After this is Josh Arnold, mister money Talk here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars including your IRA and four oh one K. But you do have to give us a call at nine five two nine two five five six oh eight. That's nine five two nine two five five six eight. You always get straight talk, not sure re coded advice. Before we begin, do have to remind
you that this program is for informational purposes only. Past performance is no guarantee of future results. Markets are always changing and can be volatile. Stocks and bonds can can have losses as well as gains. All companies mentioned can also see their share prices move up or down, both on good and good news and or bad news, and can be affected by both macro events and enter
company events. Before you take action on any company, please consult your investment professional and do bear in mind that or all of the companies mentioned may or may not be suitable for you. Here we go as we're getting close to the end of the year, and I cannot believe how quickly this this year twenty twenty three has passed by. That might be a function of age more than anything else. As you do get older, time seems to pass a
lot more quickly than when it was when I definitely was younger. That said, as we get close to the end of the year, there are a few things to remember or at least write down before before the year ends.
First, if you have not fully funded your four four one k I RA or SEP, now would be a good time to do that, particularly for the four to one k. With the SEP and IRA, you do have until you file your taxes to make your contribution for the previous year, but the sooner you put make that investment into your four one k or ira or SEP, and I recommend that you fully fund those fund those to the max and not in the case of a four to one K only put in up
to what is matched put in up to the amounts that you can legally put in. It is to your benefit as you do get a tax deduction. The money that is in the four to one k ira SEP is tax deductible going in accumulates with no tax, but is taxable on upon withdrawal. With a four to one K depending on the company you work for, there could be the additional benefit of a match up to a certain percent. This is
all in your or for your benefit. In terms of investment choices, typically with a four to one K, you might be offered a target fund, a guaranteed fund or funds, several different bond funds, and several different stock funds. My choice if I were using a four to one K, I happened to use an s S e P within Josh Arnold Investment Consultant. And with the SEP they have it's self directed, so we have many different choices.
My choices happen to be stocks and put put money into the same investments that I recommend for my clients, going in at the same time and coming out at the same time. But in a four to one K and in some iras you might be limited in terms of your choices. But in a four to one K, I do know that there are several different mutual fund fund choices. As I mentioned, a target date fund, a bond fund, or a series of stock funds. The target date funds typically are fund
of funds that have a mixture of bond funds and stock funds. And as you go further out on the scale, the more years that you have towards retirement, those target date funds are more weighted towards stock funds. The closer you are to retirement, the waiting moves more to bond funds. I am not a bond or bond fund investor, and I'm not going to recommend somebody
putting money into bonds. Bonds give or where you're lending money, either to federal government or a corporation, or in the case of tax free bonds, which you're not going to put in a retirement account. There are bonds issued by the state or municipality. Bonds do, as we have talked on this program for a very long period of time, fluctuate based on changes in interest
rates. Interest rates go up, bond values go down. Bond funds are buying a mixture of bonds that come do at different different points in time. But I have found that is interest rates move up, bond funds move down in value, and it takes a lot longer when interest rates reverse going down for those bond funds to recover. So I've recommended not using bond funds,
and I'd even recommend not using a target date fund. I think you'd be better served by putting money into one of the stock oriented funds, or just to make it easy, if you have a choice of a in stock funds your only choices, and S and D index fund, that would be the choice that I would recommend. Yes, stocks do go up and down in value. Yes, if the market goes down, that index is going to go down. And yes, if the index goes down a lot, you're going to want to say, oh, get me out of all my stock
funds and just put it into a money market fund because it's safe. Well, I will tell you that over any period of time, long period of time, not short periods of time, the stock fund is going to out for form the bond fund or outperform cash on a long term basis. But you do taking some risk for that. So my recommendation in the four one K is put money into this the S and P index fund, you know, as a to the max that you you can. Enough said with with
that. Now, when it comes to the market this week or even this year, Wow, stocks far surpassed bonds. At the beginning of this year. Most strategists, talking heads we're saying, avoid stocks, put your money in bonds, lock in that four percent yield, and you're not going to
have to worry about anything this year. They these strategists seemed to give a guarantee that putting money in bonds at the four percent was the only way that you were going to make money and make money without without any any risk. So they recommended no stocks, money only in bonds or the money market instruments, and that was the way to wealth in twenty twenty three. Unfortunately, that is not how things worked out. But we're going to talk about that
and more when we come back with more money Talk. I am Josh Arnold, mister money Talk, here to help you n five two nine two five five six eight. This is Josh Arnold, mister money Talk. Actually up with Judd Arnold, Sun number two. But Judd is in New York on some business talking to several of the small and mid sized companies that he likes to invest in, So he will be back next week. But I mister money Talk, Josh Arnold, I am here to answer your questions on stocks,
bonds, mutual funds. Now you should position your investment dollars. Give us a call nine five two nine two five five six oh eight. That's nine five two nine five five six eight. You always get straight talk, not sure code of advice. As we said at the conclusion of the last segment the beginning of twenty twenty three, investment strategists talking heads both in the news on TV, we're saying that only place to be, only place to
be. In twenty twenty three, bonds had to put your money in bonds because of their belief that interest rates would top out and then start then start retreating as the Fed's fight against inflation with higher interest rates in twenty twenty one would put the economy in recession mode. And once the economy was in recession, the FED would be forced to cut interest rates. And as the FED started cutting interest rates, bond prices would go back up. And do remember
that bond prices is represent by any of the index. Index funds were down significantly in twenty twenty two as measured by TLT the long long bond index that was down a third in twenty twenty two. It was down as much as the Nasdaq in index q q Q. And it would take a significant drop in interest rates for any investor to make to make up that that loss in
the in the long long term bond. But in any case, strategists for recommending bonds over overstocked US, and we're of the belief that we'd be heading into a recession, whether it be shallow or deep, so soft landing versus hard landing. Well, looking back eleven months, bond prices are well up from the bottom, are still down for the year. So if you were to invest in the long bond TLT at the beginning of the year, yes, you did get some nice interest about four or four percent, but the
value of your holdings is still down eight percent. That's that's not so good for when you're investing in bonds. Yes, if you're going to hold those bonds or that fund over a longer period of time, and you know, should interest rates continue to fall, and long term interest rates have come down in the month of November and come down hard, and that has pushed up the value of TLT. You know, from a low of eighty five dollars
a share to Friday's Clothes at ninety three dollars a year. That's a pretty good good gain, but still down significantly year to date. And that's particularly against the S and P index, which at the beginning of the year strategist said of void avoid Avoid, and that index is up year today about sixteen
percent. Yes, it's been a rocky ride putting money in the S and P Index or in stocks this year, because we have had several five to ten pull backs over the course course of the time in terms of the index, and we even came close to going into bear market territory for a brief period of time this past summer as interest rates moved up. And there are still a lot of strategists that didn't change their tune in terms of investing invest in bonds, go light on stocks, and you definitely do not want to
be in the Magnificent seven because those are priced too high. Those being Apple, Amazon, Alphabet or Google, Microsoft, Meta, Navidia, and Tesla. Those stocks which make up a large chunk of the S and P Index because of their market weight, have continued to outperform. And I would say Meta also known as Facebook and owns reels and Instagram probably been the I'm not going to say the best performer because that'd be was Na Video, but that
has done exceedingly well. Microsoft this year hit a hit a new high. Apple rebounded from from a bottom and that's up a bunch, and even Amazon has done done very very well, the laggard of the Magnificent seven, that would be uh, Tesla. But that's that to me is another story altogether. Tesla's a company. I look at it as a car company. Other people look at as a straight up technology company or a battery company. To me, they sell cars, and now they're going to be selling trucks.
And yes they are the leader in electric vehicles, but electric vehicle sales are flagging. General Motors and Ford are not going to be as aggressive in selling electric vehicles. To me, there are plenty of issues related related to them, which I'm not going to go into it this at this point in time. But to me, testsstilly a car company, and if I look at it as a car company, it's a very expensive car company. If I were to look at it just as a straight up technology company, well maybe
maybe not so much. But they're selling cars. They've got to, as they say, they've got to move that, move that metal to generate the revenue will support the support to technology. So that to me would be one stock that I'm not looking looking to buy at this at this point in time. Others, you know, see see Tesla differently. To me, it is a car company and an expensive car company at that. If I want technology, man, there's a whole host of technology companies out there that to
me offer some better growth opportunities, you know then than Tesla. So yes, it has been underperforming. If I had had to choose, I'll say amongst any of the companies in the Magnificent seven. And I'm still still heavy in Apple and Amazon, but I've gone over both of those on a very
frequent, very frequent basis. Apple by the way, did get some or had some interesting news on Friday, and that and that relates, and that relates to a potential deal with Paramount to bundle streaming on on Apple on Apple Plus. That could be very interesting. Indeed, gives giving Apple some more content that they can they can distribute. And the market seemed to like the potential of the deal as it bid up it bien up the media company Paramount
today. But we're going to come back and talk a little bit more about some media companies as well as some issues that one of my clients brought up to me. When we come back with more money talk. I am Josh Arnold, always here to help you. Nine five two nine two five five six oh eight. This is Josh Arnold Mister Money Talk with Judd Arnold. Now not this this week, jud is in New York visiting several several companies.
But I am here to answer your questions on stocks, bonds, mutual funds, how you should position your investment dollars, including your IRA and four oh one K. Don't hesitate to give us a call at nine five two nine two five five six oh eight. That's nine five two nine two five five six oh eight always gets streight talk. Not sure code of advice, just a reminder this show is for informational purposes only. Past performance is no
guarantee of future results. Any of the companies that we talk about on this program are may or may not be suitable for you. All investments include risk, and any discussion that is offered comes from our opinion and our research only. Please consult your advisor before you make any investment decision. This is Josh Arnold Mister Money Talk. Call nine five two nine two five five six eight. Well, this past week I had a very interesting conversation with one of
my clients. He was concerned that the market was not only a little bit too high, but he was concerned that the market this being the stock market, not the bond market, is ready for a repeat or a replay of what happened in two thousand and eight two thousand and nine when the mortgage bond market and or mortgage backed securities that were invested in with tremendous leverage caused and when the mortgage market fell apart, those mortgage backed securities dropped significant in value,
and banks that held those mortgage backed securities or individuals that held those mortgage backed secure and particularly held those with large amounts of leverage UH suffered significant losses. And the way that those losses or the margin margin was met was by selling selling stops. So during that period of time, as the saying goes, the baby got thrown out with the bath water, and numerous companies that had significant assets, had very strong businesses, saw their stocks get crushed.
So this particular client is concerned about a credit crunch affecting affecting the market. Additionally, well, we had did not have a recession this year, a
recession defined as two straight quarters of negative GDP growth. He was concerned that with a credit crunch, with the potential of business slowing down, the potential of consumers being up to their eyeballs in debt, that a recession would be imminent and it would be a good idea to reduce his stock position and increase his cash position with the intent of coming back in after this event occurs. So my response is, of course, yes, some of these things could
happen. Yes, at some point we could have a recession. However, most strategists have been predicting a recession for the last year and a half, and they have predicted that we'd be in a fairly steep recession right now, given where what the FED was doing with their quantitative tightening and raising interest rates. My response was, in terms of recession, we did have a recession in the first half of twenty twenty two, when GDP growth was negative for
two quarters in a row. Additionally, we were coming out of a government mandated shutdown slash recession from that started in early twenty twenty. So as the economy started coming back to life, GDP grows even with the FED raising interest rates, even with the price of oil moving up, and the price of oil actually peaked in June of twenty twenty two. But even with that, the economy started to expand, and yes, the government with their spending large
es, which has increased the national guart that's another issue. Altogether has created a situation where the gross domestic product has actually been accelerating and not slowing down. Indeed, this past week, the GDP growth was announced at five point two percent, which is definitely unsustainable, but is a pretty significant, very
significant number. And that that that growth was coming a lot from government spending and also from private industry spending and trying to expand, expand their their business. As it comes to a credit crunch or bank issues, well, I think that that has been priced in to at least to some extent, and I think that has been priced in many months ago. And all you have to do is look at bank stocks. Bank stocks are still not back to
where they were at the beginning of this year. Bank stocks stocks took a significant hit and actually hurt the market in April when three major banks were forced to close down and government regulations or regulators came in and really came down hard on many banks and asked them to increase their capital capital reserves. Many banks also cut back on their lending, so the lending market tightened tightened up, and you could see see how that has rippled through the economy and many different
many different segments, including or especially in housing. Now housing demand is is up significantly. H home sales have actually slowed slowed down, and prices have started to come down, and now mortgage rates have also come down. I am not a bank investor, nor would I recommend investing in banks. I'll leave that to you know, to other other people. Has met, So
that's that's still there. Now selling you know, our stocks, which leads to the next question, our stocks too high or certain stocks uh too expensive? Here I could I could say guess stocks and even particular members of the Magnificent Seven are trading at higher price to earnings multiples than they would during a
market sell off. But part of part of that is the amount of money that's come into this year, has come into all the indices from index investors, and part has been these companies actually doing better with their earnings reports and even guiding i'll say less conservatively than they've had in the in the in the
past. Plus, there is this big push towards artificial intelligence and generative artificial intelligence started with Microsoft's announcement of dealing with Chat GPT back in May, and that announcement really gave we'll say the Magnificent seven and technology companies in general, a big, a big, big boost. Could these companies be right for
a pullback? Sure it was the pullback going to happen now, don't know, But I could look at the volatility index the VIX and say, well, it's down significantly from where it was this summer and at the place it is, that could be indicative of a little bit of caution. So if you wanted to raise a little cash right now, you know, for safety's sake as you come into the end of the year, that could make some
sense. You might also see in the next several weeks a lot of individual investors and maybe some institutional investors start balancing their portfolios, selling some of their winners to use up some of the losses that they took in twenty twenty two or even early in twenty twenty three. So there might be some either tax we'll call it tax laws selling or tax gain selling, trying to balance off off the two before the year year ends. So that could indicate a little
bit more volatility. Pay attention. This is Josh Arnold miss or Money Talk here to help you have a question would like to sit down for a personal, no cost, no obligation consultation call nine five two nine two five five six oh eight. This is Josh Arnold, mister money. Talk with Judd Arnold. I'm here to answer your questions on stocks, bonds, mutual funds. You should position your investment dollars. Don't hesitate to giving me a call
at nine five two nine two five five six oh eight. You always get straight talk, not your code of advice. Nine five to two nine two five five six oh eight. We're here to help you now. Another big week of earnings concluded, and some other interesting events took took place this this past week. Two heavyweights, in my opinion this week passed passed away. Henry the Kay Henry Kissinger died midweek at age one hun hundred. A phenomenal,
phenomenal presence, we'll say, in politics and in international affairs. Tremendous thinker and definitely somebody that you want to have on your side in any foreign policy matter. Very great, great man. And second, Charlie Munger, probably one of the more brilliant investment minds and investors on a very long term basis, passed away at ninety nine just shy of his one hundredth birthday. Charlie Munger ran his own company, Daily Journal, and I was also vice
chairman and partner to Warren Buffett at Berkshire Hathaway. Charlie Munger was known, we'll say, for his wit and wisdom. An interesting book about him called Poor Charlie's Almac, kind of a take on Ben Franklin's book Poor Richard's Almanac. Both men, in my estimation, will be missed for a very long period of time. Well switching gears from these two giants, we'll say the market. The market this week was still in the thralls and probably will continue
to be in the thralls for quite some time. Of the Federal Reserve either you had Fed FED speakers this week and with a FED meeting coming up in a couple of weeks talking about inflation and their views of interest rates, and it's still for the most part higher for longer. But the market has tended to move now on any bit of news or any indication that the Fed is going to be on pause and may in fact, at some point in twenty
twenty four start to cut interest rates. And of course all of this is data dependent there is still the belief that inflation is still quite sticky and sticky on the high end. Yes, you've got a few things that keep inflation sticky. One is going to be the price of energy or price of oil. Although the price of oil has been coming down and has not been moving up. The price of oil is down at seventy five dollars a barrel. And as the price of oil falls, price of energy stocks have also been
coming down. Another area that I'm not running running out to invest invest in. The other area that provides sticky inflation, of course, is the price of housing or mortgage adjusted rents. With mortgage rates starting to come down a little bit, that should bring that price down, but that's still up significantly from the beginning of the year. So those are two primary causes, will say, of stickiness and inflation. And the third cause, of course is
wages, and wages have been creeping up a little bit. All you have to do to look at where wage growth is going is looking look at some of the recent union contracts, which have of course been up. But should the Fed at least go on pause or not talk as hawkish. That is
going to provide fuel to keep the stock market up. But again remember my caution from the previous segment in that the market has moved up, the leading leading stocks are now trading at higher price to earnings multiple, the volatility index
has come down at a low. We're coming into a period of time where there's going to be some what'll call it tax related selling by individuals, and that could create as the month of December evolves, at least either prior to or after the FEDS meeting in a few weeks, that couldn't involve a little
bit more volatility before we go into the new year. Without making too many predictions, I will say there are a lot of strategists that are continuing to recommend that next year will be the year of to be in bonds, and maybe maybe next year will be a return to the importance of a balance portfolio of sixty percent in stocks forty percent in bonds. Our view is, if you want safety, put your money in cash with not a lot of risk
and interest rates and a money market is still good. We like to use an asset allocation model of keeping up to thirty percent in cash because we know that during the course of any year there are going to be several five to
ten percent pullbacks. Want to have cash available to invest during those pullbacks, and the balance investing in companies that offer a product or service that we feel will lead to continued growth of revenue and then earnings, with a focus on companies involved in the Internet, leisure, China related businesses, and real assets. This is Josh Arnold, mister money Talk, Always here to help you. Give me a call. Nine five two nine two five five six oh
eight. Been here through boo markets and bear markets, Always here to help you. Josh Arnold Investment Consultant is a registered investment advisor located in the state of Minnesota. All securities discussed are for informational purposes only. Investment contains risk, including risk of loss. Consult your investment professional before making any decisions about your investment portfolio.