Let's Talk Money

Here again a little bit, but the changes every time. You're good morning, Welcome everybody to this warm, unseasonably warm Saturday morning. You're listening to Let's Talk Money here on eight ten and one O three one WGY. I'm Ryan Bouchet, and I am excited to be with you all for the next hour or so. I appreciate you tuning in and uh, you know for those listeners who are also callers, always appreciate you adding to the discussion and

being part of the show. So I'll give out the phone lines one eight hundred Talk WGY. That's one eight hundred eight two, five, five, nine, four nine. If you have any questions you want to talk about the markets, the economy, maybe something more specific to a financial planning topic or retirement planning topic. Happy to take those calls and hopefully give you the answers you may be looking for. Again, one eight hundred Talk WGY. One eight hundred eight two, five, five, nine, four nine.

So I have a lot I want to talk about today, relatively quiet week in the markets, not a lot of economic data coming out, not a lot of headlines really driving the markets. But you know, the markets ended on another high note and finished up for the week, making it now five weeks in a row of a you know, positive returns in the market. It's a great thing. On top of it, probably the bigger headline to close Friday is that the SMP finished above five thousand for the first time,

so we're heading new highs. Market continues to roll, you know, in many ways, it feels like, you know, one of the most hated bull markets that we've ever been a part of, but you know, week after week, month after month, it feels like the market continues to rise. So that's a good thing. We'll look under the hood to you know,

talk a little bit about why what's happening in the markets. You know, this past week and even so far year to date has been a welcome change to what we've seen over the last year or two in the market, especially as it relates to stocks and in the interest rate market. So we'll talk a little bit about that. We'll continue talking about earning season, right, I mean, it's it's hasn't been the best earning season ever, but

it's actually been a pretty good one. And we talked to clients all the time, especially recently, why we feel earnings are so important this year especially and in this environment. We'll talk about that continue strength not only in the markets, but in the economy. Again, not huge headlines this week, but some some you know, notice sible sort of data points. We you

know, jobless claims continue to be low. This is a you know, this job's market and labor market continues to be tight, and that's so important to the overall economy. Uh. The Atlanta Fed, they they put out their estimates for GDP growth and they've been pretty accurate. They've they've been awfully optimistic, but they've been pretty accurate. And Q one continues to look strong

in their eyes. And and so we'll talk about why that's going to be such a big driving force to what we see in the markets and how it could have a big impact on stocks for this year. Yeah, well we can talk about you know, interest rates. I know it's it's on a lot of people's minds. Uh. I had a number of meetings this week with clients, and you know, whether we're going through financial plans, portfolios, whatever it may be. And I always like to, you know,

end the meetings just what what didn't we cover? What's what's on your mind that you know we have maybe haven't talked about, but you want to go over before we end the meeting, and multiple times this week, what's the what's the interest rate outlook, what's the FED outlook? What are what are

we looking at? So we can talk a little bit about sort of what we're seeing in that area of the market and how that impacts not only stocks, but economy sort of future, you know, for the consumer especially right so much of you know, whether you're looking at mortgage rates, consumer loan

rates, it has a huge impact on us. So just kind of what the outlook there is and in what we're the conversations we're having with clients, and then lastly, you know a multitude of conversations discussions we've been having that I think are so you know, pertinent to this market and what we're seeing

today. And I can jump into some of these topics. But I thought it was really interesting this weekend both the Wall Street Journal and Baron's had articles about dividend stocks, and there's so much we can talk about there, and I think it's really important too, not only when it comes to maybe retirement planning and those folks looking for a yield to live off of from their portfolios.

How it's impacted by just the overall market sort of maybe some preconceived notions we may have, and and there was some really interesting stats from one of these articles that I want to go through because I think I think it lays the foundation of how a lot of people think about dividends in their portfolio and

how it's so important to their overall management of the portfolio. But you know, in an environment that we've seen not only in the last couple of years, but really the last you know, ten or fifteen years, why you know, some of there's been a shift in you know, how dividends play a role in the overall market, and you know their impact on a portfolio, and just how we talk to whether it's prospective clients or existing clients on

you know, especially those clients that are nearing or at retirement and needing to take distributions from their portfolio. You know, how we view kind of dividends as a as a what role they play in that portfolio, and and kind of it's almost philosophical and how thinking about you know, where you're driving yield from and how you're pulling cash loan needs that you may have. We can talk a little bit about AI. You know, that's something that that comes

often. We get a lot of questions on it, some interesting things to sort of think about, and you know how we sort of put a framework around that conversation. And this is something that's come up, you know, over the last couple well it's come up the last few weeks, but certainly something that's come up over the last year too, is it was now a

good time to buy a house. And if you find yourself in that type of situation and maybe it's a first time home purchase or relocation or you know, you're just interested, you know, talking a little bit about the housing market. I mean, it's such for so many people, their house is a huge asset, you know, oftentimes one of their biggest assets. So how are we having those conversations with clients and what's the outlook in the housing

market look like. And finally I'll share with the listeners, we got news late last night from our colleague Sam Macy that our State of the Economy presentation is now on our website. So if this was a event we put on for clients, we hosted over three hundred clients two weeks ago, over a

couple of nights and it's our big annual presentation. We talk a little bit about the firm where we're at, but a lot of the time is spent reviewing and discussing the economy, you know, some general market themes that we're seeing and just the overall prospects of the market, what we're doing, how

we're viewing things, and how we're allocating our portfolio. So if you're interested there, you can go to our website Bouchet dot com and under our insights tab up in the top, if you go to the Bouchet blog, you can see the twenty twenty four State of the Economy and it's you know, an over hour long presentation, so we have slides and we actually have some

Q and A at the end. If you want to listen to some of the questions that again our clients have and have been wondering about, you can find that on our website and we'll talk a little bit about you know, the themes and topics that we went over during that night. But it's a great, great presentation and gives you, you know, if you're not as familiar with our firm, gives you some great insight to how we work with clients and how we think about the markets, how we think about portfolios,

and really what we're all about. So again, feel free to take a look at that Bouchet dot com. You'll see the twenty twenty four stateid Economy presentation and we have the presentation. We also have our slides available as well, so if you see anything there, or if we make any reference to it, you can always take a look at the data and the information that we're using. So again, our phone lines are open. Give me a call one eight hundred talk WGY. That's one eight hundred eight two five,

five, nine four nine. And so let's just jump into the markets, right, talked a little bit. You know, it felt like a quiet week for the most part. Wasn't really a lot of volatility or you know, the beginning of the week was a little down, but nothing too major. You know, pretty pretty low vall type of week. But you know, again we we ended on a high note. The s and P and NASAC we're both up to end Friday, and you know, markets are up

again. Another week up markets. That's five weeks in a row, and you know, the SMP broke through the five thousand dollar mark, and you know, we're hitting all time highs. I said it earlier, said it in the intro. It just feels like, you know, this relatively hated bull market. There's not a lot of enthusiasm here. And but you know, you turn around the SMP up last year mid twenty twenty five percent or

so. So far this year we have the s and P was up one and a half for the week, up five and a half percent for the year, and NASZAC was up over one and a half percent last week, up about six and a half percent for the year. And we just see continued growth. And you know, some of it's driven by earning. So far this year, we've had relatively strong earnings, beating expectations. But you

know, you think about just the bull market as a whole. And I use this during our presentation a few weeks ago, and I think it's just a really relative quote, especially as I'm just thinking about the markets in today's environment. But old quote by John Templeton talking about bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. And much has been made about economic conditions. Obviously, last year there was

a ton of fear of an impending recession. But you think about where we're at in today's market cycle, and it's true. Usually when you see you know, whether it's a market bubble bursting or a market leading to a you know, bear market in a reversal. Now, oftentimes there's there's huge catalysts that can be involved. Somewhat recently was COVID, but even COVID, right through twenty twenty one, I mean there there was definitely optimism in euphoria in

that market. I mean when you remember how quickly markets recovered from COVID early in twenty twenty and you know, continued to rally through twenty twenty one, I mean there was definite euphoria. I mean the markets were almost on a straight path upwards, and you know, we saw a pullback in twenty twenty two. We saw the impact of I think that growing optimism a lot of you know, the market was probably a little overbought, so evaluations really kind

of get ahead of their skis. We saw twenty twenty two is a you know, pretty down year in the market. You know, it lows, the SMP was down twenty five percent or so, NAZAK was down mid thirties we saw a really pretty substantial pullback. But when you look at the market today, yes, we're hitting all time highs, and that worries investors. I mean a lot of times in and we hear it quite often from when we're having initial conversations with prospective clients. Is that, you know, especially

if maybe they're not fully participating in the market. Right, all time highs tends to scare investors. They don't want to put their money to work when markets are all time highs, when in fact, just the opposite tends to be true. Investing at all time highs is actually usually a good thing and can can be a real catalyst for further growth. Right, You don't ever want to, you know, disrupt some of the momentum that's in the stock

market. Doesn't mean that you know, it's going to be a straight line up, and it doesn't need necessarily need to be you know, twenty plus percent rate of return, right, I mean historically, I think the SMP returns you know probably like low, you know, nine to eleven percent depending on what part of the market, but you know, ten eleven percent. We don't anticipate that high of growth rates when, especially when we're planning for

clients. But historically, right the SMP tends to average around ten to eleven percent rate to return annualized. And you know, we're hitting all time highs, but certainly doesn't feel like there's a lot of euphoria. I'm not even sure there's a lot of optimism out there right. A lot of the conversations we're having are you know, people that have been scared. They've been scared since last year. You know the all the headlines on recessions, and you

know the market not being to sustained this. But again here we are. Again, we're at all time highs. SMP up over five thousand, five weeks in a row of up markets. Not only that, the market's been up fourteen out of the last fifteen weeks. And so I saw that, I think it was in a Wall Street Journal article today, but I saw

that stat was really interesting. First time it's happened since nineteen seventy two, so that's over fifty years, and it just, you know, it reminds me of of a quote that I've seen, never short a dull market, right, in shorting the market means going against the market, never short a dull market, and that's what we're in right now. Right it does feel

like a little bit of this dull market where the fixed levels. If you follow the VIX, that's a volatility reading an index that's around twelve right now. The historical average is about seventeen eighteen. Usually the twenty mark is tends to be a good indicator of historical average. We're well below that. We're not seeing a ton of volatility in the markets. We're seeing sustained growth. We're seeing you on top of that, good earnings, good economic readings.

This has been a pretty good time to be an investor. And it always surprises me when you know there's as much fear and uncertainty as there is out there. And I know why that is, right. I know inflation doesn't help, although that's come under control. I know the headlines don't help, right, you talk about the recessionary headlines and all the other headlines that are out there tend to be negative. I know an election cycle doesn't help.

I shared this with a new client yesterday, but talking about our state of the Economy presentation from a few weeks ago, the one we held last year the beginning of twenty twenty three. So you know, a little over a year ago, the number one concern of the folks that were participating that night. We do some live polling questions, which is a lot of fun, just to kind of read the room and get the pulse of what people are

thinking. The number one concern back there was the election, which wasn't even happening for another, I don't know, twenty months or so, twenty one months or so. And you know, the election cycles worry investors, and you know, we have the data, we have the history. Election years tend to be pretty good, to be honest, just they tend to actually be relatively strong years in the market on a historical basis. So again,

there's so much to be worried and concerned about. But when we take a step back, you know, this market continues to rise, continues to do well, and we're seeing it again this week, and again I spoke about it a little bit earlier in the intro. When you look under the hood, I mean there's there's a lot of positive momentum going on right now. So it's a you know, it's been it's rewarded investors and it's been a

good time. Again. Our phone lines are open if you have a call, you want to give me a you have any questions you want to run by me and maybe discuss anything I'm talking about today. Jumped on in one eight hundred talk to gg. Why that's one eight hundred, eight two, five, five, nine, four nine. We're gonna take a just a quick commercial break, but when we come back, talk a little bit about

like I said, what's under the hood right now? Why you know, I think not only just having some good weeks in the market is always a positive, right but why there's you know, more data and information that is leading to some of the strength and why I think it's a you know, good environment to be in right now. 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 on eight ten and one oh three one WGY.

I'm Ryan Bouchet and I am your host today. It's so good to be with all of you. Appreciate you tuning in and uh, you know for those listeners and callers out there, always appreciate you being part of the show, part of the program. So again, if you have any questions you want to jump in, give me a call one eight hundred Talk WGY. That's one eight hundred eight two five five nine four nine. So super Bowl weekend. We got a beautiful Saturday, seasonably warm, but maybe gives you

an opportunity to get outside. I know I'll be outside, I'm sure with my three young kids. It's always nice to get this weather in February to get everyone out of the house and get them moving. So hope all of you out there have the opportunity to enjoy the day as well. Again, our phone lines are open if you want to give me a call. Anything on your mind, stocks, markets, economy, retirement planning, financial planning, jump on in one eight hundred Talk WGY one eight hundred eight two five

five nine four nine. So we finished talking about just the stock market. Another up week, five in a row, fourteen of the last fifteen weeks. Haven't seen that in over fifteen years, not fifteen fifty now since nineteen seventy two. So pretty incredible streak we're on here, and hopefully you've been part of that. Hopefully you've been invested. I know our clients have been and doing well with with the recent run up. You know, we have

again speaking with clients or you know, oftentimes more prospective clients. But you know, there's a lot of cash on the sidelines now, and we went over the numbers in h during our State of Economy presentation. We actually have a slide there again, you can find that at Bouchet dot com under our Insights and Perspectives tab. But there's over you know, six trillion dollars in money market accounts now, it's the highest it's ever been. We think that

can be a good catalyst for the market as we move forward. If and when the FED decides to cut rates and we see those short term rates start to come down, you know, where does that money go from money markets? You know, could go to the stock market, which would be a good thing, and you know, we think that could be a good long term catast I'll get back into talking about money markets and and how that, you know, plays into kind of where we're at with stocks. But I'm

going to go to the phone lines now. We have Ron in Queensberry, and Ron, thank you so much for giving us a call. We only have a few minutes until the news break, so why don't you jump in and try to get your question and I may not be able to answer right away, but we will make sure we answer it after the break if we can't get to it. So good morning, Ron, how are you? I appreciate it, Good morning, how are you? I had called about

a month ago and I spoke to your father concerning my daughter. She's twenty three. She has about seventeen and a half thousand dollars in a roth ira and in Schwab, and we had had it in cash. We didn't know what to do with it. So I called and your father had suggested that we researched the intelligent account on the Schwab, and so I looked at it. It looked really, really good, and so we ultimately did We made

the switch over to the intelligent account. But when they give you the questions of risk whatever, I you know, my yeah, it turned out to be that it worked out to be a three rating. My daughter didn't want to go too risky and didn't want to go conservative. I wanted more of the four or five rating because of her age, but I just wanted to get a professional's opinion as to whether or not at twenty three, with a lot of time to go before she has to dig into the or whether a

three rating is was the right choice at this point? I know we can, we can self direct you, you know, rebalance it along the way. But what would you say on that? Yeah, no, it's a great question and something we are constantly talking to clients about. So I only have about a minute left. I'll start answering the question. Make sure we you know, wrap it up after the break. But yeah, I mean

twenty three year old. I mean, you know, especially roth accounts, right, Roths are sort of the catalyst for growth because you get so much benefit from the tax free nature of it. So I would say three is

probably low. I don't know what the makeup of the portfolio is, but you know, I will tell you for most of our clients that are in their twenties and with a rough account that isn't needed for decades, most likely, you know, something like that should probably be almost invested one hundred percent in stocks, you know, with with the long term outlook. Doesn't mean you know, couldn't go down, But I'm going to I'll talk more about that on the other side of the break. We have to take a quick

break for the news you are listening to. Let's talk money here on eight ten in one O three one w G. Why it was a night, such a night, and welcome back to Let's Talk Money here on eight ten and one O three one WGY. We have a capable colleague today, Ryan Bouchet, sitting in. Appreciate all you listeners joining us and being part of the show. Got about thirty minutes left, so a lot to talk about. A lot we want to go over and have some good calls and good

questions coming through. So I'm going to get back to Ron's question from just before the news break, and I know ed if you're selling the line, I'm going to try to get to you real soon as I wrap this question up. But Ron's question had to do with his twenty three year old daughter being into one of the intelligent portfolios with Schwab and getting a rating of three on a risk scale. So just two things I'd want to get into.

You know, I think sometimes those questionnaires can be a little misleading in terms of what is a right portfolio for you. You know, frankly, we don't use a you know, fifty question or twenty question questionnaire to determine clients risk. We really want to have a conversation with them. I think it's so important as advisors to help lead a conversation like that and be a part

of that conversation to really understand what that money is intended to do. You know, what's a true tolerance for risk and volatility in the market, and educate clients as to the real or perceived risks that are out there in the market. And so I think, you know, questionnaires can be a little misleading and a little bit tough. And the other thing is especially for young investors and whether you know, in this case, twenty three year old,

in other cases, you know, maybe thirty to thirty five. Even you know my case, you know, I'm going to be forty this year. And you know, my whole investment life when I got out of college was right at the start of the global financial crisis. So, you know, for folks in their thirties, you know, close to forty, we've lived through global financial crisis, We've lived through COVID, we've lived you know, just before cover. Just in the last five years, there's been three bear

markets. And I've talked about that in the past. Young investors have gone through a lot of ups and downs. Now, if you've been invested, it's been a good thing, but there's been so much volatility that I think it, you know, shapes our perception of what the market's all about.

And you know, if someone's in their early mid twenties and are investing in a row, you know, unless maybe you maybe using some of that for in taking advantage once it's opened for five years, you could use some of those proceeds for a down payment on a house, and you get some tax benefit there before you do, so you know, please look into the rules.

You get some exceptions on gains there, and it has to be open for five years, so that's certainly you know, a use case a little bit more in the immediate term, but more times than not, you know, this money, if you're in your twenties, isn't going to be accessed for forty plus years. So you really want full growth on this. You really want to take advantage in the market. And yes, there's gonna be ups and downs, but that's a set it and forget it type of account

and type of investment. So you know, at that age, my recommendation would be, you know, at the very least or the very most maybe ten, no more than twenty percent in fixed income, but really something like that should almost be one hundred percent equity or ninety percent equity. That's how I would view it. And you know, especially for a roth account to get the most benefit. And you know, I talked about our City of the Economy presentation earlier, so if you go to Bouchet dot com you can

take a look at it. But one of our favorite slides is in the presentation. So if you pull up the the slides, which is there, it's a link right on our twenty twenty four State of the Economy recording, you can download the slides and slide fifty eight is a great picture of you know, the volatility of stocks for one year and then it goes to five, ten, and twenty years. And in the longer you go out, yes there's going to be you know times where maybe a week, a month,

or even a year, stocks are going to be down. But the further your time horizon, the less risky stocks become. So again I would encourage you to have that that conversation and make sure she's she's comfortable no matter what she is doing. But you know, in a case like that, you really got to be probably almost one hundred percent in equity. So appreciate the call. Ron hopefully that helps answer it. But you know, every situation can be a little bit different, and you know, best of luck

and talking to your daughter and hopefully educating her moving forward again. Her phone lines are open one eight hundred talk w GUI. That's one eight hundred eight two five five, nine four nine. I'm going to go back to the phone lines. Ed. Do we still have you on the line? Yeah, she do. Hey, Ed, good morning, thanks for calling in. Yes, I got a simple question. I'm already retired. I came

into a large sum of money. I understand the markets are at their pretty much their all time highsh With that, uh, in lieu, how would you invest money and this this type of market being in all time highs and you know, knowing probably there's going to be a correction at some point where you don't want to lose money, but uh and also have a good, good, good gain. So I speak, would I be more interested in a fixed income uh? Like money markets or something like that or what?

I just go right into the market. Uh. My tolerance for risk is high, but I know with the correction, I'm going to take a loss. Mm hmm. So, like I said, I'm retired, so I want to keep I would like to use some of this money in life before I jump in a hole. Right, So I don't I don't have five ten years to wait around. Mm hmmm hmm. No, it makes makes perfect sense. And uh, it's it's I'll hang up now and you can

answer the question. Okay, all right, perfect, Thanks that it's a it's a really good question, and it's something we talked to existing clients and new clients about all the time. You know, oftentimes we maybe we're working with new clients that are sitting in cash because you know, maybe they're just worried about the markets, or other times, you know, in your case, maybe they've come into a lump sum and trying to determine what's the best

way to put that money to work. And so there's a few ways to think about it. One is always you know, where's that money coming from? Was if it wasn't invested, If it was you know, sort of unexpected maybe not invested, then okay, maybe that changes your approach to it. If it was money that had been invested and maybe had been growing, you know, we tend to see that as you know, put that to

work. If it was already invested. If it was already grown with the market, you know, there's not a huge risk of keeping it invested because it was already invested. We see that with like four ow K rollovers. Maybe it was an inheritance of of something that was, you know, invested in the stock market. We tend to like to keep those you know, moneys invested if it's something that again was was maybe unexpected or you know,

life insurance proceeds. Not sure you know your exact situation, but it's in cash and it hadn't been invested, and you need to determine what to do. A few ways that we like to shape the conversation. One is, odds are you're better off putting that money to work upfront, right, And that's just from a historical perspective of the markets up more times than it's not. The market's up seventy five percent of years, So just based on history

and the numbers, you're typically better off putting it to work. However, that may not be the best approach for everyone, and you know, it depends to you know, how much of this cash is part of your overall net worth. If it's a small percentage, if it's only you know, five ten percent of it. You know, there's less risk of putting it to work and having the market come down because you know, it's a less

you know, overall percentage of what your net assets are. If it's you know, fifty sixty percent of your total net worth, then that has a bigger impact and you may want to be a little bit more cautious. So, you know, in cases like that, we may do a dollar cost average approach, and you know, it may be with that full amount of cash, we may say, hey, let's put half of it to work.

But then dollar cost average meaning you know, we'll put it to work once a month for the next you know, typically we go four to six months. Sometimes, if it's large enough, maybe you go it a little bit further out. But again, sometimes you don't want to be too cautious

with it either. Because I said it earlier in the show, just because we're at all time highs isn't a bad thing for investors, and in fact, hitting all time highs is typically a good time to be in said there means there's a lot of momentum in the market, there's you know, a lot of market participation. You know, generally speaking, that tends to be actually a good time to be invested. I wouldn't say markets are overly enthusiastic

right now. I talked about that earlier. It doesn't feel like we're in a bubble situation. Although valuations are high right now, they're a little bit higher than the average historical you know, if you're taking price to equity or price to earnings ratios, I apologize price to earnings ratios, which is a good fundamental catalyst or fundamental bell weather for where the market is. It's a

little high, it's a little bit over industry or historical averages. But again, if earnings continue to grow, our economy is continuing to grow, which we're seeing in the data and seeing in the numbers, then all time highs could be a good thing. I always and I also look at it in a you know, regret minimization framework, and what that means is, you know, are you going to be more upset if you put all that money to work and we get a five, ten, fifteen percent pullback, which

is very possible. Right We average about a fourteen percent pullback each and every year, even though the market's up more times than it's not it's not a straight lineup, right, So we tend to see every year about a fourteen percent pullback in the market. So are you going to regret putting that money to work and seeing a ten to fifteen percent pullback right away versus you know,

taking that dollar cost average approach. So maybe you're sitting a little bit more cash and the market goes up ten to fifteen percent from here and you miss out on those gains. What are you going to be more impacted by? What are you going to regret most in those two scenarios? And again, it's different for everybody, most people, and this goes back I think it's Daniel con Conmon, the behavioral economist who put this together, but most

people regret losses about two times to one versus gains. It hurts a lot more to see to experience a loss than it is in terms of the benefits of seeing a gain. So most people would regret losing money more than they would benefit from the ups in the market. And that's just, you know, from a behavioral finance perspective. That's you know, goes back to studies. I don't know when when that study came out, but you know, years ago but I think it's an important way to think about it. So

again, there's no one proper approach. I really think it depends on your situation. How much of that cash is made up of your overall networth, what you're going to regret most right a down market and being fully invested versus an upmarket and dollar cost averaging through it, and you know your tolerance for risk. It sounds like you have, you know, a relatively high tolerance,

and that could be a good thing, you know. I think in cases like that, I tend to like to put a big at the very least, put a you know, a third of it or half of it to work right away. Like I said, that just goes into the numbers

that you know, the stock market's up more than it's down. But if you couldn't risk seeing a ten to fifteen to twenty percent loss of that full amount, you know, maybe put a third to work, put a half to work, and then you know, dollar cost the average the rest of it over a four to six month window, staying very consistent with how you put that to work. But also if we do get a pullback, now

you have some cash on the sideline to put to work. And that's something we do if if clients are doing a dollar cost average approach, if we get volatility in the market, we like to take advantage of it and put more to work when the markets are down. So and hopefully that helps answer it and at least sets a framework of how you may be thinking about it. You know, if you do have any further questions or you know, would like to talk to us, feel free to give us our offices a

call. Could certainly set up a call or zoom or in person meeting to talk a little bit more about your situation, because like I said, you know, it's there's not you know, one way, you know, one type of approach that that fits everyone's situation. But that's those are the elements of that conversation and how I like to think about it. And yeah, best of luck with everything. And like I said, I if you want to give our offices a call, you can do that at five one eight

seven two zero three three three three. Would be happy to discuss that more so, appreciate the call. And it's a really great question because it comes up so often with you know, perspective clients and even in some cases existing clients. So appreciate the call, and I think it gives the listeners a lot to kind of think about if they're experiencing that in their own financial lives. So again, our phone lines are open. Give me a call one

your Talk WGY. That's one eight hundred eight two five five nine four nine. We're approaching the end of the show. We got about eleven twelve minutes left. I'm going to go to a quick commercial break, and when I come back, let's talk a little bit. We can talk about interest rates, although we've we've talked a lot about that, why don't we talk a

little bit about dividend stocks? And I think because it's such an important topic of how we think about retirement planning and uh, you know, cash flow needs for clients and really interesting stats that came up in article in the Wall Street Journal today. So I want to talk about that when we come back. And again, if you have any questions, you know, in the last ten minutes of the show you want to jump in, give me a call one eight hundred Talk WGY. That's one eight hundred eight two five five

nine four nine. So stay with us. You're listening to Let's Talk money here on eight ten in one O three one w g Y and welcome back to Let's Talk Money here in eight ten and one O three one WGY. I'm your host, Ryan Bouchet. Great to be here with all of you. We're in the home stretch of today's show. We got about ten minutes left, but if you haven't gotten enough, you can always tune in tomorrow. We do have our show on Sunday here in eight ten one O three

one WGY at eight am. You can tune in and join us then as well. But like I said, we're in the home stretch of today's show. I have to do have any questions. We've had some great ones today and really relevant questions to a lot of conversations we have with prospects and clients, so, you know, really awesome participation. Appreciate the calls coming in from Ron and Ed. Thank you for making those calls and any other listeners that do have a call. As we wrap up today's show, one eight

hundred Talk WGY. That is one eight hundred eight to five five, five nine four nine. So with that, I'm trying to think of, you know, what is pertinent to wrap up today's show, And there's two articles about dividend stocks in both the Wall Street Journal and Barns this week. So you know, there's some really interesting stats that we're in there as well. So figured out it might be good to share those with all of you.

And I think it shapes and how it's kind of ingrained into our minds, you know, how we think about dividends and how we think about yield and how that plays into portfolio decisions in conversations, and so you know, when we're looking at it, you know a lot a lot of times, and you know, now fortunately we're in a position and we talked a lot about this over the last year that with interest rates up, your diversified investors,

you know, whether it's a sixty forty portfolio, seventy, thirty, eighty twenty, you know, it doesn't really matter. But those who are maybe a little bit more conservative historically maybe don't like the ups and downs of stocks

and feel a little bit more comfortable and fixed income. You know, now has been a great time to be a sixty to forty investor to have those bonds in your portfolio, because yields are higher, you're getting more income for taking on that less risk, and something we haven't seen in fifteen to twenty years. But when it comes to stocks and how you build a portfolio on the equity side, so often we have that conversation of well, you know, how am I generating yield? You know, I want to be able

to especially for retirees. I want to generate that yield to live off of. You know, I need that cash flow. You know, how are we getting yield both from stocks and from bonds? And you know, with interest rates being so low for so long, you know, many investors were looking for that yield from stocks. In building their retire portfolio is so important and we've seen you know, new clients come in with with very dividend heavy

equity allocations. And while it may you know, feel good to have more income being derived from that side of the portfolio, we take a little bit of a different approach. We view the retirement portfolios as you know, total return, because you know, if you're just focusing on dividends, you know, many cases, you're missing out on some of the biggest growers in today's

stock market. Right those large cap growth companies which we've seen actually you know, as they've matured, are getting to a point where they're actually offering a dividend. We just saw it two weeks ago from Facebook Meta, which was huge, and we saw the stock rip twenty percent following that news. But more times than not, you know, those growth companies tend not to offer a dividend. They don't pay out dividend to shareholders because they want to keep

that money in house for future growth prospects. And that's what you're paying for, and that's where you see growth in those types of companies. Now, dividend payers. You know, historically, you know, we can go back and these are some of the stats that I thought were so so interesting. You know, from the eighteen seventies. Now this goes back pretty far,

so before all of our times. But you go back to the eighteen seventies through the nineteen fifties, dividends accounted for eighty percent of total return from stocks. So dividends did play a much different role. You know, in the first half of the twentieth century, they were more in a bigger role. You know, you think about valuing stocks and using future cash flow to get

an intrinsic value. I mean, dividends were huge in being able to do that, and you know, you think about the first half of the twentieth century. Through the nineteen fifties fifties, dividends account for eighty percent of returns. In the past decade, dividends had only accounted for about thirty percent of total stock market return. So the stock market looks a lot different today than

it has in the past. But I think some of those dividend conversations in the view of dividends being such an important part of equities have just been ingrained in US and ingrained in investors for so long that you need to have dividends.

Another stat that I thought was so interesting, since nine dividend companies that pay over five percent dividend have returned about four hundred and fifty percent, whereas the SMP in this case they use the S and P fifteen hundred, so this incorporates more mid and small cap companies returned about six hundred and fifty percent. I looked since the lows of March of nine spy, if you just invested in the S and P five hundred has returned almost nine hundred percent,

so almost double what those highest dividend payers have returned. So you're not getting you know, yes, you may get a little bit more cash flow. You may get a little bit more income. That probably feels good because you know that income's coming, but you're not getting the same type of total return by just focusing on dividends. And no time has that been more apparent than

last year. I mean, we saw some clients come in towards the end of last year with portfolios that were built to take you to generate more income in stocks because we've been in such a low interest rate environment up until you know, a year and a half two years ago. In those returns last year for just the highest dividend payers was not good. It did not keep

up with the market, did not keep up with these growth companies. And again some of them do you know, Microsoft pays the dividend, Apple pays the dividend, Meta Facebook is now paying a dividend, So some of them do pay dividends, but historically growth companies are not. And if you've been out of those growth companies, which have been the biggest drivers of this market over the last fifteen years, you've missed out on a lot. So we

clients that need distribution and cash flow and retirement. Again, we view it as a total return basis. We're looking to build, you know, a strong equity portfolio. We like, we like dividend growers. That's actually a you know, a factor that we put into our portfolio, not so much the highest dividend payers, but dividend growers because again, we feel those are

quality companies, companies that are growing cash flow. The ability to grow their their dividend means that they're you know, solid, they have strong balance sheets, They you know, they can grow in up or down economies and markets. So we like that, but not necessarily just finding the highest yield because the highest yielding industries now tend to be manufacturing, right, financials, utilities, and all three of those sectors are in the red over the last year.

So again it's it's just philosophic coming to a point of knowing, you know, how do dividends pertain to your portfolio and what is the right way to approach an equity portfolio. And like I said, we definitely view it on a total return basis, protecting you know, two years worth of distributions for clients that need money, but not necessarily having to build it around dividends.

So just some interesting stats wanted to share with all of you, and you know, we're coming up to now the last thirty seconds or so of today's show. So again we appreciate everyone tuning in, appreciate everyone being part of the show, and for the callers with their questions. We're good discussion points today. Don't forget we have a show tomorrow. You can catch us at eight am tomorrow morning, Super Bowl Sunday, and so I hope everyone

has a great rest of your weekend. Appreciate you tuning in and have a great rest of your day. You listen to Let's Talk Money here on eight ten one o three one WGY