Let's Talk Money

that celebrates whatever the holiday is that you celebrate. I hope that it's as happy as can be, and that you enjoy your family friends. I hope that you're able to make a difference in their lives somehow, some way. And I once again appreciate your tuning in today early on a Sunday morning, a little I guess we got a dusting of snow overnight, at least in the Upstate area. You know, for me, I don't like the snow anymore. I don't like the black ice. But a lot of

people do so enjoy the snow. The phone lines are open. I am Stephen Bouchet. I am here, and I do have amazing colleagues, twenty professionals that I'm surrounded by that do an amazing job. And today you have me. I'm live Stephen Bouchet, and the phone lines are one eight hundred talk WGY. That's one eight hundred eighty two five five nine four nine, one eight hundred eighty two, five fifty nine forty nine. So I had a beautiful, beautiful

night last night. I take over the Hotel Adelphi. I put all of my colleagues and their spouses partners up for the weekend, and we close down Austeria Danny's last night. So for those of you that tried to get in for dinner, I apologize. We kind of took it over and we had an amazing time, an amazing dinner. Just I look at my colleagues and I can't begin to tell you how proud I am of them and a night like last night where we celebrate just being together.

My success is because of who I'm surrounded by, and each and every member of my team. They do such a job, they care about my clients the same way that I care about them, and I can't thank them enough. So we had a beautiful night last night, a beautiful, beautiful evening, and I just you know, can't get enough of them. Eight hundred eighty two five five nine four nine.

We had a good show yesterday. A lot of good questions, questions on you know, dividend paying investments, life insurance, just some life planning questions, which is always nice because sometimes we rush through life and we really don't take the time to just make sure that our life is planned out the way that it is. So we had a really good show yesterday, and hopefully we'll get more questions today because I can assure you if you have a question,

somebody listening will thank you for asking that question. They may be too shy to call in with the question, which is why you need to call in with the question. One eight hundred eighty two five fifty nine forty nine. It was a good week in the markets. You had an asked that up almost three point three percent, SMP up just shy of one percent. Russell two thousand didn't fair so well. Russell two thousand was down one percent. And I'm telling you folks, twenty twenty four is a

good year. You had NASDAC up thirty two, almost thirty three percent, QQQ, which is Nasdaq one hundred up almost twenty nine percent, the S and P up twenty eight percent, with dividends twenty nine percent, and the Russell two thousand is up nineteen percent even with the down week. If it wasn't for the down week, it would be up twenty percent. And that's good. You hear me say often that we need the mid cap and small caps to take part in this rally. That's how you know this

rally is here to stick. And it's nice to see the Russell two thousand up as much as it is. The international markets. And believe me, folks, there's a lot of a lot of good reason on paper to invest overseas. You know, the US markets have dominated in years, especially recent years. You I give out the statistics often over the last fifteen years, your average return in the S and D, which is really the benchmark for the US

stock market, it's about fourteen percent year in year. Out overseas, it's you know, five to six percent, a big, big difference. We're not invested overseas, and that doesn't mean you shouldn't be. We just feel that we can get some really good value out of this good, great country of ours, and we invest exclusively in the good old USA. But while US stocks have you know, really dominated emergent markets, countries like Vietnam, Mexico are gaining attention basically because of the

global trade supply issues. And if you're thinking about investing overseas, there's good ETFs out there that are broad en up. As I said, we are not invested overseas, not just yet. We're being very patient. I'm not sure we're looking to get in to overseas investments anytime too soon. But that doesn't mean that it's there's not a case to be made, Zach. I'm going to take a quick fifteen second break. Don't

go anywhere, folks, anyone. Oh thank you, folks. I needed to really wet my whistle and clear my throat, So I appreciate you hanging in there letting me do that. One eight hundred talk WGY one eight hundred eighty two five five nine four nine. So as I said, there's on paper I could I can make good, good reasons justification of why you should invest overseas. We're just not

invested overseas. You're to date, if you look at the rest of the world, which includes every stock market except for this great country of ours, year to date return is seven percent compared to the S and P twenty nine percent with dividends. If you look at just emerging markets, eight percent year to date, once again compared to the SMP being up to twenty nine percent. So so far, international markets isn't the place to be. But that doesn't mean that if you have a little bit in your

portfolio for diversification. There's a lot of people that believe and that we just haven't been invested overseas for quite some time. And I'm okay with that. I'm actually okay with that. Our returns in the USA have been pretty pretty stellar. You know, yesterday we talked a little bit about inflation, and believe me, folks, inflation is there. It's not the nine percent that it was just a couple

of years ago. It's somewhere around two and a half to three percent, depending on which indicator you look at. The CPI Consumer Price Index is down to two point six percent and the peak was nine twenty twenty two. And you know, inflation will always be there. That means that you're paying more for milk and bread. Every year, you're you're paying more. Very seldom do you see the

prices go down. And we know for those of you that are shopping, especially low income folks that aren't making a lot of money, it really affects them when they have to go to the grocery store and they look at you know, one hundred dollars worth of groceries doesn't go as far as it as it did just a few years ago. The same act the gas pump. You're paying more than you were a few years ago, and you're heating bills are more. That's inflation. Inflation is here

to stay. And what do people do? How can especially retirees who are on fixed budget, how can they beat it? Well, I think we talked yesterday and I talk almost weekly. You know, if you're living just on Social Security, your average Social Security annual check is about fifteen thousand dollars, you're going to get a two point five boost for

twenty twenty five cost of living adjustment. And that's you know, it's nice that that recipients who are receiving Social Security are going to get a two point five percent boost. But as I said, you're paying more than that for milk and bread and gas and heating bills. Those costs are a lot higher than two point five percent. So what do you do? How do you cut it? Well, we talked about real rate of return. Real rate of return is when you get your return less inflation. That's

the real rate of return. If you put your money in the ten year US Treasury right now, you're going to get almost four point two percent. If inflation is let's just keep it simple, three percent. That means that your real rate of return is one point two percent. So having stocks in your portfolio, listen, if you go back from nineteen twenty six to recently, your average return for the SMP was about seven percent. When you add individends, almost ten percent. So your long term return in stocks

is somewhere around let's say ten percent. I know over the last fifteen years it was almost fourteen to fifteen percent. Of the last fifteen years have been pretty good. Even with all the bad headlines, all the bad news, all the negativity out there, the stock market has done well. When you look at your average return in bonds over the same fifteen year period, about two point five percent. And that doesn't mean that you shouldn't have bounds in

your portfolio. Bombs soften the volatility. It doesn't mean you can't lose money in boonds. We know that you can if you look at bonds. We know that over the last couple of years, especially investors weren't used to losing money in bonds, but they did. In twenty twenty two they were down about thirteen percent, twenty one down almost two percent, and in twenty eighteen almost break even. So bombs it's not guaranteed that you're going to make money

every year. If you own bonds. You're going to have up in down days, just like the stock market, Just like you do in gold or real estate. You have good days and bad days, good weeks, good months, bad weeks, bad months, sometimes bad years. So there's no guarantee that you're going to make money in bonds, accept if you buy individual bonds. And we had a good callery yesterday. We talked that he wanted to buy some Uni bombs.

He was in a low tax bracket, so I kind of suggested to him that he should look at treasuries. If you can ladder a portfolio of a bond portfolio, especially treasuries, because you don't pay New York state tax on or any state tax on treasuries. So you can buy a six month treasury right now yielding almost four point four percent, of one year four point two percent, of five year, just over four percent, ten year almost

four point two percent. Why ladder because when those bonds come due, you don't know where interest rates will be, so it kind of takes the guesswork out of it. You're laddering a portfolio, and you can do it with CDs as well, and when they come to you just buy a new one. Wherever interest rates are at that time. We're going to hit it right. Maybe you'll get lucky and get it right here or there, but consistently it's hard. So what you want to do is ladder of portfolio.

And I like treasuries because you don't pay state tax on it, so it just it makes that like four point two percent a little bit more depending on what state you live in, especially if you live in New York City. So yesterday we had a good caller where the gentleman wanted to buy Muni bonds, and I got them thinking about buying treasuries We're not sure what he'll do or not, but this is how really investors should think.

A lot of people buy muni bonds because they think they're paying so much in taxes, and when they break it down, their tax rate may not be as great and that means that they don't need that tax free income. They could probably get more income. So bonds is good in the portfolio, especially for retirees, having that diversification, and then alternative alternatives could be considered commodities like gold, could be real estate. There's some good real estate ETFs out

there that have decent yields. We have alternatives in our fixed income portion. So if a client has a sixty forty portfolio growth and income strategy, sixty percent will be invested in the stock market. We believe in the stock market. We really try not the water down the stock portion of the portfolio, but the bond portion of the portfolio.

That forty percent will actually add alternatives, sometimes cash, and we have some buffer investments that protect on the downside and on the upside you don't get as much, but it's a nice alternative to fixed income. And we've made some really really good money with our you know, alternatives one of them is is really not only is it a good diversification of JP Morgan equity premium income. You know, the return has been pretty pretty stellar. You know, year

to date we're up about almost seventeen percent. That so that's actually one of our alternatives. Last year we were up almost ten percent. Twenty twenty two, we were down three and a half percent, but that's a whole lot less than the bond index being down thirteen percent. Twenty twenty one, we were up twenty one percent. It's got a nice yield. There's risk with it, but as I said, we we we blended in. You're getting almost an eight percent SEC yield, and we've blended in is part of

our fixed income. This is one of the reasons that our returns have been as stellar as they are because we're not afraid of adding some risk in the portfolios. We let our clients know that we add risk to the portfolio, so they understand. My advisors explain to them that, you know, we have a well diversified portfolio, and we'll we're not afraid of adding stuff like alternatives into offset the fixed income. We feel we get a little bit more alpha, a little bit more return by adding it in.

And always remember, and I said it yesterday, anybody who takes money out of their portfolios, anybody who needs money over the next one to two years, that money really should not be invested. That should be really conservative. So that not if, but when that next correction, when that next bear market, when that next recession comes, you don't worry. You know, you have twelve to twenty four months, and I say twelve to twenty four months, because we start

out with twenty four months. We let it drift down, We wait for good opportunities to replenish it. So twelve to twenty four months on average we have set aside, and most corrections bounce back within twelve to twenty four months. That's why we picked that is, you know, a safety net. We ensure our clients that they don't have to worry when that correction comes. The world won't come to an end.

It hasn't come to an end yet, and they don't have to worry about their quality of life turned retirement because we had them protected. We have their money set aside that they need to live on. And it's not in the stock market where you could have years down twenty thirty forty percent, and we know that happens. You go back to twenty seven through twenty oh nine, the stock market was down fifty percent in you know, less

than two years. That hurts that, you know, there were a lot of investors who really jumped ship, got out of the market because they felt they couldn't lose any more money. We tell our clients, you really haven't lost any money if you're still invested. You only lose when you sell. When you sell, that means you don't have the chance of bouncing back playing, you know, keeping that

money invested for when it rebounds back. And the stock market will rebound back every correction, every bear market that the market has been through, Guess what the market has come back and guess what it's gone on to make new all time eyes. That's what the market does. The average swing peak, the trot high to low swing in the stock market over the last forty some years is about fourteen percent a year. That means you can go from a to a low swing fourteen percent on average

year in year out on the average. And this is you know why, if you're invested properly and you have a well diversified portfolio, and you should have a well diversified portfolio that you're going to have bouts of volatility. And there's volatility, as I said a few moments ago, in every asset class, so you have to expect that. The key is, if you have a well diversified portfolio, you're comfortable with the risk you're taking when those bounts

of volatility happen. Do not get scared. Do not listen to your brother in law this afternoon at the Sunday dinner table. Do not listen to some of the bad newspaars on some of these financial programs that are really just trying to sell fear. We love fear. We love to pick up and read about bad news because you just want more of it. Well, stocks are up more than they're down. Over the last eleven years, there were only two years where stocks were down, including this year.

This is the eleventh year, so only two years where stocks were down. Over the last forty four years, I think it's eight nine years where the stock market was down. So, as you can see, stocks are up more than they're down. And this is why we're we're perfectly fine with clients, especially retirees, having stocks in their portfolio. One eight hundred talk WGY one eight hundred eighty two, five five, nine, four nine are the phone numbers. If you have any questions,

any questions whatsoever, Folks, give give me a call. I would love to get you pointed in the right direction. You really have one opportunity to retire. You can't go back and make up for all those decades that you were working, all those decades that you should have been putting on the way towards your retirement, saving for that day when you want to retire, because you go from making money getting a paycheck to living off the money that you set aside, living off the investments that you've

made through all those years that you were working. And you hear me say this often. If you're not saving ten to fifteen percent of your pay, more than likely you're not saving enough for retirement. Retirement, it's expensive to retire. When you retire, you need, you really truly need to have a pretty good nest egg set aside in order

to live off that. If you have a million dollars saved up a million dollars on average, you should be able to take four to six percent withdrawal rate, and that gives you forty to sixty thousand dollars a year that safely you can take out and you know you have that folio, keep up with inflation and have it be good for you for all the years that you retire. Remember, if you retire at sixty five, you're going to live for twenty five thirty years maybe. And that's how you

have to think. One eighty five five nine four nine. Let's go to the phone lines where we have Mark in Clifton Park.

with regards to a CD coming to and Mark. What you're looking at is the Victory Shares Free Cash Flow ETF and basically it has about fifty two stocks and the top ten account for thirty four percent of the total assets. It's it's a brand new fund, you know when you and even though it's had a good year, if you look at the holdings in the fund, there's some good holdings that you'll be familiar with. You have you know booking holdings, Qualcom, Delta, Conico, Phillips, Expedia. Those

are some of the holdings. The top holdings account for just about five percent, and as I said, the top ten holdings account for thirty four percent of the total portfolio. But it's a brand new fund. Mark it's not a fund that we would invest in because there's just no track record, no history there, and it's had it's had a good good year. I think there's probably a sales charge with this fund, which means somebody sells it, but

I don't know that, you know for for sure. It's got a fairly good expense ratio about zero point four percent, which doesn't scare me if it had one percent or more, because a lot of mutual funds have those high expense ratios, and this is an ETF, so that's one of the reasons why the expense ratio is a little bit less. So I guess, I guess there is no sales charge because it's an ETF, you're just going to buy it. But it is brand new, it's only been around for

a year. I would rather one if you want to get in the stock market. The beauty about stocks, and this fund has fifty two stocks in it, so you're really investing inos even though they say it's safer than maybe the stock market index. I don't know about that. There's just not enough data to really analyze it. But if you know, you want to get invested in stocks. The beauty about the stock market is it's almost always that all time highs. It always is near the all

time highs. And we had HASSTACK and SMP closed Friday at all time highs. It's a beautiful thing. That's that's what I love about having stocks in the portfolio because sure you'll get a breather and I can't tell you when the market will correct itself, but it will correct itself. If you want, you know, put that money in a money market fund, getting you know, somewhere around four percent,

wait for a little correction. If you don't want to put the money in now, if you google and kind of do a lump sum in that it's been versus dollar cost averaging, you will find most of the time just putting that money in the market as a lump sum will pay you off more than dollar cost averaging. And believe me, I can sell dollar cost averaging all day long because it sounds safe. You're tell an investor, listen, put a little bit in now, a little bit in a month from now, a little bit in a month

after that, from now and so forth. Well over the last fifteen years, dollar cost averaging has not worked because the market has been on a pretty good rally. And sure there's breaks in the action if you're lucky enough that a month from now the market corrects itself and that tranch you put in. But you can look at studies and Vanguard has a great study mark that shows

putting that money in. And if you're a long term investor, listen, the market may be down a month from now or two months from now, but a year from now, two years from now, five years from now, you know there's a good answer that market will do good. Did I help answer your question?

not like you're for a new fund. I'd rather see you actually put that money in the SMP with with good solid companies and just over time, that'll be a good investment. One eight hundred eighty two five five nine four nine, One eight hundred eighty two, five fifty nine forty nine. Any questions, folks, give me a call. I would love to talk to you. So, you know, this

week we started out South Korea. You know, they they went into six hours of martial law, a little scary, you know, before before it was overturned by the people in power and looking to impeach the president. You had, the French government, led by Michael Barnier fell in a no confidence vote and ironically, you know, I'm on Twitter for information and President Trump went over well, President Elect Trump went over to for the opening of the Notre Dame Cathedral and I'm telling you, I hope to get

over there to see it. My wife and I you know, our last time in Paris, we saw we actually stayed on a little the Isle of Saint Louis, which is the little island next to the island of Notre Dame where Notre Dame is, and it's nice, busy get off the airplane in Paris and driving into town as a pain in the neck. But you can take a subway right from the Paris airport to the Notre Dame stop and he kind of walking. It's a nice little neighborhood.

And every time soon I have been in Paris, that's where we stay, a little small bootique, almost like a bed and breakfast, and you feel like you're in your own little neighborhood. You got the shoemaker, you got the butcher, you got the cheese, you know, the maker and so forth. And it was always a pretty romantic place and a nice place to stay. But I'm hoping, hoping to get back there to see the newly rebuilt Notre Dame Cathedral. And President Trump was there, and you know, you would

have thought he was a rock star. Everybody, everybody just you know, all eyes were fixated on him, and everybody came up except for Michael Barnier. There was a little tension there. So to be interesting when President elect Trump is president, what goes on there? You had bitcoin on top one hundred thousand dollars as President Electrump have pro

crypto Paul Atkins to run the SEC job. Snap snap back to two hundred and twenty seven thousand new jobs for the month of November, and we had another thirty three revised up word for the month of October. So for the week, as I said, it was a good week. The SMP up just shy one percent, NASTAC up three point three percent. A beautiful week in the stock market. It's a beautiful year in a stock market. One eight hundred and eight two five four nine. Let's go back

to the fall lines we have ed in Newburgh. Hello ed, hello there, good morning, so good morning to you.

your rm D at age seventy five. If you turn seventy two before twenty twenty three, you've already started taking your rm D. And it's so you know, it looks as though you can put it off till next year. So what that means is sometime next year you need to take your rm D and when you're seventy three, and when you take it is you know, we have some clients that take it at the beginning of the year. Some clients take it at the end of the year, as long as you take it out because there's a

pretty hefty penalty if you don't take it. But it is, you know, Uncle Sam, you know they made it confusing. It would be nice to just kind of do away with IRS, to be honest. We all know what we owe in taxes. As long as everybody's honest and pays their fair share in taxes. IRS just really really confuses things, and they really confuse things with the R and D.

I know, Angela says me. And Janie in my office and Andrea and Shelley our service team, they go crazy, especially this time of the year, because we need to make sure that our clients take those rm ds and they actually have a system down, and I'm pretty proud of the job that my service team does to make sure that happens. But it is, it is confusing. They're they're right on top of it. So there you have it.

If you're if you're born between fifty one and fifty nine, you start taking at age seventy three.

And remember, if you have multiple I rays, you got to calculate the r m D for each account separately, but you can take you can take your rm D from just one of them as long as you take If you have ten I arrays and you need to take ten thousand dollars out, as long as you take ten thousand dollars out. You're you're good. The penalty for not taking money out it used to be fifty percent, and now it's dropped to twenty five percent, but that's

still a hefty, hefty penalty. So you got to you got to really keep your eye on it and make sure that you take it out.

it's not like owning the video, that's for sure. So Intel was one of those companies that just hasn't done well. Tesla has done well, I'm telling you. And I don't say this because Elon Musk is part of President elect Trump's team. I said this long before he was part of his team. He's a brilliant man. I'm kind of excited to see what goes on, to see what kind of savings. Listen, folks, we're in debt in this great

country of ours, thirty six trillion dollars. We're spending more money than we bring in at an astronomical rate, and we can't continue on like that. We are going to We're going to go belly up as a country that day will we'll come when you know, I mean, how much money can we print? The beautiful thing about this country is where we can print money and we sell it to countries like China. When China buys our bonds, Basically we're printing money. We're selling those bonds to China.

Now we have to pay interest to China because they've bought our bonds expecting interest, and just the line item of our budget for interest alone. Listen, when interest rates were close to zero, interest was a whole lot less. Now that interest rates are let's say, four percent, give or take depending on what bond you buy, all of a sudden, that interest rate number almost quadrupled. So it'll be interesting to see what Elon Mosk and Vivek do. See you know, supposedly they're going to go from like

four hundred agencies down to ninety nine. Folks, we know, we know. Everybody knows there's a lot of waste in government. Everybody knows most politicians all they care about is getting re elected. That's really what most most politicians do is they just want to get re elected. And it's a sad thing. Guess what, Elon Musk he care less about getting re elected. President Electromp. He can't get re elected.

So the next four years will be interested in to see if we can wrap our arms around this financial mess that we're in. Thirty six trillion dollars is a staggering amount to be in debt, and that's exactly what we're in debt in this great country of ours. Somebody has to somebody has to wrap their arms around it. And folks, listen, if you're taking social Security, they're not going to hurt your social Security check. Now listen, if forty years from now you're going to take social Security,

they should look at raising the retirement age. We're living longer, people are working longer. They have forty years to This came out of the Bulls Simpson. President Obama had to bipartisan committee. How many years ago was that, and this was one of the things they wanted to do, just raising the full retirement age for people that were twenty eight years old, so forty years down the road, and guess what, it got shot down because that wasn't enough

time for people to plan. Listen, I've been planning for clients for almost forty years, and I can assure you whether they take that money out at sixty seven and a half or sixty eight years old, it's not going to affect them if they're planning properly. But just that little tweak would make a huge difference. We have a lot of entitlement programs in this country. Social Security when it was you know when FDR brought it to to life, our life expectancy I think was somewhere around sixty five

years old. Why do you think that's when Social Security full retirement age because a lot of people weren't living past that. Now people are living into their nineties. Life expectancy is the late seventies. So there needs to be some tweaks. But folks, they're not going to touch your security. Those that take it now you're safe. Those that are

going to take it soon. You're safe. But there are things that they need to do in reducing the agencies and just cutting one percent of all federal employees show up to work. They all work remotely, folks. If you don't think that's a waste, those days are coming to an end, and they should come to an end. This is our money. The politicians spend our money. Those of us that pay taxes, those of us that work and

pay tax is that's our money they're spending. They got to stop spending it like drunken salers in the port one eighty two five four nine. Let's go back to the phone lines we have ed in e screen Bushel. Good morning, Hello, Ed.

the five hundred companies in the SMP. The Broad Stock Market Index buys the five hundred companies in the SMP, the four hundred companies in the mid cap indecks, and the six hundred companies in the small cap indecks. So you're getting a much broader diversification. Although the returns are similar, you're getting a much broader diversification, and you're getting some mid caps and small caps, which I think is a

good time for investors to put that money in. But yes, when you take your R and D, you can just turn around, open up a taxable account if you don't have one at Charles Schwab, and buy back in. You could probably journal that S and P, you know, up to whatever the dollar amount of your R and D is into the taxable account, But you don't need to do that because there's no tax consequences when you sell that in your I array, you're not paying tax on any gains that you may have in it, so just

sell it and buy a new fund. As I said, I like not only do I like the broad stock marketing decks. We use Schwab. We used to use Vanguard, but Schwab has the lowest internal management fee. There's fees in ets, there's fees and mutual funds, there's fees and annuities. The internal management fee of this is point zero three percent. It doesn't get much better than that. That's almost they're almost paying you to buy that. So that's the other reason why I like it. Hopefully that helps you.

money market fund. Wherever you're whoever you're talking to at that bank, Fire them, you know, open up a a Schwab account, go into the retail office and tell them you're taking money out of a CD and you want something safe, Steve. Hopefully that helps you. Eight two five four nine. Let's go back to the phone lines. We have Dan and Glen falls. Hello.

We're coming up to the show. You're listening to Bouch Shape and Answer Group Let's Talk Money, where we help our clients manage their wealth and we hope that you stay healthy. Thank you for tuning in. Go to our website Bouchet dot com. We got a lot of good information there. Have a great day folks, Bye bye