Let's Talk Money

with questions they may have. I always say that if you have a question, there's more likely than not that there's other listeners out there that may be going through similar financial or investment you know, issues or considerations. And so I think a lot of the questions not only do they create great talking segments and conversations, but I think it helps a lot of the other listeners that are out there. So our phone lines one eight hundred Talk WGY. That's one eight hundred eight two five five

nine four nine. Like I said, if you have any questions, give me a call, happy to you know, dive into things that are top of mind, things that may be of interest to you, or just you know, general questions.

may impact them. But you know, there's always great room for conversations along you know, financial planning topics, retirement planning topics. So we have a lot of good things to talk about today. Again, phone lines are open one eight hundred talk WGY one eight hundred eight two five five nine four nine. And you know, before we get any calls, run through a lot of what I'm thinking about today,

things that are coming up in client conversations. You know, current events, things that are you know happening in the world of finance and the markets. So we'll talk about a great closed to the week yesterday, you know, a nice pop to the markets, got us above and gave us for the week.

away from that. But we'll talk a little bit about what Jerome Powell came out and said, how that impacted the markets to close the week. Well, so you know, we can dive in a little bit. We had some of the notes were released earlier in the week as to July's commentary in what the FED Board was talking about back in that meeting. How that all really you know,

helped shape and drive the markets for this week. Earlier in the week, we had you know, we had a revised report from labor statistics and saw what you know, was a pretty big cut in jobs created over the last twelve months that was ending in March. It's not necessarily real time in terms of the previous twelve months, but the twelve months ending March of twenty twenty four, big drop off there. We'll talk about, you know what that means. We had some other unemployment claims came out

this week. We'll have August payrolls report coming out in another few weeks, so, you know, some of the big ticket items that the FED is considering. The FED is looking at as they drive interest rate policy. I know for many of you it's affecting you in different ways. Again, whether it's investments, whether you may be in a situation where you're owned buyer looking to get a mortgage and seeing what interest rates are at car purchases, you name it.

It's affecting all of us in some way, shape or form. So we'll just talk a little bit about what's happening in the economy, how that's driving rates, what we're seeing, and kind of what we should be thinking about what we should be doing as we're kind of going through this next phase of you know, most likely changing economic

and interest rate environment. Really interesting article will dive into we can talk about you know, may not affect everyone listening, but I'm sure it affects a large portion of you. And this is a Wall Street Journal article I saw earlier in the week, but talking about you know, are you prepared for retirement in your forties and fifties? And like I said, you know, that may not be everyone out there. I'm sure a lot of folks that listen

may already be retired. But you know, for those those individuals that are in their you know, forties or fifties, maybe even early sixties pre retirement, you know, kind of the factors that that folks are thinking about and how this is you know, it really is a new environment for a lot of these retirees from a generational standpoint, right, you know, this generation now that may already be retired in some cases, but approaching retirement is really kind of

that first generation that is almost fully reliant on what they've done through the years, whether you know, when it comes to investing four oh one k's and the popularity of you know, employer based retirement plans versus historically speaking, maybe pensions and other work related retirement investment vehicles that you know, help provide through through those years of retirement.

And you know how many folks in their forties and fifties today, you know, don't feel prepared or don't feel like they're on the right track to get to the finish line of retirement. So we'll talk about, you know, how we work with clients, you know, some of the

things that we try to implement and work on. And if you're feeling that way, if you're in that position where you know, I just don't know if I'm if I'm ready, or if I'm on the right path, we'll talk about, you know, ways to feel more confident to get to that point where you feel like you're ready, not necessarily maybe retiring next week or next year, but you know, on that path for the next ten, fifteen, twenty years that you had the confidence in your finances to,

like I said, get across that finish line.

an overlooked area. It's become more popular in recent years, obviously, but we talk and focus so much on kind of the quantifiable elements of investing and putting your money to work and having your money grow, but so much of the emotions and the behavior and how you know, really when you think about, you know, even the impact that we have as financial advisors and working with clients their studies going back through the years through you know, companies

like Vanguard and in terms of what value and advisor can bring, but the behavioral elements of investing and you know, success or oftentimes and unfortunately lack of success in some investment strategies because of this human behavior and our human behavior. Man, it has a huge impact. So we'll talk about that.

isn't for everybody. It's not the end all be all, But I think, you know, sometimes these articles and these commentaries trying to poke holes and disprove kind of the effectiveness of it, they don't talk about it, I think as much in sort of the dynamic sense of the word and how we kind of approach it or think about it as advisors and in the work that we do.

So we'll talk about that. Yeah, I actually had a there's a Saratoga Business Journal article that came out a couple of weeks ago focusing in on investment advice and you know, looking at ensuring a comfortable retirement, and so was interviewed by Christine Graff over there at the Business Journal, and you know, we'll talk about you know, because I talked about sixty forty a little bit, and you know how it plays into some of the strategies and elements

of what we're working with clients on. But again, it's not a stagnant approach, right, it's a little bit more dynamic, and I'll talk about that. Those dynamic elements that that we bring to the table and we work with clients on, we can talk about, you know, these last couple of weeks, I know, going back about three weeks ago, we had incredible sell off in the markets right after jap We

had the Japanese yet crisis, if you will. We had a pretty bad labor report for the month of July, and you know, in some cases and for some people maybe it felt like the sky was falling but here we are three weeks later, markets have recovered, We're we're in a good spot. I would say, what has changed? You know, what are we seeing out there? What are we talking about, what are we thinking about? And finally, I always try to direct the listeners out there if

they haven't checked out our website. We're always putting a lot of new great information, whether it's blogs, webinars, videos, you name it. But we had a great webinar this past week from our team talking about you know what is which, which comes up often, especially with clients, especially with retirees, it doesn't make sense to relocate from New York. Uh So I encourage you to check out our website

Bouchet dot com. You can view this under our insights tab, go to our webinars portion of our insights and just great commentary from Nicole and Scott from our office went through this and really went through the the ins and out and outs of you know what it means to relocate in retirement, you know, changing states? Is it for taxes, is it for lifestyle?

So totally understandable. And I thought it was really just a great topic and a great webinar put on by our team. And so, like I said, you can check that out on our website. You can check out some other blogs and information that have been put out there. So again I encourage you to check it out Bouchet dot com. Again, our phone lines are open one eight hundred TALKWGY. That's one eight hundred eight two five five,

nine four nine. And like I said, we had a great, great end to the week yesterday Friday, markets were up, markets were ripping, really kind of gave the the boost we needed to close out, you know, another up week in the market, especially these last these last few as we've recovered from like I said, kind of that bad labor report from July. We had concerns overseas, you know, mostly rooted in Japan and what they were deeming the

Japanese yen carry trade that started to unravel. For a day, I think the Japanese markets were down twenty percent or so over a two day period, which which created a lot of uncertainty, created a lot of volatility.

You know, that seems like a thing of the past, and I think it just goes to uh, you know, being a you know, having the right time horizon, not overreacting, especially not overreacting because it was you know, it would have been easy to overreact that week, would have been very easy to you know, I think the Nasdaq at one point was down six percent or so that Monday, Uh, the SMP was down over four percent. And so, you know, anytime we see market movements like that, it it can

be hard to hard to stomach and difficult to handle. So, you know, getting through that and having the right approach and and the right you know behavior, I talked about it earlier, the investor behavior and how important that is, you know, get you through times like that and get you to today, where like I said, for the week we had the sm P was up about one and a half percent, NASAK was lagging a little bit, it was up one percent, down was up a little bit

more than one percent, and small caps the Rustle two thousand had a big week, up three point sixty five percent.

And you know, honestly, when you look at what happened Friday, in what happened to the markets yesterday, you know, most of those gains were really rooted in what happened yesterday and what was driving that was, you know, as it often does, I think, Yeah, I'm trying to find the right balance here with with you know, not only the commentary we have with clients, commentary on the radio, commentary that we have with our other advisors, because you don't

want to put too much weight or too much emphasis on it, but these big trading days we see, you know, are still somewhat rooted in what the FED is doing. And you know, yesterday's movement in the markets were primarily related to what Jerome Powell came out said and I think we had our first sort of major shift in in commentary, major shift in tone, uh major shift in in terms of what the focus and what the FED

hasn't focus. And that's been a that's been a big change from some of the previous meetings and previous UH press conferences, releases, whatever it may be, from Jerome Powell in the FED. But we saw a like I said, a pretty considerable shift in in some of that commentary yesterday, and so we'll talk about you know what that means. We do always look at, right, the FED has that dual mandate. That's that's really what their intentions are. It's

the dual mandate of low inflation and low unemployment. And ever since COVID, you know, maybe a few months after COVID really started, the big focus from the FED has primarily been all about inflation.

You know, back in twenty twenty immediately following COVID and kind of the shutdowns and everything that we're seeing, but unemployment kind of came back down and got to a point that you know, some of the lowest unemployment that

we've seen historically. Economy was humming along, but really what was the Fed's focus was that inflation right a couple of years ago peaking out and I think it was June to twenty twenty two where we had the year over year unemployment or not unemployment, year over year inflation rate over nine percent. I mean, pretty scary times, you know, driven by a number of different factors. We don't have to get into all of it now, but their goal, their focus was really.

going for. But you know, as as the market tends to do in days like that, especially when you know you're getting something that that the focus is wanting, which is lower interest rates. Market really liked it, and you know, I'm just looking at you all the major indices, whether the S and P, DOW, NASDAC all up over one percent, and like said that those small caps really like that

being up more than three percent. So we'll talk a little bit more about, you know, what this shift means, what we're kind of looking at, and what investors should be thinking about, because I do think, you know, it does change some of the approach and kind of a strategy that many people have had around fixed income in that portion of their portfolio. Again, our phone lines are open if you want to talk about markets, talk about the FED, or talk about some of these other planning

topics that we'll get into today. Give me a call one eight hundred talk WGY. That's one eight hundred eight two five five nine four nine. So with that, I'm going to just go to a quick commercial break and when we come back, well we'll talk a little bit more about the FED, a little bit more of how that may be impacting you, and then second half of the show will we'll get more into some of those

planning conversationations that I mentioned in the open. So again you're listening to Let's Talk money here on eight ten in one O three one WGY And welcome back to Let's Talk money here in eight ten one O three one WGY. Hope everyone out there is having a great Saturday morning, great start to the weekend.

some some quotes and change in strategy. Right we the main goal has been getting inflation under control, and based on the comments in commentary yesterday, it seems as though the Fed feels pretty confident that that inflation is under control. And I think one of their big concerns has been, you know, reigniting inflation right in lowering rates that could lead to you know, inflation rearing its ugly head again.

But when we hear and see commentary like we did yesterday, you know, Jerome Powell saying, hey, we do not seek or welcome further cooling in labor market conditions, you know, essentially saying they're they're finally and I think they're convinced that, hey, there may be some cooling right now in the labor market and they're seeing a slowdown and they're going to

do something about it. I think we've been under the assumption for for a while, you know, especially as inflation, I mean, inflation was cool and probably closer to that three percent level. I think they want to get it to two. But for most of last year, the second half of last year into the early part of this year, was you know, on that trend line was was at three, maybe a little bit more than three, coming below it on month over month basis, and that trend line was

coming down. But you know, I was always in the camp that, hey, they really you know, they're really cautious. They're really nervous about stoking inflation and bringing that back to the forefront. But as we're starting to see a little bit of a cooling from the labor market, you know, we saw that revision of eight hundred and fifteen thousand

jobs in that twelve month peer ending in March. You know, they're seeing enough weakness there that And I think they've been in this camp that, hey, our ability to control the economy and you know, a slow economy or a recessionary environment, we can do that. With lower rates, we can do that. We can we can have a big impact,

especially given where rates are today. They felt that they could they could control that, and so I think that's with the commentary and the shifting sentiment really came to the forefront yesterday.

An article I read earlier this week. I think I brought it up earlier in the show, but interesting article in the Wall Street Journal talking about you know that that Generation X, and it was titled as Generation X approaches retirement, reality still bites and you know, you you forget sometimes as folks, and you know, we we oftentimes, you know, we work with a lot of people who are who are you know, right at that retirement age, whether they're you know, maybe a year out from retirement,

entering retirement, maybe retired for a couple of years. But there's a big cohort of clients that we work with in their forties and fifties, and you know, this article really highlights some of the you know, whether you call them struggles concerns that they have, and we have this generation that you know, in many ways.

And you know, there are a lot of people. Many people feel confident, they feel good, they feel like they're on the right path. Many of the clients, i will say, in their forties and fifties, in working with them and in working through you know, some detailed, complex planning and planning strategies, feel even more confident. And that is something that comes up in many studies that are out there in terms of kind of that financial confidence that comes

with working with an advisor. But there's many folks that are out there and maybe it's you listening that you know are in that ten twenty year time window from retirement and it just maybe it feels out of your grasp. Maybe it just feels like you're not on the right

path today. And like I said, from this this Are article, and when you think about it, you know, this is a generation, this this Generation X that you buy and large there's there are a lot of folks that are retired that had to do it themselves, right, you know, the pension options weren't weren't available anymore. But across the board for the most part, this Generation X is that first generation that's going at this alone, meaning that yeah,

there's there's very few pension options. They've been saving on their own, you know, utilizing whether it's a four to one K plan, a four three B plan, maybe it's a business owner utilizing you know, uh, set Byray plan, whatever it may be. But it's it's this first cohort of folks and retire or not retire reeks because we're not there yet, but of people that it's up to

them to save for retirement. And uh, you know, in many cases, there there's just a lack of confidence that we're getting there, and you know, I think even more so going going about over these last four or five years when inflation was super high, the cost of living just kept increasing increasing, It's become harder and harder, it feels like to maybe save towards retirement or you know, you have kids that are that are nearing or entering college and in the cost that we see there and

trying to save and trying to do all you can to put your kids in a better position than maybe yourselves by helping pay for that. But you know, does it come at a cost? What is the impact of getting ready for retirement? And you know, in this article, a lot of the folks that they spoke to and talked to, you know, kind of just chalk it up that, hey, I'm just gonna work until I die.

what can what can we do now? What can we do to get our situation and more in our control right, feeling getting that confidence that comes with knowing you're doing the right things, knowing that you're on the right path, knowing that your you know, not only yourself, but you know the next generation is going to be, you know, taking care of you as you approaching retirement, getting closer to those retirement years, and doing so in a way

that you can feel good about. And we work with clients all the time in navigating these times and navigating these challenges, but doing so in a way that instills confidence, gets them on the right path doing the things that we need to do now, so that again, ten fifteen years down the road, they're in the best position to

make that choice to make that leap into retirement. And you know that comes with a whole subset of challenges and concerns on its own, right making that that shift and lifestyle change and mentally making that transition from working to retiring and and so you know, we're putting a lot of time and a lot of energy into working with those folks and working with Generation X. Right, we have a lot of Generation X clients to get that confidence in doing what they need and you know, what

are some of the things that that we're talking about, or what are some of the things that you can do now if that if you find yourself in that situation or you find yourself, you know, feeling the struggle or the uncertainty if you're going to be able to retire on your terms when you want to, you know, living the lifestyle that that you want to be living. And what are those things that you can do now?

And so, if I think about this from the folks that we work with that that are in that category or in that age range, one of the I think the primary things to do. And we see this with our most financially ready or or retirement ready clients. What is the one thing because you know, we get the question all the time, Hey do I have enough money? Like I've saved X amount of dollars? You know, how do I compare to you know, some of your other clients, or how do I compare it to your average client?

And honestly, when it comes to personal finance, that that personal element of it rings so true because everyone is so so different. But I can tell you the people and it doesn't matter what their portfolio is, doesn't matter what they've done for work. You know, in some cases it may not even really matter, you know, what age are,

whether it's sixty seventy, fifty five, sixty five. But the folks that are most prepared for retirement have the best you know, successful financial plans are those that have a clear, clear understanding of their spending. And I think that, you know, it's hard to fully control. You know, you may have control in terms of how much you can make at work, maybe you're in a position that you know whether through commissions, bonuses,

you know, performance, you name it. You know, maybe there's some mobility for higher income, but it is hard to fully control that at times, depending on what career you're at the trajectory of that career. But one of the things that you can absolutely do, no matter what the circumstances are, is assess what you're spending is have that

understanding of spending. And like I said, the clients that we work with that are in the best position for retirement, it's not all about you know, how much they have in their portfolio, how much they've saved, how much they make. Those are factors you don't want to dismiss them. But the clients that have the best outcomes and are the most confident, they all have a great understanding of what

their spending needs are. And again that doesn't mean that they have the lowest budget or they're spending the least amount of money. It's just an understanding of their spending. It's knowing their spending habits. It's having clear spending habits. And you know, on top of that, you to me in terms of where you you know, not only getting an understanding of this, but having maybe a little bit

more control over it. Is being able to spend really intentionally, being able to spend on things that are really important to you, your family, finding ways to maybe cut around, you know, maybe some of the elements that aren't as important to you, or or you feel as though are getting a little bit out of control in your your circumstances, but you know, spending really intentionally on the things that

matter most to you. And like I said, those client situations that that we work with again, they tend to be in the best shape for retirement or have the most confidence heading into retirement because they know exactly, you know, not only what they're spending, but what's important to them, what they want to spend on, what they can you know, we go around their budget and having a clear spending goals and in trajectory and inconsistency, and that spending makes

a huge difference so, like I said, that's I think one element that is so important, so critical to you know, gaining a little bit more confidence as you you know, are in or entering kind of those later stage career and in working years, as.

the markets and the strategy to get there. But how are you going to get to that number? How are you going to save in a way that gets you there? And I think once you have that spending under control, you know, working your savings into that can have a big pack doing it where it's automatic, where you're you're you're putting away what you know you need to get to to to kind of reach those future goals. And then that gives you more leeway on your spending too,

especially once you have that understanding. You know, say first, spend later, but doing so in a way that again is incredibly intentional, clear understanding of it, and you know, do it in a way that whether it's automation, doing it in a way where you're not thinking about it and tracking those goals. And and lastly, I mean, like I said, it's it goes without saying, but especially the world that we live in, but coming up with the plan and doing everything you can to stick to it.

You know I said earlier, there's so many variables that come into play. You know, if you're in your forties or your fifties and you still have again that ten to twenty year window ahead of you before retirement, you know things are going to happen.

working with them through this process. You know, there's big changes that happen, not all the time, maybe not every year, but you know oftentimes those plans, you know, they may show up and they may look like it's a linear path forward, but we know it's anything but that. And so having that plan in place, really thinking about it and and forging that plan and having something that you can you know, both set goals for have you know, recommendations to to doing for the next weather, six months,

twelve months, two years, five years. But having that in place and being able to navigate the variability of life and the challenges and the changes that a company you know, just every day, everyday life makes a huge, huge difference. And so, like I said, you know, for that generation X, if you you know, find yourself in that position where, hey, you know, we're we're doing good. I think, I think we're on the right path. I think we're doing what we need to, but I don't have that full confidence.

It is just so important to have the right plan in place. And you know, like I said, comparing yourselves to your neighbor, uh, to your family members, your in laws, you know that's not going to do it either, because there's no you know, there's no magic button to get to where you need to be. There's no set number, magic number to do what you need to do because

everyone's a situation is different. Everyone's you know, personal situation in personal finance varies so much that you know, just thinking about it from your own perspective, your own situation and having that right plan in place can make all

the difference in the world. And so I thought is really interesting, and I do think, uh, in terms of the work that we do and and everything that you know, we discuss and work with clients on helps get to you know, that confidence, right, having the the financial confidence

of sleeping well at night. Knowing that you're on the right path is something that uh, you know, it doesn't hard to show up maybe on on you know, a balance sheet or or you know, hard to put a quantifiable number two, But I can tell you the conversations, and you know, the confidence that that our clients have and their plan and what they're doing and the work that we do, I know, I know makes a huge, huge difference. So again, our full minds are open. Give

me called one eight hundred talk WGY. That's one eight hundred eight two five five nine four nine. Came across another good article this morning, which uh, you know, I think it's overlooked sometimes right in terms of investors success, financial success, and that's the behavioral elements of investing. And you know, this article was kind of more rooted in

index funds ETFs. And if you've listened to the show in the past and heard us, you know we're we're big believers in ETFs in utilizing index funds for a number of reasons, low cost, market trackability, tax advantages, in tax efficiency if you hold them in a taxable account vers is a qualified account. Uh, ETFs are a lot more tax efficient. There's so so many benefits to them that that we love using them. We use them in

our portfolios. Uh, we manage for our clients. But even though these are great products and they do what they're intended to do, again, whether it's a S and P five hundred index or if it's a sector specific index, you know, maybe you want to have a little bit more exposure to technology, you know, something that we do internally, or a little bit more exposure to industrials, you name it. If you can get it in in these low costs uh ETFs and and they can work out really well.

If if that's a good holding, and it does well, but the problem becomes, you know, it goes back to this investor behavior.

the best way to end up capturing losses. And that chasing element was a big, big piece of what we were communicating with clients back in July, because you know, we've we've had this great run up in a lot of areas of the market, especially concentrated and rooted in some of those you know, AI plays, large cap growth companies.

And as things you know, start to get really good in the markets, we start hitting all time highs, certain areas in the market may be doing really well, you know, there becomes this sort of chasing element trying to chase returns, and when they do some of this this back test

analysis of how investors do in these index funds. And know, again this one is kind of rooted in these different sector funds, but most investors, the folks that are actually putting their money to work in these funds, tend to underperform the funds by about two point nine percent over

the long term. So this was a study done over the previous ten years ended December thirty first to twenty twenty three, and over those past ten years, those investors in these low cost sector specific ETFs tended to out underperform those ets by nearly three percent annualize. That's not over the ten years, that's on an annualized basis. And that all has to do with timing. And we always say you can't time the markets. We're never trying to

time the markets. But what oftentimes happens is that you know, certain areas of the market do well and a certain certain market areas of the market overheat. That's when investors tend to get overconfident in those areas, or it's when investors tend to try to chase gains in those areas,

and that's where that underperformance comes in. You know, I remember seeing a you know, if you're familiar with ARC invest Kathy Woods, and they were you know, they had great performance, especially you know following COVID up until COVID in some ways you know, really invested in the high tech type of companies. But you can see as as the performance kept doing better and better and better, that's

when more money came into the funds. That's when you know, the bulk of assets came in, and then they go through stretches of just really strong underperformance versus the market, and all those people that piled in at the peak of the fund or at the peak of the market,

you know, then they tend to underperform. So even though there's maybe a strong track record over the long term for a fund like this, the bulk of the money is coming in when when prices are high and maybe valuations are a little stretched or a little frothy, and you see those those investors tend not to do as well as the overall fund does.

a bearishness element in the markets. So it's not just retail investors or every day investors that you know could get this wrong or have that human behavior element sort of displaced their investment strategy or impact it negatively their investment strategy. This is coming from Wall Street strategists. These are coming from economists, you name it, and you know, when you think about it, at those lows, for many people, that's the best time to be putting money to work.

It's the best time to be investing if you're a long term investor. Again, not trying to time anything, not trying to time and market bottom. But hey, if the market's down twenty twenty five percent, you're getting a discount from where it was trading not so long ago. But it's so hard to make those decisions, it's so hard to overcome human behavior and the emotions that come to investing, and it shows up in a lot of these studies.

And so you know, having having the right framework, having the right strategy, trying not getting greedy when when things are good, having you know, the ability to step back and say, you know, is this a good time for a rebalance? Is this a good time to have a little bit of diversification?

impact and how important investor behavior it is. It's not always just about you know, what investments you're choosing, it's it's how you're going about, you know, making those investment decisions and getting invested there. So we're coming up to the end of the show. Appreciate everyone tuning in today and joining us. We do have another show tomorrow morning, Sunday at eight am here in eight ten one O three one WGY, so hope you can join us again.

Appreciate all of you listeners taking the time and joining us today. You're listening to Let's Talk Money here in eight ten one O three one w G Y see you tomorrow.