPhones and and that's really going to in our eyes, perpetuate

you know, iPhone sales and really bounce Apple continuously forward. And the market certainly agreed with that, right because in the first couple of months of the year, Apple was down dragging the overall index, something that you know, over the last ten fifteen years we certainly were not used to. Usually Apple is the foreth front leader and We think that a lot of that, you know, had to just do with not having any sort of AI play.

But once they came out at the World Developer Conference and said that they're going to be partnering with Chat GBT and using using that in their next iteration of iPhones, you know, Apple has been soaring since then, up over twenty five percent from the lows of this year. So those have ben are two

individual holdings within the portfolio. And you know, Steve has always said, you know, he's he's been in business for thirty four years and always have said that he'll never shy away from opportunities within the market, and sometimes that can mean single stocks and that will you know, anything that will help you know, our clients achieve the long term goals that we have for them. We won't hesitate to make sure that we could go out and pull the trigger.

You know. The other thing I want to point out is, you know, Steve has been acting as a fuduciary for thirty one years, certainly been an industry leaders though as a reminder of what a fuduciary is, that means it's an advisor or someone that always acts in your best interest. Right, So they don't sell products. We don't make commissions on any sort of

product trading or anything of that sort of nature. The way that we do businesses, we charge an asset under management fee and that helps eliminate any sort of conflicts of interest. And I think that's important as we wrap up today's show to think if you're looking for an advisor or currently work with an advisor, ask them if they are a fuduciary. There's spent so many times we've

had prospective clients come in and sign on and again. Ed and I are on the portfolio side and we see, you know, products that should not be in their portfolio. But folks, that is going to be the end of today's show. I appreciate everybody for listening. I hope you have a tremendous, tremendous rest of your weekend and 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 a great weekend.