Let's Talk Money

Good morning, and thank you for tuning in to Let's Talk Money on eight ten WGY. I'm John Malay and I'm going to be your host for the next hour. I'm a certified public accountant and the chief financial Officer, chief operating officer, and a wealth advisor at Bouchet Financial Group. This morning, I have the honor of being joined by my colleague, Samantha Macy. Sam is a certified financial planner and wealth advisor with the firm. Good morning,

Sam, glad to have you joined me this morning. Good morning John, It's a pleasure being on with you. Yeah, Sam, and I had the pleasure last night of being at one of our colleagues homes. Nicole Goebel had a little gathering for some of our colleagues and their spouses, so we spent the night having some great conversation, eating some wonderful food that people brought, and then playing some games. So it was a great, great evening

unwinding with colleagues. And I will say, you know, it's always amazing to be a part of a team where people like to spend time together outside of work. So it was a great evening and and we also played some games. Sam introduced us to a new game that was a lot of fun, a little difficult to start with. But Sam, what was the name of that game? Do we call the name of that? It was called Poetry for Yeah. Yeah, great game, a lot of fun and a

great way to spend the evening with team. And you know, if you've heard me on the radio before, I always say it really is a great team that we have here, you know, just individuals who are all like minded, think of our clients first, highly ethical and just people who do the right thing. We work hard, we play hard, and I know Steve is very proud of this team, you know, and these i'mble a

really phenomenal team at Bouchet Financial Group. So and you've heard many of us, you know here at the radio, you know, so over the past few months you've listened to Nicole, Ryan Bouchet, Marty Shield, Paulo La Pietra, Harmony Wagner, Samantha and Vinnie Testa. And tomorrow you get a chance to hear one of our colleagues with Ed Wilhelm who will be joining Vinnie. So a great team we have here, you know. We've got twenty professionals, seven cfps, hopefully nine shortly. You know, we've got some

colleagues working on some designation, so wishing them the best of luck. Four CPAs, one certified divorce financial Analysts, one certified private wealth advisor, and two enrolled tax agents. And as I mentioned, Steve is very part of the team. But quite frankly, we're also proud to be on this team because it is a great collection of individuals. So with that said, it's enough on Bouchet Financial Group, but I do like to tout our firm because

we are very proud of what we have. So we appreciate you tuning in today and I hope you enjoy the next sixty minutes with us. With that said, I encourage any listeners to call in with questions. You can reach us at eight hundred talk WGY. That's eight hundred eight two five five nine four nine. So this morning, we're gonna talk about the markets, we're gonna talk about investing some financial planning topics, and you know, whatever questions

you call in with. Uh. So you know, we'll start right off with the markets. And wow, what a what a phenomenal week in the markets again, uh, you know, all three major US equity indexes added at least one point three percent for the week. You know, this is making six weekly gains in the eight weeks so far of twenty twenty four. Not a bad average there. So, you know, just a great,

great week in the markets. And you know, the last time I hosted the show, Meta, you know, Facebook's parents, you know, set the markets on fire with their earnings and they announced their first ever dividend. You know, this week it was another member of the Magnificent Seven, Navidia, who released some stellar numbers and put you know, set the markets on

fire again this week. And you know, this week was you know, interesting week because Navidia didn't post earnings until the end of the week, near the end, and so you know, first part of the week, there was a lot of build up of expectations. Markets were down a little bit, uh, and just a lot of concern about what those earnings were gonna be. And uh, you know those earnings we were outstanding. And I'll talk a little bit more about them in a second. But you know what

it's good to see, is it's earnings driving the markets, right. It's it's not it's not all just about expectations for the future. It's about earnings, and that's what kind of been the messa so far this year, you know, big tech not just giving, not just delivering hope, but delivering solid, solid earnings. And you know, again it's good to see earnings drive the market, not just expectations about what's gonna happen with the Fed.

So wrapping up the week, you know, had the S and P five hundred close at an all time record high on Friday, you know, so up one point almost one point seven for the week and up close to seven percent year to date. The Dow also closed in all time high on Friday, up one point three for the week, almost four percent year to date. And the tech heavy NASDAC, you know, driven heavily by what we saw with na video, you know, closed up one point four percent for

the week, almost seven percent year today. And NASDAK is you know, didn't he hit it's didn't close it it's all time high, but it is flirting with an all time high. So all major index is up phenomenally for the week. And again we'll talk more about Navidia and AI in a second, but certainly big tech earnings driving a lot of what's going on in the markets ten year treasury, you know, yield closing about four and a quarter, which is down slightly from the on Friday, but you know, very

strong market. So we have a caller and Maria from all the name Maria, we appreciate you listening this morning, and what can we do for you? Yes, I'm not a very a good stock investor, meaning I easily invest in mutual funds, rough iras, retirement things like that nature. But I've been eyeing plug Power for a while and it's almost down to like three dollars this year, and now I have some play money from extra money. I just wanted to play around with it. Do you do you know anything

about investing in the stock market as far as plug Power specifically? And am I being silly by thinking it's a good investment when it's just been going downhill for the past couple of months. Yeah, yep, yep, great question, Maria, and uh, I appreciate you tuning in. And so, you know one I'll say as a you know, you said you're a novice investor, certainly I will say diversification is king and individual stock investor. But

I'm bad with stocks. I mean, I don't guy with mutual funds and safe investments like you know, like X five hundred funds and YEP and lifestyle funds things of that nature. But I'm not good at picking stocks, right right, Well, I will say, you know you are. You are

not alone in that because it's hard. You know, I remember Ryan Bouchet pen to piece that we sent out to clients, and I think it's posted up on our website saying it's hard picking individual stocks, right, It just is, and and that's why we primarily use you know, exchange traded funds, which are similar to mutual funds, and that they're are a basket of securities. So you know, plug Power certainly has had you know, some difficult news lately, right, and so, uh, you know it's hard

to say. I mean, they're they're affirm that uh you know, seems seems to have great potential. I think it's about how they put it all together. So you know, it's hard for me to say whether that's a good investment or not. But I but I will say, any time you're you're betting on a single stock, right, there's certainly more risk than if you diversify through an ETF or mutual fund and so you know, the concern there is. You know, if I'm personally, if I'm looking at individual

stocks, I'm learning. I'm looking at companies that I believe I understand what they how they generate earnings. I understand how they are positioned in the market in terms of market share, and that I have kind of solid insight as

to where their future earnings are going to be going. And so you know, with plug Power, you know, I don't follow that stock individually that closely, but I certainly have seen from the charts, you know, what's happened with their stock, and so I would just say, if it's a company that you you don't know much about and you don't know really where they're generating their earnings from, I think that that's where the concern would be for

me. If I'm putting money into an individual stock, I want to understand their story. I want to understand where they're going from where they are today to the future, where their earnings growth is going to be. And so, you know, have you held Plugged for a long time? No,

I've been eyeing it just to buy it. It was like for fifty a share and it's like down to three dollars now, and I'm like, wow, I mean a lot of like the analyistry courts, like I read Yahoo Finance and it says that's going to probably bottom out of two fifty and go back up. Who knows, right, we don't have both crystal Ball, But I was thinking of just even getting like one hundred shares or two hundred shares a little bit of money to see what it does, because it's a

local company and it's I don't know, it's cheap. It's cheaper than in the video or video or like Microsoft or one of those. Yes, yeah, can you hear John? I can hear you now? Okay, I think we can hear John kind of faintly in the distance. You must have lost his good connection there, okay, yeah, so while he's still connecting.

Yeah, I mean, I would say, if you're looking for, you know, maybe something for a good price point to get in now, it would be a good time, right if you're if that's what you're sensitive about, and that's what you're looking for, you know, And it sounds like you're not putting a large sum in. You're kind of testing the waters. And so if you're ready, well diversified and that's what you're looking for, you know, waiting until it gets down to two fifty nine compared to

three dollars. You know, maybe you don't want to risk that if that's if that's you know, what's important to you. Okay, sorry about that we had. I had a little bit of technical difficulty, but I heard

Sam finish up, and I think that's you know, great advice. And again getting back to single stock picking, you know, I do think it's difficult, and I would say, certainly, if I'm looking for growth, I'm certainly there's companies in the AI space that I'd probably looking hard at if I was buying individuals, you know stocks, and you know, I don't think it's too late to get in on even the video and some of the

other AI stocks. So certainly great question. And but I think long term, and it sounds like, you know, I would have the lion's share my portfolio diversified, well diversified. But we again, I do think tech, the tech sector in general is you know, we're very bullish on tech in whole. And what we like, quite frankly about ETF investing is you know, you're not betting the farm on just one single stock, which is there's just a lot of risk in that. So reappreciate the question and thank

you for tuning in with us this morning. Thank you, great show, love it, thank you all right. Well back from I'm not quite sure happened on the technology side, but that's okay. We love technology when it works, and what doesn't, we don't love it so much. But great question there. And you know, it is very difficult to pick individual stocks.

And it's interesting you can look at charts of you know, who are the top mark cap companies, market capitalized companies over time and and it transitions and you don't you know, you expect some of the big companies to be there forever and they're not always there. So certainly much more risk in picking individual stocks. And you know, just wanted you know, as we're talking about Navidia, who you know, AI has become such a buzz word,

but you know, there it's not just hype. There is real substance behind AI, and certainly Navidia is one of the first companies to really you know, monetize this in a big way. And in Navidia is a chip maker, so you know, for AI, for companies to implement it they need computing power. And this includes the big tech companies like Amazon, Microsoft, you know, so for their their data centers that they need the chip power. And that's where Navidia has come in. And Navidia has crushed it.

And you know I mentioned, uh, you know, they delivered their earnings update close the markets on Wednesday, and you know, their fourth quarter revenue up you know, twenty two percent from the prior quarter, almost two hundred and seventy percent year over year, So revenue of twenty two million billion excuse me with a B you know B Street estimates of twenty billion in data center revenues really drove that increase of over four hundred percent. And it's not just

revenue growth. I mean, they're they're bottom line earnings that they're delivering margins it's seventy six percent, I mean, just phenomenal earnings. So it's not just hype. It's not just revenue growth, it's bottom line earnings. And you know it wasn't just fourth quarter earnings that drove the stock and the stock in the video stock went over seventeen percent over a couple of day period, rebound, you know, basically responding to that earnings release. And it's not

just about fourth quarter earning. It's not just about what's in the rearview mirror. Their their outlook for twenty twenty four extremely strong Q one revenues expected at twenty four billion, gross margins at seventy seven percent. I mean, just solid, solid top line in bottom line growth, really driving the outlook. And you know, when you look at AI, you know, certainly you've

got companies, uh like Navidia who are really on the front end. You know, they're delivering the hardware, super micro computer another company delivering the hardware. But AI, you know it's going to impact companies, not only those that are developing the hardware, but companies who implement it from a technology point of view. And I've been talking to a number of people, people in

the software world. Uh talk to a gentleman works with a software support company, and their company is implementing uh, their fast and furious implementing AI. And what it's going to cost for them is a workforce reduction and really, uh, you know, removing some jobs and and uh maybe shifting some jobs too to to different types of work. And you know, certainly, you know that it could be a long term concern is how that may impact the

labor markets. Right now, we have such a strong labor market we can absorb that. But this is you know, this is really a technology advancement that isn't just going to impact those companies that again that are delivering the software or hardware. It's it's companies that can implement it and implement it to streamline

operations, become more efficient, or to deliver more top line growth. Right if you can use AI, and you think of a company like Amazon, right you go online to purchase things from Amazon, they're certainly working on several different AI features really that are meant to increase the amount of items you purchase per transaction. So instead of you buying three items, you're buying five items. And they you know, they have that effect across their whole customer base,

and that's going to be a significant revenue boost. So certainly, you know, AI is not a fad. It's certainly you know, many are viewing this as a huge technology leap, and it's gonna have it can have broad implications, you know, and again, those companies that have large workforces that could be enhanced or supplemented by AI technology, you know, those companies

have significant opportunity to improve their efficiency and bottom line results. So we are going to take a quick commercial break, so please stay tuned and we'll be right back with Let's Talk Money on eight ten WGY. Well, good morning, and thank you for staying with us through the break. You have John Malay and Samantha Macy hosting the show this morning. We appreciate you tuning in on this beautiful Saturday morning. It's we really have had some phenomenal weather here

in the Northeast, and as a skier, I've given up. I'm now like, I'm focused squarely on spring, which I know we're pretty close, I think twenty five days away from spring. So now I'm I'm focused on that. I'm not worried about snow anymore. I've given up. I've taken this ski season for what it is, and now I'm I'm thinking about golf and things I'm going to do in the spring, and really I'm just trying

to tempt fate here. And maybe we'll get some like three feet of snow next week and we'll have some really good ski weather, but but I'll take I'll take the nice weather. The sun has been nice, and uh, so it's uh, it's certainly been nice the last the last week or so, so you know, we just kind of wrapped up on markets and you know, had a great caller come in with a question and you know, talked about Navidia, who Navidia. Uh, you know earnings where Stellar really

drove some some great results in the market this week. And you know, what's what we're seeing is certainly technology has been leading a lot of what's happened in the markets this year, but also starting to see some broadening out to other sectors, which which is good. And the other thing that's good to see is it's it's earnings, right, it is earnings driving the market, not just sitting here looking at expectations for what the FED is going to do.

But as we talk about expectations and what the FED is going to do, let's turn a moment to that for a second. So you know, next week we're going to have some new inflation news come out. So you know, the Fed's preferred inflation gauge is the PCE, which is the Personal Consumption Expenditures Index, and so we're very everyone's very familiar with the CPI. The PCE is another index, but it's one that you know, the FED kind of prefers, and so those numbers will be coming out next week,

I think on Wednesday. You know, expectations are we're going to see a decrease. I think we're expecting to see uh, you know, maybe in the two zero point four percent range, but this will be an indication, you know, certainly. You know, the FED met in January and you know, as we all know, kept rates, you know, consistent, didn't decrease rates, which was largely expected, and you know, had some strong rhetoric around, hey, we've seen improvement, which is good, but

we want to make sure it's sustained. We want to make sure we see that we're getting close to that two percent price target, inflation target. And so you know, the data coming out next week is going to be important. So you know, inflation. You know, no matter what everybody's expecting the FED to do with rate decreases this year, the FED has been very consistent in saying they are going to be slow to reduce rates. They want to make or that inflation is in fact under control and then and not just

temporarily under control. They want to make sure it's sustained under control. So next week, big week in inflation numbers come out, will certainly see how markets react to that. But certainly, you know, we know the FED. FED will be meeting again in March, so middle dend of March, like the nineteenth to the twentieth, and you know, at this point it's

hard to see a rate decrease on the table. I mean, you know, some of the FED meeting notes that were released, you know, alluded to that that that March it's not really expected to see any rate movement. But again, I think the inflation news coming out next week will be could

have some impact on that. So hopefully we'll see inflation numbers showing continued decline and the Fed, you know, so the FED meeting minutes were released this week, and that was from their January media at the end of January, early February, and you know, they've expressed caution right that they do not want to lower rates too quickly, and you know, really some of the comments coming well, you know, don't worry about it. Let's let's let's

just relax. Let's let rate stay where they are, and when we see more improvement or sustained improvement, we'll put a rate decrease on the table, So more to come on the FED, and certainly, you know, with the inflation numbers we see next week, we'll have more conversation about where we think FED is going. So we are almost halfway through today's show and we're

going to be taking a short commercial break. You know, I want to thank you for tuning in with Sam and myself and hope you are enjoying the show and going to hope you rejoin us after the break. We courage any listeners to call in with questions. You can reach us at eight hundred talk WGY. That's eight hundred eight two five five nine four nine. When we return from the break, Sam and I'll talk about some tax related items and

some financial planning related items. So you have been listening to Let's Talk Money, brought to you by Bouchet Financial Group. Well, thank you for staying through the break. I am John Malay, your host for this morning show, and I am joined by my colleague Samantha Macy, and we appreciate you

joining us on this Saturday morning. We were just kind of giving a recap of the markets and just the strong showing by Navidia and I think a lot of investors are trying to figure out, you know, where do they go with AI. And certainly, you know, individual stocks like Navidia and there's several others certainly are seem to be first to market on monetizing what AI has to offer. But you know there's also you know, a play for just

broad technology because you know, many of the major technology UH players. Certainly the almost every member of the Magnificent Seven is embracing AI to drive revenue UH and increase bottom line results. You know, one of the things that you know we're coming up upon is tax time. You know, so this is certainly the time of year where UH individuals are paying attention to tax strategies.

And you know, as part of our jobs investment advisors, you know, we don't not only manage money, but we help with you know, tax planning, financial planning, other matters. So I know, certainly Roth roth conversions backdoor roth certainly have been a topic of conversation and a lot over the

last two years. And I know, Sam, that's something you know, as part of our financial planning meetings, something we analyze for clients, and I know it's something you've had a lot of experience and spending some time with and just thought it'd be a great subject to share with the listening audience. Yes, thank you, John, And it really is a timely topic to

be talking about today. And before I jump into that, I was just thinking about our first caller and heard talking about supporting local businesses and I feel like, you know, we are seeing a lot of exciting developments locally and in regards to chip manufacturers and AI and that being across the board is helping businesses become more efficient. But on Monday, the Commerce Department said that the government intends to provide one point five billion dollars to Global Foundries to help us

build a new factory in Albany and expand semiconductor production in Vermont. And you know, that's that's a very exciting thing locally and something that I'm sure we'll be talking about in the future. But just great to see that that local

business getting some funding from the twenty twenty two Chips Act. Absolutely, I think that's a great Yeah, great point to bring up, Sam, is that you know this is you know, impacting us locally, right, We've are you know, New York has made that investment in Global Foundries and we're certainly seeing that payoff in a good way. Mm hmm, yeah, yeah, I totally agree. So let's change gears a little bit, and we're

going to be talking about some some very timely planning topics for you. And as John was talking about, I first wanted to point out that there is still time to do twenty twenty three traditional IRA and roth Ira contra ditributions before the tax filing deadline on April fifteenth. And for twenty twenty three, the contribution amount was six thousand, five hundred and for those that are fifty or

older, seven thousand, five hundred. Of course, for twenty twenty four, you can make contributions this entire year, and the limits did increase a little bit. For twenty twenty four it's seven thousand dollars and fifty and over

eight thousand dollars. Now, remember that when you make a wroth IRA contribution, it is limited by your income level, and if you are someone that has income above the modified adjusted growth income limit to make a contribution, there actually is another option for you to make roth IRA contributions, and it's called

a backdoor roth For some this might be familiar. For others, this might be a completely new strategy to hear about, and so I just thought I would talk through it a little bit today and feel free to call in if you have question. But what it is is you make a non deductible contribution to your traditional ira and then you convert that money to your roth ira, and then you simply invest the money and receive the long term benefits of tax

free growth in a roth ira. The ideal candidate for this is someone that is a high earner who does not already have traditional IRA savings and won't need the roth ira funds for at least five years. Now. The reason I say you should not have IRA savings already is because a backdoor roths conversion is a taxable event and the IRS requires us to follow the pro rata rule.

And under this rule, if you have both pre tax and after tax dollars in a traditional ira, when you go to do the backdoor ross, the conversion will be a proportional share of both types. So, for example, let's say your traditional ira already has a balance of four thousand dollars when you make a non deductible contribution of six thousand dollars into that account. When you do the conversion to the ross. The IRS doesn't let you just take the

six thousand dollars after tax that you just contributed and move that over. Instead, your conversion will be forty percent pre tax and sixty percent after tax, just like you're overall waiting in the IRA, So you'll have to pay ordinary income taxes on the pre tax amount when that conversion occurs. And if you do not have an IRA with a balance and already, then you can do a contribution of the after tax money and then move that over without having to

worry about the pro rata rule. And that's why that's what we recommend. And some people open up IRA accounts simply for this purpose. They're high earners, they can't make ROTH contributions otherwise, and so they have an IRA that they fund and do a backdoor with every year. So what are the benefits of this, Well, it offers tax free growth because it is a ROTH

IRA. So the goal is to fund it as much as you can, and it's a tax advantage retirement vehicle where all future growth is tax free as long as you wait five years and until fifty nine and a half to make withdrawals. And of course there's no taxes paid on those distributions. Some people do have options to do after tax dollar contributions to their employer plan, but again, if you're a hierner and you do not have that option, this

is your only option to make roth Ira contributions. What's more, wroth IRA assets are not subject to required minimum distributions, which means you can leave that money in your account as long as you would like and get all of that growth on the account. And they are the most attractive types of accounts to inherit, one of the most I should say attract types of accounts inherent as

it will be tax free for your beneficiaries. They will still be subject to the ten year rule, so they'll have to take out all of the funds within ten years, but tax free so it won't impact them, let's say if they're a young working person who is in a higher tax bracket. Is not going to hurt them in a sense of pushing them into an even higher tax bracket. Both done correctly, a backdoor ross should be a non taxable event, and you can still do one for twenty twenty three before the tax

filing deadline as well. If this makes sense for you. On another note. I know in twenty twenty two roth conversions were a hot topic because of the opportunity when the markets were down, and obviously the market has recovered since then, but we are still having conversations about them. And it's really not a one size fits all scenario for people when it comes to ross conversions.

So if you are considering a ross conversion, I recommend you think about if you have a long time horizon to let the money grow, if you can pay the taxes with other money outside of that conversion amount, because you want that full conversion amount to be growing and not impacted by having to pay the taxes with it. And will doing the conversion push you into a higher tax bracket. For some people, this means doing it in chunks over several years

to manage that. For others, it means it's simply not the time because they're already in such a high tax bracket. And would you need the money for any reason in five years. If you do, then you don't want to be doing that because it would cause you to incur penalty for withdrawing it within that timeframe. So I know that was a lot of information, and if anyone has questions about ross IRA contributions, traditional iras ROTH conversions. So

back to a ROTH, please feel free to call us. You can read us at eight hundred eighty two five five nine four nine. And Sam, those are some really great topics. And we know from a financial planning perspective, right, one of the difficult UH situations can be when somebody has all their money in qualified accounts. Right, So whether you know an IRA rollover or IRA, you know in that case every dollar they take out is going to generate taxes. And as Sam said, there's you know also r m

D requirement. So certainly, you know, we see from a financial planning point of view, what we like to do is diversify our buckets and have some of the money in qualified accounts UH and then some in non qualified like a WROTH or traditional brokerage account. Just allows more flexibility and and you know,

quite frankly allows you know, better planning. And certainly you know, those who are able to contribute to WROTH or do WROTH conversions and you know, gives them that flexibility of having those multiple buckets that they can decide to pull from, and it also helps limits you know, the more you have in a Wroth bucket versus like an IRA, it reduces the r m D right, and the required minimum distribution would be taxable, so can certainly reduce

you know, your your tax burden as well. So and as Sam talked about, you know when when markets were down, you know, it was a big topic, but you know it can still work now. And again, as as Sam did mention, it is an individual by individual analysis.

It really does take analyzing the whole situation understanding what money is available to pay the taxes because with a Wroth conversion, you know, upon conversion, you now create a taxable event, right, So unlike the back door where you're not creating a taxable event, with the conversion you are and so you know, just our analysis has shown that if you need to take money out of the IRA to pay those taxes, typically the payback is not there, right,

And so the factors become is do you have resources available to pay the tax effect out of other resources? And as Sam mentioned, how long can you keep that money you know, growing in the markets, because the longer you can, the better the payback analysis is for sure. So we are going to take a quick commercial break, so please stay tuned and we'll be right back with Let's Talk Money on eight ten WGY. Well, thank you for staying with us through that short break. Allowed me to get a little

sip of some water. And I am John Malay. I am your host for this morning show, and I'm joined by my colleague Samantha Macy. Samantha just gave a great overview of backdoor ross and Roth conversions. Certainly, you know with the backdoor ross certainly attacks strategy that we still have time to pull off. And again, I want to encourage any listeners to call in with questions. You can reach us at eight hundred talk WGY. That's eight hundred

eight two five five nine four nine. So, you know, one of the things that has happened with the markets is, you know a lot of individuals over the last couple of years with concern you know, pulled back and are sitting in a lot of money in cash. And you know, this is the conundrum, right, if you get out of the market, is when do you get back in? Right? And so you know, and some would say, you know, we certainly are big believers of if you

know, we're long term investors. You know that that's our strategy is definitely a long term investment strategy. So we stay We set our philosophy is stay invested, and you know, be smart with your allocations, right, so you can allocate and if you need money out of your portfolios, you know, and we set up cash management strategy, so if we know a client needs to take money out, we're moving that into a cash management strategy really

to protect it from the markets. But you know, a lot of individuals and as we're talking to new clients or just friends of mine, I've talked to who over the last couple of years, you know, did get a little nervous, took some money out, or maybe they came into money through

bonuses or other situations and they didn't put it into the market. And now they're sitting on this sizeable cash and they're watching the markets go and and they want to get better into the market or they want to put that money to work in the market. And so we get a lot of questions about dollar cost averaging versus lump some investing, you know, in the dollar costs instead

of you know, just making up a number. If you had one hundred thousand dollars sitting in a checking account that you decided you wanted to get invested in the markets. You know, you could put that one hundred thousand in right away, or you could say I'm gonna put a little bit in each each month over the next year, and that would be dollar cost averaging.

And you know, it is interesting because you know, there's been several analysis of one strategy versus the other, and history does show that that lump some investing does outperform dollar cost averaging when you look at it, you know, over history, and you know, so from a performance point of view, definitely, I think history shows lump sum is better. Now, I will say that that timing, depending on when you're time arising, that could produce

one result or another. But history does show lump sum does outperform DCA. However, you know, there is a whole psychology of investing, right, and so certainly you know one of the things that DCA does provide, right is sometimes it's that psychology of regretting risk. Right, so you want to say, if I can do I reduce my risk by putting it in over a series of installments, and really that's the psychological part. So certainly, you know it's a time we feel to get invested. We're very bullish in

the markets and think that lump sum is the way to go. But I will say, you know, from a psychology point of view, if that brings you too much concern, certainly DCA is also an approach. We have a caller on the phone, Leonard from Scaring Leonard. We appreciate you listening and what can we do for you this morning? A Hi, It's just a quick question on subject. I know if you have a four to oh one K and you are taking your distributions and you're in a nursing home that

the nursing home can't go after the principle. Is that true with roth Ira, Hi Leonard? Yes, so retirement types of accounts are protected in that sense. Okay, that's all I need and now thank you all right, thank you for calling in letters. Sam. Appreciate that response, and that is a concern. You know, we have clients who you know, sometimes set up trust but also as as Sam mentioned, retirement funds are protected, which is certainly a benefit. We also have a caller ed on hold Ed.

We appreciate you calling. What can we do for you? Okay, I have to take an I WACO IMD required minimum distribution this year. Yeah, and R and D. My wife and I were married. I'm eighty one and she's sixty nine, and we don't need that cash. Is is it appropriate for us to fund her IR with that excess cash? So I'll take that one as well. Yeah. So you have to have earned income to contribute to an IRA or a roth IRA, and if you're not working,

you're unable to do that. What you could do is we both have earned we both have earned income. Okay, Yeah, so if you have earned income you could be doing that. You could also be putting it into a taxable or brokerage account as well, which would be equally better official for you. Mm hmm, John, do you want to add anything here? No? And I would just say, you know, it's it's not unusual that we have individuals who don't need that the r m D money to to

support their their everyday expenses. But you know that is part of the tax code, is they you know, the government wants to get that tax so they do require those r m D s. And we have many clients who then you know, just take that money and put you know, transferred to a brokerage. Now, if you are able to contribute. Uh if you are you know, able to contribute to a qualified account. You can still

do that if you meet all the requirements. But certainly, uh, you know, we have a lot of clients who maybe they're retired and they don't have earned income, but they don't want to just take that out and sit in cash. They just move it to a brokerage. Uh and then uh, you know, put that money back to work in the market. Okay, understand well those definitely have an earned income and will continue to have it,

so it is possible. Okay, thank you all right, great, thank you for the question ed, and appreciate appreciate you listening to us this morning. So great questions there. And and certainly you know, you know, good for Ed. That's you know, great to be uh at that position still have earned income. And I will say, you know, it is interesting. We have more and more clients who who in retirement are still generating earned income through whether it's consulting work or going to part time. And

it's really it's interesting. It's not about doing it because they financially need to. It's about really what brings them joy. And and you know, we've had many clients we work with who sometimes change careers but go into something that they really enjoy doing that that makes them feel that they're still very valuable and uh, you know, keeps mentally sharp and physically sharp and so great to

be in a position to do that. And uh, you know, so just you know, wrapping up the conversation on the DCA versus lump some and and and I will say, you know, as investors, right there, there is a whole psychology. Uh and and there's great books out there, there's a whole study of it. But that does it does, you know,

sometimes impact how we we react to things as investors. And and I'll say a big part of what we do as advisors, and an advisor does is really takes the emotion out of investing, right And you know, sometimes it's it's understanding, Hey, understand that maybe DCA does make you feel better from a risk perspective, but let's really talk about you know, long term, what what what is happening with these funds that are gonna be invested?

Are they going to be in the market for a long time? Uh, And really take some of that emotion out of the picture, and we see that, you know, quite frankly, we saw that a lot when the markets were declining, you know, And I will say, we do so much communication, and Sam in her role also, you know, does a lot of our marketing and marketing communication, so we spent a lot of time communicating with clients. So we really didn't have a lot of clients who were

overreacting to the markets. But you know, it's just nature if you're seeing markets go decline. We would have conversation with clients, some who wanted to go all cash. I need to get out, I can't handle this anymore. And then we talk through and make sure we've got money set aside that they need over the next two years through a cash distribution strategy. But that's where, you know, the behavioral side of investing is very serious and it

does influence behaviors. And I will say that is one of the best benefits of working with the advisor and not that we take away those feelings, right and again, it's investors' money, so we're always gonna do what is right for the investors or what they are comfortable with. But sometimes it's just helpful to have somebody independent to have those conversations with. And Sam I was talking

about some of your marketing efforts you do for our company. I know one of the recent things you did and we've talked about is you know, in late January, we had our annual State of the Economy and that a lot of effort goes into those events. And we have several members of the firm present and we have a Q and a session and we have that session recorded and Sam worked with a company that did the recording, did editing, and I think Sam, that's all been posted to our website, So certainly something

that Sam was heavily involved with. Great great tool for our clients but also prospects. So I highly encourage you to go to our website Bouche dot com and you can check out the great work there. Well, Sam, we are coming to the end of the show. Oh it's hard to believe hours gone by. Appreciate you and being with me this morning. My pleasure. Yes, yes, and I want to thank everyone here for tuning in with

us today. And I hope you enjoy the show. I know Sam and I did, and I hope you enjoy the rest of your weekend and have an amazing week ahead. Please be sure to tune in tomorrow morning, bright and early atam to hear another show. Check out our website Bouche dot com for great content and information you have been listening to Let's Talk Money, brought to you by Bouchet Financial Group, where we prioritize our client's health while we manage their wealth for life