Let's Talk Money

I was raised out of ceiling the swamps, Jersey some misty years ago. The mud and the beer. Good morning, folks, cham I hope you're doing well. I had Zach our producers start off with some Bruce there. It's been about a couple of weeks since I saw him at the MVP Arena, but if any of you were fortunate enough to see him there, I also know he played in Syracuse as well that week. It talk about a guy who's passionate for his craft and who at seventy four. He's seventy four

years old. If you saw him perform for three hours straight, you know it's only a hope that any of us can strive for that. At that age, we're still that passionate about something in life and that we have that amount of energy and well, folks, it's great to be here with you.

My name is Martin Shields. I'm the chief Wealth Advisor at Bruchet Financial Group, and as always I'm here to answer any questions you may have regard to your financial planning or investment management concerns, and I encourage you to call in with those quick questions. You can reach me at eight hundred eight two five five nine four nine. That's eight hundred eight two five five nine four nine. And as I always say, there's no dumb or silly question except

for the one you don't ask. And you may be doing your fellow listener favor by asking that question. Right. You know your your fellow listener may be more shy and doesn't want I'm on the phone, or whatever the case may be, and you're feeling comfortable doing it, So go ahead and ask that question, and you may not only help yourself out, but another listener.

So any questions you may have, as we always say, we're our client's personal CFO, So if it's finance related, we want to talk about it again, you can reach me at eight hundred eight two five five nine four nine. A lot to discuss today, both from an economic and investment perspective, along with some financial planning and tax topics that want to put out there to give you some insight on things you can be doing in your own situation. Hopefully you are going to be out enjoying this. We boy,

I think we're moving into spring right, it's kind of official. A lot of green out there, the flowers are coming up, and some warmer temperatures. I thought I heard we might be in the seventies this week, which is a really nice thing. As you know, if you've listened to the program, I'm all about embracing winter. It's great, But at the end of the day, I'm really more of a summer person. So when the heat comes in the warm weather, I'm in my element and it's great to

finally see it to be here. Of course, we've had a lot of rain, but as the saying goes, April showers bring May flowers, and we're right there in May. We're just about right there, folks. So it's about time to get out there and enjoy spring in the Capital region. But let's let's go ahead and chat a little bit about some of the headlines that we've seen from an economic perspective. So there is a little bit of a mixed bag this week with some of the economic data. You know,

you saw inflation come in a little stronger than not. The Personal Consumption Index the PC in the E and index, which is what the Federal Reserve is the primary index for inflation, came in a little sticky. It was at three point seven percent versus three point four and you know, I've said this all along. You know you're going to probably see inflation be a little sticky when when the economy is as strong as it is, you're going to see

a little bit a little sticky. Well, GDP still was up. It was up one point six percent, which is decent growth given what we've seen, but it was down from what we've seen in prior quarters. So that mixed bag made people a little nervous. But you know, in the end, it was a positive week for the markets. But we could see you that discussion. We're going to go to the phone mines Johnny there, Yeah, yeah, how you doing today? Oh? Not too bad? And

you I'm doing well? What can I help you with? I'm just wondering. I'm wondering about LLC and wondering whether or not if you have a property in Florida, because I know you guys do South Florida too, Yes, better LLC in Florida or in New York. If you're a New York resident, Well, where's where's the property? Are you operating out of Florida with this? The property it's in is in Florida, But I'm resident in New

York. Okay, Well, you know I listen. I like to give advice, but I don't want to get over my head here when we start talking about the legal or tax ratifications of where you open that, So I don't. I can't. I can't get the guidance on that because it's it's gonna be something I don't have expertise in. I think at the very minimum, you want to be opening established in the LC, right, So what I would suggest is talking to an attorney UH and or a uh CPA regarding

the tax and legal legal ramification as to where you open it. But certainly establishing the LC is the correct approach, right, so you know you want to put that into that LLC that that takes that risk of something happening on your property both you know, somebody getting hurt and or any financial situations and removes it from your own personal UH financial situation. So that is the right approach. But where you establish it, I don't want to provide advice to

you because I'll probably get it wrong. That one. I appreciate your candor on that, so yeah, that's that's great. Other than that, I mean, you said markets are doing pretty well now or no? Yeah? Yeah, so yeah, that's right. You know, we had some mixed economic data. Uh, but you know markets are up for the week and we're all for highs for the year. But you know, we started after a great year last year and certainly a pretty strong start at you know,

one point the sp was up ten percent for the year. Now we're up. You know, we're not quite back up there, but you got to get had these some of these pullbacks within a year. And you know, in general, you look at the economic data, things are strong and I don't know what you see out there, but you know, every small business owner and or executive I talk with, you know, their biggest challenge continues to be not be able to find enough good qualified labor. Uh. That's

that's the challenge. Certainly the case sir, Wow, I can't take your time on a Sunday morning, you got it anytime you have any questions, so I couldn't help you out. But there's in particularly in regards to your question, there's probably somebody better else that could answer that for you. So well give me good advice. So that's that's that's all good there, Okay. Where you enjoy your day, John, Yeah, great question from John. The one thing I always tell my younger colleagues. And I'll say it

right here. If you don't know the answer, don't don't wing it just to say, you know, I don't know the answer I'll get I'll get back to you and or you know, maybe there's somebody else better to talk with. And I think that's probably the case for John's question. But to his overall thought of having the l S absolutely the way to go right.

You want to protect yourself. You want to protect your financial situation. You know, any business you have in particularly is it relates to real estate, Establishing that LLC is the proper course of action to make sure it's handled that way. So hopefully John gets his answer. Let's let's go back to some of the economic data. So I talked to you about how GDP growth was up, but it was up at one point six percent, so below what we were seeing in previous quarters. But you know a couple things. One

is there are a number of moving pieces behind that GDP growth. You know, in this case, it really was some element of inventories being drawn down that impacted it. And you know, you're certainly going to have variations within a quarter or over year on what the GDP growth is, and we've had some really strong prints. I mean, boy up the three percent plus range.

And if you remember, for almost a decade plus we here we had what was called the new normal, which was GDP growth at two point five percent, which was all things considered, below what we had seen for you know, let's say the nineties or even the eighties. But you know, I'm not too concerned about that lower GDP print, And you know, with the inflation coming a little bit stronger, as I mentioned, I just don't think you can have a strong economy like we have with inflation already in place

and unemployment as low as it is without inflation be a little sticky. And I don't think you know, this is a little bit of the Goldilocks environment, right, which is you know what this may you know drive is the Federal Reserve not to be able to cut interest rates. Right. So when they started the year, the estimate was that the Federal Reserve would cut rates anywhere from three to six times a year. And I always said, if the Federal Reserve is cutting interest rates six times a year, that is not

a good thing. There is no way that J. Paul was going to be cutting interest rates six times with a robust economy and inflation at any level, I mean, it just does not make sense. So I think the market was certainly way too optimistic in that regard. But as I've said before, which is you can't have historically speaking, interest rates remain flat, which is what they've been over the last six months. They haven't gotten up or down. As far as the federal reserves interest rates, right, that's the

federal front rate, which they control. It's remained at around five point three percent, and that if that stays constant historically speaking, that could be very

good for the markets. And I always say, you know, if you make a different references historically, really what you could be looking at is some time period of the mid nineties where you had a very strong economy, you had something like AI artificial intelligence that we're seeing now get put into place, and back then it was changed as in telecom and the internet being introduced in the mid nineties, and that really was a very strong economy, and you

know, markets continue to go up. But now, the only difference between that time period and now. In that time period, we were really in the process of outsourcing. I mean, everything we were doing was about shipping manufacturing overseas, which you could argue was or was not a good thing for the US economy long long term. The other thing was underplayment was not as low as it is now, so it was probably more in the mid five percent range versus now we're in the low threes, right, sorry, the

mid to high threes and unemployment. But there's a lot of similarities between the two timeframes. And I'm of the mindset that, you know, along as we can keep interest rates flat and not be necessarily increasing them, we're talking about getting the Federal reserve, then I don't necessarily think we need to have interest rate cuts. And you look historically in general, when the Fed is cutting rates, that can be stimulus for the markets, but it also can

be indicative of a weak economy. And so personally, I'd rather have a goldilocks environment where you know, you have strong economic growth, you have inflation stays in them within a range, and then the Federal Reserve with the Federal funds, rates keeps constant and this can be a good thing for the markets and the me You know, the other thing, too is when you look at some of the other data that came out household spending increased by point zero

eight percent for the year. I'm sorry for the month, so that that was a good thing. I mean again, consumer spending is very strong, and you know with our with my job, with our firm, we're in constant pulse at least of the caliber region, but now more and more of our clients come from around the country. We have clients in over thirty five states, and you know, we hear what's going on in their lives and with their businesses and in general it's it's very strong. So you see consumer

spending being very strong. Also, personal income rose for the month as well. It rose by zero point five percent versus the estimate of point three percent. So you know, again I kind of like this cold goldilocks environment where

you have some areas that can be a little bit challenging. Right, So we're not it's not all great stuff, but you have enough good stuff that we can continue moving forward with both the economy and the Fed not potentially having a raise rates, but the market moving higher and we're seeing that even in

earnings as well. Right, So this year, last year it was a situation where I think there was a realization that we're not going to go into recession, and that you know, pretty much many equity positions were moving higher this year. It's really a function of what are the earnings going to look like? Right, So if you can't come out and show good cash flow, show good earnings, your stock is going to get really take a hit. And if you look at some of the big names, you know you

had two stocks that didn't come out with great earnings. Now one of them went up, that was Tesla, but the other one was Meta, which is Facebook. They their earnings were not great. Now you know, there's this big debate is Tesla a car company or is it a technology company? And I think you know what kind of got the market excited after Tesla earnings was not their numbers. The financials were not good. You know, their sales are down, their prices are they keep having to reduce the prices because

of competition from China. But what is what they got everybody excited is this idea of a Thomas driving and a Timis driving taxis and everything that Elon Musk is making a big push into. I like the idea. I think certainly with Elon Musk, you'd never know. I mean, right, this guy is brilliant you s don't know what he's going to do, good or bad. And I think if you had to pick somebody who they could make that happen, I think it could be Elon Musk. But I think what's important

to realize we're talking probably five or ten years down the road. This is not around the corner, and you know, it's not the norm for him to put something out there that you know, kind of acts like it's maybe going to happen soon, but it's not right. I mean, there's just no way we're going to have a Thomas driving cars and taxis everywhere anytime soon. Between the regulation that's going to be in place to put that in place, and just purely the technology for it to be safe, we're really talking

about five or ten years. It will happen. I have no doubts about that, and I do feel like Tesla could be one of the primary drivers behind it. But this isn't happening tomorrow, folks. But then again, you look at some of the other big tech companies that came out, you

know, Alphabet and Microsoft crushed it. It's just amazing with these companies how they're able to even given their sizes, right, they're just huge behemoth of companies, but they're able to continue to increase revenue and profitability, and it just shows the pricing power they have. You know, there's been taught that Google or Alphabetic which is the parent company, you know, may not be able to continue to be as successful with AI coming out and different search engines,

but that's not the case right now. You know, it was shown that they're they have pricing power when it comes to advertising on Google website and they're going to be able to continue to increase profitability with that. And Microsoft the same thing. I have a good friend, it's an executive at GitHub, which is part of Microsoft now, and he did say that every part of their company, GitHub and all the other elements of Microsoft is employing AI

to be successful and increase revenue and profitability. So really it's amazing what they've done. And Microsoft is really one of those unique companies where you look at it and it was one of the largest companies in the nineties and it's one of the largest companies now. And that's not easy to do. Historically speaking, companies that become one of the largest companies in the US, they tend to fall off and it doesn't mean, they go to zero, but they

tend not to be one of the largest companies. A good example that is Excellent Mobile. Certainly in the seventies or eighties, it was one of the top five companies in the USA. It's not now, but it's still obviously doing well. But Microsoft has found a way to come back and be successful. And you know, it really has just employed this idea of finding areas where it can grow. And it's obviously moved quite far from where it was on just being the operating software, you know, for the for the PC.

It's moved quite a bit from that, and it's still in that space, but that evolution they've been able to put in place is impressive. So even from corporate earnings, you're seeing this kind of this mixed bag of news, and you know, certainly for the market to continue to move higher, you're going to have to see, uh, you know, really a lot

of strength in earnings. But you know, I'm of the mindset that you probably I don't think you're going to see any rate cuts this year, uh, you know, and probably if you do, uh, it may not be a good thing to this to the extent that I think you're going to see inflation be kind of sticky. So you know, I'm I'm positive that we can we should be able to continue to see a reasonable economic growth and

inflation remain in the range. Now, the one thing that you do see out there is interest rates rising quite dramatically, right, And so again I want to highlight the difference between the Federal Reserve changing the Federal funds rate, which is a very short term rate. Right, they control that, but the Federal Reserve does not control the overall interest rate that exists in the market.

Right. The market itself says those rates and rates for the year have gone up because you know, as the market has looked out over the next six to twelve months, it's this realization that hey, you know, short term rates controlled by the Fed are not going to be dropping. So in general, the market has needed to adjust and rates have gone back up. You have the two year US Treasury rate, which is one of the benchmarks to utilize that it hit above five percent, and the ten year moved up

to about four point seven percent. So you really have seen a dramatic increase in the markets rates that exist out there. And what does that mean, Well, that what that means in particular is if you're looking to borrow, whether you're a business or whether you're a consumer, whether it's credit cards or personal loans or loans for colleges, mortgage loans, they've gone up, right, they have gone up, and you know that does impact spending over the

long term. But I'm of the mindset that you're gonna this is a little bit more than new normal, right. I mean, where these rates are right now is not a ridiculously high level. This is kind of where rates probably should be. You know, historically speaking, cash has earned around three to four percent annually. We might be a little bit above that now, but you know, to have cash at least be an investment vehicle that if you put it in a CD you can earn some element of an interest rate

that can be valuable. That is really where you think about. It's kind of a healthy economy where we were before, which was with interest rates well below you know, their historical norms. I mean, when you have a mortgage at a thirty year mortgage at two point seventy five percent, that is way too low. That that money is just way too cheap. And you know, because it starts to distort, distort, decisions, And I'll give

you an example of that. You know, when we give people guidance on paying off debt, we'll talk to them about, you know, what is

their mindset with debt, and we'll look at the numbers for them. Well, when you have a mortgage at two point seventy five percent, relatively speaking, I'm not talking about what your mindset is on debt, but from a numbers perspective, you should never be paying that debt off right because your decision hurdle is simply, can you earn more on a diversified portfolio over time and in this case, let's make it a conservative portfolio over time time versus your

mortgage at two point seventy five percent. And you know the fact of matter is, if you have that mortgage at two point seventy five percent, you can go out right now and buy a ten year yours treasury with no risk, zero risk, and you're going to get four point seven percent. So why would you ever take cash and pay off that mortgage when you can simply go and take that cash and buy a ten year years treasury and get an additional, uh, you know, two percent in interest versus paying that mortgage

off that's the way to view this. So you know, I do think that where we stand now is a level of interest rates that more or less the economy can function. I mean, you're seeing it right now, right you know, there's nothing about the real estate market that is really declining.

You're not seeing any major issues when it comes to lending for businesses. So again, I don't want to say if rates go higher or won't be a problem, because it could be if you get mortgage rates up in the eight percent range, But if they can remain in the six or seven percent range, I do feel like the economy in the current environment can be successful with

that, and that's important. Well, folks, I want to move on to a few other planning items, but again, if you have any questions, you can give me a call at eight hundred eight two five five nine four nine. Now, one of the things I want to talk about are inherited irays. So if you if you're a spouse and you get an inherited IRA, you can keep that IRA either in your spouse's name who passed,

or in your name. You have that option. But if you're a non spouse and you receive an inherited IRA, you have to take those distributions within ten years. Right, that's the that's the new rule that was about four years old. But I want to put out there that for irays that were in rm D status, meaning that the beneficiary had it in rm D, you had to take that out every year over that ten year period. That rule has been delayed again. This is the third time that the IRS has

delayed that. So it's just important that if you have your non spouse, you have an inherited IRA that was in R and D status, that you do not need to take that out every year over ten years. Now you do need to take it out within ten years, but you can delay as long as you want, and of course with ROSS you can do that as well. Well, folks, we're gonna go a commercial break, but come

back and join us. You're listening to Let's Talk Money, brought to you by Bouchet Finance Group, where we help our clients take care of their health while we manage their wealth for life. Come back and join us, folks. Welcome back, folks. So there's just who are just joining us. My name is Martin Shields. I'm the chief well devisor and if you heard me in the beginning show, we're doing a little bruce to get things going. I know it was a couple of weeks ago that he was here,

but haven't been on since then. And still you go to a concert like that and you just continue to listen to that music for a little bit, just because it was such a great show and really inspirational. It's kind of almost like a spiritual kind of event, right, and it just was was

phenomenal. So it's great to start the show with that. But it's great to be here with you on this Sunday morning to answer any questions you may have regarding your financial planning or investment management concerns, and I encourage you to call in with those questions. You can reach me at eight hundred eight two

five five nine four nine. Again it's eight hundred eight two five five nine fortnite, So any questions you may have, I'm here to answer those questions for you before we jump into a lot of discussion on the financial planning and investments. Just want to highlight a great announcement this week. Graphite Range Community Forest had its ribbon cutting this week and it actually was opened last fall.

This was the official ribbon cutting that occurred. It's in Saratoga County on Maple Road, just up above from the middle School, and this is one of the first community forests that's been established within Saratoga County. It was a great partnership. There was a family by the name of the Winter Family that was really instrumental in getting this going, and then Saratoga Plan which is a great organization within Saratoga and then the county, and then a group of individuals called

the Founders put this all together. That it's a great parcel of land for hiking and for this amazing mountain biking trails. You can go there in the winter, do crosswindy skiing, and it just it shows you what if a group of people get together with great vision and perseverance, what can happen. And to have this new gem that's available for anybody to go to and certainly

for the residents of this area, it's fantastic. So congratulations to everybody that put together and worked so hard to get the Graphite Range Community Forest up and running it. Please, if it get an opportunity to go check it out, I would encourage you to do that. We're going to go to the phone lines. Is it Stephan, I'm not even gonna try to. You got to tell me how do you pronounce your town there? You know, I'm a little surprised, Marty. I would think that you could remember where

the ground cloud comes from. I thought you needed a little you know, some good news today that spring is coming in about six more weeks. We thought it was here a little while ago, but as you said, it's going to be in the seventies today. It's it's Stevie Bae Marty. Hi, Stephen, are you in Plexaitani? No, I'm actually in Manhattan. I took my wipe away for a little bit. We had a nice, nice weekend and we're enjoying it. But I'm sitting here and I said this

suit. You know, I don't feel right waking up and not putting the headphones on. So I thought i'd give you a call and say hi. Well. As always, Steve, it's good to catch up with you, whether it be during the week or on the weekend. So I'm glad you called in. Oh yeah, yeah, yeah, So how about you know, the first caller said, how about the markets? How about these markets?

Just when you thought things were going to hell in a handbasket, all of a sudden Friday, we had a day out of nowhere with as you already said, Microsoft and Alphabet. Not all the Magnificent seven are doing well. But you know, Marty, as you and I talk often in the office, I am so optimistic about the future direction of this market. As most listeners know, I get one guarantee that investors will lose money. I can't promise in them which day, which week, which month, or sometimes

which year they will lose money. And I can't make this guarantee, but I'm pretty confident, and you already touched on it, that the next move for the FED will be down, and I agree with you. I'm not sure how soon that move will be, but I'm pretty sure the interest rate heights are behind us. And once again we don't know, we don't have a crystal ball, but I'm pretty confident about that. And that's all good

news for the stock market. And when investors do a gut check and they think about their emotions, when we get a few days of volatility, they just have to like forget about it and you know, make sure that they have a well diversified portfolio and let that volatility rid itself out. What's my favorite slide party for the state of the economy every year, Well you have three, but they're all about what it means to be what what it means to be a good long term investor? Right, you know, there's going

to be intra year volatility. You can be down fourteen percent on average, right, fourteen percent absolutely over the last forty four years, year in, year out on average fourteen percent. So you know, I think, what were we at the hind mark we finished the first quarter? I think up if weget twelve percent, yeah, ten and a half, ten and a half of the and a half percent, and now we're up about seven percent. Yeah, I mean, and we're up twenty two percent over the last

fifty two weeks. That's that's pretty good. And you know, before before I let you go back to the callers, you know the other thing, we got another bite at the apple with bombs. Who would ever think that bombs would have the roller coaster arrived. Investors thought stocks were volatile. If they ever checked their share price of their bomb mutual fund or ETF every day, they would find that was a volatile movement over the last few years as

well. But right now we got another byte at the apple with interest rates up a little bit because inflation is a little hotter than expected, as you pointed out, and because you know, we're not sure when when they'll cut rates, and you know, there's there's there's something. You know, Ryan runs all of our money now, and he's been buying bonds for those clients

where the accounts are large enough where we can buy individual bonds. Forget it and set it, you know, load up on some of these you know, one, three, five, seven, ten year treasuries, laddered out that portfolio, put it in in your your mix of investments for those that are doing it themselves, and forget about it. We get that movie. Zach knows the movie movie what movie? On my thinking fact, he pulls

it up for me every once in a while. A favorite line. Forget about it anyway, Hey Marty, if anybody wants to call in with some great questions, the phone lines are open. One eight hundred talk w g Y. One eight hundred eighty two five five nine four nine. Marty, thanks for letting me steal your thunder for a little bit. One eight hundred eighty two five five nine four nine people, Marty's one of my closest confidantes. He's good. Give him up a call. Hey, Marty, listen,

they have a great day to say hi to the family. I'll talk to you tomorrow. You got it. Steve Always good hearing from you, all right, that's great? Uh with Hell, I'm looking at it. Yes, Stefano, So Steve jokingly, you know goes by Stefano and uh so it's great to hear from him. And always a wealth of knowledge and uh inspiration, expertise. And you know, I've been working with Steve now for coming on twelve years, and you know I came from other wealth managers

down in Virginia. And you know, the one thing I'll say about Steve great leadership. With our firm. We're actually always constantly reviewing how we do things, and we're working with some consultants on trying to just look at our processes, how do we improve them, how do we be better? And we're reading Jim Collins any business folks out there. Jim Collins is a very

well known business writer. He wrote Built to Last and Good to Great, And you know Steve is one of those individuals that you know, our firms starting to celebrate our thirty fifth year, and you know, he's done an amazing job at building this organization that is Bouchet Finance Group. I had we had somebody talk to us about the Bouchet wave away. So it's the Bouchet

way of doing things. And there was another business that mentioned this to us, And you know, it doesn't happen by chance, right, and it's Steve. And there's certainly Ryan John and I have helped Steve do this, but Steve establishing these ideas and ways of doing things that are just really valuable for our clients and have been very instrumental in allowing us to grow the firm and take care of our clients. And you know that's that's just important.

But the other thing was Steve is that he has a great view of the market. Right. It's always very positive, which is what you need to be. You cannot be invested in the stock market if you're going to be a debbie downer all the time. There's just always something to be concerned about.

And Steve mentioned in his three was he mentioned his top slide which talks about intry year volatility, but the other two slides that he talks about in our state of the economy, is if you look at over the last certainly ten years, but even the last one hundred plus years, there is always a situation, a headline out there that can make you say, I don't want to be invested, this is too concerning, and if you do that,

you're going to miss out. And it goes to what I've said, which is you've got to have an element of being an optimist that you know what, I don't know what tomorrow will bring. We may have some challenges, we will have bear markets, we could even have a recession. But from an economic perspective, to quote Warren Buffett, don't bet against the US

economy. You're going to lose that bet. And you know, that's a mentality that Steve helps instill across all of our advisors, which is, you know, we may have some challenging times, but you know, you want to grow your portfolio. You want to be invested into stocks. And the other the third slide that we utilize is that over the long term, over the short term, stocks can be volatile. And although he was talking about you know, you know the last couple of years, bonds are volatile.

You know, year to date bonds are down could be three or four percent, So bonds can be volatile as well, but over the long run, certainly five ten plus years, stocks are a lot less risky than bonds are. Actually, if you look at the overall performance and you've got to have that right mindset, you can't get caught up in the short term. You have to understand what each of your asset classes do in a portfolio. So for our clients, you know, we have an allocation to equities, it

is only in US equities. We haven't been in international equities in four years, and we've been underweight for about eight years, and we have an allocation to bonds and they still play a role. Bonds are important for many of

our clients for what's called capital preservation and income. We could have an allocation to a cash or cash substitute, and that's also important to the extent that you know, if you're taking distributions from a portfolio, if you need that cash within the next couple of years, you need to have something that is

really not going to move at all. And that's how we have a conservative fund that we utilize that it gets a pretty good yield of four plus percent, but it doesn't have the volatility that bonds do even now, right, So that asset class, that fund that we utilize is a steady Eddy fund. It doesn't move much one way or the other. Where As we talked about, bonds can go up and down and you have to appreciate that. And then also alternatives, so you know, we use it alternative investments in

our portfolios. There are a hybrid between stocks and bonds as far as risk and return. And you know, each of these years that we've been in there are very unique in some respects as far as some of the swings we've seen in stocks and bonds, both up and down. The alternatives have kind of been the steady eddy as well. You know, they've been down a little bit when the markets, both the bond and stock markets were down in twenty twenty two, but not nearly as much as stocks are bonds. And

last year when when stocks were up, they were up as well. They were up anywhere from high single digits to mid to low teens, but not up as much as stocks. But that is a nice asset class that we have in our client's portfolios that reduces the volatility and adds to the overall performance. So you know, having that in the portfolio and understanding these asset classes and all how they come to play is very valuable. So yeah, skis three slides. We talk about it every year. He's every year we put

him out there and and again we talk about this. The importance of having an educated investor as our client. That is to us an extremely important thing. If if our clients are educated what it means to be a good long term investor, they're going to be successful and they're going to let us do

our job to manage the portfolio. And as Steve mentioned, our colleague Ryan Bouschet is our chief investment officer and as he mentioned, runs our money handles, our portfolio management a along with our investment management team of five other four of the colleagues. And you know it does a great job. I mean, Ryan is just just does an awesome job. He gets a lot of communication out to our clients as to what's going on with the markets and the

portfolio. What do they need to be aware of, because you know, you get caught up in any of the headlines, it's easy to get in a downward spiral. Uh. You know, we always joke that we'll have our our tech company come over there, and disconnect our client's TV from the news segment if they're watching too much news or look looking at their portfolio values too much, because it's just easy, it's human nature to kind of get

caught up in some of the negative elements. And as we always say, you know, the news is out there selling bad news, right, that's what sells, and so it's you really don't want to watch that too often. It's just you with twenty four hours news cycles. You know, they really have got to sell a lot of bad news, and it's easy to kind of get your mental perspective kind of not in a good spot. But

let's continue to talk about some of the items. Let's just a little bit go back from a plan find planning perspective, just highlight some things for you. But if you have any questions, you can reach me at eight hundred eight two five five nine four nine. Again that's eight hundred eight two five

five nine four nine. So I mentioned this idea with the inherited I rays that if you're a non sense spallase and you have an inherent di array that you received in the last ten year, sorry since twenty nineteen, do you have to have that distributed by year ten of receiving that and that the IRS put into place rules It said that if it was an IRA where the owner was in R and D status meaning they were taking their R and ds out, that you needed to take out money every year over that ten year period.

But to make it more confusing, the IRS keeps delaying that it's been this is the third year they delay that requirement. So all that means is you do not need to take out any money in the any given year.

You can wait to year ten. But with that said, if it's a traditional IRA, you are really better off taking somebody out every year rather than waiting to year ten, because the problem is if you wait, Yes, the upside is that you get to delay that income, but you may really put yourself with a big tax bill depending on what the eyes of that inherited

diarray is if you wait to year ten. Now, of course it's different with a WRATH because you don't have to take there is no requirement to take that money out, and by delaying, because there's no taxes, you really want to wait to year ten. That is certainly the best way to do that. But again that rule has changed once again with the IRIS not requiring you to take out distributions from an inherited diarray if you're a non spouse.

The other thing I want to highlight is just real quickly, some questions that we get in regards to Medicaid planning for longed with long term care. So two items with this, the questions we've gotten. If you have long term care insurance and it's a New York State partnership plan, and unfortunately the New York State Partnership plans do not exist anymore. But if you have one of those, hold on to it because it's kind of like this golden ticket.

And all that means is you have LAUNCHERM care insurance that's going to cover your assistant care if you need it, and that if you use the full benefit. So let's say the benefit is for three years and up to three hundred thousand dollars. If you and or your spouse go through that full benefit amount, if you have a New York State partnership plan, you will automatically get switched over to Medicaid at that point and Medicaid will pay for your care.

And the thing that's important is your assets will be protected. Right. So it's just an incredibly important thing to know, and that's why I say that's a really valuable option with these plans, so that you're really protected your assets very well with this. But again, new York State Partnership plans, you cannot buy those now. But the thing that with the New York State Partnership Plan, as I described there, that is, if you're in New York

State receiving assisted care. If you're in another state receiving assistic care and you have a New York State Partnership plan, that idea of not having to spend down assets does not apply. There are some rules to it that work in your favorite but in general you have to be in New York State for this

to apply. So that's a very important caveat to that. The other thing is just a reminder that you know if you're looking at a qualifying from Medicaid that if you have an IRA, that the state will expect you to take some sort of income off of that, but they will not expect you to spend it down. So for example, let's say have a million dollar IRA, they will assume a certain spend down ray annually, but they will not

expect you to spend it down to zero. But here's the difference. If you have a wroth IRA, they will expect you to spend that down to zero. Right, that is not protected the way a traditional IRA is expect is protected. So that that is a very important nuance as you're if you're gonna go down the route of doing medicaid planning between those two types of rays, and you just got to be aware of that when you're doing planning. And unlike let's say a taxable account, you cannot put a raw iray into

a trust and remove it from your estate. Right so, if you have taxable assets, whether it be a house or property or investments, you can move those outside your state protect them for medicaid planning. But with a raw you cannot do that. The state will expect you to spend that down and it's not protected like a traditional iray. So that's very important to know.

But let's move on to talking a little bit more about portfolios. Again, we talked about as Steve mentioned that right now, we did this last year when the ten year US treasury hit five percent, we went out and bought individual bonds for many of our clients. And it's very difficult to get this

timing right. You know to the extent that we might be buying them a little bit early or a little bit late, but we did in some case is by the ten years treasury right when it hit five percent, So you think about that in some of these cases, again it could be off just a little bit, but we're buying that ten year bond and locking in somewhere between high fours to five percent for our clients. And that's great. I mean, you're talking about a risk free investment that you can get high fours

to five percent, and that's the case right now. So the ten year years treasury is at four point seven percent. So as Steve mentioned, if you can build out a bond ladder of a three year, a five year, seven year, ten year US Treasury, you're going to lock that in. And so this is a great time to be doing that. You know, we may see the ten years treasury hit five percent, we may not, who knows, but it's not a bad time to be doing that.

And that's something that we are doing for our clients. And I do want to make this it's important to know the difference between if you have either a bond fund or you have individual bonds versus a money market or CD. Right, So with the money market CD, there's gonna be no fluctuations in that price. It is static. So you know you can get a five to five and quarter percent rate on those and you're not going to have any movement

either up or down in the price of that security. So that's really nice. But the thing you have to appreciate what you do have with those is what's called a reinvestment risk, which is, as Steve mentioned, the likelihood at some point the rates are going to go down. It's probably pretty good. And when that happens, when you're if you have a money market fund,

it's going to adjust almost immediately or very quickly. And if you have a CD, when you go to reinvest it, it's going to be at a lower rate, whereas if you have a diversified bond fund or individual bonds, yes, your prices may be down year to date, right, so you may see the value of those securities down unlike you unlike a CD or

a money mark fund. But the thing to remember is now you've locked into those long term rates for three, five, seven years, where with a money market fund or a CD in many cases you're you're not locked in except for the next six months or nine months or a year. So you know, you have this issue that if rates do go down, you're not going to continue to get these that great interest rate which you will get if you lock it in with an individual bond or a bond fund. So it is

important to remember that. And also, as we've talked about, you know, our use of alternatives, it has been a happy medium between that stocks and bonds, right. It has allowed our clients to really get good downside protection with a number of the alternatives we use and also get positive returns either through income and through appreciation on that. So just important that you know these days it's looking at all those asset classes that can be important to you know,

how you how you manage your portfolio. All these things come into place, and you know, for for our perspective, you know, that's where we add a tremendous amount of value. In an initial client meeting, you know, they have the perspective client say back to us that you know, our firm is about removing the emotion and stress from managing a portfolio. And

that's that's really valuable, folks. That's that's where you know, it takes just a lot of pressure off of an individual as they get older and it makes things easier. Well, folks, it's been a great hour here as always. Love being here with you do give you some perspective of what you need to do in your financial life. I hope you're benefited by it. You're listening to Let's Talk Money, brought to you by a bouchet financial group.

Well, we help our clients take care of their health while we manage their wealth for life. Folks, make sure you take care of yourself, take care of each other, and get out there and enjoy this gorgeous day.