Market Crash is Here

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 00:00:49 Hello and welcome everyone to the annuity straight talk podcast, episode number 41. My name is Brian Anderson, founder and creator of annuity straight talk branching out once again and joining us today from Southern California is the ever popular, mostly famous Jonathan baller. How you doing buddy? Speaker 3 00:01:07 Brian? Thanks for having me on again. Appreciate it. Always good to be with you a gosh, episode 41. I can't believe it. You're going on a, you're going quite a ride here. You know, Speaker 2 00:01:17 I'm just trying to keep it rolling. You know, like we'll have to do like episode 100, maybe do like a special event for that, but hell that's a year away. That's a year away Speaker 3 00:01:28 Throw a big party. Speaker 2 00:01:29 Yeah. So I'm coming on my 20th anniversary. That'll be next February. I'm thinking I should do like a giveaway or a contest or something. Cool. Just a sign of appreciation. I want to, I'll say it as many times as I have to. I just, I love the people I work with. I appreciate the opportunity to serve and the business that we do, we enjoy it. We have fun with it and interacting with people and making a positive change for them is the goal. So 20th anniversary I'm gonna do like 20, 20 gift cards or something like that. I dunno, there's gonna be a 20 or I'll give 20 bucks to everybody on my list. Speaker 3 00:02:07 Wow. 20 years in the business. So I've been in this business going on 23 years, entered in, uh, right around, uh, what's kind of dejavu right around the.com crash late nineties, late 99 and telling you right now, we're in the thick of it kind of reminds me of 2000. Well. Speaker 2 00:02:28 So I was in finance class and in 2000, 2001 is when I was doing like the investment stuff, where college, you take finance classes and investments. You get like the whole semester, you get to play with a portfolio, you get to pick your stocks and you have to justify your choices based on whatever metrics there are. And of course, we didn't know what the hell we were doing. We're just picking stuff that we thought was cool. But I remember the.com bust. And I thought, what am I gonna do with this degree? Cuz I don't want to deal with any of that stuff. <laugh> and here we are, again, are we not? Speaker 3 00:03:02 We've gotten full circle. You know, except now the companies actually make money and you know, Amazon is not a startup. It's uh, the most valuable company in the world, apple is no longer on the verge of bankruptcy. It's either one or two in terms of the largest market cap in the world. So we've come, you know, over the last 22 years up into the right, we've come a long way. But I think one of the things I wanted to talk to you about today was kind of the market turmoil. You know, where we are right now, kind of the market macro market environment and see how we can help. Some people figure this out. It's some scary times right now. Speaker 2 00:03:39 Yeah, it is absolutely is. And I know you've had a stressful past few weeks and I would tell you like these are the times when I'm very thankful to be an annuity guy. <laugh> cause Speaker 3 00:03:50 Amen. Speaker 2 00:03:51 We might not be getting a lot of yield, but that's where that downside protection really comes in. And I think, ah, it's nice. Oh, I think I, in 2020 when the market crashed, after COVID came out in the lockdown started all that crap. I wrote a newsletter, fixed annuities have never been so sexy. Speaker 3 00:04:06 That's right. Speaker 2 00:04:07 Yep. I could probably run that one again. I just talked to a guy on the phone who has never done anything, but fixed annuities. He's saved in them for years. He's got great guarantees on these things. And he built a business. He did really well. You know, people gave him a hard time for a long time, you know, 90% of it is saving the money and then managing it when you get to retirement's a whole different deal. So, but you can talk a little bit about risk can't you? Yeah, Speaker 3 00:04:29 It definitely is. Accumulation is far different than distribution. When it comes to retirement, providing a sustainable income to people it's difficult, it's difficult to navigate those waters and that's why we're big advocates and that's kind of, we've chosen our profession as advisors is to help people navigate those times where we're looking at the, the worst day on the NASDAQ on the year, if not in a couple years down almost 5%. I think we touched like 5.1% on the downside in the NASDAQ that was after a monster move yesterday. It's pretty ominous given that the environment we're in is pretty scary. You know, this could go on for quite some time. Uh, and I've been telling you since what October, I think, you know, since maybe last year when we, when we met that things were getting a little stretched and uh, I think we were right. Speaker 2 00:05:21 Yep. Well, and that's, I wouldn't say we, I think you were right and that's where, Speaker 3 00:05:26 Well, I don't wanna take all that credit. <laugh> Speaker 2 00:05:29 That's a, well, I can't take any of it, so you're gonna have to take some of it. Well, and that that's funny and you look at it and everybody thinks, you know, I had, I kind of recently been telling the story about a guy who reset his index annuity about a month ago. And with this particular company, he had a month to make changes. And so he got through the year and he made about 1%. It was kind of weak and that's not how they always go. Like some years are like that, but he was kind of bummed out, ah, only got 1%. And then I said, okay, well let's give it a few weeks and see how the market moves. We'll decide how to allocate all the options after we see it for a while. Well, in the three weeks between our two phone calls, the S and P dropped 9%. Yeah. And I thought, Hey, how's that? When I called him the second time, I said, Hey, we hit a milestone. And that was earlier this week I talked to him, he said, what's that milestone? I said, well, the S and P 500 is lower now than it was one year ago. Speaker 3 00:06:19 That's Speaker 2 00:06:20 Right. And he, I said, so, so how does that a 1% look, he's like, ah, okay, I get it. So it's all right. <laugh>, you know, do better going forward hopefully. But just the point being that protection and lack of volatility. So it's a balance, right? Speaker 3 00:06:33 Yeah, absolutely. Absolutely. It's funny that I've been doing this for damn near 23 years. This has probably been the most stressful five months of my life in business, just because of the environment that we're into. And I can kind of go into it. You know, you have almost like an everything bubble. You have the COVID lows, the S and P 500 doubles from the COVID low to right around December of, uh, last year and or maybe January of this year, due to what seven, $8 trillion being pumped into the economy by the fed. Then you have the fed, you know, you've run away inflation. You have a housing market, which by the way, there is a housing shortage. But now that rates have risen, mortgage rates are over 5%. How much longer is that gonna be sustainable? In terms of affordability, you have a bond bubble rates are going up, prices of bonds are going down and you have, uh, valuations that were just way too stretched in a speculative market and throw on top of that. A war in Ukraine and Russia. I mean, we're earlier this year, we were talking about the verge of nuclear war. I mean, that's a pretty damn scary thing to talk about. Speaker 2 00:07:48 Yeah, no kidding. Speaker 3 00:07:49 And you have volatility where the market's being pushed up all over the place. I think we had more than 10%, uh, correction in the market. We had a 10% rally. And again, we're back down a 10% correction from there. So, you know, markets are on, uh, uneven ground. I think the S and P 500 right now is down for the year, roughly 10%. NASDAQ's right around 20. Tell me I'm wrong. But this kind of reminds me of 2000 and this could go on for a lot longer given everything that we're, that that's being thrown at us. So if I wanted to re quote, there's a really good friend of mine, one of probably the smartest investors that I've ever met, just a really, really bright guy knows the market well has been doing it for 40 plus years. Managing not only being a principal at one of Vanguard's largest sub-advisors I think at the peak, he and his team ran about 190 billion of retirement funds for Americans. Wow. He sent me this text this morning and I'll read it to you. It's you know, it was pretty poignant cuz we talk all the time about the markets. He said the machines have literally taken over the market. To me, this is the scariest, most ominous and worrisome development in my investing lifetime. This is a guy that had Speaker 2 00:09:13 <laugh>. Wow, that's insane. Speaker 3 00:09:16 Yeah. I had a phenomenal track record in investing, not only picking great stocks and great companies, but managing a portfolio and a pool of assets worth billions and billions of dollars. And you know, that really kind of hit home today as a financial advisor. First of all, risk disclaimer, everything we talk about is for informational purposes. Only if we get into any charts you should consult professional or your own advisor, uh, or contact Brian. But yeah, that was a pretty poignant moment for me this morning. I one of those moments where you're like getting real, Speaker 2 00:09:54 Yeah. Speaker 3 00:09:56 Somebody who's that smart and who's that much experience, let alone a phenomenal investing track record telling you something like that. You've gotta take notice. Speaker 2 00:10:05 Well, it's, it's one of those things where you just have to, I think a lot of people take for granted them. Oh the market's always gonna go up. Right? I mean, oh, in the long run we're buy and hold long run. It's gonna be fine. And it's probably true, but nobody can get away from the stress they feel from momentary lapses and all this stuff. Right. I mean, I did the podcast, I don't know, weeks ago about wars racket. And don't let all these little things bother you. There's a lot of little things right now. So you have to have a plan and if you're planned out and you're do everything the right way, then you don't have to worry about this stuff again. It's like, what do you wanna worry about in retirement? And the guy I talked to before we got on to do this was he loves to golf and that's what he does. Speaker 2 00:10:50 And he's a fixed annuity guy. He always has been before he met me. I didn't turn him into one. We just met because obviously our line of thinking is similar, but I said, yeah, what do you wanna do out there? You know? And his brother is like, oh, you got, I gotta get into the market. You gotta do this. And so he's a conservative guy, his brother's a risky guy. And I was like, when you're on the golf course, do you want to get off the golf course and run home to see like, make sure you didn't lose five or 10% or, I mean, what do you wanna spend your time doing? Really. Speaker 3 00:11:18 Absolutely. Yeah. And, and I being an, an advisor, I run across a lot of clients who are do it yourselfers and that's great. But do you really wanna spend your, your retirement? I mean you spent your whole year or, or your whole lifetime working, sitting in front of a computer or being out in the field or doing whatever their chosen career was. Do they actually really wanna spend the rest of their life sitting in front of the, the, the screen watching ticks, watching CNBC. That doesn't sound like a whole lot of fun to me. So that's why, you know, guys like you and I have dedicated our careers to help people who are either intellectually, emotionally, or just not physically able to deal with the, the ups and downs of the market. We have to have a bigger picture. And if you're a younger investor and you have a longer time horizon, you always have to gauge that. Speaker 3 00:12:09 But yeah, if you have a, if you have a long term time horizon, and when I, when I talk to people about investing, I always talk to 'em about a 10 year time horizon at the bare minimum. If you don't have a 10 year time horizon, then you shouldn't be investing in stocks or in the market at all, you should protect your principle. But if you have a longer than long, you know, and most people have retirements that are longer than 10 years. Most people have retirements that are longer than they actually work. And I think about someone like my mom, she's 86 years old. She retired at 65. So she's coming up on what, 31 years of retirement, Speaker 2 00:12:49 21, 21 Speaker 3 00:12:50 Years of retirement. That's a long time. Speaker 2 00:12:53 That's almost half your life, Speaker 3 00:12:55 Right? If you're a firefighter in California and you retire at 50 or 55 and you live to 90, that's a long retirement. So people know like you can't just be invested for today or tomorrow or next week or next month, you've gotta be invested for the long term. And there are periods in time where you have to deal with volatility. Now it, it definitely sucks. And if you're with a great advisor, they're gonna guide you on when to raise some cash from time to time to try to sidestep some of these types of mark. Like those things that you and I talk about on a regular basis, but it's, it's being properly inappropriately positioned in the first place that can give you a tremendous amount of success in retirement. I would say that's, you know, 60% of my business are people who are no longer working for those that are, that are still working, still contributing to their retirement plan. They can afford to be more aggressive, but if you're a retiree on a fixed income, you can't necessarily take a 50% draw down in your portfolio. It would kill you. You'll never make it back. So you have to have a different mindset when it comes to your retirement income plan. And I think Brian, that's what you've done phenomenally for your clients. Many of, of them who I know in setting them up for success, uh, over the long period of time. Speaker 2 00:14:15 And that, I mean, that has been the goal. Just because again, where, you know, where I started, I was, I was looking into this career path during the.com bubble and I thought, oh, how do you do this? I mean, it only because I met some insurance based guys that I decide, Hey, there's a better way to do it. And then, and then, you know, run the numbers over time. And everybody thinks yield is the key. But like, I don't care who I'll argue with anyone who disagrees, but saving money is 95% of the issue. That's it? Speaker 3 00:14:47 Yeah, that's right. People don't save enough. Speaker 2 00:14:50 Everybody. I know that is successful and retired with plenty of money or more than enough money has saved, saved, saved. Speaker 3 00:14:59 You're absolutely right. Speaker 2 00:15:00 And so when you get there, like I always told, I told people for the last couple of years, like the market is higher than it's ever been. I mean, I'm looking at, I guess it's on a commercial now. I got Bloomberg on right now. But even though the S and P's down 10%, it's still higher than it's ever been before. I mean, really, you've got more money in the market than you've ever had. And the market's higher than it's ever been. Meaning you have more risk, exponentially, more risk than you've ever carried in your life. I mean, most people that are retiring now, didn't have a whole lot of money in 2000. Speaker 3 00:15:32 That's right. Speaker 2 00:15:34 And so if you had, they had a $30,000 401k and they lost 50% of it. You lost 15 grand, but now that you kept contributing to it, now you're 401k is a million bucks and you lose half of that. Holy cow, I'm not saying we, I don't like, I'm not saying that you're gonna lose half. It's certainly gonna bounce around a little bit. You had a good rally yesterday or recording this just for reference Cinco de Mayo May 5th. So yesterday, May 4th is when the fed came out and raised interest rates, just a reminder to everyone. The fed only sets rates, sets the rate at which they lend to banks. So that's the only rate they set. The other rates bank is gonna set mortgage rates and loan rates and stuff based on that in part. But the rest of it is it's a free market, open market and kind of a supply and demand economic issues, force different interest rates. Uh, it's a complicated mess. There's actually no way to really define it. As I understand, do you, John, you know, but interest rates like for consumer rates and the things that matter to most retirees, those are a factor of the market and can go any which way. Speaker 3 00:16:46 Yeah, absolutely. I mean, we, we stated over the last, you know, the course of the last year with the 10 year note has gone from what 55 basis points or 35 basis points over the last two years to just near 3%. And if I, you know, if I look at where the 10 year treasury is, Speaker 2 00:17:02 Yeah. Speaker 3 00:17:03 If I can just pull it up while I keep talking, Speaker 2 00:17:06 I saw it at 3.04 this morning. Speaker 3 00:17:10 Yeah. Let's just take a look. So us treasuries, what's the, the baseline rate for the, well, let, let me just pull it up real quick. Speaker 2 00:17:19 You know, we're gonna be, we're gonna compete with the, uh, the happy hour crew. Speaker 3 00:17:23 Oh, that's right. Speaker 2 00:17:24 We're gonna get big and there's gonna be a lot of people watch us and they're gonna say, oh, those guys are the best happy hour is, uh, is, uh, investing. What is it? It's on Fridays. Speaker 3 00:17:33 Yeah. Friday happy hour with, uh, with a lot of option traders that, uh, I, I do some trading with, you know, really some really smart technicians who have kind of been leading the way in terms of technical analysis. On the other hand, there, there a few former portfolio managers that I follow pretty closely who have like really been spot on in terms of market calls. Now the us tenure treasury is at 3.1%. Where did that come from? It was in the last year. That rate was, Speaker 2 00:18:09 It was about 1.2 a year ago. Speaker 3 00:18:11 Yeah. 1.2 August of, uh, I mean, if we go back to, let me just go back three years, I think we've bottomed out August of 2020 at a right around half a percent. So you've gone up an extreme amount in terms of interest rates. And that's really been reflected in a lot of these high flying tech stocks that are based on discounted cash flows and, you know, interest rates that were betting on interest rates staying low. And so, you know, you've seen this massive carnage underneath the market, although the, the NASDAQ is down 20%. Let's see what it's down the market's in the internals of the market, the individual stocks. And this is why, you know, I'm not a huge advocate of owning individual stocks if you're a client, just because you have days where you can have some real damage done to your portfolio. I mean, I'm looking at a couple stocks that I own right now. One was down, uh, 19% this morning. Luckily I only own one share that Shopify Shopify was $1,700 a share at the beginning of the year or late November. It's $420 today. It hit 3 99 this morning. Wow. So you're talking about some massive damage. PayPal was 2 69 or $300. It's about 88 bucks DocuSign $310. It's now around 80. And, you know, the list the list goes on and on Speaker 2 00:19:43 You have a connection at DocuSign, do you not? <laugh>? Speaker 3 00:19:46 Yeah. I have a family member of mine that, that personally owns, you know, significant amount of DocuSign. And it's been one of those things, you know, the Lord giveth and the Lord take it the way still own the stock still is a long term believer in the digitization, uh, in terms of, you know, what's going on in, in, uh, the world, uh, how we're moving to more of a digital platform away from paper being more environmentally friendly. But on the other hand, you can't bank on a company trading that doesn't have any positive revenue, or they have positive revenue, but they don't have any earnings yet. They're still, you know, a company that's, you know, growing at 20, 25% a year, but you can't evaluate a company on 20, 30, 40 times sales. And that's that happened across the technology landscape, just because we did have such low interest rates. I mean, it was just a recipe for the upside. And as rates have moved up from 50 basis points to 3.1, you've seen tremendous amount of, of value destruction, and maybe it wasn't deserved in the first place. So that's why I like to stick to index funds. Uh, diversified portfolios is the time to be diversified between growth and value stocks and bonds, alternative investments, commodities, fixed instruments, like annuities and insurance products right now. It's about preservation of capital. Speaker 2 00:21:09 Yep. Well, and you, this is something I don't think people understand that, you know, I look at it right now. The S and P is down 3.2, 9% on the day S and P 500 that's 500 different stocks. So there are probably a few of 'em that are up in value, right? There's probably some that are, there's some that are down 20%. It's just an aggregate of that. And the more divided up yard, the potentially more dramatic your losses could be, but just, it's an interesting thing to pay attention to the SB 500 offers you the diversification of a bunch of different stocks. So when you're up, you're up when you're down, you're down, but not by as much as you would be otherwise. Speaker 3 00:21:48 That's right. That's right. It's interesting that markets being driven a lot by large institutional buyers and sellers, you know, hedge funds, algorithmic traders. I mean, what we saw yesterday, and if, if you want me to share some charts with you, we'll show you it, wasn't the retail investor, buying stocks and pushing the market up, nor is it the retail investor dumping those same stocks today. I mean, it's really like my friend alluded to, yeah, it's really, uh, machines that are really driving the algorithmic, the flash boys of the world, if you would, that are really driving this market. And you know, we as investors right now, if you're in the markets, you know, this is why you have to have a long term perspective because you're quite frankly on the ride of the roller coaster. There's nothing that you can really do. But the problem is is that if you really want to have a decent retirement and you need to get to the amount of money, unless you're gonna save, and self-insure your entire retirement, you need a return on that money and you need it on a fashion of five, six, 7% on an annualized basis, over a long period of time to get to where you need to be. Speaker 3 00:23:00 So you have to be somewhat in the market, but during volatile times like this, you definitely are going to be along for the ride. It's, it's a tough market to navigate. And a lot of people say, well, let's just buy the dip. And it's, you know, there's a technician, a certified market technician, his name's Brian, Shannon. If you have any interest, he has his own YouTube page. He's a phenomenal trader. Mostly does swing trades. He advocates, he never buy the dip, buy into momentum, buying the strength. It's all about risk management and price pays. So buying the dip is a terrible mentality to have. It's something that I've made mistakes in the past and have paid for him. And, uh, you know, right. Now's not the time to buy the dip. Speaker 2 00:23:44 Yeah. And that's the thing is you never know where the dip is, right? Speaker 3 00:23:48 That's right. It's like catching a falling night. Speaker 2 00:23:50 Like a lot of people it's like, oh, I'll buy that in next annuity. I'm wanna wait till the market drops. I had a guy tell me that probably five years ago, I'll wait till the market drops. And I know for a fact, he's still sitting with money in the bank cuz it never dropped. I'm like, just get in. I mean, that, that helps you time the market in, in itself. Like, but it, you know, it's interesting where, where is the bottom? There could be more in this. There could be a lot more in this, but I, I think it's interesting to talk more about, you know, the machines, like what your friends said, machines run the deal. Uh, I read the book, flash boys, anybody I re highly recommend that book. It's it's a fascinating story. And if you wanna learn how, I don't know how anybody could ever, like any single person could have 500,000 a million, 2 million in retirement savings and not read that stupid book. Right? Speaker 3 00:24:38 Yeah. Speaker 2 00:24:39 I just trying to get people to care about the money they have and to understand how it works and how things work against you and the fewer things that work against you. The better off you're gonna be. So cutting volatility, preserving assets is a better way to a lot of people think like, oh, I put money in the nuity, but I'm not gonna make that much. Okay. Well we're looking at averages over time. You blended portfolio the right way and you cut out the volatility. We'll increase your yield over time. Let's not forget that in the past 20 years, the S and P 500 has probably maybe averaged about 7%. Speaker 3 00:25:15 That's right. And you and I talked about that all the time. It's, it's, you know, protecting a portion of your capital and then letting the rest do what it's going to do over time and grow with the us economy in an index type of fashion, where you're gonna get some rates of return. But you know, we have this debate all the time about that. Speaker 2 00:25:37 Yeah. Well, so yeah, you got some charts for us. You want to walk us through your analysis a little Speaker 3 00:25:43 Bit? Yeah. Let's go here. Let's let me pull it up here real quick. Speaker 2 00:25:46 Johnny bomber, the expert coming to us from a closet in California. Speaker 3 00:25:51 Yeah. I am in a closet. Speaker 2 00:25:53 Did you get locked outta your house this morning, John? <laugh> Speaker 3 00:25:56 I actually, I did. <laugh> I had a little traumatic moment. My son locked the door behind him. I don't have a house key. I'd given it to someone else. And so, you know, we were scheduled to what, nine 30 to start recording this podcast. Speaker 2 00:26:16 Yep. Speaker 3 00:26:17 Yeah. So I got locked out, had to break it back in and uh, it sucked, so, okay. I'm I'm here. Showered. We're ready to go. I'm gonna share this chart with you. He Speaker 2 00:26:29 Wa he was texting me and I was giving a, giving him a hard time. And he is like, he was, he was really frustrated and I picked on him. Speaker 3 00:26:38 Yeah, Speaker 2 00:26:39 I, that was great. <laugh> Speaker 3 00:26:41 So this is the actual monthly chart of the S and P 500, going back all the way to, I mean, we can go back as far as we want, but if you see here, this is, you know, this is 2000 and you had about a 50% draw down in the S and P and we made it back. This took from August of 2002, all the way to about October of 2007, that was a five year period to break even tremendous amount of destruction in terms of basically a lost decade, you know, a full year. Then you had the great financial crisis bottom down in about March of 2009. You literally had an entire decade, 2009 to 19. Let's just call it 1997. Had you invested in a dollar in 1997, you woke up in 2009, like a 12 year period of time. You would've made no money, but you would've had a whole lot, whole lot of stress in terms of your portfolio. Well, Speaker 2 00:27:48 Take, take the top in 2001 until the break, even until you got back to that in what, 2012 or 13. Speaker 3 00:27:56 Yeah. I mean, if we take, if we take a look at that top right here, look at that, that took you. If you invested in the top in 2001 that would've been, let's call it April of 2000. And I remember those days, I mean, that was the day when you asked your coworker, you know, what are you day trading today and Schwab and all those firms existed, but we were paying $50, a hundred dollars a trade to do that. But a lot of people were buying mutual funds, ETFs were in their infancy, but you, you had a lot of people getting into that mania when Amazon was $200 a share. And by the time it shook out, Amazon was like $8 a share. Obviously, you know, that's why you wanna be a long term investor, cuz Amazon is about $2,300 today, Speaker 2 00:28:41 Right? Speaker 3 00:28:42 It took you from, you know, let's call it April of 2000 to roughly 2013 for you to break. Even if had you and invested a dollar at the top in the, in the.com. That's a long time. It's a really, really long time, uh, and a lot of heartache. So then we had what was called QE and that was quantitative easing. And that's where the fed was injecting liquidity in the market. And they've been doing that for literally the past 10 years. And so starting with the bottom in 2009, as they, you know, billed all the banks out, you had tarp, you had all these different programs, you saw this just tremendous literal vertical, and then remind you, this is the monthly chart of, of the S and P 500. You keep going up. Then you have these huge volatility events and you had kind of a flat year, 2016, 2000, uh, 15, you had a tremendous move up. Speaker 3 00:29:38 And then you can see these really big red candles. And that was December of 2018. That's when we had rates start to rise. They, they tapered off, we had this huge run up all the way to COVID and you can see these huge red, monthly candles. I mean, they're just massive, massive volatility in terms of destruction of value. And then you saw this 7 trillion pumped into the market. And we were basically went vertical from there, had a little pause for about two months in September and October of 2020 went straight up. And what are you seeing in this pattern right here? You know, you're seeing a pattern of value destruction. You saw it here. You're now seeing it. This is January of this year. This is February of this year. You had, you know, this massive rally back up. So you had basically a lower high on the monthly chart. And then you just had a huge value destruction. We're right in the beginning of may. So we'll see where this candle takes us, but it's, it's pretty ugly if I switch to the daily chart and I want to go back in time, you can kind of see that we are now literally back to where we were in, you know, last year, 13 months ago, April 12th, 2021. You can see that I've already drawn a couple blue lines here. Speaker 2 00:31:11 So unless you sold it, then you didn't go anywhere. Speaker 3 00:31:14 Yeah. It was just a really expensive round trip ticket. So that's why I always advocate. And I had a client of mine ask me, you know, why did I sell a particular position? Well, that position had really doubled. And so there comes a time where you have to think about, I'm always thinking about risk management, but you always have to think about, you know, where can I take profits? You know, I wanna sell some of my winners and I wanna buy some of those losers because that's just prudent risk management, prudent portfolio rebalancing, which is something that I advocate. And it, to be honest with you, it's pretty hard to do because a lot of people don't wanna sell what's what's working, but it's just bringing your portfolio back into alignment, back into your risk tolerance. But you can see it was, it was a pretty expensive round trip. Speaker 3 00:32:00 I had a client in the depths of COVID by zoom at $125 a share zoom made it to about $600 a share. And we ended up selling it earlier this year for 158 bucks. So knowing that things do go down, they don't always go up, but I mean, this is a really expensive round trip. You can see these blue lines that have already drawn in here. One level's at 36 43 on the S and P 500. Another technical level here is at this pivot point at a right around 3,300. And if I take the measured move and a measured move is, and I'm just gonna draw it, Brian, a measured move is from here to here, right? I can say, well, if I want to copy this, I'm gonna take that. I'm gonna paste it and I'm gonna take this and I'm gonna move it back down here. And it gets me right around to that level where I think the market could potentially be going within the next, you know? Speaker 2 00:33:01 Yeah. That's another 25%. Speaker 3 00:33:03 Yeah. Good. Get ugly. And then now you're just right at the level of your pre pandemic high. So that would basically erase the last two years entire gains. So things like that get scary. You do have a couple, you know, pretty strong pivot points here where you had a lot of support in the market and I can bring this down right here. You had support here. You have support here. You have some resistance here, but resistance will act as support on the way down. You have some pretty decent support here. So if the market doesn't come down all the way to here, you know, it could be, could come up to right, right around here. The fed may actually see that the, they don't want the market to go down, but they have to curb inflation. So they have to raise rates. But you know, these are some of the levels that are, they're not definite, but they're potential. Speaker 3 00:33:54 They're areas of interest that you could watch. NASDAQ's even worse. If you want me to kind of look at the NASDAQ, I'll just look at the QQQ that's in, uh, that's the, uh, Invesco QQQ. You can see there's a tremendous amount of value destruction. You can kind of see this 1 94 as a level that I've already kind of marked on my chart. Well, if I take a look at it, you know, let's just take a look at this. Uh, I'm just gonna do a segment line here. If I get that right there and I copy this, it's not gonna look straight down like that, but I mean, you could get to this just below your pre pandemic high on a measured move basis. And that's all technical stuff. You know, obviously you've had, you've seen a tremendous amount of value destruction within the internals. You know, a lot of stocks have really come back down to earth. Speaker 3 00:34:45 I mean, who would've ever thought, but the thing that scares me right now is, you know, you still have apple Tesla still kind of holding a lot of the, the, the major indexes up, you know, what's next. We don't know, but we just have to, you know, we have to remain nimble and, and willing to act in our portfolios to, to see if we can see where it takes us. But those are potential levels that we could get down to. Nobody wants to believe it. People want to cover their eyes, but you know, those are some of the levels that I'm prepared to, you know, maybe start nibbling at. Speaker 2 00:35:19 Yeah. So you'll get active if, uh, we hit those levels, you get real active, right? Speaker 3 00:35:23 Yeah. That's, that's my thought. So, you know, well, Speaker 2 00:35:25 We've told a lot of people that is to sit in cash for the last three or four months. I mean, and we turned out to be, I just want everybody to know, we're not, we're not bullshitting here. We're not trying to sell something. We're actually trying to figure this out. And based on what we did in October, and we did one earlier this year, John's here to talk about market analytics and all that stuff. And damnit, he called it every single time. We're trying to give you actionable information. And we put that in practice where, you know, the people that have come to me and want more of an investment management approach, you know, I hook him up with John and all that. And there's several people. John we've had stay out of the market because we thought it was a bad time to get in. Speaker 2 00:36:07 We've probably not to, I am gonna pat us collectively on the back because we probably saved a few people, a total of, you know, several hundred thousand dollars in losses just by taking your time being measured about the approach protection is the key doesn't mean, I'm not saying you have to put all your money into annuities. I'm just saying like, there, you know, that's why I have John here because he gets it. And he's also a pretty analytical approach. He's not just gonna sit on assets in the market and collect his fees. You've got the same goals that I do, John, right? Speaker 3 00:36:41 Yeah, absolutely. You know, we want to help people have a successful retirement. We obviously want to grow our business, but we want to grow it in the right way. You know? And its, it makes, uh, you know, to be self-serving it makes my life a lot easier when I don't have to dig out of a 20% hole on a client account, if they can be prudent enough. And that's why people hire us is to take our advice. Sometimes they choose to, sometimes they choose not to. Oh Speaker 2 00:37:06 Yeah, Speaker 3 00:37:08 Yeah. You know, I go back. I had a couple that I worked with at a very concentrated stock portfolio. The wife would talk about risk management and the husband didn't want to hear anything about it. These people were 70 years old and they never wanted to pay the tax. They had, most of their money was in non-qualified assets, which means, you know, it was taxable account. So anytime you sold something, they a very low cost basis. Anytime you sold something, it triggered a taxable event. Well you either, you know, in markets like this, you either pay the tax man or you paid the loss man. And I can remember that that particular client held the tremendous amount of Adobe. And it was like 66% of their portfolio. And it got down to as low as 2 85 during the pandemic. And then it raced up to about 700, well right around 500. Speaker 3 00:38:00 And this is right around the time they decided that to leave me for a larger firm that they said had lower fees or whatnot. I don't believe it. I think they were just mad. I sold about a hundred thousand dollars worth of Adobe for them. And they had to pay $15,000 in taxes. So it ran up to about six 80, well Adobe today sub 400. So selling at 4 97, wasn't a bad move after all, even when you pay the tax. So I hope they have a good retirement, you know, they're no longer, you know, getting advice from us, but you know, I probably would have forced them to sell a lot of those holdings and sit in cash. But now they are probably sitting on half of the portfolio that they had just, you know, six months ago. Speaker 2 00:38:46 Right. It's sad, but you can't protect people from themselves again, it's not for everyone. This is not advice. We're just kind of talking about it. But Speaker 3 00:38:54 Yeah, we, you know, we should go over a case study that, you know, maybe on the next podcast or so you know of what makes a successful investor in retirement. Speaker 2 00:39:03 Yeah. I could pull up case studies from clients of mine. And I, like I said, I mean, I know, I know what the recipe for success is. It's saving money and you know, the guys, the people I know that don't worry about a damn thing in retirement. Just they got their money, locked away, CDs, annuities, fixed index, all this stuff. Not saying that's what everybody should do, but that's probably what I will do personally, because I don't really like playing the market. But anyway, so it's, it's interesting. I appreciate you bringing that. All that. The analysis, John. Speaker 3 00:39:32 Yeah. You're welcome. Hopefully I didn't go down, you know, too far of a rabbit hole, but Speaker 2 00:39:37 Oh, we didn't like we didn't even get to the edge of the rabbit hole. Speaker 3 00:39:40 Yeah. You and I love talking about rabbit hole. Speaker 2 00:39:42 So yeah. So we should, like I, I said we should do a different podcast, a conspiracy theory podcast, but I think we got some rabbit hole divers that, that, that watch this regularly. So anyway, but this is all no good technical stuff. All above board, public information, nothing crazy. So thank you. Speaker 3 00:39:59 Hey Brian, it's my pleasure. I appreciate you having me on. I know that, uh, you know, you're building this channel and this podcast and I I've been sending it out to, to people that I know think they can get a lot of value out of it. You know, you, you speak truth and you know, you take a really measured approach in terms of people's money. And I think people should appreciate that. So I love working with you and I'm looking forward to doing many more of these. So annuity straight talk. Speaker 2 00:40:26 You're welcome. Anytime you want. So everybody, this has been episode number 41. The market crash is here. Our special guest, my friend, John Ballmer down in LA occupied territory. He's a communist. Just kidding. There. There's the rabbit hole, but uh, yeah, episode 41. If you wanna chat with me about it, if you wanna get in touch with John, you contact me. Schedule a call top right corner. Nice button on any page on the website, annuity straight talk.com. You can call me at (800) 438-5121. Subscribe to the podcast on your favorite podcast platform or the YouTube channel. If you wanna see both of our beautiful faces, we're here in video as well. So thank you everyone for joining us, John. Thanks for being here, Speaker 3 00:41:07 Brian. Thank you. Looking forward to the Speaker 2 00:41:10 Next. We'll do another one soon. And anybody has any questions get ahold of us, uh, for now? I think we're signing off and everybody have a great day. Okay, bye. Speaker 1 00:41:30 You have been listening to annuity straight 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 and do not necessarily reflect the views in talk or his partners, no information presented today should be acted. Qualifi. It is important that I.