WEBVTT
1
00:00:07.200 --> 00:00:08.980
Well, thank you everyone, for joining us
2
00:00:09.010 --> 00:00:13.060
today on a market conversation that
we wanted to have with all of you.
3
00:00:13.090 --> 00:00:14.120
I'm Jeremy Swonger.
4
00:00:14.150 --> 00:00:16.740
We're joined here today with Byron Braun.
5
00:00:16.760 --> 00:00:17.980
Byron, thanks for being with us.
6
00:00:18.010 --> 00:00:20.020
Oh, great, Jeremy.
Glad to be here.
7
00:00:20.040 --> 00:00:20.980
Jump right into it.
8
00:00:21.010 --> 00:00:23.740
I want to have a conversation
about the current market.
9
00:00:23.760 --> 00:00:28.400
So Byron, tell us a little
bit about where we are now.
10
00:00:28.640 --> 00:00:31.980
Based on where we are and I kind
of call this a transition year.
11
00:00:32.010 --> 00:00:34.300
If you remember, last year inflation hit
12
00:00:34.320 --> 00:00:41.060
9.1%, went down to 6.4%. Interest rates
were at zero from the federal funds rate,
13
00:00:41.090 --> 00:00:47.540
now at 4.75%. The markets were very
choppy going into the end of the year.
14
00:00:47.570 --> 00:00:53.620
We've had a really nice rally, reflecting
optimism about inflation continuing.
15
00:00:53.650 --> 00:00:56.380
But the elephant still in the room is
16
00:00:56.410 --> 00:01:02.200
inflation and that's quick synopsis
of where we are as we speak.
17
00:01:03.480 --> 00:01:08.410
And tell us more about the
trend for interest rates.
18
00:01:08.440 --> 00:01:10.560
If you think about interest rates, and I
19
00:01:10.590 --> 00:01:14.620
kind of like to use analogy,
it's kind of like medicine.
20
00:01:14.650 --> 00:01:16.290
If you're ill
21
00:01:16.320 --> 00:01:21.570
and the doctor prescribes you so much
medicine and then you take it for a week
22
00:01:21.600 --> 00:01:24.780
or two weeks, you feel
a little bit better.
23
00:01:24.810 --> 00:01:27.180
Sometimes you regress backwards.
24
00:01:27.210 --> 00:01:31.260
Then you got to take more medicine
or different types of medications.
25
00:01:31.290 --> 00:01:36.020
So the medicine that the Federal Reserve
is using is rising interest rates.
26
00:01:36.050 --> 00:01:42.180
And more importantly, it is the perception
of where interest rates are going to go.
27
00:01:42.200 --> 00:01:43.720
Are they going to go higher, are they
28
00:01:43.720 --> 00:01:45.700
going to stay the same,
are they going to go down?
29
00:01:45.730 --> 00:01:46.980
So and so forth.
30
00:01:47.010 --> 00:01:50.260
But we're in this period now that
31
00:01:50.290 --> 00:01:55.660
since we have a divided government, the
massive trillion dollar bills that were
32
00:01:55.690 --> 00:01:59.380
passed in Congress last year probably
aren't going to happen again.
33
00:01:59.410 --> 00:02:00.540
So think about it.
34
00:02:00.570 --> 00:02:02.900
Last year Congress was stimulating
35
00:02:02.930 --> 00:02:07.260
inflation where the Federal Reserve
was trying to fight inflation.
36
00:02:07.290 --> 00:02:14.040
And even during that push pull, they still
got inflation down to 6.4%, which, if you
37
00:02:14.040 --> 00:02:16.340
think about it, was pretty
good accomplishment.
38
00:02:16.370 --> 00:02:18.240
I would agree.
39
00:02:18.320 --> 00:02:22.660
So as far as
looking at things, what do we think the
40
00:02:22.690 --> 00:02:27.880
outlook is going forward
with the inflation?
41
00:02:28.400 --> 00:02:30.520
If I had to bet, I would say we're going
42
00:02:30.550 --> 00:02:36.020
to have a sticking point right now because
right now wages are still relatively
43
00:02:36.050 --> 00:02:39.820
strong because the unemployment
rate is relatively low.
44
00:02:39.850 --> 00:02:44.180
So my guess would be maybe
move sideways a little bit.
45
00:02:44.210 --> 00:02:46.880
And then once all of the things that the
46
00:02:46.910 --> 00:02:54.240
Federal Reserve is doing gets through the
system, plus the world has had an
47
00:02:54.270 --> 00:03:00.920
amazingly warm winter, and that has a
positive impact on
48
00:03:01.600 --> 00:03:07.900
lowering of natural gas, lowering of
energy, cost heating, so on and so forth.
49
00:03:07.930 --> 00:03:12.060
So we've been fortunate
to have a mild winter.
50
00:03:12.090 --> 00:03:17.380
So sticking a little bit, federal Reserve
raise rates maybe one or two more times
51
00:03:17.410 --> 00:03:20.940
and then a continuation of a
downward movement, probably.
52
00:03:20.970 --> 00:03:25.940
Okay, can you speak a little bit more on
how inflation affects
53
00:03:25.970 --> 00:03:31.300
the budget or the aspect for
everyone here on their, I guess,
54
00:03:31.330 --> 00:03:35.100
discretionary versus
nondiscretionary monies.
55
00:03:35.120 --> 00:03:35.460
Yes.
56
00:03:35.490 --> 00:03:41.580
Everybody has a budget and I don't care if
you're rich, poor, middle income, if you
57
00:03:41.610 --> 00:03:45.460
are a school district, if you are the
government, everybody has budgets.
58
00:03:45.480 --> 00:03:47.280
So if you just think about budgets in
59
00:03:47.310 --> 00:03:51.180
these terms, you have X dollars
that comes in every month.
60
00:03:51.210 --> 00:03:56.610
And what's happening with inflation-
inflation acts like a magnet and it takes
61
00:03:56.640 --> 00:04:01.220
money away from the discretionary
side of one's budget.
62
00:04:01.250 --> 00:04:03.860
So your discretionary side are things like
63
00:04:03.890 --> 00:04:10.060
sporting events, things like going out to
dinner, things that you normally don't do.
64
00:04:10.090 --> 00:04:12.140
And so if I have a budget of, let's say
65
00:04:12.170 --> 00:04:19.860
$5,000 a month and inflation is at nine,
that magnet is taking money away from your
66
00:04:19.890 --> 00:04:28.300
discretionary side into
rent, housing, heating, food.
67
00:04:28.330 --> 00:04:31.220
Anybody that shops at a grocery store
68
00:04:31.250 --> 00:04:37.420
knows food is unbelievably expensive
right now, so it sucks it away.
69
00:04:37.450 --> 00:04:42.140
But it happens in the flip
when inflation starts to drop.
70
00:04:42.160 --> 00:04:46.220
So if I'm spending a dollar 89 for
71
00:04:46.250 --> 00:04:52.600
some raspberries and now it's a dollar 59,
believe it or not, that $0.30 has a
72
00:04:52.630 --> 00:04:55.580
tendency to move over to
the discretionary side.
73
00:04:55.600 --> 00:05:00.540
So every time you see it drop, the
discretionary side improves because
74
00:05:00.570 --> 00:05:03.220
everybody has a fixed
budget in their lives.
75
00:05:03.250 --> 00:05:10.580
So the hope is that it continues to
fall, taking money away from the feeding
76
00:05:10.600 --> 00:05:14.300
side, all that to the
nondiscretionary side.
77
00:05:14.330 --> 00:05:21.700
Okay, so any adjustments or portfolio
thoughts for our clients right now?
78
00:05:21.720 --> 00:05:23.380
With interest rates at approximately 20
79
00:05:23.410 --> 00:05:29.100
year highs, it's very tempting to
reduce the risk of a portfolio.
80
00:05:29.130 --> 00:05:32.080
So for example, most corporate bonds in
81
00:05:32.100 --> 00:05:35.500
the five to seven year
range are around 5%.
82
00:05:35.530 --> 00:05:38.020
We haven't seen those
rates in over 20 years.
83
00:05:38.040 --> 00:05:40.460
So that would act as a ballast or a good
84
00:05:40.480 --> 00:05:45.140
foundation for your portfolio and
reduce the risk at the same time.
85
00:05:45.170 --> 00:05:52.060
So my tendency is, is to be a little more
guarded, especially if you're in the last
86
00:05:52.090 --> 00:05:58.440
window of retirement, put a little more
money in bonds, get that 5% floor, reduce
87
00:05:58.470 --> 00:06:02.880
the risk of the portfolio; a
s a general comment.
88
00:06:03.800 --> 00:06:08.740
And as far as closing remarks, any
other closing remarks or anything?
89
00:06:08.770 --> 00:06:12.940
I just want to say to our clients
thank you very much for your continued
90
00:06:12.970 --> 00:06:15.340
trust and confidence
in this difficult time.
91
00:06:15.360 --> 00:06:18.220
We're going to try our best
to navigate through here.
92
00:06:18.250 --> 00:06:22.140
We as your financial advisors are
going to do our best possible.
93
00:06:22.170 --> 00:06:24.700
We will reach out to you ongoing to
94
00:06:24.730 --> 00:06:29.260
evaluate where you're at relative
to your risk and your objectives.
95
00:06:29.290 --> 00:06:34.780
And furthermore, we just want to continue
to share our service model with you here.
96
00:06:34.800 --> 00:06:40.980
Most of you have experienced this, but we
answer the phone with by the second ring.
97
00:06:41.010 --> 00:06:45.460
We don't have caller ID here, so
we're not screening anyone's calls.
98
00:06:45.480 --> 00:06:48.060
We don't have voicemail during business
99
00:06:48.090 --> 00:06:53.140
hours and we make it a point to
return your call within 24 hours.
100
00:06:53.170 --> 00:06:55.320
So we're also here of course, Jennifer
101
00:06:55.350 --> 00:06:59.060
& Stephanie are here for any
support needs that you have here.
102
00:06:59.090 --> 00:07:04.620
So, along with that, and kind of our
philosophy of just being simple, focused,
103
00:07:04.640 --> 00:07:08.080
and disciplined, we just want to share
that we're here for you and that we're
104
00:07:08.100 --> 00:07:12.100
going to continue to service you
in the best way that we know how.
105
00:07:12.130 --> 00:07:14.260
So.
Thank you, Jeremy.
106
00:07:14.290 --> 00:07:19.580
And I just want to again, say thank you to
our clients for allowing us to be part of
107
00:07:19.600 --> 00:07:22.900
your journey, for your financial
goals and aspirations.
108
00:07:22.920 --> 00:07:23.760
Yes.
Thank you, everyone.
WEBVTT
1
00:00:07.200 --> 00:00:08.980
Well, thank you everyone, for joining us
2
00:00:09.010 --> 00:00:13.060
today on a market conversation that
we wanted to have with all of you.
3
00:00:13.090 --> 00:00:14.120
I'm Jeremy Swonger.
4
00:00:14.150 --> 00:00:16.740
We're joined here today with Byron Braun.
5
00:00:16.760 --> 00:00:17.980
Byron, thanks for being with us.
6
00:00:18.010 --> 00:00:20.020
Oh, great, Jeremy.
Glad to be here.
7
00:00:20.040 --> 00:00:20.980
Jump right into it.
8
00:00:21.010 --> 00:00:23.740
I want to have a conversation
about the current market.
9
00:00:23.760 --> 00:00:28.400
So Byron, tell us a little
bit about where we are now.
10
00:00:28.640 --> 00:00:31.980
Based on where we are and I kind
of call this a transition year.
11
00:00:32.010 --> 00:00:34.300
If you remember, last year inflation hit
12
00:00:34.320 --> 00:00:41.060
9.1%, went down to 6.4%. Interest rates
were at zero from the federal funds rate,
13
00:00:41.090 --> 00:00:47.540
now at 4.75%. The markets were very
choppy going into the end of the year.
14
00:00:47.570 --> 00:00:53.620
We've had a really nice rally, reflecting
optimism about inflation continuing.
15
00:00:53.650 --> 00:00:56.380
But the elephant still in the room is
16
00:00:56.410 --> 00:01:02.200
inflation and that's quick synopsis
of where we are as we speak.
17
00:01:03.480 --> 00:01:08.410
And tell us more about the
trend for interest rates.
18
00:01:08.440 --> 00:01:10.560
If you think about interest rates, and I
19
00:01:10.590 --> 00:01:14.620
kind of like to use analogy,
it's kind of like medicine.
20
00:01:14.650 --> 00:01:16.290
If you're ill
21
00:01:16.320 --> 00:01:21.570
and the doctor prescribes you so much
medicine and then you take it for a week
22
00:01:21.600 --> 00:01:24.780
or two weeks, you feel
a little bit better.
23
00:01:24.810 --> 00:01:27.180
Sometimes you regress backwards.
24
00:01:27.210 --> 00:01:31.260
Then you got to take more medicine
or different types of medications.
25
00:01:31.290 --> 00:01:36.020
So the medicine that the Federal Reserve
is using is rising interest rates.
26
00:01:36.050 --> 00:01:42.180
And more importantly, it is the perception
of where interest rates are going to go.
27
00:01:42.200 --> 00:01:43.720
Are they going to go higher, are they
28
00:01:43.720 --> 00:01:45.700
going to stay the same,
are they going to go down?
29
00:01:45.730 --> 00:01:46.980
So and so forth.
30
00:01:47.010 --> 00:01:50.260
But we're in this period now that
31
00:01:50.290 --> 00:01:55.660
since we have a divided government, the
massive trillion dollar bills that were
32
00:01:55.690 --> 00:01:59.380
passed in Congress last year probably
aren't going to happen again.
33
00:01:59.410 --> 00:02:00.540
So think about it.
34
00:02:00.570 --> 00:02:02.900
Last year Congress was stimulating
35
00:02:02.930 --> 00:02:07.260
inflation where the Federal Reserve
was trying to fight inflation.
36
00:02:07.290 --> 00:02:14.040
And even during that push pull, they still
got inflation down to 6.4%, which, if you
37
00:02:14.040 --> 00:02:16.340
think about it, was pretty
good accomplishment.
38
00:02:16.370 --> 00:02:18.240
I would agree.
39
00:02:18.320 --> 00:02:22.660
So as far as
looking at things, what do we think the
40
00:02:22.690 --> 00:02:27.880
outlook is going forward
with the inflation?
41
00:02:28.400 --> 00:02:30.520
If I had to bet, I would say we're going
42
00:02:30.550 --> 00:02:36.020
to have a sticking point right now because
right now wages are still relatively
43
00:02:36.050 --> 00:02:39.820
strong because the unemployment
rate is relatively low.
44
00:02:39.850 --> 00:02:44.180
So my guess would be maybe
move sideways a little bit.
45
00:02:44.210 --> 00:02:46.880
And then once all of the things that the
46
00:02:46.910 --> 00:02:54.240
Federal Reserve is doing gets through the
system, plus the world has had an
47
00:02:54.270 --> 00:03:00.920
amazingly warm winter, and that has a
positive impact on
48
00:03:01.600 --> 00:03:07.900
lowering of natural gas, lowering of
energy, cost heating, so on and so forth.
49
00:03:07.930 --> 00:03:12.060
So we've been fortunate
to have a mild winter.
50
00:03:12.090 --> 00:03:17.380
So sticking a little bit, federal Reserve
raise rates maybe one or two more times
51
00:03:17.410 --> 00:03:20.940
and then a continuation of a
downward movement, probably.
52
00:03:20.970 --> 00:03:25.940
Okay, can you speak a little bit more on
how inflation affects
53
00:03:25.970 --> 00:03:31.300
the budget or the aspect for
everyone here on their, I guess,
54
00:03:31.330 --> 00:03:35.100
discretionary versus
nondiscretionary monies.
55
00:03:35.120 --> 00:03:35.460
Yes.
56
00:03:35.490 --> 00:03:41.580
Everybody has a budget and I don't care if
you're rich, poor, middle income, if you
57
00:03:41.610 --> 00:03:45.460
are a school district, if you are the
government, everybody has budgets.
58
00:03:45.480 --> 00:03:47.280
So if you just think about budgets in
59
00:03:47.310 --> 00:03:51.180
these terms, you have X dollars
that comes in every month.
60
00:03:51.210 --> 00:03:56.610
And what's happening with inflation-
inflation acts like a magnet and it takes
61
00:03:56.640 --> 00:04:01.220
money away from the discretionary
side of one's budget.
62
00:04:01.250 --> 00:04:03.860
So your discretionary side are things like
63
00:04:03.890 --> 00:04:10.060
sporting events, things like going out to
dinner, things that you normally don't do.
64
00:04:10.090 --> 00:04:12.140
And so if I have a budget of, let's say
65
00:04:12.170 --> 00:04:19.860
$5,000 a month and inflation is at nine,
that magnet is taking money away from your
66
00:04:19.890 --> 00:04:28.300
discretionary side into
rent, housing, heating, food.
67
00:04:28.330 --> 00:04:31.220
Anybody that shops at a grocery store
68
00:04:31.250 --> 00:04:37.420
knows food is unbelievably expensive
right now, so it sucks it away.
69
00:04:37.450 --> 00:04:42.140
But it happens in the flip
when inflation starts to drop.
70
00:04:42.160 --> 00:04:46.220
So if I'm spending a dollar 89 for
71
00:04:46.250 --> 00:04:52.600
some raspberries and now it's a dollar 59,
believe it or not, that $0.30 has a
72
00:04:52.630 --> 00:04:55.580
tendency to move over to
the discretionary side.
73
00:04:55.600 --> 00:05:00.540
So every time you see it drop, the
discretionary side improves because
74
00:05:00.570 --> 00:05:03.220
everybody has a fixed
budget in their lives.
75
00:05:03.250 --> 00:05:10.580
So the hope is that it continues to
fall, taking money away from the feeding
76
00:05:10.600 --> 00:05:14.300
side, all that to the
nondiscretionary side.
77
00:05:14.330 --> 00:05:21.700
Okay, so any adjustments or portfolio
thoughts for our clients right now?
78
00:05:21.720 --> 00:05:23.380
With interest rates at approximately 20
79
00:05:23.410 --> 00:05:29.100
year highs, it's very tempting to
reduce the risk of a portfolio.
80
00:05:29.130 --> 00:05:32.080
So for example, most corporate bonds in
81
00:05:32.100 --> 00:05:35.500
the five to seven year
range are around 5%.
82
00:05:35.530 --> 00:05:38.020
We haven't seen those
rates in over 20 years.
83
00:05:38.040 --> 00:05:40.460
So that would act as a ballast or a good
84
00:05:40.480 --> 00:05:45.140
foundation for your portfolio and
reduce the risk at the same time.
85
00:05:45.170 --> 00:05:52.060
So my tendency is, is to be a little more
guarded, especially if you're in the last
86
00:05:52.090 --> 00:05:58.440
window of retirement, put a little more
money in bonds, get that 5% floor, reduce
87
00:05:58.470 --> 00:06:02.880
the risk of the portfolio; a
s a general comment.
88
00:06:03.800 --> 00:06:08.740
And as far as closing remarks, any
other closing remarks or anything?
89
00:06:08.770 --> 00:06:12.940
I just want to say to our clients
thank you very much for your continued
90
00:06:12.970 --> 00:06:15.340
trust and confidence
in this difficult time.
91
00:06:15.360 --> 00:06:18.220
We're going to try our best
to navigate through here.
92
00:06:18.250 --> 00:06:22.140
We as your financial advisors are
going to do our best possible.
93
00:06:22.170 --> 00:06:24.700
We will reach out to you ongoing to
94
00:06:24.730 --> 00:06:29.260
evaluate where you're at relative
to your risk and your objectives.
95
00:06:29.290 --> 00:06:34.780
And furthermore, we just want to continue
to share our service model with you here.
96
00:06:34.800 --> 00:06:40.980
Most of you have experienced this, but we
answer the phone with by the second ring.
97
00:06:41.010 --> 00:06:45.460
We don't have caller ID here, so
we're not screening anyone's calls.
98
00:06:45.480 --> 00:06:48.060
We don't have voicemail during business
99
00:06:48.090 --> 00:06:53.140
hours and we make it a point to
return your call within 24 hours.
100
00:06:53.170 --> 00:06:55.320
So we're also here of course, Jennifer
101
00:06:55.350 --> 00:06:59.060
& Stephanie are here for any
support needs that you have here.
102
00:06:59.090 --> 00:07:04.620
So, along with that, and kind of our
philosophy of just being simple, focused,
103
00:07:04.640 --> 00:07:08.080
and disciplined, we just want to share
that we're here for you and that we're
104
00:07:08.100 --> 00:07:12.100
going to continue to service you
in the best way that we know how.
105
00:07:12.130 --> 00:07:14.260
So.
Thank you, Jeremy.
106
00:07:14.290 --> 00:07:19.580
And I just want to again, say thank you to
our clients for allowing us to be part of
107
00:07:19.600 --> 00:07:22.900
your journey, for your financial
goals and aspirations.
108
00:07:22.920 --> 00:07:23.760
Yes.
Thank you, everyone.