Ep: 92: Bull Run: A Deep Dive into the 2nd Quarter Market Surge
THE X'S & O'S
In this episode, we provide a comprehensive review of the financial market's performance over the past quarter.
We begin with a discussion on:
The significant drop in inflation rates, a key indicator of economic health.
The Biden administration's decision to resume federal student loan payments, a move that impacts millions of borrowers.
Nvidia's impressive entry into the $1 trillion market valuation club, a testament to the growing influence of AI.
Fidelity's filing for a spot bitcoin ETF, a move that could potentially revolutionize cryptocurrency investment.
Apple's launch of the Vision Pro mixed reality headset, a product that could redefine the tech landscape.
Soccer legend Lionel Messi's decision to join MLS club Inter Miami.
In our Retirement Planning Corner, we provide an overview of:
The year-to-date returns of major indices, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite.
Current interest rates, a crucial factor for investors and borrowers alike.
The state of the stock market, with visuals to illustrate key trends and movements.
We also share our personal investment strategies and financial planning goals, offering insights into:
Our portfolio management tactics.
Our approaches to maximizing 401k contributions.
Our strategies for navigating higher prices and budgeting effectively.
Whether you're a seasoned investor or just starting out, this episode is packed with valuable insights and expert analysis on the latest market trends and financial planning strategies.
Resources:
Connect With RPA Wealth Management:
Transcript
Welcome to The Retirement Plan Playbook with Brent Pasqua, Matthew Theal and Joshua Winterswyk from RPA Wealth Management. In this podcast, we cover current events, retirement planning strategies. And provide you with the tools to help you build a successful retirement playbook in any political or financial landscape.
Brent Pasqua: It's nice to be back in the studio with you guys. It's been a while.
Matthew Theal: I'm so happy., it's been way too long of a break from the podcast, but happy to be back. I
Joshua Winterswyk: missed it.
Brent Pasqua: Yeah, it wasn't by choice. We've just have had some life events that have. Held us up from being able to record with some clarity.
Brent Pasqua: So we are back in the studio though. I like seeing you guys sitting across and probably being able to, to talk about the markets and the headlines again.
Matthew Theal: Yeah, absolutely. And I think one thing too, for the listeners is we like to keep it to like, you know, the three of us. So if like one of us can't make the show for whatever life event or reason, we usually push the show.
Matthew Theal: So that's all but anyways Brent. Hey, it's been a long time You know, we kind of mentioned a little bit on a previous podcast, but I know you got some big little league news to share So tell the listeners what happened during to your little league team. Yeah,
Brent Pasqua: so after five months of hard work In June, we ended up winning the little league championship for our league.
Brent Pasqua: And then we went on to play all of the league winners in our district and the surrounding areas. And then we won that tournament. So basically we won as much as we could possibly win. And I was so proud of. How hard the kids worked, how well they played, how well they came together and the season came together for them.
Brent Pasqua: And I was so super proud of them.
Joshua Winterswyk: Congratulations. Congratulations. That's awesome. What is the tournament called after you've won your, your local league?
Brent Pasqua: It's the tournament of champions. So. You know, it combines all the districts and their champions, and then we play a big tournament and win that. When you
Matthew Theal: got into Little League, I remember my prediction, I feel like this was like 2016 or 2017.
Matthew Theal: Do you remember what year Landon was in T ball and you started coaching? I think
Brent Pasqua: winter of... Maybe 2018, 2019, something like that.
Matthew Theal: Okay. I, I made a prediction that I felt like you were going to go to the Little League World Series one day. And I, you know, I'm still holding that prediction. So we've got what, three years left?
Matthew Theal: Yeah. I mean,
Brent Pasqua: that's not an ambition of mine. I mean, I, I think ultimately like you just take it year by year and want to see the kids have fun and you make it about them. And you want to see them excel and succeed in the positions you put them in. And you want to see them learn most importantly, but you also want to see them come back and you want to see them be signing up to play again next season.
Brent Pasqua: And I think that's the ultimate goal. And we're excited to
Matthew Theal: see their growth. Well, Josh and I have tickets to the 2026 little league world series. So we hope to see you
Joshua Winterswyk: there, but we're not surprised you, I know, put in the work for your team and watching you do, it's really, really cool. And just so you're, you know, kind of commitment to all the kids.
Joshua Winterswyk: So congratulations on all the hard
Brent Pasqua: work. Yeah, it's a big sacrifice too. Cause you know, Practices are a lot and games are a lot. It's a big time commitment. So it's, it's nice to see when you put a lot of work in it to something that just to see some success that comes
Joshua Winterswyk: from that. Yeah. And all the kids look, I mean, all the social media and stuff.
Joshua Winterswyk: And even I went to a couple of games, they all look just happy and, you know, vibe in and it was really cool to see them having so much fun. Yeah, it's,
Brent Pasqua: it's fun when you work towards a goal and you tell kids like, Hey, if you work harder than everybody else. There's a lot of times you'll realize your goals, your, your goals will be accomplished and they put in the work and they deserved it.
Brent Pasqua: They worked extremely hard and ultimately they, they finished a job and you know, that's, that's a proud moment to watch.
Joshua Winterswyk: Absolutely. We're happy
Matthew Theal: for you. You're a great leader. Let's talk about inflation.
Brent Pasqua: Yeah. Tell us about inflation.
Matthew Theal: Yeah, so I guess let's jump in the hot take headlines. Our first one is inflation.
Matthew Theal: It's been so long since we've done a show I think we even missed May's inflation reading but June just came in about a week ago And it was 2. 9% and that was you know a little bit lower than expected, but inflation continues to go down the interest rate the federal funds rate is much higher than inflation right now and And that's a good sign.
Matthew Theal: So inflation is expected to keep decreasing. I think people get a little bit confused though when talking about inflation because they're like, Hey, it doesn't look like prices are going backwards. Right? Like I think they think like, Oh, inflation came in less than expected. That means like chicken prices should go down or egg prices should go down, but that's not how it works, right?
Matthew Theal: It's a year over year
Joshua Winterswyk: reading, correct? Yep. And I guess the, the way I see it is. You know, when we get these readings, what it's telling us is the price increases are just slowing down. They're not stopping. They're not going backwards. And most of the time with inflation, when we read these readings and historically, we see that prices probably aren't going back to, let's say pre COVID or they're not going to go backwards for the most part.
Joshua Winterswyk: And, you know, I think the reading's good that it's more negative. Or excuse me, has decreased. But again, you know, prices are just slowing down from increasing. They're not going negative like you're saying. Yeah. If they go
Matthew Theal: negative, that's a really bad thing. That's called deflation. And that leads to like depressions.
Matthew Theal: Yeah. So we don't want that to happen. But we're happy inflation's coming in. It's cooling. I got nothing more to say.
Brent Pasqua: Is it, is it decreasing faster than the Feds had thought at this point? Cause it seemed like it, like based on the chart, like it's going down pretty rapidly. Yes.
Matthew Theal: It's going down faster than, than what a lot of economists expected.
Joshua Winterswyk: It seemed like last year, though, it was just so slow to get any sort of, like, positive change from the inflation report. I think everyone was so used to it, you know, we peaked at, like, over 9%. And then, as it started to decrease, now we're seeing it down below 3%. And that was a little bit better than expected.
Joshua Winterswyk: You know, yay, it's good, but we were just in that such high inflationary period for all of last year and it just seemed like it was never going to break. At least that's the way I felt about it.
Brent Pasqua: And is the assumption that the feds will continue to raise rates for the next part of this year, the last half
Matthew Theal: of the year?
Matthew Theal: That's mixed. They paused at the last meeting. Some people expect them to raise, you know, coming up here in the, for the July meeting personally, I'm not sure. I don't think they need to,
Joshua Winterswyk: but you know, we'll see. I'm just kind of confused too, because their whole goal from increasing rates was to battle inflation.
Joshua Winterswyk: And we got this really, really good print. And then they're going to come back in July and say, Hey, we're going to raise rates again. Right. It's just, to me, it doesn't kind of fit their narrative this whole last 18 months.
Matthew Theal: Me either. And then there's, actually, let's pivot into another hot take headline, the student loans.
Matthew Theal: Because this is actually something that concerns me, is student loan payments are starting back up. If you haven't been following the story, no one's had to make student loan payments since 2020. That's a lot of extra stimulus hitting the economy every month. And while this doesn't impact everybody, It impacts a lot of people probably under 40 and kind of in that prime spending range of 25 to, you know, 40 or 45 if they still have the loans.
Matthew Theal: I, I think this could be one negative for the economy that a lot of people just aren't seeing right
Brent Pasqua: now. I don't understand how a borrower could have a debt that they don't pay on that could have a pretty substantial monthly payment on it. They don't make that payment for two years and then all of a sudden they're supposed to have An adjustment in their income where they're going to be able to now afford the payment because people don't if, if someone has a surplus in income, they find a way to spend it and now, and now that they're going to have to go back and reduce spending probably pretty drastically to afford the payment that they got used to not making.
Joshua Winterswyk: Oh, absolutely. And, and it's for a lot of younger people, right? So it's not, you know, maybe high earners or high income, or you can easily adjust. This is going to be pretty impactful in my opinion. I mean, the contrarian take is that, you know, not that many people have student loans in America. So it's not going to affect like the broad American public.
Joshua Winterswyk: But I think I'm with you, Matt. I think that this can play a role in, you know, kind of the economy once this starts back
Matthew Theal: up. Yeah. Most people I'd say when I see student loans, someone comes across, it's usually about a car payment. You know, for 500 a month, at least some people are upwards, you know, 1000, 2000 a household.
Matthew Theal: That's a lot of money. I
Joshua Winterswyk: think it's a good tip though, Freddie of like parents or grandparents listening to like let's have this conversation even with our like children or our family, right? If you know your children or family members have student loans, like let's review this budget like, because you know, again, it's a car payment.
Brent Pasqua: Are they planning on getting rid of some of these student loan debts or they just pause they pause the payments and now they're Reactivating them at their old, you know loan
Joshua Winterswyk: value. Yeah, they're just reactivating them and the forgiveness I think is still in limbo, right Matt we did see some news this morning, actually, that there is going to be some forgiveness on some errors and some corrections on certain student loans, about 39 billion worth of student loans.
Joshua Winterswyk: But this isn't an overall forgiveness for all the people whose payments were just paused.
Matthew Theal: Anything else?
Brent Pasqua: No, I just think it's, it's pretty much a sort of a disastrous event for people who this does affect. You know, out of COVID they came out with, there was a lot of money circulating and now there's less money potentially circulating and inflation.
Brent Pasqua: We just went through a high inflationary period and now people are going to have to pick up a four or six or 800 monthly payment. I just don't see how that's going to end well. Not for
Joshua Winterswyk: those people, I agree.
Matthew Theal: Josh, tell us about NVIDIA. I know you've been in that stock for a while and it's one of the kind of hot...
Matthew Theal: AI companies, right? And it's been one of the leading stocks in the market this year. What's going on
Joshua Winterswyk: there? Yeah, and Nvidia is Now has reached the trillion dollar market valuation club Wow, so which is just I mean massive for the company It joins also apple microsoft amazon and alphabet in this elite club of a trillion dollar valuation for publicly traded companies in the u.
Joshua Winterswyk: s And this year it's just has taken off. And you know, a lot of this is driven by just, you know, the rebounding of the tech industry, but then also artificial intelligence, AI, which we've talked about on this podcast. And there, well, obviously in a lot of other sectors within the tech industry, but yeah, just.
Joshua Winterswyk: Great performing stock. It's been taking off and a lot of this has been driven by the AI.
Matthew Theal: Yeah, it's, we're going to talk about it in a few, few minutes, but it's one of the reasons why the stock market's been going higher this year. Just all the big tech companies go you know, leaning into AI and spending money and, you know, it's good for the market.
Matthew Theal: Is,
Brent Pasqua: I don't understand how. Nvidia wasn't a, a great purchase last year. I mean, I remember I heard Kramer saying on CNBC at the end of last year, like, NVIDIA's, like a big sell. You like, just dumped that stock. But the emergence of AI had been happening for, for years and it just hadn't hit the explosion part yet.
Brent Pasqua: And then it happened this year and then all of a sudden now NVIDIA's up almost 200%. I, I just don't know. I don't, I'm confused on how that wasn't more seen last year.
Matthew Theal: It's a beautiful thing about
Joshua Winterswyk: investing. Yeah. In my opinion, though, if I'm looking at it, just from an investor and full disclosure, I do own the stock.
Joshua Winterswyk: It, AI happened very, very quickly. I don't know, like I remember it, it launched or chat GPT launched. It was in the news. And like boom, then there was just flood of headlines all over every media that this had come out. Right. And then you just saw every two weeks, a new AI company, a new AI product. Now we even have plugins for AI.
Joshua Winterswyk: They've all upgraded their softwares. And to me. You know, that's just how fast markets move and how fast industry moves. Like Matt said, it all just happens so very quickly that, you know, I wish I would have predicted that but I didn't, nobody
Matthew Theal: really predicted it. The, the amount of spend that it takes to like run an AI bot is incredible.
Matthew Theal: I think it's like, you know, a couple billion dollars or something like that just to buy the chips from NVIDIA. Like all the stock analysts were way wrong on their earnings estimates for Nvidia this year that I think they almost doubled what the analysts expected was going to
Brent Pasqua: happen. You think that people that the shareholders that work at the company were just sitting there knowing exactly what was about to happen with the potential of their company.
Joshua Winterswyk: I'm sure some of them, I mean, they had already been working on this. I think the one take you could just say, as you said, Jim Kramer, just do the opposite of what he says. And you might be right. A lot
Brent Pasqua: of the times, I guess where my frustration is with this stock is why I didn't double down on it. I already own a good amount of NVIDIA, but why I just didn't go more, you know, like.
Brent Pasqua: I don't understand how, how it just wasn't seen more.
Joshua Winterswyk: Matt and I talked about this, like ride your winners, right? Buy your winners, like just keep buying them because they've been great performers. I'm in the same boat as you though. Like I've, I've purchased more of the stock a few times, but it wasn't right before this last boom.
Joshua Winterswyk: So I'm mad at myself.
Matthew Theal: Quick story, and then we'll move on and talk about something more fun, but your boy TaxLoss sold it at the end of last year. Oh,
Joshua Winterswyk: you did.
Brent Pasqua: Oh, wow. Oh, no. I
Matthew Theal: didn't know that. What an idiot, huh? Did
Joshua Winterswyk: he just not want to tell us?
Brent Pasqua: Yeah, I didn't know that. I mean, you have to be kicking yourself a lot.
Matthew Theal: Yeah, I am. But you know what I didn't tax, tax law sell it's coming back. Bitcoin's back.
Joshua Winterswyk: Oh my goodness.
Matthew Theal: We're back. Bitcoin's been rallying. I don't know if crypto as a whole is back, but Bitcoin's driven to be pretty resilient through this bear market and the big news is that Fidelity Has, has announced that they're, the Bitcoin space with the ETF with BlackRock and Coinbase.
Matthew Theal: This is pretty cool. And most people believe this is going to get approved. Anybody have thoughts or comments or is this just something that interests me? I don't
Joshua Winterswyk: want to like it, but I do. Yeah, no, I really do. I think that, you know, just having an index Bitcoin ETF out there for people to be able to purchase from, you know, just an ease and a kind of retail investor point of view, I think it's good.
Joshua Winterswyk: What's crazy is like the futures ETF was. Was it already approved? Or further along in the process, like how the sec gets, you know, that approved before the just index ETF. I'm not sure that doesn't make sense to me, but I'm, I think that this is a positive for Bitcoin and a positive for kind of retail investors that want exposure without having to, you know, buy physical coins.
Joshua Winterswyk: So good thing for me. The big boys
Matthew Theal: are in Fidelity, BlackRock. I mean, who else do you need?
Brent Pasqua: I think what's important here for mainstream investors to know is instead of you having to buy coins from other custodians like Coinbase, this would give you Bitcoin or crypto exposure in your brokerage account at Schwab Fidelity or somewhere else where it opens you up more to the market rather than having to have another account, which, you know, is a lot of times a hesitation.
Brent Pasqua: For somebody to have to go open up a Coinbase or another account at another institution, you know, that's, that's kind of the hangup for the growth of it as well. Yeah. We could add it to portfolios for
Matthew Theal: clients. Yes.
Brent Pasqua: And he's in anybody who has a fidelity account or, or a Schwab account can go and purchase now crypto through their account, through the ETF.
Joshua Winterswyk: Yeah. And it gives you more awareness instead of having that separate custodian, like you're saying as
Brent Pasqua: well. I think that's the one benefit besides that I don't really care, you know I, it's not like I'm going to go out there and start buying this ETF. Like I'd rather double down still at Nvidia's price right now than trying to, you know, go buy some crypto ETFs.
Joshua Winterswyk: What about you, Matt?
Matthew Theal: I'm just kicking myself on a video. Let's just not talk about it. But Hey, I got a fun one for us. What do you guys think of the Apple snow goggles? Apple vision pro
Joshua Winterswyk: hot. When they came out, I haven't thought about them. Very interested to watch the demo video. When they first launched these goggles, they look really cool.
Joshua Winterswyk: We watched a kind of quick demo video together, Matt. And we were like, wow, these are pretty awesome. But then I haven't even thought about them since that first day.
Brent Pasqua: Did you watch them? Brent? No. Can you buy them yet? Or they're not on the market yet. I don't
Matthew Theal: think they're even for pre order. I think they come out next year.
Matthew Theal: From my understanding too, you have to like, to buy them, you have to make an appointment with the Apple retail store. They're,
Brent Pasqua: they're gonna give you like a physical exam to make sure like, brains can handle it? I don't
Matthew Theal: know. I, I don't know. But I suggest watching the demo video. It's crazy. If anyone's gonna do this like, goggle AR thing correct, it's gonna be Apple.
Matthew Theal: I would put
Brent Pasqua: my chips on that. So. What does it do though? What are you actually getting out of wearing a goggle headset? Like, are you going to be walking around in public with this thing or are you using it for only an activity like in your home?
Matthew Theal: In my opinion, if you walk around in public with these things, you're going to look like an idiot because
Brent Pasqua: you could see through it too.
Brent Pasqua: Right? Like you could see your eyes.
Joshua Winterswyk: So. We're going to save that clip. So like in the future, if we ever see Matt walking around with the Apple AR goggles or driving, I could see him driving like one of the cool demos though, is, I mean, if you've seen like minority report and stuff, it's basically building a screen in front of you.
Joshua Winterswyk: So, I mean, it's potentially even for work. So instead of using a screen, like a computer in front of you, you're actually working off of this goggle. So that was pretty cool, but I do recommend anyone who hasn't watched like the demo video to. Do that. I could see
Matthew Theal: it in five years. Like we'll have some special cameras set up in our conference room and our clients will just put on Apple vision pro goggles if they have them and meet with us virtually through the Apple vision pro and B it'll be like they're in our conference room.
Brent Pasqua: I think, you know, like Tim cook calls us a historic moment in launching this product. And anytime I think Apple calls anything a historic moment, for the most part, they've always been right. I would assume that they see bigger pictures on how they can use this thing. Probably it opens up a whole nother part of the market that we're probably not realizing that they could do at this point.
Matthew Theal: You know who it's going to be perfect for? The biggest use case that I think is people who travel a lot, especially for business, pop these on the airplane and you've got like a movie theater just right, right on top of your eyes. That's pretty
Joshua Winterswyk: cool. Also just like I see a lot of family like FaceTime has has been so great for like people who are like distanced Mm hmm, and I think it brings like another like dimension To like FaceTiming and like seeing family and phone calls and kind of bringing that together So I think that's also a really cool
Matthew Theal: feature of it really nervous for the young generation though parents Don't get your kids these products This is something that's just going to absolutely ruin them.
Matthew Theal: I would like to
Brent Pasqua: take a gamble that or a wager that Matt's the first one to buy one though.
Joshua Winterswyk: I think so. He has a pretty strong interest, I will say. Right. So he's, he's, he's interested. Oh yeah. And especially here's the kicker. If they have some sort of cool golf application or fix your game, Oh, he's going to be able to play golf on this.
Joshua Winterswyk: So then he, that is. In my opinion, my vote is that he is the first one to get it. Pre,
Matthew Theal: pre kids Matt would like be ordering this for sure. But with kids Matt, this isn't something like you really want to probably wear around your kids. And, you know, I'm around my kids most of the day when I'm not at the office.
Matthew Theal: So this is a no for
Brent Pasqua: me. So probably, so where I could see you using this is we could see, we'll see you at the office and you'll have a golf club in your office with a headset on. So we'll walk in and you'll just be on Pebble Beach on your visual headset and swinging the golf club as you take your shots.
Joshua Winterswyk: Yeah, absolutely. So you're telling me if they have a golf app that's just dynamic, awesome, going to fix your game, you're not, you're not buying this thing?
Matthew Theal: Probably not. Not first generation. I'm telling you, like, dude, you're putting goggles on around your kids like that's weird, man. Yeah.
Brent Pasqua: It's pretty cool though.
Brent Pasqua: Pretty new, pretty neat new invention and you know, it ties into the way that tech is advancing right now. And
Joshua Winterswyk: Apple, right? They're continuing to innovate, which is awesome to see. Personally,
Matthew Theal: I just don't think this product is for any of us. Maybe
Brent Pasqua: we're too old. What's happening with the Saudis, with Messi, with Miami as one of the last headlines for today, but what's, what's going
Joshua Winterswyk: on here?
Joshua Winterswyk: Well, there's a lot going on with the Saudis, not only in golf but in soccer this transfer window. So soccer globally has windows where players can transfer from team to team. And the summer is with the biggest transfer window. And this summer the Saudi Arabian league has been spending ridiculous amount of money.
Joshua Winterswyk: Rinaldo was one of their biggest first signings to join the Saudi league to try to lure players to play in their professional soccer league. But over the last few weeks actually one of the biggest stars in soccer, now Messi, who played for PSG and previously Barcelona and the Argentine national team.
Joshua Winterswyk: Actually joined inner Miami, which is a part of the MLS, which is our American soccer league, which was you know, a huge headline, a huge event and just huge for the growth of American soccer. I think one of the biggest storylines to this headline also is that Messi took a lot less upfront money.
Joshua Winterswyk: Saudis offered him. Quite a lot more money to join their league. He took less money to join inter Miami here in America. And he kind of talked about the reasons, one being kind of his young family and raising them here in America. So yeah, Matt, what are your thoughts? Well,
Matthew Theal: I think part of the deal got left out.
Matthew Theal: He messy's betting on, you know, himself and soccer in America. Cause he, he negotiated part of the Apple TV soccer deal. So he's getting the rights to all new Apple TV plus subscribers who buy the MLS package. And then he also did a merchandise deal with Adidas where he's getting a split share of his jerseys.
Joshua Winterswyk: And ownership. Oh,
Brent Pasqua: yeah. And ownership. That's what I was going to ask. Does he get ownership in Miami? Yeah.
Joshua Winterswyk: Yeah. In Miami. And they're just, they just, they're building their brand new stadium. So that club is, is really expanding. This is similar though. It reminds me, if you guys remember when, when David Beckham came to America, he joined the LA galaxy and you know, now we can look back and how much more money he made than just signing the contract.
Joshua Winterswyk: For the LA galaxy, he made tons of money on endorsements. On partnerships and it ended up tripling the amount of money he made here in america So and he's teaming up with david beckham on this on this whole venture and deal. So he's taking that david beckham, you know Blueprint bringing it here to enter miami with him.
Joshua Winterswyk: I think it's a smart move and i'm happy to see him play in america
Matthew Theal: i'm happy to and josh. I I want to know am I going to get to see him play in america this year? Rumor has it you have the Miami LA FC tickets. Am I, am I your guy?
Joshua Winterswyk: I do, or you're not gonna announce that? I'm, I'm not announcing that.
Joshua Winterswyk: I might, I might just. Do you know how much those tickets are selling for? Yeah, but like we should
Matthew Theal: go dude.
Brent Pasqua: You should take it. Is he gonna
Joshua Winterswyk: play though? Is it, well, you know, as it gets closer we'll see. But we can potentially sell those tickets and pay for all of next year's tickets. Have you ever seen Messi play?
Joshua Winterswyk: No, I haven't. Messi, I mean, don't get me wrong. Messi is one of the best players. Ever to play what he played for Barcelona. I'm a Cristiano Ronaldo guy. I mean, I mean, it's Cristiano Ronaldo. I'd be going, but I don't know. We'll see.
Brent Pasqua: It'd be pretty cool to have all that money living in Miami though.
Matthew Theal: Yeah, absolutely.
Brent Pasqua: There's a lot of luxury there. Yeah. All right. Let's get into the retirement planning corner. Tell us a little bit about the market, the year to date returns and how this quarter went.
Matthew Theal: This quarter was, well, this year has been bonkers, but like in a good way, right? So the NASDAQ composite, the NASDAQ index is up 36%, but if you take the top of hundreds stocks in the NASDAQ, they call that the NASDAQ 100, but if it's up 41 or 42%, that's astronomical.
Matthew Theal: Like, what we're doing is making back all of last year's
Joshua Winterswyk: losses right now. Yeah, NASDAQ was the worst performer last year, I think negative 33%.
Matthew Theal: S and P five hundreds up 17 and
Brent Pasqua: it was down 19 and a half last year.
Matthew Theal: And then the Dow Jones is the laggard, which is only up 3%. But we're getting a big market rally and it's caught so many people off sides right now.
Matthew Theal: It's just, you know, one of those things where you could just never predict what's going to happen with the stock market. So many people were bearish going into this year and it's given the exact opposite. The economy is really strong. Inflation is coming down and stocks are going higher. What like, what do you, what else do you want?
Matthew Theal: You know,
Joshua Winterswyk: I think just because of last year and just the negative headlines and inflation not coming down and interest rates being hiked so quickly and the bear market last year lasted forever. I think it was over, you know, 225 days, right. That that bear market lasted, we were kind of getting used to this, like.
Joshua Winterswyk: Negative world we were living in. So to see this, you know, very good start to the year, one of the best starts to the year is refreshing and to see also that the economy is, is a lot stronger than everyone. Well, this
Brent Pasqua: year hasn't been the market going up the entire time though. I mean, although we're seeing that the NASDAQ is up as high as it is, and the SMP is as high as it is.
Brent Pasqua: There was a stretch from March to the end of May where there was virtually nothing but negative to no movement in the market. And we weren't sitting that high with positive returns. Yeah. Cause all of
Joshua Winterswyk: it came with in January and then it kind of scrolled down. Not very volatile as far as big swings, but, but yeah, no, absolutely.
Joshua Winterswyk: It hasn't been just straight going up.
Brent Pasqua: Yeah. I mean, a lot of it has come in the month of June. I mean, a big portion that's came in January and in June and you know, it, but it hasn't been a year of just constant. Inclines of the market we saw last year where it was just constantly declining a lot last year.
Brent Pasqua: Yeah,
Matthew Theal: you're right If you're if you've been paying attention And you are on the sidelines the market gave you plenty of times again this year. Yeah, totally I think there's gonna be some other buying opportunities coming up though this summer It's been on a pretty big run since the debt ceiling And this latest inflation data is just helping move it higher.
Matthew Theal: But, you know, usually the market pulls back for a little bit stalls, like you said, Brent, and then you know, I expected the, to continue, you know, after the fall and move up into the, you know, December,
Brent Pasqua: what, what data is out there showing that the rest of this year could be good? Well, so we
Matthew Theal: have a lot of positive data on our side right now to support, like really, you know, starting to buy stocks right now.
Matthew Theal: And so this was the 14th best start of, to a year for stocks. And this is, we have data going back to 1926 on, on average, when the first six months of the year are positive, stocks returned 7. 8% the rest of the year. So we could still have some pretty big gains to go this year. Josh, tell us about how consumer confidence impacts stocks.
Joshua Winterswyk: Yeah, what we really see, though, with consumer confidence and as it increases, is it really reflects good stock market returns to follow. So these are just another trends that we like to look at that historically, when we see this type of consumer sediment change, we're going to see potentially higher returns going forward.
Joshua Winterswyk: So just another case for. So
Brent Pasqua: if we saw, cause we saw interest rates go up right all last year and then a big, and we hit kind of a peak throughout part of this year and we saw so much money move from stock over to bonds or to savings accounts. Is that money now already coming back to stocks and that's why the stock market is going up or is that money yet to start moving over to stocks?
Matthew Theal: I think it probably has slowly, but it's, it doesn't come in as fast as it goes out. Right? So that's what creates those really scary down days. Like we had last year's money's just flying out of the market so fast. It never flies in fast. It's always slow and steady. Like this year reminds me so much of 2013 or 2003.
Matthew Theal: And those were years coming out of kind of like poor stock returns poor economic environment, people feeling down and not happy. And, you know, predicting more negative returns because people always predict, you know, negative return means more negative returns, right? That's how people think. And instead, those were plus 30% years, just like we're having now.
Brent Pasqua: So somebody's still sitting on the sideline with money and cash or sitting in short term treasuries. Did they miss the boat on the returns of the market? I mean, you look at the NASDAQ, the NASDAQ is up 37%. Did they miss it or they still have time to get in?
Matthew Theal: I don't think so. You didn't miss it. Like if you bought in 2013 and then in 2013, you didn't miss anything.
Matthew Theal: You know, we had a bull market that lasted what? 10 years nine years after that, eight years.
Joshua Winterswyk: Always be buying. I mean, that's my take, right? Like, even if you thought you've missed it. And I think you mentioned this earlier, like there still could be potentially a lot of return left in this year, especially off the data we saw historically.
Joshua Winterswyk: So keep buying.
Matthew Theal: Yeah, absolutely. And I think that goes to like what we've been telling clients, right? So what are we telling clients this quarter? Get invested. If you're conservative, bonds are paying 5%. That's perfect. Getting bonds. Like let's start buying bonds. Even you could go longer duration than short term treasuries.
Matthew Theal: Those are still pretty, I saw like a 10 years at 4%. Yeah, I mean, it's great.
Joshua Winterswyk: They lock that
Matthew Theal: in 4% for 10 years.
Brent Pasqua: Yes. Yeah, we were doing a lot of rebalancing last year. And for the first part of this year, as we saw, you know, stock allocations kind of dropped down below the target allocation, we were bringing them back up.
Brent Pasqua: So we were adding to the quantity of shares that clients own in their equity positions so that. It was helpful as prices come back up. The recovery was a lot quicker. Personally, we didn't ever get in a position with our clients where we started getting scared or panic last year, selling off positions.
Brent Pasqua: We know how this kind of works. We've been through it so many times that we just, you know, you keep doubling down at that point. You know, we didn't sell our Nvidia shares
Matthew Theal: taxless, but, you know, as an advisor, the worst thing you could do for a client is take them out of the market because you're never going to know when to get back in.
Joshua Winterswyk: And I think that like one thing we last year, we talked a lot about like in towards the end of their cash management and buying treasury bills and kind of using some different like short term strategies, but we can't lose focus on like, and we use the word all the time diversification, right? Having that balance, like what's right for you.
Joshua Winterswyk: So then you're not in a situation where you're flipping one way to the other, right? It doesn't have to be that position, that situation for yourself. And you should be buying everything, right? Like there's good opportunities out there for treasury bills. If that's what you're into, there's equity opportunities.
Joshua Winterswyk: We're constantly looking for opportunities for our clients that fit their plan. But we can't stay stagnant either. We need to taking those opportunities as they arise.
Matthew Theal: Yeah. I'm like, I have an aggressive personality. So, you know, I want to buy stocks.
Brent Pasqua: A really good point right now. If you're planning retirement or you're close. Or in retirement to be sitting on TBIs with as high as rates are. I mean, there's not many people that are gonna squawk at a guarantee. Five, five, 4%, you know, five, two, 5% right now.
Brent Pasqua: No. I mean, rates are still so outstanding,
Joshua Winterswyk: but even closer to like, you have to take the risk. Yeah, no, totally. Sorry to catch you up. But even close to 5%, like a two year, right? Like you have a two year time horizon and you're locking in 5%. And as we're seeing rates that kind of start to come down, cause the market's ripping like.
Joshua Winterswyk: You know, those are good opportunities for people that are getting close to retirement. Absolutely.
Matthew Theal: I feel like this decade could end up being like the nineties. And if you look back through like market history and you know, history, like the nineties were probably one of the best times to actually retire rates were, you know, six, seven, 8% on a longterm bond.
Matthew Theal: So you could put your money in bonds and, you know, get incredible interest. And the stock market was absolutely booming every year. So not only are bonds making money, your stocks are making money. It was great for 60, 40 portfolio. You know, that was during the PC revolution, right? Now we have the AI revolution going on.
Matthew Theal: It's a great time to retire. Yeah.
Brent Pasqua: It's a great time to invest. Yes. Absolutely. Yeah. You know, people, the people that are missing are people that don't know how to invest or people that are sitting in cash, you know, right now is not time to be
Matthew Theal: sitting in cash. They're scared. They're watching CNN, MSNBC, Fox, you know, they think, you know, everything's bad and you know, there's going to be a world war three and the economy is going to crater.
Joshua Winterswyk: Do you feel that brand like like so far this year, what has been the feeling when, when clients come in for the review, do they feel like, or do they really know how well the market's done or do they still feel like we're in this like rut of
Brent Pasqua: last year? No, I think most people are feeling the rut of last year.
Brent Pasqua: Most people are surprised to see where their portfolio returns are this year. Which is actually somewhat surprising to me, but, you know, again, it kind of goes back to this bull market has been June in January and June, so it is relatively newer to this year that this market has increased so much, but most people are still stuck in the, I think the negative news of what happened last year.
Brent Pasqua: And what they're hearing for this year. And then there's, they're also now starting to focus on next year's election year. And so I think all that sort of negativity in terms of like what's happening in the stock market is flooding into right now. And they're surprised to see what
Joshua Winterswyk: returns are. Yeah, that's what, that's what I see as well.
Joshua Winterswyk: And I, I just wanted you to make that, that good point. Cause there is some, you know, reasons to celebrate this good start to the year.
Brent Pasqua: So what should clients be doing right now as a strategy to invest?
Matthew Theal: You know, get invested, get their cash working. You know, if you're conservative, we said we like the bonds, right?
Matthew Theal: Bonds are in a really good position here. Stocks. Awesome. You know, if you're aggressive, you could dollar cost average. But yeah, I'll get with your advisor and, you know, make sure your plan's in order. If you don't have an advisor, great time to hire an advisor. We're at the start of a new bull market.
Matthew Theal: I
Brent Pasqua: agree. I think dollar cost averaging is important. You know, I think some people probably neglect to look in their portfolio to see if they have their positions paying to cash or dollar cost averaging. When your dividends and interest on your stocks or bonds are paying if you're having that interest or those dividends paid to cash you could have missed out a really big benefit from last year while prices were down, you could have picked up more shares at a very low price.
Brent Pasqua: So I think it is an important tactic to have and be looking at it within your
Joshua Winterswyk: portfolio. Totally. And also just always looking for opportunities to rebalance, right? You want to make sure that you keep that good balance, that good allocation relative to your target. So looking for those rebalance opportunities is going to lead to higher expected rate to return longterm.
Joshua Winterswyk: I think what I hear you guys say too, is now's a good time to like go back and look at your portfolio, right? Let's, let's. Absolutely. So. Continue to bring that awareness to your situation because now there is a lot of good opportunity out there.
Matthew Theal: Yeah. And just one tip for people don't get overly bullish.
Matthew Theal: You know, we're obviously excited. We're advisors. We're very connected to this. You know, this is how we make our living, but I saw so many people get way too ahead of their skis in 2021. And then last year they're like, you know, wanting to jump out of the, out of the building. Like just, you know, be more balanced when you're investing.
Joshua Winterswyk: It's good for us. We keep each other accountable here. So I think we could all get one way or the other a little bit too much. You mean
Matthew Theal: when I was getting too crazy on crypto and NFTs? I
Joshua Winterswyk: didn't want to say any names. I didn't want to point anybody out. But you know, we hold each other accountable in this office.
Matthew Theal: Yeah, hey, that's what you do. What do you guys do in your personal portfolio? Let's talk about that.
Brent Pasqua: What I'm doing right now is I'm doing sort of a, a summer cleaning in my portfolio. I've cleaned out some of the meaningless stocks that I've held for a period of time, and meaningless, meaningless stocks to me mean that they're not having a real impact on your portfolio, either one, because there's just not a lot of movement happening with it.
Brent Pasqua: Or number two, you're not, you don't own enough of that stock to have meaning in your portfolio. And so when you're trying to manage your portfolio, it will get choppy and messy. So I've cleaned out some of those shares. I've moved those shares over to what our investment philosophy is. And that is, you know, buying the, the, the whole market, which is the, the, the main philosophy of my overall portfolio.
Brent Pasqua: But I do own individual stock positions. So I've cleaned some of those meaningless stocks out. I have increased some of my shares in my other stock positions that I'd like to have a larger quantity of. And so I've been kind of on a summer cleaning to clean things out lately. This
Matthew Theal: is not my, mine isn't advice for everybody, but I'm going to be honest and say what I'm doing, I'm increasing my positions in the stocks. That's
Joshua Winterswyk: good, Brent. I think that that's a more along the lines of what I'm doing clean up.
Joshua Winterswyk: Right. Not doing really much. Right. I want to also the positions I liked. I mean, I'm in this for the longterm and I buy a lot of the, my stock positions and just overall mutual funds and ETFs to hold them for a long time. But now that we've had some recovery, I have cleaned up a little bit of the portfolio and given me a little bit more cash to see some other opportunities, like maybe potentially adding positions or buying something else that I really like.
Joshua Winterswyk: So good, good time to clean
Matthew Theal: up. I have to catch my rate of return up with yours. Since you have NVIDIA and I
Joshua Winterswyk: don't I just wanted to say I'm doing nothing, but I can't I want to be fully transparent I have sold a couple but yeah, but
Brent Pasqua: you didn't sell NVIDIA. Did you know I'll
Joshua Winterswyk: never sell Are you kidding
Matthew Theal: if you look on our portfolio software?
Matthew Theal: He's like the top performing person.
Joshua Winterswyk: Yeah. No, I'll never sell NVIDIA I that was again. There's winners and losers, right? I can I have losers and those are the ones I just sold but NVIDIA was my top, my top dog. I'm going to go down with the ship with that company.
Brent Pasqua: Yeah, don't blame me. I'm, I'm, I've been riding that bull too.
Brent Pasqua: And I'll keep on that.
Joshua Winterswyk: Oh yeah. You bought that
Matthew Theal: like three works in this three weeks into starting your job here at RPI. I feel like, and you're like, Oh, buy this stock. It's good. I read about it. And I was like, Oh, this guy doesn't know what he's talking about. And
Joshua Winterswyk: yeah, obviously it all stemmed. It actually stemmed from Tesla.
Joshua Winterswyk: They, they, I mean, I don't think they don't do the chips for Tesla anymore, but back then they did. And it was like exposure to Tesla and chip making. And I liked it. So
Brent Pasqua: what, what are you doing, Matt, in your financial plan right now then? Oh,
Matthew Theal: So we have our new son, which we, you know, we talked about on the last show, but I need to get his five 29 up probably need to add some life insurance for my wife and I especially on her, you know what I mean?
Matthew Theal: And then
Joshua Winterswyk: I can help you with the 529 plan, by the way, too. Oh, thanks.
Matthew Theal: You're welcome. Do you want to open it for me so I don't have to do the work? Yeah, yeah,
Joshua Winterswyk: I got you. Thank you. I appreciate that. It'll be my gift to Nolan. That's
Matthew Theal: awesome. Are you going to put a hundred bucks in there, too? If you make
Brent Pasqua: me the godfather, I'll do the work for
Joshua Winterswyk: you.
Joshua Winterswyk: Dude, you're the
Matthew Theal: godfather of all my kids. Like, it's just a smart bet. And then my living trust. Yeah. So I'm a bad advisor. I don't have a trust. I need to get that done ASAP. I
Brent Pasqua: don't, I don't understand like how, how that's not done yet when, you know, we tell you to get that done and then you tell your clients to get that done.
Joshua Winterswyk: This is like a conversation every two weeks. Yeah. Let's move
Matthew Theal: on. Let's talk about somebody else's financial plan.
Brent Pasqua: We're going to, we're going to make sure that gets done before our next pod.
Joshua Winterswyk: I'm a, I'm doing, you know, inflation, interest rates going up. I bought a car. It's all about budget awareness going into the end of the year for me.
Joshua Winterswyk: So life insurance is all good. I think I still have to get my live interest. I can't cap on that too much about that that's still on my agenda and But yeah, I think good time for everybody It's always a good time But bringing some awareness to spending especially after this high inflationary period and with interest rates changing One tip out there to if you have any variable like home equity lines of credit credit cards Your payments are probably changing.
Joshua Winterswyk: So definitely stay on top of that
Brent Pasqua: Yeah, you're not gonna want to roll debt month over month not in this market right
Joshua Winterswyk: now No, and if you have like a home equity line of credit or second that was variable and that went from four to ten Your payment went up. Yeah,
Brent Pasqua: I mean that's a good argument for Don't worry about what you're earning in your high yield savings account pay off that debt totally right now I'm putting more obviously into my 401k plan every single, every other week I'm just continuing to double down on buying more shares in this market.
Brent Pasqua: We did that last year. We knew last year was a great time to continue to buy more in your. 401k plan. Keep putting, I just keep putting in contributions like you guys. That's a very easy way to build wealth long term and one of the best ways. Yeah. And then also making just sure that. Every dollar that you're not going to use over the next couple of weeks is in a high yield savings account.
Brent Pasqua: I mean, high yield savings accounts are playing over 4% right now, besides money that you're using on a month to month or week to week basis. Like that money should be in a high yield savings account. Everything should be earning interest pretty much right now. And the other thing I'm doing in my financial plan is I need to make another good contribution to my kids 529 plans.
Brent Pasqua: I mean, my son turned 9 this year. He's halfway to college and college tuition is increasing by extraordinary percentages. So I, I'm going to miss the mark on what I would like to have saved for him because the way cost is going up for college. So I'm, I need to even put more into that and focus on helping get him ready for
Joshua Winterswyk: college.
Joshua Winterswyk: That's crazy to think about halfway there.
Matthew Theal: I'll help you. We'll do, we'll run some projections. I'll be your financial planner on this one.
Brent Pasqua: Yeah, we have I have a few clients that have their kids in college right now. And it's like 50, 000 a year for university. Yeah. And it is so expensive.
Joshua Winterswyk: That's one of the bad stats is that college tuition is, has grown faster than inflation over the last, what?
Joshua Winterswyk: 25 years. Pick
Matthew Theal: those state schools. Man, I went to, we all went to state, like state schools, like education's good. Like it's all about the person, not about where they go to school. All
Brent Pasqua: right. Let's kick off the RPA
Matthew Theal: recommends. I'm going last. So whoever wants to jump in and go first can
Joshua Winterswyk: go. I'll go first. I subscribe to a lot of these, but a lot of good like content creators and thinkers and authors, or I mean, pick your poison, but have email subscriptions.
Joshua Winterswyk: Like to give you an example I subs, one of the ones I do is like morning brew. and it sends me all of the top stories, market news in the form of an email. But then I also do this with like, there's a. Golf writer that puts out a newsletter and sends that directly to my inbox. So it's just been a, that's my recommendations.
Joshua Winterswyk: If you have a passion, you have a hobby, you have an industry. There's so many good, there's so much good content that comes directly in the form of an email subscription. Check it out. Do you guys have any email subscriptions?
Brent Pasqua: Yeah, I do. And I like reading the articles that
Matthew Theal: come from them. Yeah. I have a ton.
Matthew Theal: Brent, what's your recommends?
Brent Pasqua: My recommend is to if you're thinking about doing a trip or you want to travel, I know it's summertime and maybe you just don't want to either spend the money on it or you're just thinking about putting it off, don't put things off. Just go and enjoy them. You know, some of the best trips you take are ones that you just kind of sort of last minute plan.
Brent Pasqua: I don't have like a product recommend, but it's, you know, Hey, if you are thinking about doing something that would be one of your bucket list things or something that you really enjoy. Don't wait till next year. Just go do it now. Spend the money and go do it now, you know You'll it'll be worth it nine out of ten
Matthew Theal: times I'll book that trip to Japan and Thailand right after this pot.
Matthew Theal: Really? That's where you want to go. I've never been there Okay, let's talk about myself Guys, I got new golf clubs And here's my recommend so for for the people who like to golf out there Cause I didn't know like really what I was doing. I'm an awful golfer, but I got fitted and it is, I'm really happy with the process.
Matthew Theal: If you're going to be spending money on golf clubs and you know, buying a premium set from like a tailor made a title list, a Callaway get on, go down there, get on the simulator, get measured out. It was a really good
Joshua Winterswyk: experience for me. How many times do you have to be fitted?
Matthew Theal: Technically you probably just once,
Brent Pasqua: Are you happy with your
Matthew Theal: clubs?
Matthew Theal: I mean, I'm still not good at golf, but yeah, I'm happy with the purchase. They look really nice. Thanks. They are nice. They feel like the right set for me when I hold them, like they're the right length when, when I make contact with the ball, it goes like nice and far. Just, I'm just not that good.
Brent Pasqua: So if you're a client of Matt's that's listening, then make sure you reach out to him.
Brent Pasqua: He could probably use some practice with those golf clubs. Reach out to him, have him take you out on the golf course and get around in with him.
Joshua Winterswyk: Oh, I'd love that. Yeah. He needs to, you need to get some more swings with those sticks. I do call it. We call them the stealth bombers here in this office. Or Matt's the stealth bomber now with his new clubs.
Brent Pasqua: Well, we're glad to be back. We're glad to be back in the studio recording and we're glad to be together doing this recording. So we'll, we'll try to make sure that we're back in the studio, launching our pods every other week. Like we're, we normally do, but. You know, it's always great to, to do this and to have you all listening.
Joshua Winterswyk: Thank you guys. Thank you.
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