Let's Talk Money

a call. Zach Harris, my long term producer, and I are sitting here, ready, willing and able to talk with you. Our phone lines are open. The number is one eight hundred talk w g Y one eight hundred eighty two five five nine four nine. So, Zach, this is my first time in twenty twenty five. I was off last weekend, so some some nice anniversaries to celebrate with you. Zach. Absolutely, Happy new year, Steve, Happy new year to you. And on January second, we started our thirty fifth year in business,

which is pretty pretty remarkable. I'm very proud of that to build this firm into what it is today and have it be the just premiere talk show that we have. I'm also celebrating thirty years Zach that I've been doing this show on radio with you know, the listening audience. And as I say so often, I never get tired doing the show. I love doing the show. I love helping the listening audience out some way, somehow. That's my goal, is to be able to help people out, get them

pointed in the right direction. So thirty five years in business and thirty years on radio, that's a long time. That's a lot of weekends, folks. So once again, thank you for tuning in. One eight hundred eight, two, five fifty nine, forty nine. Those are our numbers today. Give me a call with any questions that you have. So we had a pretty remarkable twenty twenty four. You know, sometimes you get tongue tied trying to say twenty twenty five.

It just doesn't seem possible that we're in twenty twenty five. But investors, last year, you know, it was a it was kind of a crazy year. You had the political election, the presidential election, we had inflation, we had geopolitical conflict, and the indexes they had big gains, the Dow up thirteen percent, SMP up twenty three percent, NASDA composite up twenty nine percent. Those are pretty good gains, folks. That's two years in a row where we had twenty five

percent returns for the SMP five hundred indecks. As you know, I don't really talk a lot about the Dow because really there's only thirty stocks in that and how can the Dow be up only thirteen percent the SMP with five hundred stocks be up twenty three percent. The SMP is really the benchmark you want to look at. Unfortunately, the Dow Jones Industrial Average is the most popular index. It gets the most airtime, most press, and a lot

of people like to refer to the DOW. But I just look at it as a you know, basically, it's celebratory in a way. It's an old index that's been around. But you really want to look at the SMP if you're comparing your returns, if you're sitting down with your advisor, don't let your advisor sit down with you and show you a fifteen percent return last year and how it beat the Dow, which was up thirteen percent. Let the advisor show you that fifteen percent return up against the

SMP being up twenty three percent. That's really what you want to look at. So the SMP is really the benchmarket. I always I always talk about NANSDAC because our clients own as much NANSDAC as they do the SMP, and I love the NANSDACK. It's a great index. I call it our growth slash technology part of the portfolio. It's one of our core holdings. And until the day I die or they drag me out of working because I'm mentally incompetent, we will always have as much NANSDAC as

we do the broad Stock Market Index. That's how I feel about it, at least that's how I feel about it sitting here today. Artificial intelligence that's what fuel tech stocks. Last year. You have you know, listen to Magnificent seven, Apple, Navidia, Microsoft Alphabet which is Google, Amazon, metaw which is Facebook,

and Tesla. These stocks made up about fifty seven percent of the sm P five hundreds market cap gain this year according to the Doald Jones Market Day, and as a group, the stocks grew about sixty five percent and it was a little below twenty twenty three the mags seven and twenty twenty three sor at one hundred and eleven percent making up sixty five percent of the S and p's market cap game, but it's still pretty remarkable

that seven stocks is really what's driving the market. You know, you had some winners last year, Planetary Technologies, Vistra, and Navidia. They were the top, and then the dogs following Intel, Nike, Walgreens, Walgreens, Boots Alliance, I guess is what they call themselves now. So if you own those stocks, you had the losers for the year. And this is why it's hard to

pick individual stocks. I can't begin to tell you how hard it is to put together a portfolio of individual stocks and think that you're going to outperform the market. I had a pretty spirited conversation with a really really good friend this week, and I, you know, he was bragging how he owned this stock, how he owned that stock, how he just looks for dividends and that's the only stocks that he owns. So I had him mentioned a

couple of stocks that's in his portfolio. So, you know, the beauty about technology, which is why we owned so much NASDAC because I believe in technology. You know, I was able to pull up the stock charts. Verizon was one of one of the stocks, and you know, he felt that he really hit, you know, a home run, because Verizon pays such such a high dividend. You know, right now the yield is seven percent, and you know, last year it really took it on the chin. It

was really a loser. But I showed him a ten year chart and I compared it to the S and P five hundred indecks and he felt good because he's getting this seven percent dividend yield, but he actually lost money over the ten years. And I tried to tell him, don't be afraid of having, you know, one, I think everybody should have the broad stock Market Index, whether that be the S and P five hundred or the Total

Return Index. We use the Schwab Broad Market Index, which takes into consideration large cap, mid cap, and small camp because we like exposure to the MidCap and small cap, whereas the SMP really just takes into consideration the large cap segment of the market. But they're all highly correlated. And whether you have the SMP or the broad Stock Market Index, though, that should really be the core of

your portfolio. And as I showed my buddy, I said, Tommy, I said, you know, you're getting a six seven percent dividend, but look at how much money you've lost. And we talked about a couple other stops, and he's just so fixated on dividends. So he's going to give me his portfolio, and I'm gonna have Ed Wilhelm, who really does a remarkable job for us. So he's a wizard with stats

and spreadsheets, and I'm going to analyze his portfolio. And I'm pretty sure if he were to just buy the broad stock market index, he could have done a whole lot better than what he's doing on his own just trying to pick individual stocks. It's hard, folks, hard to pick individual stocks. One eight hundred eight two five five nine four nine. Zach, let me take a quick fifteen second break. Please here I am, folks, I'm back. Thank you for letting me wet my whistle. One eight hundred

eighty two five fifty nine forty nine. Any questions whatsoever. So this week's parents is the twenty twenty four round Table report cards. Basically, they have I don't know about ten money managers and they all give their individual stock picks at the beginning of the year. And you know, folks, it's it's it's amazing. These are supposed to be the best of the best, right barons, you know, chooses these money managers. Some of them I think really should be

retired from the from the roundtable report cards. You know, I'm you know, I'm looking at when they all give you know, four or five six picks, and there's only one that that that really came out with a clean report card. So now the say who works for Franklin, and ironically she didn't have one individual stock. She actually picked some ETFs and mutual funds, which kind of goes along with what I tell you all the time. You know, that's it's hard to pick individual stocks. Now, I'd like

to play with individual stocks. I have a sandbox account where I have some individual stocks and I have some bitcoin. And sure, I'm like, I'd like to play. Why not. Life is short, let's have a little fun. Let's get out there and you know, roll the dice. But that's just for my play account. My sandbox account is we like to call it a good client of ours. I'm

kind of coining the phrase from him. He transferred all of his client or his accounts to us, and he had one that he called the sandbox I said, what do you mean by that? Chuck? He says, Oh, that's what I play in, like you're a kid playing in the sands. So now we refer to it as our sandbox accounts. But as I go through all these money managers and look at their their picks, you know, you know Abby Joseph Khane, she she only had one winner out of two out of six picks, only one winner.

The others lost money. And I can go on and on and on about it. I guess the point I'm making is it's hard to pick individual stocks, which is why, especially if you're doing it on your own, or if you have a stockbroker you're working with that you know, one of the big wire houses. Sit down, do an annual review twenty twenty four, see how your performance was

compared to the SMP for the stock portion. If you have a sixty forty portfolio, bring in you know, have have have your advisors show you sixty percent sm P five hundred forty percent the ice shares, bond indecks and see how how your returns are for the money that you paid one eight hundred eight two five five nine four nine one eight. Well, folks, that was interesting I apologized I had somebody trying to call me and it

kicked me off doing live radio. So I gave out the phone number one eight hundred eighty two, five fifty nine, and I'm really truly sorry about that. One eight hundred eighty two five five nine four nine. Let's go to the phone lines. We have Dennis in Clifton Park. Hello, Dennis, Hey, good morning, Steve.

have to take it, Dennis. But if it's going to if you have a big IRA, and it's because that's taxable income to you, that's going to be reported on your taxes. Now, remember in New York, you get the first twenty thousand dollars is tax free New York State tax free, So up to twenty thousand dollars you're only paying federal tax. A lot of people in New York don't realize that. And if you're married and your spouse is taking money out, really the first forty thousand dollars

you don't pay New York state tax on. So that's a beautiful thing, and that's something that a lot of people don't realize. But if it's going to boost your tax bracket, there's really unless you're working and you're able to put money into a pension plan, or if you have a business and you're able to get some write offs,

there's really not much you can do. Unfortunately, Dennis. You know you have that money, you got a tax break when you put it in there, A long, long, long time ago, and it grew tax efferd and now it's taxable when it comes out, so there's really not much you can do.

and that's much appreciated. After thirty five years of building and creating this firm, and you know, investing in technology, investing in human capital, and investing in the time to grow the business, it takes a lot, and it's it's nice every once in a while to get a weekend. Often my goal is to have the most professional show thee where the listening audience can get good advice and on some things. Believe me, I say it often. If you wind up ten wealth advisors, you can get ten

different opinions. We all have our own style, our own way. I'm pretty honest and open with my feelings. You know, I don't like annuities whatsoever. You know that I like stocks over bonds. In my personal portfolio, I'm one hundred percent invested in stocks. I don't expect all investors to do that because there's a lot of volatility that comes with that. Although there's volatility and bonds and commodities in real estate as well. Unfortunately, a lot of investors just

are fixated on a stock portion of their portfolio. They don't look at the rest of their portfolio. But you blend in those other asset classes to kind of soften the volatility. But I'm okay with risk. The market goes up, the market goes down, the market always comes back and always goes on to make new all time highs. So if you're looking at you know, here we are in the first couple of weeks of January, and you know this week alone, the SMP was down almost two percent.

NASDAC both the Total Composite and QQQ down about two and a quarter percent. Russell two thousand was down three and a half percent for the week. For the year to date, we're down just about one percent in the NASDAC and the SMP, and the Russell two thousand is down about two percent. So we're starting off, you know, taking a baby step backwards and after having the year that we had last year's that's okay, folks, It's really truly true. Okay. You you you have to take into consideration.

Then there's going to be good years bad years. If I go back over the last eleven years in the S and P five hundred index, you hear me say this often, there were only two years where you lost money. Twenty eighteen you were down about four and a half percent. Twenty twenty two, down about eighteen percent. So it's okay,

you can't you know, twenty twenty three. So if you got spooked out of the markets in twenty twenty two because you were off eighteen percent, you missed out on a twenty six percent return in twenty twenty three and a twenty five percent return in twenty twenty four. And you look at all the headlines last year, who would have ever thought that the stock market did as well

as it did. And when you look at the one year predictions of the stock market, all I can say is you can't look at the one year prediction of the stock market because there's just you know, it just doesn't make sense when when you look at the at the market gurus and what they come out with. I'm

telling you, folks, you can't. You can't look at it and think just because somebody supposedly is a market predictor and you know, well thought of in the markets, they get it wrong as much as anybody, Which is why you need to have patience when you're invested. You need to be well diversified. You need to just you know, don't don't think you're you're you're going to pick stocks and go out there and really beat the market. It's

hard to beat the market. Sixty five to eighty percent of the time, you can't beat the market, which is why having the market is part of your portfolio. Is your core holdings make sense? One eight hundred eight two, five, five nine four nine one eight hundred eighty two five fifty nine forty nine Any questions whatsoever, give me a call, love to talk to you. So you know, the we was we started out with Wheak China manufacturing data, and we bring up China because it's the second largest economy

in the world behind US and China. You know, they would love to be number one. I don't think that will happen. I'm very optimistic over the next few years that this economy is going to be a pretty strong economy. I'm hoping we see a lot of less regulation, let's say, less government kind of spending money haphazardly. I'm really hopeful that we got some good things coming. And this is why I'm so optimistic. On the stock market, you know, it was it was a shortened week. They closed the

market on Thursday for President Jimmy Carter's funeral. Eight two, five, five, nine four nine. Let's go back to the phone lines where we have Rick in Hackpoon. Good morning, rick.

this year will be based on that. There's a factor that you'll you'll figure out how much you have to take, So you have to take that sometime before April first of next year. And then what happens is December thirty first of this year you'll have to take once again. You'll you'll you'll have to take the value of this year's r and D based on all the accounts adding up. But no, you have up until April first of next year. You don't have to take it this year. It just

means that you're going to take two next year. Okay, okay, do that makes sense?

can't thank you enough. I'm going to take a quick break for the news, but I'll be back on the other side of the news. The phone lines are open one eight hundred eight two five five nine four nine one eight hundred eight two five fifty nine forty nine. If you have any questions, give me a call. I'll pick you up on the other side of the news. Hello, folks, thank you for hanging in through the news. I truly thank you for tuning in every weekend Saturdays at ten

Sundays at eight am. I can't thank you enough. I love doing the show. We're in our thirtieth year, thirty fifth year of being in business, so I've been doing the show almost as long as I've been in business. So thank you for tuning in. The phone lines are open if you have any questions. On eight hundred eight two five, five, nine four nine. Let's go back to the phone lines where we have Jim on hold.

dollars if you're fifty year older. So if you qualify to put money into an IRA or a roth IRA, the conversion is different than the contribution. The conversion is you're taking you know, let's make believe you're taking ten thousand dollars out of your IRA and converting it to a ROTH because you feel that brings you benefits of you know, if you're one in a low tax bracket.

Now it's something to look at, especially if you think you're going to be in a higher tax bracket later if you're younger with a long time horizon where you can have that money continue to grow tax deferred, because then you'll pay tax on that money today, but when you take it out years down the road or maybe

decades down the road, it's tax free. And sometimes retirees and early retirement they have minimal taxable income, so it makes sense because when you convert to a ROTH, you don't have to take a rm D. So there's some pros and cons to it. The biggest con jim is that you're going to pay tax on that amount, and if that puts you into a higher tax bracket, you really want to maybe consult with your tax prepared to make sure that it makes sense for you.

days and weeks and months and sometimes years. As I said, over the last ten eleven years, there were only two negative years for the s and P five hundred two out of ten. That's not bad, folks. I'll take that off day long. And at the beginning of every year, the market pundits, you know, they're always there's a survey that comes out. So think about this. Last January. As as we entered twenty twenty four, the average return forecast for the SMP was seven point four percent by stock

analysts and one point three percent by market strategists. The actual return with dividends was twenty five percent. So if you listen to them, you know they were wrong. Go back a year before that, twenty twenty three, seventeen point five percent for the SMP. The strategist set a six point two percent rise. The actual return was twenty six

point three percent. You know it's it's it's hard to figure it out, and that's why sometimes you know, listen to all the news taken and digest the information, but don't don't let it. Don't let it change your long term horizon and the discipline you need to be a good investor. Stocks go up, stocks go down, so do bonds, So do commodities, so do's real estate. All those asset classes go up and down, up and down, up and down.

If you looked at them every day. Over time, stocks has been the best performing asset class one, eight, five, nine. Let's go back to the phone lines. We have Jim in Aubany, Good morning, Jim.

year or so. I would classify myself as a super saver. Over the years, I've maxed out my Flora one case. I haven't done a wroth for a one case. So I'm assuming all the questions that people are asking about roth conversions at some point in time, I know I'm going to have to probably look at that. My overall question though, is becoming a Florida resident because I we

don't like the cold. I've got children down in Florida, so longer term, and I know I've heard you say that the first twenty thousand in income is not taxable New York state wise here, but long term, if I'm going to be in those higher tax brackets, your experience on if becoming a Florida resident really has saved people a lot of money?

to look at other factors. So one New York State hates it when people leave New York State and say hey, goodbye, We're not paying your taxes anymore. And there's a lot of audits of people that do change residency. So let's make believe you come down to Florida. You want to be a Florida resident. What you have to do is you have to stay out of New York State for at least you know, one hundred and eighty four days, you know, half a year, six months in a day,

at least. I say at least because I've consulted with some attorneys and they say, if you can show irs that you're out of New York's date more like seven months, that's a better argument if you keep it right to that day. And remember, if you know, let's make believe you're a Florida resident. Let's make believe you take a six o'clock flight out of Florida and you get in

at eleven thirty tonight into Aubny airport. That's included as a day of living in New York State, believe it or not, even though you were only there for a half hour, they count that as being a day in New York State. So there's programs, and there's one great program that I always recommend to our clients that they get and It basically tracks on GPS, it tracks exactly where you are. It's called MANEO m O NAEO. And

let's make believe you're flying to New York today. If you stop in Atlanta because you're flying Delta, it'll show that you were in Florida. It'll show that you were in Atlanta to show that you ended up in New York State. And it's a pretty good program. The other thing you have to do is you have to change your doctors. You have to probably have a better home in Florida than in New York. That's one of the things they look at, although I think that's up for

argument and I'm not in an attorney. You have to make sure you change the registration of your car, and your driver's license and your voting registration. So those are all the things to think about if you become a Florida resident. But more the short and long of it is, you have to be out of New York State at least six months. In a day, you could be in Italy, you could be in you know, Myrtle Beach, you can be in Palm Beach. As long as you're out of New York State for at least six months.

that's the incentive for you to go down. But really from a tax perspective, make sure that you do your homework. Make sure that it makes sense for you to relocate. Now a lot of times, you know, one, do you have a job that you can show irs that you weren't in New York State working? Like if you have a business, it's harder to show that you were in

Florida for half the year. So once again, this is another factor to consider, a lot of things to think about, Jim, But it's a it's a good question, thank you, okay. One eight hundred eighty two five five nine four nine one eight hundred eighty two five fifty nine forty nine. Yeah, it's a real crapshoot to do you do you move out of New York State. And believe me, people are leaving New York State left and right. I guess in

some ways, can you can you blame them? Between the taxes, the politics, the regulations, there's so many things that people are just throwing their hands in the air about and they've just you know, they've they've they've had enough. You know. I was in New York City on Tuesday to go down for an appointment, and my driver picked me up at Laguardi Airport and told me all about the congestion

pricing and how it's going to affect everybody. And believe me, folks, that congestion tax is going to be passed on to the consumer. My driver, you know, every time he goes below sixtieth Street, there's a nine dollars fee that he has to pay a tax. Now, let's make believe he brings me to my appointment and then brings me back to the airport and then goes back into the city. He's got to pay that nine dollars tax again. So you think about you know, that's just one independent driver

trying to make a living. You think of all the delivery trucks. You think of you know, all the people that need to go into work, and you know that parked their cars. So the taxes that we pay in New Yorker just just crazy, just crazy. On eight hundred eighty five five nine four nine. Let's go back to the phone lines. We have Brick. Hello, Rick, Hi, Steve Looten.

I always say, ladder a bond portfolio. If you have bonds, wonder new York state tax free. Once again, if if you're paying New York state taxes, buying a treasury, you're not going to pay New York State tax on that interest. So you can buy a tenure right now four point seven six percent. That's pretty good, folks. In one year's paying four point to two percent. So finally, the yield curve is such that the shorter term bonds are paying less than the longer term bonds. And I'm not sure

where interest rates are going. After yesterday's jobs report. You know, there's there's a feeling on Wall Street that the Fed may be done with their interest rate cuts, which would be really remarkable to think that they just started cutting in September. They cut a few times, and they may be done. Maybe there's one more cut based on yesterday's jobs report. Now, remember one, it's an important jobs report, and you know, the US economy added two hundred and

fifty six thousand jobs. Unemployment fell just just a little bit to four point one percent, and the wage growth was up less than than than expect it. But it shows that the jobs market is really a resilient, strong job market. And the reason why the Fed cuts rates is to stimuli stimulate the economy as a catalyst to get the economy going, make borrow money cheaper so that people will start, you know, buying things and moving the economy.

So that's why the Fed cuts interest rates. In reverse, they raise interest rates to slow down in the economy that is grown you know by by you know, just too fast, where the price of goods and services is just going up. You know, just a couple of years ago, inflation was nine point one percent. Now we're somewhere between two and three percent. We'll find out later this week. We have a report coming out on inflation and we'll see what it is, but somewhere between two and three percent.

The target for the Fed is two percent. So yesterday's the Friday job report showed that the jobs are healthy, people are going back to work. So you actually have interest rates that are up, and I like ladder in your bond portfolio. This way you're not gambling, but I'm not I'm not against somebody loading up on this US ten year Treasury note at four point seven six percent. I mean, we're creeping up to five percent. I don't know if it'll be higher or lower, but I know

it's a pretty good yield. Just it wasn't that long ago, folks, it was three point five percent. So I'll take four point seven six percent all day long. So hopefully that helps you. Rick just ladder a portfolio. And as I said, you're paying tax on interest with CDs, you're not paying New York State tax on the interest of the treasury one eight hundred eighty two five five nine four nine. Let's go back to the phone lines. We have Mike in my hometown of Troy, a fellow trojan. Hello, Mike, Hey,

how you doing. I'm doing wonderful.

seven six percent. I just don't like annuities. One you're locked in, you can't get out of it if you wanted to get out of it, And having a well diversified portfolio is so much better than having all of your money locked into a fixed annuity. I'm just not a fan of a new Now, I'm not folks, There's there's reasons why people buy a nodies. Some people are nervous nellies. They want it annyse, they want that guaranteed in come. And remember it's guaranteed from the insurance company.

Whereas if you letter a bond portfolio, you're going to get decent yields and it's guaranteed if you buy treasuries by the US government, which I think is a little bit safer than an insurance company. But Mike, not knowing the rest of your portfolio, or if you have a

diversified portfolio. You know, if you're a young guy and you got all your money and it fixed the neudy, getting five percent, well that sounds great, but boy, you lost out by not having a diversified portfolio, by having some stocks for the growth portion of your portfolio, hopefully that helps you out. Mike E eighty five five nine four nine. So I'm optimistic on the stock market, and believe me, there will be a correction where the market

goes down ten percent. There will be another bear market where the market goes down twenty percent, there will be another recession. I don't see. I don't see a recession on the horizon. But you know, believe me, go back four years, five years now. You know we had a recession, the quickest recession and on the books during COVID, and it came and gone. So I can't sit here just because I don't see a horizon on the or a recession on the horizon, doesn't mean that we may not

get a recession. But think about this, folks, this is why you can't be afraid of stocks. If you look at any one year, any given year, the best return and I'm going back to nineteen fifty, so seventy four years, pretty good, pretty good statistics. Your best year in the stock market was fifty two percent. Your worst year was thirty seven percent, and that was recently two thousand and eight.

So you know, sixteen years ago, bonds, your best year was thirty three percent, your worst year was thirteen percent. And if you had a sixty forty portfolio, which a lot of people have, what we call a growth and income strategy, your best year was thirty four percent, your worst year was twenty percent. That's any given year going

back to nineteen fifty, any given year. So having that diversification, being invested, not being scared, not listening to your brother in law this afternoon at you know, or this weekend at the dinner table, and your coworker at the water cooler on Monday morning. You know, have a well diversified portfolio and have that discipline. Now I want you to think about I'm going to give you five year, ten year,

twenty year rolling averages. That means nineteen fifty starts a new five year rolling average, a new ten year or new twenty year. Nineteen fifty two a new so you know there's a lot of rolling averages. Stocks your best five year period was up twenty nine percent, annualized return up twenty nine percent, worse two percent, Bonds up eighteen percent, worse five year rolling period two percent, and in the growth and income portfolio, the best was twenty percent, the

worst was one percent. Now, most people are invested for ten years or longer. So with stocks over a twenty year rolling period, your best twenty year rolling period was eighteen percent, your worst was six percent. Year in, year out, your best bond per you know, twenty year rolling period was eleven percent. Your worst was negative one percent. And in the growth and income portfolio, your best twenty year rolling average was fifteen percent. Your worst was five percent.

So there you have it, folks, this is why you can't be You really can't. Don't feel like you can have stocks in your portfolio. It's okay to have stocks in your portfolio. Nothing wrong with having stocks in your portfolio. And as I said, I'm hoping with the change of guard in Washington, I'm optimistic we have some good things

to look forward to. Before I let you go any further, though, I just need to take time out because I'm thinking of all the devastation, all the people that have lost lives, their favorite pets, loved ones in California with these with these wildfires. My heart just aches for them. It truly breaks breaks for all these people that are just you know one hundred and eighty thousand I think are relocated to evacuate their homes. Then you have the thugs coming

in and looting. You know, the homes that are still standing, folks. My heart goes out to them and I say a prayer for them every morning. I just can't believe what's going on. It's just a terrible thing. You're listening to. Let's Talk Money, brought to you by Bouche Finance Group, where we help our clients prioritize their health while we manage their wealth for life. Go to our website Bouchet dot com, That's biz and boy O U C h

e Y dot com. Thank you for tuning in. I thank you for every Saturday at ten, every Sunday at eight for listening. Have a great day, stay healthy, be well. Bye bye, folks,