Episode Transcript
Speaker 1 00:00:05 This is Annuity Straight Talk. Since 2008, your host Brian Anderson, has helped clients nationwide navigate the complex market for annuities With Brian's assistance, hundreds of clients have achieved a profitable and secure retirement. I would know, because Brian has answered many of my questions concerning annuities and retirement planning, so that you can benefit as well. Let's get started. Here's Brian.
Speaker 2 00:00:46 Hello and welcome everyone to the Annuity Straight Talk podcast, episode number 89. We are getting up there and, uh, I'm coming to you from Western Montana. I'm excited about this podcast because we've got a favorite back. Uh, joining me today. Everybody asks me, uh, sends the emails in, Hey, would you ask John Bomber what he thinks about this? So I keep him pretty busy, just answering your questions. The ones I think are viable as well, but from Southern California, we've got John back. Hey, buddy, how you doing?
Speaker 3 00:01:16 Brian, thanks again for having me on. I appreciate it. How are you today? It's a glorious day out here in, uh, gloomy June gloom. It's May, but June gloom, Southern California.
Speaker 2 00:01:28 Yeah, you get the fog rolls in off the ocean, right?
Speaker 3 00:01:30 It's really nice and cool. It's great for my plants. I can't complain.
Speaker 2 00:01:35 We got nice and sunny weather. I like that. Um, we're gonna cool down a bit, but see, I I want the sunshine. You want something cooler? Yeah,
Speaker 3 00:01:43 Absolutely. What's new?
Speaker 2 00:01:45 Uh, not a whole lot. Just, uh, rocking away and rolling along. Um, episode 89 here, we're gonna talk about what happens with the debt ceiling coming up. Uh, this is gonna come out right before the deadline passes, but I want to urge everybody to, uh, like, subscribe or comment on YouTube or your favorite podcast platform. Share it with your friends, get this information out there. A lot of people find it very helpful. And, uh, if you can help us, uh, spread the message a little bit more, that would be appreciative. So, uh, John, we're here and we don't necessarily have a plan for this, but, uh, the Washington Circus is, nah, the show is, is uh, is moving right along. And we've got some bickering on both sides of the aisle talking about this stupid debt ceiling thing Again, what do you think? <laugh>?
Speaker 3 00:02:30 Uh, you gotta love it. I look back at the volatility in the market, going back to the debt ceiling, it always seems like they're gonna kick the can down the road. Uh, they'll probably get a deal done at, uh, you know, the 24th hour, you know, last week in the, in the equity markets, we had a, you know, kind of a rally on, hey, they're gonna get a deal done. And, uh, that ended up not being the case. I think they stalled out what, Thursday, Friday. Um, so we'll see. You know, you, you've got such polar opposite views on both sides of the aisle that, uh, you know, I don't know when they're gonna be able to come to a resolution for this, but, uh, it'll certainly, uh, I don't think we should default on our debt. That would be pretty detrimental to, uh, global markets. But, uh, who knows? I mean, it could, could cause a lot of chaos or, you know, on the flip side, it could, uh, it could go pretty smoothly. We get something hammered out and kick it down the cu you know, kick it down the road a year. What are your thoughts?
Speaker 2 00:03:30 Yeah, I mean, regardless, they're gonna have to kick it down the road. I mean, that's the whole point of this thing, right? Absolutely. But, uh, what I think, uh, I don't know. I think they have a deal and they're just, honestly, I'm pretty cynical about this and you know, that I think they probably have a deal. It's all struck, and like you said, they're gonna do it in the 24th hour or they're gonna let it stall for seven days. Gives each side a chance to, uh, demonize the other side, gives us something to argue about. So I just urge everyone, Hey, if, if this affects you, you're not planned appropriately, ride it out and let it go. It's probably not gonna be that big a deal in the long run because even if it gets done and when it gets done, the typ typical problems with, uh, currency, interest rates, market volatility are going to persist, persist regardless of when this thing gets worked out.
Speaker 3 00:04:16 Yeah, I would agree. Uh, I, you know, I I think that they're maybe just kicking it, they're kicking the can down the road, arguing about it so they can, you know, put a little extra fat in it, you know, couple pork projects here and there. I don't know.
Speaker 2 00:04:30 Yeah. Kickbacks more money to Ukraine and tax breaks for campaign donors, all that stuff. That's why they're not, I mean, that's why they're not making the deal. Cuz you know, you got, what, 535 people total or something like that? Everybody's gotta get something away. If you want my vote, then you're gonna have to send a bunch of money back to my district.
Speaker 3 00:04:48 That's right. People forget Washington is a business, you know, no matter how you look at it, Washington is a business, you know, it's evident. How, how does a, how does a congressman or a congresswoman or a senator, uh, go in making what a couple hundred thousand dollars a year and 20 years later come out, uh, you know, worth a hundred million or 25 million? Um, <laugh>, it's a business, let's just put it that way.
Speaker 2 00:05:16 And it doesn't matter what side of the aisle they're on. Um, I think they're both crooked. And, um, so it's, it's not worth you and your neighbor arguing about, you know, who's right, who's wrong or you or your friends. So I like to say, Hey, you know, if you got somebody that sits on the opposite side of the aisle of you philosophy wise, shake their hand, give 'em a hug, tell 'em you love 'em, right? Because that's more important than arguing about something that you can't control.
Speaker 3 00:05:42 That's true. That's true. I had, uh, talked to a gentleman, uh, about a month ago, and, and, you know, he, he had a concern about, uh, the debt ceiling. So we, I, I just, you know, outta curiosity's sake, uh, we went back and kind of of did a, an exercise on the s and p 500. Uh, when, um, and I identified all the, I think going back to 2011, all the debt ceiling, uh, debates and how it affected the market, uh, and I kind of put together a chart, showed him, uh, it was, uh, it was of interest to 'em. I thought, I thought it was of value to me as an exercise, but, uh, you know, I can go through that later and show you, um, how it's affected the market. But I think a lot of it's just, you know, real headline risk, a lot of posturing on both sides.
Speaker 2 00:06:28 Yeah, and that was kind of what I was gonna get to, uh, before I interrupt you, so I apologize and thank you for saying that. Um, you know, what everybody wants to know is how is this gonna affect markets? And to some extent, I have to think that a little bit of it's priced in already, but, and then, you know, just my, uh, naive point of view is that regardless of what happens, there's probably gonna be some short-term shocks in the market. What do you think? Yeah,
Speaker 3 00:06:51 I mean, I mean, if you look at the market right now, we're at, uh, we've had a tremendous rally to be the start of the year. Um, you know, interestingly enough that, you know, maybe the top 20 stocks, uh, in, in the cap weighted index, the Q Q Q, uh, nasdaq, uh, the s and p 500 have really driven the market higher. Um, and you've seen a lot of underlying damage, uh, to a lot of the rest of the market. I mean, I think, uh, last I looked, the s and p 500 was up about nine, eight, eight and a half, call it, year to date, while the equal weighted s and p was, uh, only up about two and a quarter. Uh, so a lot of difference there. And, and a lot of that's being driven by, you know, your big tech, your mega cap tech, Facebook, Amazon, Netflix, Google, uh, Microsoft, uh, Salesforce, a lot of those stocks have really, really run.
Speaker 3 00:07:47 And it's, it's interesting. Apple, uh, a couple weeks ago reported earnings, uh, trading it 20 times, 28 times the market, and they had a 3% year over year decrease in revenue. So, uh, it's just a flight to safety. Um, it was interesting that, uh, you know, they're 36% off, uh, 36% below their pandemic highs in terms of revenues. Um, you know, year over year decrease of 3% iPhone sales have kind of slowed down, uh, potentially heading into recession, but yet Apple is, uh, up 28% on the year. It's just totally mind blowing. Uh, I think the valuations are totally stretched. The the market is trading at 19 times earnings. Uh, that's about 5%, uh, above its historical average. Uh, I, I think the market's stretched and, uh, we, you know, we could get a potential pullback here kind of at an inflection point. Um, so yeah, I think adding to the debt ceiling, um, that's just gonna add some, some fuel to the fire, you know, either up or down, and we'll see where it goes.
Speaker 2 00:08:59 All right. And so, yeah, I mean, and a lot of people talk to me, of course, not, you know, anybody I've been working with for, you know, a year or two or 10, but, you know, I talk to new people all the time and they're getting, oh, oh, what should I put in an annuity? And then again, it goes like what I talked about last week, you weren't there, but, uh, anybody who's a regular listener, you know, you define your goals first and whatnot, but not about annuities, but about what goes into the market. And I kind of think, eh, I'm gonna, you know, that's what we talked to you about. That's what we have you on. Not necessarily a great time to dive headlong into it, but, um, you gotta have some professional advice and you can't just blindly say, yeah, I'm gonna put now 70% of my money in the market. Uh, you've gotta have something that, you know, kind of aligns with goals and helps you get there, and then obviously have your safety in place. So those short-term shocks don't hurt you. So, yeah,
Speaker 3 00:09:49 I agree. Um, I, I don't think right now is, uh, you know, considering that we've are coming off of, you know, a 20, 30% down year in the major market indexes, um, you know, the, the Russell 2000, which is a small cap index, is really, really underperformed the market, uh, so to speak. I think it's actually negative for the year. We can look at the chart later. Um, but you know, there's, Disney came out with abysmal earnings, uh, revenues down Home Depot stock is up, but came out with really bad earnings. Um, and, uh, you look at, uh, relative strength in, in companies like, uh, Deere, you know, the tractor company, um, they're, they're, they're at a multi-month low. So there's a lot, a lot of damage. And the only thing that's really propping the market up is, has been the big tech trade. And, uh, I certainly wouldn't go chasing it here.
Speaker 3 00:10:44 Uh, I think, uh, if we head into a recession latter part of this year, I think, you know, we potentially could have, um, an opportunity to buy at lower prices or maybe, uh, give up some of those gains that we have had this year. Uh, it's, it's been a tremendously difficult market unless you've been centered in big cap tech or, you know, in some of the major, in major indexes. I mean, a balanced portfolio right now is, uh, relatively flat on the year, maybe up slightly, but, um, everything else is getting crushed. And, uh, so it's been difficult from a client perspective, from an advisor perspective. Uh, it's just been very difficult to navigate.
Speaker 2 00:11:26 Well, and, and we're going back, I mean, I've said this in the past few weeks. We're going back, you go back two years, we're flat.
Speaker 3 00:11:31 Yeah, April, 2021, you know, we haven't really moved anywhere. I mean, I can show you that on the chart as well, you know, just a big bell curve. And so where do we go from here? We're at some, you know, key technical levels. We had a little, uh, you know, maybe a false breakout, um, to the upside. Uh, but you know, we gave some of that back Friday. And, uh, I, I don't think we revisit, I think we're really in a trading channel anywhere between 4,200 on the s and p and 3,900 on the s and p, and it's gonna be real frustrating, kind of a sideways movement. Um, you know, I think on the extreme you're probably gonna hit maybe 4,300, uh, but I think that that's gonna be your opportunity to kind of, um, take some profits off the table and, and just sit and wait and, you know, sitting and waiting in an annuity or in, uh, you know, a money market fund or a short term treasury that's paying you three to 4%, what are annuity rates doing right now?
Speaker 2 00:12:34 Uh, well, and that's, when you say annuities, you're, you know, the difference being, you know, annuity should be used for, you know, long-term goals, setting things in place for an extended period of time. I believe in like, the treasuries of the money market are probably better for us, ha haven that you, you know, if you're waiting out some market volatility and looking for better indicators, but, you know, we're still, I mean, annuities are still, you know, paying like super high quality AAA stuff, paying four and a half to, you know, four and three quarters, and then you can get up to five and a quarter and above if you're, you know, look looking at a rated. But then again, you're talking about look, uh, locking in for a 5, 7, 10 year period. And again, that should only be done in my opinion. I think you'd agree if you're setting up a long-term plan of some sort, doing income or required minimum distributions and things like that. So that's most of the people that we're working with on that. I
Speaker 3 00:13:26 Agree. Um, having that long-term perspective, Brian, and I know you really focus in on that with your clients, uh, as do I, you know, we're not investing for next week or next month, um, not even next year. We're investing, you know, for the rest of your life. And so having a, you know, proper plan, income plan in place, and I knew that the, the annuities really provide that foundation of safety, um, you know, a a reasonable rate to return and then an income stream, uh, that, that makes 'em really appealing in this type of a choppy market. Cuz no, nobody wa <laugh>, nobody at 65 or 70 wants to give up 30% of their, uh, their account value, uh, after working, you know, you know, their whole entire career, uh, accumulating that.
Speaker 2 00:14:13 Uh, no, that's absolutely true. Um, and again, you know, I tell a lot of people that, well, we'll figure out what needs to go into your annuity, whether we're doing income or just, uh, stabilizing a portfolio, and then you got X amount left over, doesn't mean you have to throw that into the market. You can still do, like you said, short term treasuries, money market funds, stay liquid and get ready to take advantage of, uh, you know, like you said, momentum buys or, uh, value buys, something like that where it necessarily, if we're trading at that many times earnings right now, um, and it just, like you said, it def it kind of defies logic to some extent, right?
Speaker 3 00:14:52 Yeah. It's, uh, you know, uh, even with, even with rates being up, it's all about being a, you know, a flight to safety. And, um, you know, these market cap weighted indexes are, are really skewed to those largest companies on the, on the planet. So they get the flows, the flows increase their stock price. Um, even though, I mean, you have, you actually have a fundamentally slowing, slowing business in the largest company on earth, and that's apple. Um, it's slowing down that business is slowing. And so what's their, uh, you know, second or third act? Uh, y you never know. I mean, I was, uh, I was on a call the other day and he was talking about the valuations and valuations. You don't really do matter in this market. Uh, look at, look at a company like n uh, Nvidia, the stock in January was like $110. Um, and all they started doing was talking about ai. You got this huge AI boom. And I know Brian, if for your listeners, you had a, you had a terrific podcast on ai. Um, was it a week or two ago?
Speaker 2 00:16:07 Yeah, it was two weeks ago. Um, and if anything, I went a little soft on it, but again, like I said to them, I was like, I like to look into the rabbit hole, but on this podcast, I'm not gonna dive into it and start digging <laugh>. Yeah.
Speaker 3 00:16:19 I mean, you know, Nvidia is close to $300 now. Uh, you know, I mean, that's like 180% increase. Um, and yeah, and you're gonna see if you, and I listen to a lot of earnings calls for a lot of these big companies, and if they're in technology, you know, the, the, the instances where they, the management companies are, are referencing, uh, the words AI are artificial inte intelligence or language learning models, um, it, I've never heard it before. And the, the whole chat g p t revolution and, uh, you know, it's, uh, it's gonna have an impact. It, it'll probably be another bubble. Uh, it's the flavor of the month, uh, just like, uh, uh, just like, you know, pharmaceuticals were three years ago, just like, uh, zoom was three years ago, just like, uh, marijuana stocks or cannabis stocks were, uh, I mean, we have, we go through these booms and bus and these cycles.
Speaker 3 00:17:20 Uh, yeah, there are gonna be some ai, uh, companies that, that do tremendously well. There's gonna be some AI that fundamentally changes our life, uh, over the course of time with some of the big companies. And there's probably some companies that, uh, aren't even around right now that we'll, uh, displace some of the bigger players out there because of, uh, ai, uh, and what it potentially could do, uh, down the road in, in, not only in healthcare, uh, but in business and, and other areas of, uh, of life. But it's, uh, it's definitely, it's kinda like the bitcoin again, you know, the Bitcoin, cryptocurrency, you know, it's, uh, it's a frenzy. It's a frenzy, you know, it's, and, uh, like anything, you know, what goes up, you know, will eventually come down in, in a, uh, you know, kind of a blowout fashion. So are we creating a bubble in ai? I, I probably think so, but you know how it'll play out, uh, you know, be proven wrong many, many times, and then eventually I'll be right, you know, down the line, <laugh>.
Speaker 2 00:18:28 Yeah. Right. Well, you know, it's interesting. I did, I mean, I wrote and recorded that three weeks ago, came out two weeks ago or thereabouts, and I felt like I was a few months late because I've been thinking about it for a while. And when I wrote, when I did, when I recorded that the week leading up to that, there was an article about AI in every publication, and then right after it, it went out, um, it almost seemed like perfect timing because then, I mean, I looked at a few places, you know, you look at the New York Times and Bloomberg, um, give you a pretty good idea. And then just the major news sources, and again, I, I can't stand the news, but I feel like I gotta keep an eye on what's out there. I mean, the week after I did that podcast, I was like, man, like, it was the full, like, front cover of every website publication, and it's just kind of, it's ramping up and it's gonna move. I think it's gonna move faster than anything else we've ever seen.
Speaker 3 00:19:24 Yeah, I do believe that. Um, you know, but you have to think about it. And, and, uh, you know, I always talk about, uh, I have a friend that works in technology. Um, she has a, she works for a, a company that, um, you know, they have an ai, uh, product, uh, that does contract lifecycle management. Uh, they call it C lm and, um, it's actually where AI can go in and detect changes and things. But all of that's got a big programmed by, uh, by individuals. Uh, it's not like, uh, you remember the old movie war games? One of my all-time favorites, Matthew Broderick, you remember that movie?
Speaker 2 00:20:05 This is not the first time I've said this when you asked me about a movie, but no, I've not seen that one <laugh>
Speaker 3 00:20:10 Early 1980s movie. It was Matthew Broderick, uh, he, uh, hacked into the, uh, they called it the, uh, whopper computer. Um, it was the, uh, war, it was a war game simulator, and it was basically in, um, the Colorado Nora facility. And, uh, he, he hacks into it, and he, uh, he initiates a, uh, a countdown to global thermal nuclear war. And, um, the com, the computer, uh, they called it the Whopper, but the programmer of the computer, uh, named it Joshua after his son. And so they were doing simulations of, you know, nuclear te nuclear, uh, you know, nuclear warfare, cold war stuff in, uh, between Russia and the us and, um, survivability. And it, the, the computer was learning from itself. Uh, I highly recommend it. It's one of my all time favorites. Um, just a great, you know, early eighties flick with, uh, you know, Ferris Bueller, um, Matthew broader. Okay. <laugh>.
Speaker 2 00:21:23 If anybody else has seen that, then just, uh, shoot a comment. Lemme know what you think. Yeah. If you agree with Balmer or not. Um, and I, I just call it more foreshadowing by Hollywood, honestly. It's like, oh, like 40 years ago they had this movie come out that, oh, and all of a sudden it's like the Terminator, right? Oh
Speaker 3 00:21:41 Yeah. Same thing, man. You know, I'm when, uh, wondering when, uh, somebody's going to, you know, show up at my doorstep from the future <laugh>
Speaker 2 00:21:52 <laugh>. Uh, anyway, all right, so we're, uh, we're rolling our along right here. And, uh, I wouldn't say we're running out of time cuz we don't have a time limit, but if you want us chairs some charts and, uh, do a bit of analysis, we'd probably wrap this thing up, buddy. Um, not to push you out, but, uh, you know, you and I, we could BS all day long, right? That's
Speaker 3 00:22:13 Right. That's right. Eh, we have fun. Let's, uh,
Speaker 2 00:22:16 Yeah, yeah, no, exactly. And you, yeah, but you're at risk of some rug rats running through the door any minute now, right? Yeah,
Speaker 3 00:22:22 Yeah. Let me, uh, let me share this right here. This is a chart I actually did on the debt ceiling. Uh, let me show you here. Are you able to see my screen? Yeah,
Speaker 2 00:22:33 I can see it. It's a little small, but you know, I get the idea. Yeah, this
Speaker 3 00:22:38 Actually goes out. Um, you know, this is the 2011 debt ceiling. Uh, we had a drawdown of about 21%, uh, 2013 debt ceiling negotiations. Had a drawdown of, you know, roughly, uh, let's just call it, I'm actually gonna go to the daily here, gonna go down. Uh, we had a drawdown of about 5%, uh, 2017 debt ceiling. We had a, we had a drawdown, uh, of about, it was actually flat if we want to take a look at it. Then we had a 2018, about a 10% drawdown, obviously 2000, late 2018. December, October, um, you know, end of the end of the year, had a, had a 21% drawdown when, uh, they tried to start raising rates. Uh, August, 2021, we had another debt ceiling debate market was off about six, six and a quarter percent. Uh, then we had covid obviously, uh, you had saw the huge ramp up, uh, you know, draw down in Covid and then the 7 trillion injection and liquidity into the markets, which created that super bubble.
Speaker 3 00:23:57 Um, you know, December, you know, the market rally and the, the liquidity in the market really didn't have a material effect in between October and December, 2021. Uh, and then now what, what, you know, I have out here August as a debt ceiling, uh, scenario, but I really think, you know, we're coming up in June or you know, June or July when they're really gonna talk about it. So kind of here we are. This is the s and p 500. I'm actually gonna just, I'm gonna just gonna go to the spy, uh, let's just see spy, which is the, uh, the ETF for the s and p 500. We kind of had a, uh, a breakout above this. Uh, let's just call it this, this line right here. Um,
Speaker 2 00:24:46 What's your, what's your red line?
Speaker 3 00:24:48 Uh, my red line here is the, uh, was the former resistance area. So you had a top here. I'm a, I'm just gonna focus in on here. You had a top right here. Um, I'm sorry, right here. You had a lot of traffic right here where you had a top and you have a top going back to February and you traded off into March. You kind of have a rally the market back up, kind of really over the last, what, several weeks. We had a really tight wedge forming. And when I say a wedge, uh, I'll just, you know, we'll just put it like a wedge would look like this. It kind of had this wedge in here and then you had a breakout.
Speaker 3 00:25:37 And I'm just gonna go in and I'm just gonna get rid of that. So you had this breakout, so you had this kind of declining wedge here. You had some support here. Here's the 200 day moving average, this red line, here's the 20 day moving average. And I always caution people the 20 day moving average a a really acts as a rubber band. And so I would say, you know, you kind of peaked above this, this high here. You had some resistance here. You kind of broke out above that. But then we had a sell off on Friday. Uh, I'm gonna say that the market may, you know, want to come down and revisit this level, which would kind of put us back down in that range. But, you know, you're really looking at, uh, if I can draw it for you, and we kind of have this trading channel right here. Can you see that Okay? This kind of trading channel? Yeah,
Speaker 2 00:26:36 That's fine.
Speaker 3 00:26:37 Yeah. So we kind of peaked up above that. Uh, our next real level of resistance here is at four one, which is, uh, 43 10 on the s and p 500. Um, really want to kind of keep an eye out for that. But ultimately I do think that, uh, you know, that's probably gonna be as high as we're gonna get cuz we just have too many headwinds in the market. Uh, we could kind of look at the queue, uh, the, the NASDAQ 100, you know, lot of damage going down back into, you know, let's just call it, uh, December, you had some lows here. Uh, you've had a really nice rally up and this, a lot of this has to do with, uh, technology. Um, just <affirmative>, um, just continuing to drive higher. But you do have a, um, you know, you have a, a huge resistance area right here and uh, and then you have a huge resistance area right here as well.
Speaker 3 00:27:39 So, you know, you may get up to these areas, but I don't think we're going back to all time highs. I do think we're gonna be in this, this kind of, this range of from here to here. I wish I could draw that better for you. It's gonna kind of look like this. Uh, I would assume that we're gonna have this trade back down, but this kind of channel, and if you really want to kind of go back, uh, you know, what is that February of 2021, the market has gone nowhere. You've just, just had this, you know, you had this blow off top. Uh, you had an attempt at a rally, uh, didn't work. You know, you had, obviously you've revisited the los, you had a, you had a low, you know, almost three times down here, October, November, uh, early January, kind of, you know, off to the races. Uh, stocks had really gotten beat up. I think, you know, Nvidia, Facebook, I mean all of all of those companies were, were down, you know, you know, 50 to 70%. Um, if you go back to the s and p 500, I mean, it's really, really the same thing. Um, if you look at it, where we, where do we go back to?
Speaker 3 00:28:59 Um, let's just go here.
Speaker 2 00:29:02 I want you to revisit that, uh, blowout top that you talked about cuz I'm looking through our podcast if I'm not mistaken. What was that date range on that, John? I know you know that off the top of your head. Uh,
Speaker 3 00:29:15 The date range. Oh, for the off top?
Speaker 2 00:29:18 Yeah,
Speaker 3 00:29:20 On the Q Q Q, I mean, let's just look at it. Uh,
Speaker 2 00:29:24 Was it around January 13th, 2022?
Speaker 3 00:29:27 Yeah. I mean, do
Speaker 2 00:29:28 You remember what happened on that day?
Speaker 3 00:29:31 No,
Speaker 2 00:29:32 That's when we released, uh, a podcast with Mr. John Balmer. That question is a market correction coming? Yeah.
Speaker 3 00:29:41 Oh yeah, yeah. We, we did do that.
Speaker 2 00:29:43 We're a year and a half later. Look at us. Yeah,
Speaker 3 00:29:45 You know, we did call out a topping pattern, particularly in the I w m, um, I was saying that, uh, we recognize, uh, a topping pattern in the I W M, which is the Russell 2000, uh, I'll just go to it here. Uh, at, we had a topping pattern right here. Our topping pattern was, what was this? Below two 10 was kind of my call below two 10 on the I W m. And, and, um, obviously I'm not doing a very good job at drawing this chart, but, um, you can kind of see here if I just drop in this line at two 10, um, you know, we've had some pretty significant damage and now we're in just a sideways channel. Below that two 10, you saw that topping pattern below off top right here. Uh, and this is, you know, for folks in the audience, this is like a blow off top here.
Speaker 3 00:30:44 This was, um, this isn't the small caps. So if you look at small and mid-caps, obviously they outperform the broad market, but they tend to be a lot more volatile, bigger drawdowns. Um, this is where a lot of your, I mean this is represents 2000 companies. Uh, so anything outside of your, your s and p 500, uh, this, you know, your small, medium sized business is, I don't know what revenues on these are, but you can kind of see this, this channel here. And I think what, you know, when we did talk, you know, January, I said below two 10 on the s and p, or I'm sorry on the i w m, the Russell, uh, was our kind of our inflection point, kind of sell and sell and get out. Um, obviously had a pretty hard fall, real nice rally up to that two 10 area and then just continued to fail. And we've had a multiple failures here. We've kind of just been in this trading training range. Um, it, it's, it's pretty astonishing. But going back to, uh, you're going back to April of 2021. You have, you've been in a sideways market. We'll see where things go, um, from here. You wanna look at anything else?
Speaker 2 00:32:02 No, I mean I think that's probably good for now, but, um, always good to kind of, uh, take a look back and see where we are. Yeah, you know, I gotta, I get a lot of heat cuz index annuities haven't gone anywhere in two years. And it's like, well, what, where, where's this supposed to come from? Let
Speaker 3 00:32:17 Me show you this. Uh, you know, this is, this is Nvidia, uh, this was here, this was November, 2021, uh, that, that company had, you hel held it. And people always say, well, why don't I own it? Had you held it, you would've had to hold through a 68% drawdown on that stock. Nobody's holding that. Um, yeah, 68% draw down consequently on the other side. Um, and, uh, I hold no position in this stock. I, I traded it, uh, in my account. I obviously haven't caught huge moves. Uh, no one's gonna ever hit the top. No one's ever gonna hit the bottom. But if, let's say you just, let's say you did buy it at the bottom, uh, you're, you're at 184% move, um, coming up into some all-time highs, uh, in a market that potentially could be decelerating. Um, you know, who knows? Uh, you know, these are stories that, you know, coulda, shoulda have woulda, um, nobody's gonna hold through that, you know, 70 plus percent drawdown or that 68 plus percent drawdown.
Speaker 3 00:33:34 Uh, nobody's gonna hit the bottom. Nobody's gonna hold it to the top. Cuz you had a lot of times, uh, in between here where this stock, you know, it, it, it fell precipitously, you know, a a a 230 to, uh, to 2 0 4. Um, that's a pretty huge drop. This drop here, um, you know, 180 8 to, uh, back down to 1 38. Those are, those are things that, uh, you know, your audience is gonna want to kind of look at. Uh, and trading stocks is not something I ever recommend unless you know what exactly what you're doing. Um, you know, as an advisor, I always appreciate, uh, working with guys like you, Brian, because you bring a lot more perspective into the long-term planning, um, and the diversification that, that we can provide our clients, um, as having a, having that long-term plan.
Speaker 2 00:34:33 Yeah, no, absolutely. I mean, if you're gonna be in the market, you gotta have, again, that's all I talk about. I'm not, and you know this, I mean, you and I struck up a relationship and have a good working relationship because of it. You know, you see the value in my side, I see the value in yours, and we're not sitting here on either side of it pounding the drum for, you know, one or the other. It's a combination of the two, and that's what makes a retirement plan work. So that's why, uh, we continue to do this and that's why your updates are helpful, you know, um, cuz I think it needs to be out there. And a lot of guys, you know, uh, what, what they don't realize, the value in you is you have your own perspective. Like this is what you come up, the analysis you do on your own, and a lot of the people you work with out there are listening to analysts or they get a order sheet from, you know, executive level at a management company saying, this is what you need to be telling people and doing that.
Speaker 2 00:35:22 Um, I don't let anybody tell me what to do. I know you don't, and I think that's why it's a good fit. So,
Speaker 3 00:35:27 Yeah, I mean, to that point, Brian, um, you know, as independent advisors, uh, you know, we work for our clients. Uh, we, you know, I act as both fiduciary and as broker when it's appropriate. Um, you know, uh, one size just didn't, doesn't fit all. Uh, but I, you know, I used to work for a big wirehouse firm, and when I say wirehouse, I mean, you know, Morgan Stanley, Merrill Lynch, ubs, um, some of those, you know, Wells Fargo advisors. I worked for one of those firms and, um, every week we had actually a, and we did a lot of fixed income trading. So we, we traded a lot of bonds and, uh, every, every week we had new inventory. And our job as the salespeople, as brokers was to get that inventory off of our balance sheet and under our clients, whether it was good for them or not.
Speaker 3 00:36:18 Uh, and I had a real problem with that. So that's why I, uh, you know, I left the business for a while, uh, went on the institutional side, uh, and managed money institutionally. Um, and then when I decided to come back and work with individual clients on retirement planning, uh, you know, it's really kind of ingrained in my DNA to, to actually do what's right for the client. Uh, and I think that's what you and I have most in common. Um, you know, besides it, uh, <laugh>, we have a lot of fun outside of the office and do it, you know, we're, we've strucken up a good friendship. But I think, you know, the common ground that we have for, for clients is, you know, really doing the right thing and making sure that they succeed. Um, and with their success, you know, comes a little bit of our success as well. And, and, uh, you know, that's, I think that's why we do this. Yeah,
Speaker 2 00:37:09 No, absolutely. We, uh, we have the same philosophy, just different sides of the business. The two have to work together. Um, man, thank you so much for being here. We got a lot of content on this gives a lot people a lot of things to chew on. I wanna remind everyone, uh, John's not here to market or advertise for other things, so please don't search him out and bug him. If you want to talk to 'em, you come through me. Um, I appreciate what you're doing because it breaks up the information, it gives people the full perspective on retirement planning. Obviously there are other things we need, we can do with, you know, planning with IRAs and RMDs and all the rules that go into it and trusts and estates and all that stuff. Uh, so this is not all in one, everybody's different. But again, uh, John, thank you for joining me this episode and we're gonna have you back real soon. Okay, Brian,
Speaker 3 00:37:53 Thanks for having me. Hope you have a great week.
Speaker 2 00:37:55 All right, we'll do it. And, uh, everyone that's gonna wrap it up, please don't forget to like, subscribe, comment, or otherwise share it with your friends, the podcast or the YouTube channel. Uh, get it out to as many people as you can. I think we're doing a good thing here. Our intention, like John said, is to help people. Thank you so much for joining us for episode 89. I will see you next week with a new topic. Have a great day. Okay, bye.
Speaker 1 00:38:29 You have been listening to Annuity Stray Talk. The proceeding information is for informational and educational purposes only and does not represent tax, legal, or investment advice. The views expressed by guests on this program are their own and do not necessarily reflect the views of annuity, straight talk or its partners. No information presented today should be acted upon without meeting with the qualified and licensed professional. It is important that you read all insurance contract disclosures carefully before making a purchase. Decision guarantees are based on the financial strength and claims ability of the insurance company.
