Ep. 111: 2024 Election Preview: Markets, Volatility, and Investment Strategies
The X's and O's
Hosts Brent, Matthew, and Josh introduce the show, focusing on investment strategies, retirement planning, and current events. They discuss the importance of adaptability in volatile times, especially during political and economic uncertainty.
[00:01:00] - Social Media and Distractions
The team discusses the distractions of social media platforms like Facebook, Instagram, and TikTok, highlighting how modern social media can clutter your life and be a source of misinformation.
[00:03:30] - Political Events and Market Volatility
Discussion about the recent dock strike, unrest in the Middle East, and how these geopolitical events spooked the market.
Impact on oil prices and how the market reacts to major global events.
[00:07:00] - Election Talk: Trump vs. Harris
The team dives into the upcoming election, debating whether the election results will have significant effects on the market.
Mention of Vegas odds favoring Trump by 3%, followed by speculation on how political changes could impact future market performance.
[00:10:30] - Does Politics Really Affect the Market?
Brent and Matthew share historical data on how the market performs under Democratic versus Republican presidencies.
Key stat: Staying invested through different political regimes yields better long-term results than trying to time the market based on elections.
[00:14:00] - How Presidents Impact Market Performance
Analysis of market performance under different presidents, including Bush, Obama, Clinton, and Reagan.
Discussion on how long it takes for presidential policies to affect the market and how much control a president really has over economic outcomes.
[00:19:00] - Volatility Before and After Elections
The hosts discuss how volatility spikes before elections, especially in September and October, and how markets tend to calm down after elections through Inauguration Day.
[00:21:00] - Diversification and Safe Haven Assets
The team stresses the importance of maintaining a diversified portfolio during times of uncertainty, with safe haven assets like gold and treasury bonds being key components.
Matthew's take on investing in gold, and whether physical gold or gold ETFs are better options.
[00:26:00] - Thematic and Political ETFs
The hosts introduce the concept of political and thematic ETFs, where you can invest in companies based on states or political ideologies, like the Texas-only ETF.
Insight into how political themes can influence stock performance and fund creation.
[00:30:00] - Election Investment Strategies
Josh shares practical strategies for navigating election-related uncertainty, such as staying diversified, investing in safe havens, and adjusting portfolio allocations as needed.
[00:33:00] - Betting on States: Texas vs. California
Fun debate on which states would be better for long-term investment, particularly with many companies leaving California for Texas.
[00:35:00] - The Role of Behavioral Investing
The team discusses how investing behaviorally, with moves like allocating 5-10% of portfolios into gold or state-based funds, can psychologically relieve concerns during election periods.
[00:36:00] - Wrapping Up: Diversification is Key
Final thoughts on the importance of staying invested and diversified through elections, global crises, and market volatility.
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Transcript
Welcome to the Retirement Plan Playbook hosted by Brent Pasqua, Matthew Theal, and Joshua Winterswyk of Evermont Wealth. This podcast dives deep into investment strategies, retirement planning, and current events, equipping you with the insights needed to craft a robust retirement playbook adaptable to any political or economic climate.
Join Brent, Matthew, and Joshua as they guide you through the complexities of retirement planning. Offering expert advice. to tackle challenges and the later stages of your journey. It's time to build your optimal retirement playbook. Now let's dive into today's episode.
Brent: Would you ever get TikTok?
Josh: No, I don't want my information out there.
Brent: Is it information or distraction?
Josh: Both. I don't need another social media platform. I think I have plenty.
Brent: What do you have?
Josh: Instagram.
Brent: Yeah, I think that's Instagram and X to me are enough of a distraction that I have no desire to be on anything else.
Josh: I have a Facebook, but it's not really like a, like I check Facebook or post to Facebook.
Josh: I
Brent: check Facebook for when clients tell me things. Like, oh, I went here or there to go look at pictures. What I found on Facebook though, is it is literally 98 percent ads either. I don't know, either people aren't posting on that platform anymore or, or ads are just a priority, but it's all ads on there.
Josh: It's not good. It's like cluttered. It doesn't even look good anymore. Like it's like ugly to look at.
Brent: And it looks to me like half the articles that I look at on there. I'm like, that looks like a fake article. Yeah. Like I'd be scared to even click on it. I agree. Yeah. It's like
Josh: a spam
Brent: email. Yeah. It looks like a spam email.
Brent: And then you see so many people posting on Facebook like, Oh, I got my account hacked. I'm like, yeah, if you look at half of those articles, it's like, where did that article come from? What source is that? Don't
Josh: click Dale's post. You're going to get hacked. Facebook
Brent: is the, the, the modern MySpace, man. It's like just dying out.
Brent: I don't know though, but Facebook's doing good. Is it the actual Facebook page? Like maybe
Josh: because they're doing good. Cause it's filled with ads.
Brent: Is it, is it Facebook that's doing good or is the whole meta like sphere and everything that meta is doing outside of Facebook because meta owns Instagram. So is it more Instagram?
Brent: Matt, are you okay with your notes over there? I don't know
Josh: if it's segmented. I just know Yeah, it's probably not the Facebook platform. Matt, are you okay?
Brent: You have notes stuffed in your pocket. You have notes coming out the side of you. You have your, you're holding your mic. Are you alright?
Matthew: I'm good. I just want to make sure I'm ready for the show tonight.
Brent: I don't know that
Matthew: you are.
Josh: You have three cups. One to your left, right, and behind you.
Josh: Think that it's really good to start with how this podcast started. So Brent, can you tell me that story again about starting this podcast and what you were handed?
Josh: Today's
Brent: podcast is a podcast in general because those are
Josh: just today's podcast. So you told a story right now about you walking up here to record and the papers you were handed. Can you tell that story?
Brent: Yeah, so basically we were supposed to record this show on Friday, but you were out due to child injury, which is totally understandable.
Brent: And I came up here five minutes ago, was handed the show notes, which is some things that are expired stories. I was given these notes, some papers that were 10 pages deep with a ton of different articles and descriptions. And I can't, I can't even read that right now. And those are on the ground.
Josh: Were they stapled?
Josh: No staple front back wrote on. There's also one crinkly paper that's on the floor. Those are my notes.
Matthew: Well, look, there are some really important stories that happened last week while I was out and yeah, they've kind of expired, but the two they're still going on and we could also talk about hurricanes.
Matthew: We should talk about hurricanes. Okay. So we wanted
Brent: to talk about the doc strike, but nobody cares about the doc striking, but
Matthew: the doc strike was important.
Brent: It was important, but was, is the key
Matthew: now the market down was the market down like 2 percent a Monday ago?
Brent: Yes.
Matthew: And they're saying that because the dog strike little kids weren't going to get Christmas presents and inflation was going to skyrocket again.
Matthew: So that was why everybody was scared. Yes. There was a lot of fear. Yeah, that's bad. What is it? Ryan from
Josh: Flexport said it'd be solved in five days.
Matthew: Yeah. And he was right. It's all pretty. He was right. So all the media companies that were there trying to scare kids that weren't going to get their Christmas gifts.
Matthew: Yeah, it
Josh: was much. And it worked. It
Brent: scared
Matthew: them and Matt, but Josh and I have a quick announcement though, for you. Yeah. We are both demanding 70 percent pay increases. Or we're going on strike.
Brent: I saw that. That is massive. Like, I don't know how you got from where you were to 70%. Did you see
Josh: the, the head of the union up there talking?
Josh: Was
Brent: he the guy that he was the white guy that just kept screaming and cursing on TV? Yeah.
Josh: And he was like, they don't know how bad we can hurt them. Like, who are they hurting? Yeah. I was like,
Brent: where do they, like where do they hire this PR guy? I know. Yeah. He was, he was aggressive. Is it like sports though?
Brent: Where you have only former workers that are leading the union. Probably. I think he used to be a union worker. Yeah, probably. It must be. Cause like he came out, like he was just one of the guys on the front lines of the pickets and he was just the one spouting out all this stuff. He was the
Josh: actual, he's the president.
Brent: Yeah, that's pretty crazy that he was talking like that. He wasn't very polished. He wasn't
Josh: impressed.
Brent: Especially when you're trying to like, cause they're going up to the government, right? Cause like Biden spoke about this. So like, he's the face of trying to get what he wants and he's the one cursing on TV.
Matthew: Yeah, that was, that wasn't great. But he won, right? Didn't they get a 67 percent increase? 62?
Josh: Is it 67?
Matthew: Hey, if I demand 70 and I get 67. That's a win in my book. Yeah. Oh, yeah,
Brent: I would I don't know the whole story But I would assume that they didn't get raises for a very very long time And that's how they got this to 70 percent or it's making up for lost time as well
Josh: Yeah, I'm sure and future negotiations, but it was only certain ports, right?
Josh: It wasn't our ports out here On the West Coast. I don't
Brent: think our ports on the West Coast even striked. They did it So our kids would have got their Christmas gifts
Josh: It was it wasn't a West Coast issue because I think they're different unions
Brent: So it was all these poor East Coast kids that were gonna lose out on Christmas
Matthew: All right, so that story turned out to be a nothing burger, all right
Brent: I thought you said it had a lot of meaning though.
Brent: It did but when I made
Josh: this show it You know what? I'll defend you Matt here They didn't reach full agreement yet. Right. It's kind of like a temporary we're agreeing, agreeing so far. So if it goes back to the negotiation table, we can touch on this topic again. Okay. So this was a nothing burger. So, so
Brent: kids still might not get their Christmas gifts.
Brent: Yes.
Matthew: Okay. Don't be the Grinch, right? Kids are going to get their gifts.
Brent: You're the one that brought it up.
Matthew: All right. What about the unrest in the middle East? Like that's
Brent: still a story that that's important.
Brent: And then didn't Iran start bombing Israel? So yeah, Iran started bombing Israel. They did it for one day, right? They sent whatever, two, three, 400 missiles over there. A few of them hit the ground. A lot of them were just intercepted. And basically Israel hasn't responded in any way to Iran with anything.
Brent: They've just keep taking out Hezbollah.
Matthew: So, so then that, so though this word, the markets, right. The spook, the markets on Monday, I wasn't here. I think the market was, the market was down, right. It was this plus a dock strike. It was,
Brent: it spooked the market for a lot of last week
Matthew: because oil prices started to get affected.
Matthew: Right, so that's one of my favorite trades, right? Long tech and long oil because they go the other way because I saw the tech stocks were getting killed during the sell off. Yeah, I saw that we did add some, some oil stocks recently. Yeah, so oil's, oil's a good investment if you're scared of World War III.
Matthew: But I think what's important, and if you look throughout time you know, some people think we're on the precipice of world war three, maybe, or maybe we aren't, never know. But there's always stories like this, right? There's always, you know, Russia invading Ukraine, right? That was the topic two years ago.
Matthew: You know, we invaded Iraq and all these stories were just blips on the radar, the stock market, and the market was down for, you know, three, four days. And then it found something else to pay attention to. And, you know, the growth of the stock market continued, right?
Josh: It just creates more uncertainty, right?
Josh: We always talk about that. Markets don't like uncertainty when those events happen that we can't foresee, there's more uncertainty. Markets are going to be more volatile.
Brent: Yeah.
Matthew: So I think the reason I want this one on the show is, you know, to let listeners know we're watching it. But you know, overall, over time, the market's going to just go higher.
Matthew: It's going to be a non story in two months
Josh: or longer. I think it's why it's polarizing too. There's a lot of events going on right now. And it seems, and I feel like we keep saying this, but especially geopolitically. I don't know if there's ever been a time, what, in the last five, ten years, as many geopolitical headlines have been out there.
Josh: Would you disagree with it?
Brent: No, I think there's a lot going on
Josh: was it almost a year exactly from the first attack?
Yes. I think
Matthew: it was
in
Matthew: a
year
Matthew: today.
Josh: It's a year today. Yeah.
Brent: All right. So what do we think about the election and now investing?
Matthew: Yeah, I'm fired up. Let's let's get at this topic. So I guess this will be our election preview. Kinda let the listeners know what are we a month from the election?
Matthew: Exactly. Yeah. What's the date today? Yeah, the seventh. So we have basically a month. Josh Harris, Trump, who you got?
Josh: You know what I think just based off of the information we saw today, sharp movement and Vegas odds for Trump. Really? By how much? Three, 300 basis points.
Brent: So 3%. He's favored by 3% right now, or he has a 3% potential.
Brent: It
Josh: moved 3% to his favor, which I think it's. 51 percent now got
Matthew: it.
Josh: So he's got a 1 percent favor right now. Well,
Matthew: I mean he'd win a lot of states what
Josh: happened
Matthew: I don't know.
Josh: I don't know either Do you know what changed over the weekend?
Matthew: Is that elon? Maybe? I mean, he's always been on, he's been on Trump the whole cycle.
Brent: Yeah, but for a long time, like Elon said, like he doesn't support any political party, but then all of a sudden he's out there with, in a rally with Trump.
Matthew: Well, that's not true because actually when he, before he said he was donating to Trump, he said previously he was a Democrat and he donated to the Democrats.
Matthew: And then he said he was switching because he didn't believe with where the Democratic Party was headed.
Yeah, but I saw like three months ago, he was like, I don't support
Matthew: either candidate. He did say that too. Yeah, and then he started then there's the report that he was giving Trump like 20 million a week or something You
know, what's amazing to me that I didn't really realize is that a lot of companies Actually donate to both parties.
They got to hedge your bets. Yeah. So they, I mean, they're, they're supporting their employees on both sides of the coin.
Matthew: You guys make fun of me for having multiple football teams, but I'm just hedging my bets and that's all at the company. You just
Josh: like the NFL. Yeah. So, you know, these companies just love democracy, so they're contributing to both parties.
Matthew: Yeah, so like last year in the 49ers or in the Superbowl is a small win for me because I'd like the 49ers when I Was 10 up until the Rams moved to LA. Okay, and then when the Chargers are in the Super Bowl I'll be a Charger fan. Got it. Why cuz they're here in LA. Exactly. Alright, so all this election talk going on You know, I see like it's you know Harris is gonna be bad for the market Trump's gonna be bad for the market Inflation is gonna go skyrocket even worse.
Matthew: Like does any of this even matter? Is that even true?
Josh: You
I
Josh: don't think it matters at all, to be honest. I think the, the actual events that are unknown are a lot more impactful, right? The election is going to be on a particular day. We already know when that's going to happen. We know the candidates, we know it's either going to be Harris or Trump and the markets price in a lot of that change already, right?
Josh: It's not something we don't know. It's not that uncertain. So I don't think it's that impactful. Like some of these other events we even just talked about. World War Three could break out. I think that would be more impactful than this election. So I have some
Matthew: stats here for you all. Going back to the 1950s, if you invested in the S and P 500 and just held your money, you've gained 8 percent per year.
Matthew: So that's the rate of return going back to the fifties. If you invested only during Democrats, your rate of return was 5. 15%.
Josh: So that would mean you would sell and go into cash when the Republicans are in office.
Matthew: Yeah, exactly
Josh: Okay
Matthew: And if you did the opposite you bought when republicans were in office and sold when democrats were in office Your rate of return is 2.
Matthew: 79
Josh: Do democrats actually have a better rate of return than republic? How
many years did the republicans occupy office versus democrats? It's
Josh: a good
Matthew: question.
That's a good
Matthew: question i'm not sure i printed this in black and white
Oh, this is the one you printed right
Matthew: before the show. This is what exactly you threw on the floor?
Matthew: Yeah, the one you threw on the ground. So you're probably like, wow, I'm not so smart. Look at all these numbers he's got. But you're missing the important part here. But anyway, so the point is it's better just to stay in no matter what your political preferences
Josh: to be fair I don't know anyone who's done that
pulled out.
Yeah. I don't know anybody who invests
Josh: Well, like it's pretty extreme maybe through a couple of those times. I don't know anyone that's stuck to that strategy
We do have people that definitely want to be invested or scale back their equity positions When certain parties are in office versus others, but I feel like the emotional side of it
Josh: I feel like that's just around the election, not necessarily like through the whole four years.
Josh: I agree. But
that's
Josh: what's
hard is you, they only get back in once they realize it's not that scary and they've already missed a ton of positive returns.
Josh: Right, because the last two presidencies, After the election, the market rallied.
Yes.
Josh: Over double digits, over 20 percent in both cases.
Correct. And it wasn't until after the second year that they were in office that the market started to decline.
Josh: So even if you timed the top, you didn't get back in. You lost that off on all of that opportunity. Yes.
Matthew: Well, I think later we should talk about some strategies for folks who are nervous about the election, because I think, you know, Josh, you came up with a good list of strategies. But I have a fun question for you guys in the modern era.
Matthew: So going back to the fifties, who do you think the worst performing president was for the stock market who had the worst returns president Bush. Did you cheat?
Brent: I did not cheat just because I've presented this stuff with clients. So, you know, that's the PGC on the floor for the last four elections. What do you think, Josh?
Matthew: I'm going to go with Brent. Yeah. So it's definitely a Bush jr. Dude. Like
Josh: he had the inside
Matthew: scoop on this story. So this guy's returns Bush jr. Was minus 36%. That was his rate of return.
Brent: Yes. But there's reasons why that really don't. Isn't his fall. Right. He came into office in January of 2001 and 9 11 happened on September 11th of 2001.
Brent: So the market crashed right after 9 11 for basically three years. True. Then he gets re elected. He pulls the market all the way back up. And then in 2008, the mortgage crisis happens and the market comes crashing down right before he gets out of office.
Josh: It's bad timing. Very bad time.
Brent: All right. So then who's the best now?
Brent: Would you now in hindsight, do you blame the mortgage crisis on the administration?
Matthew: I mean, that's a tough one. I kind of blame it on the fed and golden sacks, but I mean, that's a topic for. Let me ask
Brent: you another question. Would you blame president Bush? It only been in office for nine months that nine 11 was partially his fault.
Brent: Okay.
Matthew: That's a tough one. We're going to go down the conspiracy alley here. It's never one variable, right? Because I think if I remember correctly, Osama
bin Laden tried to bomb New York city, right? Way before that when Clinton was president so you can date that all the way back to me somebody else. It's true
Josh: Yeah, that's speculations a slippery slope.
Josh: Yeah.
Matthew: Yeah. Okay. So who's the best president Clinton? Oh, yeah, I would say Obama there does that's one two It's Clinton and Obama Clinton was plus 209 percent and Obama was plus 181 percent
and the other reason I said Obama was because he picked it up at such a low point where Bush
Josh: They were talking about right after that really poor He picked it right on the trough.
Josh: Yeah.
Matthew: And then another, another good one that I think is a lot of people's favorite president especially like our parents generation, if you were to ask them, Reagan plus one 17, which isn't as great as the other ones, but it
is good. That's when he made
Matthew: big strides at the economy. Yeah. And then Trump plus 67 and Biden plus 41.
Matthew: So those are all the ones in modern time. Only other negative president was Nixon, who I think is probably the most hated president. our parents generation minus 19%.
Here's what I would ask though. You know, how much does a president have the ability to impact the markets in their four year span? Like how much of it is from the previous president and everything that they put in.
And then that next president is just taking over. Before they really have that much of an impact on the market. So I feel like policies take time to, to like start to affect the economy. I would say,
Matthew: It probably about a year and we actually have, and I'm just looking at recent history, we saw that with Biden and with Trump.
Josh: Yeah, it took a year.
Matthew: It, so Biden had all these inflationary policies, right? When he came out, everything was free, right? Giving money to everybody there, they're dropping helicopters and money in the sky. And what was it? 4 He handed out the first year in office and it took a year for the inflation. And then the market is down 22 percent and we've been climbing out of that hole ever since.
Matthew: And then I know Obama when he was elected in Oh, wait, remember, it was a really bad market. I think we had both started our careers around that time and they came out with TARP and all the governmental relief programs and his first year was trending And then the markets turned around in 2009 and it raced forward for the next, you know, seven, eight years,
right?
So you think it takes a year or so for the president's policy to actually impact the markets,
Matthew: right? And, and one thing I know Obama did just from kind of studying like technology and startups is he signed something I think is called the safe act. That made it really, really easy for people to start companies and sell stocks.
Matthew: So that kind of created that VC boom that led to all those companies coming public in the 2010s like Facebook you know, Airbnb, all those Uber, all those companies that were created under Obama
Josh: and that directly helped the market.
Matthew: Yeah, I mean it directly helped those companies for sure.
Josh: So I think to answer your question, then a minimum of a year.
Josh: Yeah, that'd make sense.
Matthew: So there's one thing we do expect though, and we know that as we get closer to the election, we're already kind of starting to see it when we fire up CNBC or turn on our computers on a daily basis and look at portfolios, is volatility is going to increase. So the months of September, October like we're in right now, going into the election become very, very volatile, right?
Matthew: And that's measured by the VIX. So the VIX spikes. And we're seeing that take place today. So everything we're seeing is perfectly normal
Josh: to give some context though, to the, the VIX was low, very low to begin the year. Historically, what does that
Matthew: mean? The people are, are betting there's going to be more market volatility.
Matthew: There's more volatility in the market. Prices are going up and down
Josh: more fluctuations,
Matthew: a higher rate than normal. However, once we get through this election here in about a month, The volatility starts to decrease and it decreases all the way through inauguration day. And then, you know, like you said, the new president's end is kind of, you know, steady as she goes.
Matthew: Right. So we're in the worst of it right now.
Josh: The uncertainty is gone.
Matthew: Yeah, exactly.
But October and September are notoriously like just terrible months for the market, regardless of election year or non election year.
Matthew: Especially September. That's true. But this data from this chart that I have, That's next to your feet.
Matthew: This is just for election data. Oh, okay. For election years, so. Yeah, that was a good one. Anything else on the election?
I don't know what else you have in that pamphlet that I threw on the floor.
Josh: Oh, let's see here. I think you printed out my list.
Matthew: I did print
Josh: out
Matthew: your list. Your
Josh: list
Matthew: was good.
Josh: Yeah, we can talk about, we can talk about the list.
Josh: Well, hold on. This is actually for clients, though.
Matthew: Yeah, well, the clients listen to the podcast, so I thought they'd want to listen, hear the list.
Josh: Okay, did you like my
Matthew: list? I thought your list was incredible. That's why I printed out. Where is it? It was
Josh: crumpled up right next to me. I can't find
Matthew: it
Josh: You crumpled up my list per fault.
Josh: Well, I'll just start with the list number one, obviously We we talked about this a lot on this podcast, but it's to keep diversified Right diversification is going to be your best friend through these uncertain times and especially even And all of this geopolitical events we've talked about today so say diversified now is just a good time to make sure you're still diversified as well.
Josh: Right? We know portfolios move and you want to stay diversified. With those 401ks and investment accounts number two matt. Do you want to talk about safe haven assets?
Matthew: I do and so this is one of my favorite diversifiers right now Gold, oh, he's back good old yellow. He's back to gold. Well, here's the thing I, I think gold has always had a place in a portfolio.
Matthew: It went through a nasty bear market for 12 years, maybe more, maybe 15 years. So it didn't have
a place in the portfolio for 12 years.
Matthew: Yeah, but now it's fully back. Gold's going higher. You see Costco's been selling gold bars and they're sold out in most locations. I
Josh: did. Yes.
Matthew: And you can
Josh: order them right
Matthew: online.
Matthew: But here's why I like gold. You know, if you're nervous about the market, you're nervous about what could happen if candidate A or candidate B gets elected. You know, gold's going higher, but 10 percent of your portfolio, 5%, you know, work with your advisor, figure out the number, put some in your portfolio, take some chips off the table and you have gold and, you know, maybe some treasury bonds as well, which is another great diversifier.
Matthew: Make sure you have some bonds and you have some money that's safe and secure. And one thing about gold is while it doesn't really go up, it doesn't go down too much either.
So because I know I'm gonna get questions on this because you're saying this You're not talking about physical bullion or coins or bars.
You're talking about holding a gold ETF in In your
Matthew: portfolio. Yeah. So the problem I have with people, when you go to, and I just had this conversation with a client the other day is when you go for the physical, which is cool. It's nice. It's shiny. You get to keep it in your safe or keep it at the bank.
Matthew: You're going to have a hard time getting rid of it. So you're going to have to go to a gold dealer and they're going to inspect it. You know, it's kind of like selling a diamond or something. I have a different take.
Josh: If you're going to hold gold because of fear, wouldn't you rather hold it physically?
Josh: Not in a digital asset. No, because everything's a trade, Josh. It's just a trade. So to me, I'm like, if you don't wanna hold it physically, buy it safe for it and deal with the hassle of selling it eventually, then do I, do we really even need it in the portfolio?
Brent: Yes. Because it's a trade.
Okay. It's going up.
So you,
Brent: you make the trade.
Yeah. It's a commodity in the portfolio. But if you had the physical coin and people are, are holding this for when either the dollar they think is just gonna implode or the whole US economy and markets are gonna implode, then how are you gonna actually sell that coin? You partner.
Yeah, so you're bartering stuff. So we think that we're holding coins. So we're because we're going back to the barter system.
Josh: Yes Because if you buy it digitally, then if the whole market crashes and technology crashes your you know, your etf is not worth anything
Matthew: If that happens, I want guns. I don't want gold.
Matthew: Yeah, I want
to be able to make food like I want farm land So
Matthew: yeah, great investment. So treasury bonds though. That's another good one. Safety stability Money's backed by the U S government.
Josh: And although we, we've talked about treasury bond yields coming down, I mean, you can still write around 4 percent for one year TMO.
Matthew: Yeah, it's good. I mean, it's not as good as five, five is good. Five is great. Four is exciting. Yeah. Four is exciting.
I mean, and so what a U S treasury bill is you can buy bills. We buy clients, treasury bills online or on in a Schwab portfolio. And we'll buy them generally from anywhere from three months to two years and sometimes even shorter, sometimes even longer.
And, but rates have been fluctuating with the feds dropping the rates by a half a percent. So we've seen sort of this fluctuation in rates recently, but they're basically the safest investment that you can buy. By like textbook standard, right? So people do like to hold them in their portfolio whether it's for a short term or long term because it can be Conservative and you know what you're getting.
Matthew: Yeah, it's safer than cash, correct? Because the government owes you money. That's a good thing to have you want the government I
Josh: think the saying is some of the safest money you can buy. Yes. Yeah, there you go
Matthew: Then there's dividend paying stocks. Those are fun. I like dividend paying stocks Defensive stocks who defensive stocks that works really well to during like a world war three scenario Like how oils me going up defensive stocks are great.
Matthew: Are you holding defensive stocks in your portfolio? Well, actually there's a couple kinds of defensive stocks, right? So we got like your Lockheed's right and your Raytheon's those are the war stocks but then we also have I think probably this is more like the Pfizer the General Mills the
Can you tell people what makes those stocks at General Mills or Pfizer is a defensive play?
Matthew: Oh, that's a good question. So the theory behind it is like when the economy is bad, those are the, those are the things you don't cut out of your budget. So they're like defensive, right? Like people are still going to feed their kids. Cheerios, right?
Josh: You don't want to own carnival cruise when there's world war three and a recession going on.
Unless you're going on a cruise and they're giving you perks to hold their stock.
Josh: That's true.
Really? They do that? Yes, you get credits when you go on cruise lines for holding their shares. I think you have to have a hundred shares of Carnival to get a hundred dollar credit on the cruise. Don't quote me on that, that's just what I've been told.
Josh: I've never heard of that. I've never heard of that. You heard this from clients? Correct. I'm more of a Royal Caribbean kind of guy,
Brent: but Really?
Josh: Yeah, I guess you look like and I find out what kind of cruise do you like Go ahead
Matthew: the the viking cruise. I say i'm more of a viking cruise kind of guy. I've
Josh: never been on
Matthew: viking
Josh: I've only been on carnival and royal caribbean and I liked royal caribbean better I've
never been on viking but from what I hear i'd be a viking guy I heard that norwegian cruise line is the lower end one than carnival, but I didn't know that
Josh: Oh, I didn't know I just heard that.
Josh: What about princess? I don't know. Is it Princess High?
I don't know. You
Josh: probably have some of our listeners help us decipher between the we
and we have some expert cruise clients that come in here.
Josh: Dang. I was judged for who I like. And you never even been, have you ever even been on a cruise? What I look like, I've never been on a cruise.
Matthew: I don't know. You
Josh: look like a resort guy.
Matthew: I am definitely a resort. Do they have a five star resort guy? Do they have a Four Seasons cruise ship? If they have, I want to go on it. So I wanna know, have you ever been on a cruise? Yes. Okay, where'd you go on? I went to Mexico twice. I actually went through brother to Mexico one time.
Matthew: Did you?
Yeah, he was brother Yeah,
Matthew: I don't want to say his name We could bleep it out No, but him and I went to Mexico together with my parents and then I went to Europe with my parents and you know Funny story they pay all this money to take me my brother and Haley who's my girlfriend at the time now my wife On this cruise to Europe and my brother just sat in the cabin all day You
went to you went on a cruise to Europe.
Matthew: Yeah,
I didn't know that. Yeah.
Matthew: What how did he play video games? Probably one of those handheld playstations or something. Oh like a
Josh: what do you think? Or he
Matthew: had his laptop in his computer gaming. Oh, okay. Yeah What
Josh: cruise line was
it? I think it was carnival No way, you went on a carnival your parents put you on carnival cruise.
Yeah, it was before they were spending a bunch of money You
Josh: Hmm. So you judged me, but that's the only cruise you've been on is a car cruise? I've been on three. Well, have you been on a Royal Caribbean?
I don't know. I think you went a Royal Caribbean. Did you?
Josh: I did. I went, there was like a period in, in my life where my, I was very blessed that my aunt and uncle took me and my cousins on like three or four cruises, like three or four years in a row.
Josh: And we went rural Caribbean. I had an awesome time though.
Cruises are great.
Josh: We went to the Caribbean. I've, we saw probably like 10 different islands between those three or four cruises. And even the last, the last few of them, my girlfriend is now my wife went on them too. It's a good experience for us.
Josh: We went with our cousins and their significant others. It was great.
Matthew: All right, let's get back to investing. So I'm going through this list, Josh and the rest of them on here and kind of boring cash, corporate bonds, private equity, reits annuities. Like, eh, we talked about that last time, but you know what the cool one is. And we saw this at future proof is these political and thematic funds.
Josh: Oh, I knew you were going to say that. I like them. We were all happy smiling at their booth at future proof. What
Matthew: does that mean? So at future proof We went to the booth of like the texas etf company I don't remember their full name, but basically it's a etf that invests only in texas based companies And so there's all these new kind of funds coming out that are, you know, meant to have like singular bets on places.
Matthew: So I don't know if there's a California one, but if you wanted a fund potentially that's only California companies, you could get a fund that's only California companies or you could bet against that fund if it exists, you know, short it. So bet the price would go down but then there's also funds that Take out certain companies like if you're like, oh, I don't want to own oil stocks because i'm a i'm against drilling for oil You can find a fund that does that so there's all these really cool political and thematic funds that it's a really fast growing area of The etf landscape.
Matthew: So I think those are cool and You know, again, if you're a client who that sounds interested, talk to your advisor, if, if it's me, Josh or Brent, we'll, we'll do the research on the fund and help you get in one, if that's what you'd like a portion of your portfolio to be in.
Brent: So basically you could buy a basket full of stocks that are filtered down to just companies in a certain state.
Brent: Exactly. So you're betting on the political sort of ramifications that can happen with those companies inside that state. So I'm thinking about California in the hand that Gavin Newsom has on so much of the state, like you're betting on what basically he's backing or he's able to keep. Because if you look at Tesla, like Tesla was here and then they left.
Matthew: Yeah. So when I talked to the guy at the booth who was selling the ETF and, you know, he said like Tesla's in their portfolio cause you know, they're in Texas now. And they, they had a few other ones. I'm sure it's a lot of oil and gas companies, but you know, if you, if you like the idea of, Hey. I want to invest some money in Texas.
Matthew: Well, it's possible, which is really cool. There must be a lot of demand. Oh yeah. Well, you hear it from our clients. They all want, you know, different kinds of investments or, you know, I want to, I want to buy companies that are non woke that don't, you know, anything like that. So if you
had a bet on a state right now, you got to pick one, which one would you go for?
You mean, Over the next, for the next five years,
Matthew: man, you can't be California. I live in California.
Josh: Are you talking about from an investment point of view? Yeah. You're going to bet on companies in one state. I think that's why that funding exists is because a lot of people are betting on Texas is so many companies from California.
Josh: Or, I mean, he made the comment that ETF provider made the comment that so many companies are actually leaving California and going to Texas, right? So you're not,
he might be short in California.
Josh: Correct. Yeah. I mean,
Matthew: I like
Josh: California. I mean, we're all here. I like California too, but he's just talking about from an investment opportunity standpoint.
Matthew: I'm sure California Turner look opening eyes in California. That's like the hot company right now Facebook's in California
Josh: face
Matthew: I think yeah, Silicon
Josh: Valley didn't disappear. Yeah, Applestone, California apples. You make a good point I think what's really cool about this though Is that because investing has gotten so cheap that you're able to customize these portfolios down to even state sized Investing right like you talked about really customizing what you want in these investment portfolios
Matthew: It's really cool.
Matthew: And it's for everybody. It is. And you know, whatever your investment view is, you could probably find a way to express it through a fund.
Josh: Yeah. And it's never been cheaper,
Matthew: right? Which is a lot different than how it was even five years ago, or when we came in in the industry 20, 25 years ago.
But I feel like when you break a lot of that down, you start getting into data like you saw with the politics, where if you only invest in this president or this political party during this period of time versus if you invested in the other one versus if you just stayed and invested in everything, like you saw your returns are greatly different.
I feel like if you're separating data out and you're saying, I'm only going to invest in Texas or California, you're probably going to do less than like average market returns.
Matthew: You are, you absolutely provide you less than average market returns. But I think of these plays as more of something that's just like psychologically relieving.
Josh: It's behavioral,
Matthew: right? It it's, you're doing it with not your whole portfolio. You're doing it with, like I said, with gold five to 10%. So. You know, one, you feel like you've made a move. You were concerned about the election. So you did something and it helps you sleep at light and get over the concern.
Josh: Here's what I hear. You say, just stay diversified.
Brent: So what I'm hearing is that. I'm going to invest in everything, Apple and Tesla and anything I agree or not agreeing with 90 percent of my portfolio, but for 10 percent of it, I'm only going to just invest into Texas.
Josh: Yes. So that's going to make things better.
Josh: Everything else we talked about that is hedging against the fear, but might not lead to higher expected rates of return.
Matthew: So here's the deal. All right. I like to bet on NFL games. It's enjoyable for me. And. Almost every week in this season, I've bet on the Cleveland Browns. How's that working out? It is working out awful.
Matthew: Deshaun Watson, their quarterback is probably the worst quarterback in the NFL.
Josh: What's wrong with him?
Matthew: Well, I could tell you what's wrong with it. And I mean, just look at the allegations and I, I literally just lost money on him this weekend, but I'll tell you what, Brent. I'm probably going to bet a little bit of money on the Cleveland statistics.
Josh: And when you run analysis on looking at future bets, you're like, this makes sense. It's hits my screens, but it just never actually plays out.
Matthew: And that's why the five to 10 percent of the thematic funds in a portfolio makes sense. All right,
Josh: so even though we know betting's a
Brent: losing game and you lost and you're given an example of when you lost, you're going to go back to, he's giving
Josh: us an example of what not to do,
which I, I don't bet ever on football or sports.
It's just, it doesn't get me excited. I'd rather just put that money into owning a couple of stocks that you're going to hopefully grow instead of having a win loss rate on a football game. But that's just me. You guys enjoy it. And I, it brings you guys excitement, entertainment, and I get it. You
Josh: do bet you play fantasy football.
Yeah, but that's, that's different. I'm not betting anything weekly. I, you know, I put a pull a little, I put my, you know, league fees in at the beginning of the year that aren't very much. And that's it.
Josh: I got you. It doesn't Satisfied you don't have a craving for it.
Yeah,
Josh: you
guys get those new iPhones yet?
Yep I have my new iPhone. Did you get yours Josh?
Josh: No. No mine still hasn't came. What is
your son?
Josh: Let me look
He's not committed though, you know, like I woke up at you know, 430 in the morning so that I was on to Do it at five and
Matthew: push the
button. But he's just like, I'll just do it when I get to it.
Matthew: Yeah.
Matthew: He was acting like he was going to do that, but he wasn't going to do that. No, Josh, you don't spend money. Okay. Here's
Josh: the deal guys. I was up at four 30 that morning, but it was changing diapers and taking care of a three month old. And I just didn't have the the energy to also do that. I woke up or I did it the next day and mine's going to arrive.
Josh: I think this week,
Matthew: there you go. Well, cause, so the reason I'm asking is on the last show, I was kind of bashing Apple and telling you guys, your phones weren't that cool because you didn't get one because I didn't get one and they're not that cool. It's the same iPhone for the last six years. But I saw something that really got me excited and it was really cool.
Matthew: Facebook or Meta had a virtual reality event last week and they updated their Ray Ban glasses Which those are already super cool. Hold on.
Josh: This sounds
Matthew: dorky dude. It is dorky. They're on my Christmas list I want to get those Meta Ray Bans, but they also have this prototype of these Orion glasses They're a little bit thicker than like your standard eyeglass But they're full like AR, VR headset.
Matthew: Wait, let
Josh: me hear you. You don't want to watch to just make your life more convenient. And you're going to put tech glasses on your face. For what?
Matthew: Now this, this is the kind of thing that gets me excited. This is like a new product development. That is going to push the stock higher. It's going to get a bunch of people.
Matthew: You're going to see tons of people wearing these when they come out. Okay. Let's, let's save this
Josh: podcast.
Okay. So what, what are these glasses that you put the glasses on and you're in like a VR system where you're, you no longer have your phone, right? You're just, you, you're able to call through your glasses.
Matthew: Yeah. That you could do all that. Everything you could do on your phone, you could do through your glasses, but also like. If you, if I don't know you and you and me are on the street, it'll take a picture of you, identify you and pull up a bunch of information. That's scary.
Josh: That's what you want.
Matthew: I'm not saying I want that.
Matthew: I'm telling you, this gets me excited. This is cool. This is a cool new product. I don't,
I don't want to be walking down the street and somebody being able to identify through some glasses.
Matthew: Well, it's a good thing that you're on this podcast with me. Cause I'm telling you that technology is here and it's coming and it's going to get adopted very fast.
Matthew: So if you don't want that, You should take your face offline.
Yeah. And, and isn't there, isn't this part of the thing that people are screaming for regulatory stuff to get passed for potentially
Josh: here's my investment opportunity, cybersecurity, man. That's all it tells me.
Matthew: Yeah, yeah. Cybersecurity is good, but I mean, these glasses, I mean, these are cool guys.
Matthew: They're basically like those Apple headsets that came out, but they don't look like ski goggles, but did you buy the ski goggles? No, because they're four grand. Yeah. And it has, it did very many people buy them. No, it's
Josh: a
Matthew: flop.
Josh: Okay. How much are the Ray Bans?
Matthew: No, the, well, the Ray Bans are three 50. You could get those today, but the other glasses, the Orion's, those, those are just a prototype.
Matthew: They're like, they're not releasing those yet. Those are meadows.
Josh: Yeah.
Matthew: Okay. So what are, which ones are you buying? So you could buy the Meta Ray bans today. And those are like sunglasses with a, like a phone built in and a camera, some other like smartphone type style features. Are you able to watch like YouTube TV?
Matthew: Like you watch the football game on your glasses. I don't know about that, but like, I know like if you have the glasses on, it'll give you like directions to get back to your car or walking directions from the glasses, like kind of basic stuff like that. Does it block the [sun?
Josh: Anything that I'm going to need, cause everything you're saying sounds like, okay, that's kind of cool.
Josh: But yeah, no, you don't need it. It's cool, Josh.
Matthew: And then the Orions are the prototype that they demoed for like tech bloggers. And these things were supposedly fantastic. And these are like the, they're like what Apple released, right? The, whatever they call the ski goggles, but they don't look like ski goggles.
Matthew: They look like thicker glasses, kind of like, Is it Drew Carey? The one that had the thick black glasses. Who's that guy? Yeah. So that's what they look like. And those are hopefully will come out in the next few years
and they say what those are going to cost So you're basically are they saying that our phones are going to be replaced by glasses?
Yes.
Josh: I don't think so Well, I just want to tell you guys something that excited me. I'm only kind of like, you know Making fun of you a little bit about these because you gave us such a hard time about the phones and the watches that we were Excited. I think this is a novelty item in my opinion I already wear glasses, but I wear contacts.
Josh: I just don't see me adding another, something more tech to my face through the form of glasses and wearing them all the time for what you've told me so far.
Matthew: So that's what people are doing is they're getting the Ray Ban glasses and putting prescription lenses in them so that they'll have the sunglass ones to block the sun and then they'll have their eyeglasses.
Matthew: I'm good with less distractions and more. So you say that now until you're coaching little league and you put the glasses on and it's, the glasses are analyzing the movement of the kids. They'll ban, they'll ban that. No, they won't. No. And they're analyzing the spin of the ball or something. And then you're telling your kids like, Hey, Here's a tip to pick up on or something.
Matthew: Yeah, they'll ban that. You can
Josh: see the camera in the glasses. You'd note someone wearing them. It's not like they're super subtle.
Yeah, they're not going to ban sunglasses from little league. Yeah, they do. They ban bats. They ban sunglasses now. You cannot pitch with sunglasses on. I don't believe you're allowed to hit.
I think you could hit with some, you know, I'm saying you as the coach, you're going to have the glasses on. You can't, as a coach, have a phone. You can't have electronics in the dugout.
Josh: Really? Can you order these glasses?
Matthew: Maybe. Alright. And if they do, I'll do a recommends on them. Okay. Give a product review.
Matthew: Alright, that's all I want to talk about with Facebook. You guys can have the whole show now. It's yourself. Fifty minutes in, we can have the show
Josh: now. Thanks. Thanks for handing over the reins. I'm out of here. You can throw your papers on the papers, Brian.
Those papers can go with my papers that are already on the ground.
There's thousands of pages of paper on the floor. I
Josh: don't think I have any recommends. So I have just like a comment about kind of recommends. I was never a Halloween guy, not like kids, like not excited about like Halloween or dressing up. My wife likes Halloween. So like I would dress up cause she'd like find a costume for me.
Josh: My parents had a, like a Halloween party before Halloween. Really fun. Why it's fun to me now is because I have kids to see my kids light up for Halloween and get excited. Now it makes me excited.
Matthew: Yeah. Kids are so awesome in that one of our neighbors has really good Halloween decorations and every night.
Matthew: Like probably three to four days since they put up their Halloween decorations. Both my kids have asked to go walk in front of their house.
Josh: I have to go every day. Yeah. Yeah. My son wants to go see the scary houses
Matthew: every night now. That's what we do. So it's really fun. Kids are amazing. Brant, I'm disappointed you don't have a recommends.
Matthew: I think I'm gonna do a recommends for both of us So it'll be a joint recommends, but I just don't remember what what it is you drink Have you talked about that Starbucks drink you've been drinking?
Yeah, we talked about the melon burst.
Matthew: Oh, we did
Yeah, it was it's I looked it up to the other day. It's 170 milligrams of caffeine.
Is that a lot? It's like three cups of coffee. It's like three cups of coffee. It's in a large cup. So it's a lot of a drink I don't feel like it's like Like very, I don't feel like it's a heavy caffeine. Like you get instantly a burst in it. Like if I drink a half a Celsius, like, you know, I'll feel it, but I don't really get that way with the Starbucks drink.
So are you off the Starbucks drinker on it? No, I enjoy it. I like it, but I just, I won't drink it all the time. So with the days of us going to Starbucks three days. Yeah, the reason why is because one drink cost me four cost of four drinks. So put
Josh: Starbucks on your
watch list. Yeah,
Matthew: man. I mean,
I almost took a picture over the weekend cause my wife and I did.
My wife picked me up one and I almost sent it to you guys like, Hey, this drink only cost me two instead of four.
Josh: Hey, But I think you, you bought around, I bought around. Yeah. I
bought you tons. Hey, I'm not picking on you guys. I'm only just playing because I think it's just, you know, fun to tease you. I've known you guys for a long time, so I can't poke.
Hey, if you want to buy a
Josh: Starbucks every day, we're good with it, man.
Matthew: My point is though, so like you've been liking those drinks and I, I'm not really been a Starbucks guy. I've been more of a craft coffee guy, but I've just been enjoying also just getting one of their cold brews and putting the cream cream foam on it.
Matthew: What's it called? Cold foam? Cold foam. Yeah, you like that. Yeah, I haven't had that. I want to try that. It's coffee with cold foam. That's good. I wish we could do
Josh: that. You told Paulina cold foam was the best invention ever.
Matthew: It is. I like it.
Josh: I've never
Matthew: tried it. So I guess mine and Brent's joint recommends is Starbucks.
Matthew: Do you recommend the
Josh: stock?
Matthew: Well, I need to look at the stocks.
Josh: I've been thinking how much money we, because it's okay. You can't recommend stocks on this podcast anyway.
Matthew: Well, we need to look at it cause I know it dropped a lot. They got the new CEO coming in. buT I've also been spending a lot of money there with my wife.
Matthew: We've been going on the weekends to get cold foam, cold brews. Cause I like it.
Brent: That's what Starbucks does to you. They come out with all these new drinks and eventually they're just going to hook you. One's going to hook you. Like I'm not a pumpkin latte person or whatever. I'll never go there to go get some like sugary drink.
Brent: But then they come out with something that's like, you know, coffee and some good foam and all of a sudden you're drinking it. That's the dude. I don't like
Matthew: pumpkin coffee either, but the pumpkin coffee cold foam is good. How does your wife
Josh: get cold foam too? Yes.
Matthew: Yes.
Josh: And does it like, does it like, how do you drink it?
Josh: You just drink it. And do you get like a drink of the coffee and the cold foam together? Does it eventually like melt into the coffee? Yeah, it
Matthew: like melts in and then the first few sips are so good because it's like coffee hitting your mouth, but also the cold foam flavor. It's good.
Brent: See, if I didn't have my Celsius already or half, I had a little bit of Celsius before we started this pod, I would say, let's go get our cold foams.
Brent: Both
Josh: of you guys legs are twitching. It's only 3. 30.
Matthew: I'm going to be up till 10 at least. So like, we could probably go drink one.
Matthew: Did they make it in smalls? Tall. They do. You can get a tall one. All right, let's end the show.
Brent: All right. As advisors, we love helping people. That's why we obviously do this show. If you'd like to schedule a consultation phone call with any of us please reach out. You can find us at evermont.com. You can also get the play, the show notes at retirement plan, playbook.com. But as always, thank you for listening.
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