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 00:00:48 Hello and welcome everyone to the annuity straight talk podcast, episode number 56. My name is Brian Anderson. Dang. If I haven't said that 55 times before now, founder and creator of annuity straight talk. If you're new, there's your introduction. If you're old, I'm sorry for the repetition here we are with, uh, man, a fan favorite. I tell you, I'm not even gonna introduce him. He's gonna introduce himself. Why don't you say hello, sir.
Speaker 3 00:01:16 Brian. Good to see you. I'm John baller and I am, uh, sometimes Brian's part-time cohost so glad to be back lucky to be here, thankful to be here and thanks for having me back. Appreciate it.
Speaker 2 00:01:30 And before we get started for anyone who's watching the video, I gotta tell you that the lighting today is a little bit different. You know, the sun's kind of moving to the south as it does toward the end of summer. My tan looks exceptional. I've been working on that this summer. I hate to admit it, cuz that's such a vain thing to do, but I'm getting ready to go hunting. And I thought, Hey, it's a good time for a market update. I invited John cuz he had some good insights on the charts again, like we have done before. And I thought a lot of people that ask about it. So we'll kind of go back and forth on that. About some of the comments we've received, John and you know, various things. And then you're gonna share with us, with us what you see. Okay.
Speaker 3 00:02:10 Yeah, absolutely. What's new.
Speaker 2 00:02:12 Well I'm this is gonna come out. Obviously we at the end of August, but this is gonna come out to the list probably the day I go elk hunting. And so I'm gonna be semi dark emails, only text messages. If you have my cell number, phone calls on emergency only basis, I suppose. I mean I'm in an annuities, there's no emergencies, right? But that's, what's new and I'm, I'm getting excited about it. So what have you got going in Southern California?
Speaker 3 00:02:38 We, you know, not a whole lot school started. I had a speaking about your 10. I had a skin cancer procedure last week, went under the knife for a minor removal of a basal cell. Hopefully they got it all on the mend and doing well, keeping myself busy with the volatility in the market. I mean, I gotta tell you, Brian, we had a tremendous rally off the bottom, 19% in the S and P 500. And I think it's over. I think it was a head fake. I think it was a bear market rally. A lot of the people on the financial news networks were saying that, uh, it was the start of a new bull market, but I'm gonna wholeheartedly disagree. I think we still have a lot more volatility ahead of us and I'll, I'll tell you why, you know, we can get into it later on in the show. But I think that we're definitely going to have some moments that, and as you've seen the market has sold off over the last week, uh, pretty precipitously starting with a thousand point drop last Friday, following the comments by a fed chairman J Powell.
Speaker 2 00:03:46 And so, and for context with everyone. And if I might jump in and talk about some of the ones we've done in the past and how this relates as well is, you know, we're talking to, you know, John bomber's here because he's very good at what he does. And he is kind of an analyst for those people. And we're talking about the annuity straight talk podcast is geared toward retirees and we're talking about long term planning objectives. And one of the things we've heard is from some people to say, oh, you said it was gonna get to this level or you said it would do that. And I will remind everyone that John did call volatility every single time he's been on to talk about it. Now I'm never gonna say he's gonna bat a thousand. He is a human being, I think a tremendously decent one by the way. But
Speaker 3 00:04:33 Thank
Speaker 2 00:04:33 You. The point is to remind everyone that we're talking about, long-term planning objectives. And a lot of times the commentary is gonna be to be honest with you in a short term perspective, what we're really trying to look at the long haul on this. And so if he's off a little bit, or if I'm off a little bit in these predictions, it's simply because we're getting those questions from people all the time. And so if, if you're new to this or if you've watched it over time, this is more all encompassing than you're gonna get from say CNBC or Bloomberg news on a daily basis. The sentiment changes a hundred times throughout the day. Does it not
Speaker 3 00:05:11 That's right? It does. And in fact it changed pretty significantly over the last two months, as we saw in the market, kind of had this bear market rally. It was, it was tremendous. Lot of people. I caught a lot of flack for it, cuz I didn't reach the target to the downside. A lot of people were very conservative sitting in cash while we had this rally. But I think at, in the end, all things considered, I think we're gonna be right and we're gonna hit our objectives.
Speaker 2 00:05:39 Well, and you would say a, a few people have said, well, well I stayed out and it went up so much and then it almost it's as if they're kind of wanting to day trade and you know, tell me what you thought, John. But I thought, well, I could keep going for a little bit. And I always, I agreed with you. I thought there's gonna be long term volatility, you know, going back a year or so into, you know, the next year or two, but we didn't see that drop on Friday. We didn't know that was gonna happen. And even in last week there were a lot of people saying, okay, fine, they'll wait until it's up five or 6% and then they'll go get back into it, which is kind of the wrong trend to chase in my opinion. And that's kind of what we're trying to, you know, just get to people to learn about how to really just take a long approach to it and have some short term analysis to either say, when, you know, now's the time when you should be concerned or cautious or maybe now's the time you shouldn't worry too much and things are gonna bounce around.
Speaker 2 00:06:34 So anyway, I'm excited to have you back because a lot of people have asked for it. And I think it's fair that we do a little market update and some chart reading once in a while on the podcast.
Speaker 3 00:06:46 Yeah. I appreciate you having me on Brian. So, so I mean, if you want me, I can go ahead and go into, you know, just what happened Friday or, or the course of the last two months, what happened and give you a little overview of, of what's going on in the market. And we can kind of talk it out from there, but there's a couple key points that I wanted to touch on. So, you know, we thought that we would get this move to the 200 day moving average on the S and P 500. And it was a tremendous rally off the bottom. It was, uh, 19%, 19.2% in 40 days. But what was significant about that is that on the Mac D ratio, it, it created the greatest over bought territory in market history. Something to consider if you follow the markets, Mac D is a pretty significant indicator.
Speaker 3 00:07:35 I don't use it a whole lot, but it was something that I thought was pretty significant. The greatest in the history of the market Friday, we had, I mean, well, over the course of the last two months we had this bear market rally and it literally came up to the 200 day moving average, touched that rim or touched that line. It immediately sold off $3 and we've gone down ever since. So we've given back about 10% of that 20% of that 19% move over the last week. So let's just call it. It was a 10% rally over the last 45 days. Some things to consider is that when we get to the 200, a moving average, we've gotta keep an eye on the slope of the average there's supply and demand. And right now they're the supply is overwhelming the demand side. So particularly with the S and P 500, now that we did rally up to there, clearly the sellers are control because the slope of the average is pointing down into the right.
Speaker 3 00:08:38 So we've gotta keep that in mind. You know, and I saw a lot of, a lot of stuff on TV, like a lot of technical baloney over the last two weeks, it was clearly a bear market rally. It was a head fake in order for us to be really constructive in the market. We've gotta get above the 200, a moving average, and it's gotta be sloping upward. And until it does, we're not out of the woods. You know, you have a lot of traders from wall street on the beach. It's the end of the summer. There's not a whole lot of liquidity sloshing around on the market. So I still think, you know, we're still we're guilty until proven innocent as you know, the great Brian Shannon likes to say,
Speaker 2 00:09:13 Can I jump in for one second? You know, I mean, we did have a recovery from the top end, but I think what was the previous top of the market, which is the all time highway, say January 2nd or something like that, we still not, did not recover that level. And I think when it comes to retirees and you're very good at talking about the technical aspects of it and pointing to what people should be looking for, for instance, the 200 day moving average is not the all time record high. And I think there were a lot of people who lost money from the top of the market and then saw that rally and said, I'm gonna hang in until I get all of that back. This goes back to last week's podcast, Vegas odds in the stock market where winning doesn't mean winning all your money back. Sometimes it's okay to walk away with some of it and just time kind of something to think about, whether you're talking about technical analysis or if you're chasing every last penny you ever had in the market. So there's a lot of risk there, and I'm not sure if that's too much of a rant, but again, we're just not back to the all time high by any means.
Speaker 3 00:10:17 Yeah. We're 17.5% still down from the all time high on the S and P 500, we were the low the market. We were down about 25% on the S and P and we'll just use the S and P that was the bottom in June 16th. So it took down 25%. In about six months, we were traced about 60% of that move, and then we've come back down. So, you know, as it sits today, we're right around, I would call it 17 and a half percent year to date on the downside in the S and P 500 in the 200 day, moving average is still sloping down. But I think that there's a lot of different things that we have to, we have to consider. So, you know, fed chairman Powell came out on Friday and his, his speech was eight minutes and it was very to the point and he's very hawkish.
Speaker 3 00:11:11 He was dead serious about not pivoting as the market goes down, you know, a lot, there's a lot of talk in the news. Uh, a lot of articles being written about the fed pivoting, if the market crashes, the fact is, is that inflation affects a hundred percent of the population and they don't care about cratering the stock market this year, or next year. They want to get inflation outta control, which means they're gonna continue to raise rates until they do. So if the market is collateral damage, unless we get to a 2008 type of level where things become systemic, they're not gonna budge and they're not gonna print any more money. Quantitative tightening is coming into the pipe and we're seeing a lot of liquidity dry up, you know, know, we could potentially see some further downside in this market. That's just, it's my opinion.
Speaker 3 00:11:59 It's not to, to be, not to be acted upon. It's not advice, but it's just my opinion on, I think that, uh, we're overwhelmingly, there's a lot of stuff going on in the market. Yes. So yeah, not to mention the fact that, you know, you may see some of the largest allocators on wall street, the insurance companies, the pension plans rates get high enough. They may pivot away from stocks and do a rug pull and move into bonds lock in that three, 4% rate. It's a lot better than losing 20% in the market. And so you may see that rug pull at some point.
Speaker 2 00:12:32 Yeah, definitely. It's uh, yeah. I can see the pensions and insurance companies doing that for sure. So not bad to lock in at 4% maybe.
Speaker 3 00:12:41 Yeah. And I think, I mean, you, you've gotta have your balance and Brian, you and I talk about this all the time, long term planning, uh, with your retirement, you have to balance your, your fixed income or your more guaranteed type of stuff with your risk assets. You know, your risk assets are over time going to help you outpace that inflation. But there's, you know, we're, we're kind of working right now with an unprecedented time in the market. This has really kind of never happened before. So fed was serious when they said they're not gonna pivot. And that's what drove the market down a thousand points on Friday.
Speaker 2 00:13:15 Right. And we see, so they're not afraid to crash the market, which, you know, it's interesting. Yeah. It doesn't affect a hundred percent of the people. It affects a small population. Unfortunately, our clients and anybody curious about our services are doing that are gonna be damaged by it. And that's kind of, well, my goal's been to mitigate that damage because it's going to happen from time to time. And I think we had some immediate pain in 2020. We just haven't seen it for a while. We haven't seen any real pain, real long drawn out recoveries. And so I think that's what you were pointing to earlier is that this, you know, could be happening. Right. And that's some of the charts you shared with us before we learned a little bit about it. I think it's fascinating to be able to read that. And you certainly were very good at explaining how to see things, uh, you know, see things coming and nobody's got a crystal ball, but that's kind of where we're at, I guess, is to explain how this compares, if it can compare to anything that's happened in the past. Right?
Speaker 3 00:14:15 Yeah, absolutely. When did I share those with you? Was it, uh, it was just, you know, last week or so, wouldn't you say,
Speaker 2 00:14:21 You show, you showed me the charts that talked about previous draw downs. You showed 'em to me. Yeah. It was a little over a week ago. And that's when I said, Hey, that's a really good topic for the podcast. So yes. Stock market head, fake question mark. Yeah. So why don't we look at those? You
Speaker 3 00:14:38 Mind if I share my screen?
Speaker 2 00:14:39 I think you should. Yeah. And while you're doing that, I'm just gonna remind everyone you're not allowed to call John bomber. He's not gonna hand out his phone number. This is for informational and entertainment purposes. Only trying to simply get people to think about stuff. We're not trying to scare anybody, freak anyone out, or, uh, elicit an immediate response and a major financial decision based on this information. If you wanna talk to John, you call me first. Um, I will qualify you and see if it's worth him, uh, taking his time to do it. I've had several clients ask for that. And, uh, I think they're, uh, pretty happy with what he's been able to do, but again, that's, uh, up to me. And as far as you know, he's just some guy in California.
Speaker 3 00:15:21 <laugh> thanks, Brian. Uh, you know, you know, I think it's timely that it, uh, I'm gonna show the, uh, the S and P 500. Let me know if you can see that. Yep. You're gonna see here. This red line is the declining 200 day moving average. That what I that's what I was talking about. We, we felt pretty strongly. We were gonna hit this line little, did we know that we hit it almost to the penny right here? And then we sold off that day about $3. So never reached it or breached it. That line is still down into the right, as we've sold off, it's starting to decline, which just means there's a ton of supply in the market. Not a whole lot of demand. Now, if we saw this go up into the right, that would really be a real constructive area of the market that we could be dealing with.
Speaker 3 00:16:12 Today's market action. Wasn't so great. Yesterday was so, so slightly positive on the day, but nonetheless, a down today, we had a really big red candle. Friday. You see a big red candle today was a pretty nasty selloff, trying to make a rally in a LA latter part of the day, but it did breach this orange line here is the 50 day moving average. We did breach it. So where do I think we go from here? So we have a pretty strong level of support going through here. If you just wanna say, you know, this would be a strong support area here. This could be some here, but ultimately I do think that we make it down. You, we may go up like this. I think we make it down. And you know, maybe we breach these June lows. We'll see. So keep things in context.
Speaker 3 00:17:02 Price is the only thing that pays, uh, you gotta know where your support levels are. And I tell people that, that we're bringing a board is, you know, the hardest thing to do in a bear market or in a bull market is, is stay fully invested. And the hardest thing to do in a bear market is to, um, not be invested. So people sit on a lot of cash. They get nervous when the market starts to run away from them. It's the fear of missing out. So in markets like this, this is kind of where I've done. Some of my best work in the last 20 years is nobody likes sitting in cash, particularly me, but if I can save you from losing a ton of money, uh, that's what we're gonna do. And when things become more constructive, we're gonna allocate you appropriately to your risk tolerance and to your long term plan. So everything's driven by the plan.
Speaker 2 00:17:50 I gotcha. So you had, you had compared you showed me the chart and you compared it to 2008 and what happened back then, right? Don't mean to put you on the spot. So if you, you look at that and say, and this, this relates the reason I keep bringing it up, John is because that's what, you know, people's comments saying, oh, it was supposed to go here supposed to go there. Well, it doesn't always happen overnight, or even over a three month period. It's a matter of, you know, kind of long term where the market's headed.
Speaker 3 00:18:16 Yeah, absolutely. So I, I'm gonna show you two pictures, so not necessarily charts, Brian, but I'm gonna show you one here. So this is today. This was as of what last week. And you could see, this is the 2022. We ha came back up. We kind of made an all time high beginning of the year in the S and P 500. And then we basically had this market sell off rallied to the 200 SMA, which is a simple moving average. So that's kind of what I just showed you. The market kind of has come down to here. If I can draw on here, I will, you know, we've kind of come back down to here. So I want you to keep in mind, this is 20, 22 mm-hmm <affirmative>. And I wanna show you what, 2008 looks like
Speaker 2 00:19:11 It was eight and into oh nine. It was somewhere into oh nine, right?
Speaker 3 00:19:15 Yeah. So here we were in 2008, and this is not to scare anybody. You just wanna make people aware of some of the things that we do and why we do them, and why we talk about having a portfolio and really kind of managing risk appropriately is here we are back in oh eight, we hit that all time high. We had this market selloff kind of traded sideways. And then, well, what did we do? We had a really nice ment to the 200 day moving average. And that's the same thing that we did in the other photo, in the other chart. And from there, we've kind of come back down to here, but look where what happened. So it doesn't seem like the pain in this is March of oh nine right here, the low. So if we take a look at these, could we be there? I don't know, but it's something that, you know, you definitely wanna keep your eye on. No, one's saying that the market's gonna do this and crash, but if 2008 is an indication of anything, we don't know if history repeats itself or not. We've gotta know that that, uh, something's going on here. Here's the touch of the 200 day in 2008, it was rejected.
Speaker 3 00:20:43 Here's the touch of the 200 day. We already know we're here. We've already been rejected. Where do we go from here? Do we go up and recover or do we hit this point and go back down and hit the COVID low. So don't wanna scare anybody, but just want to have people be consciously aware of what's going on.
Speaker 2 00:21:05 Don't get in too big, a hurry. And that goes, and what I always tell people is what do you think what's your overall feeling of what the market could do? If you're really bullish on it? I have not met a lot of people that are super bullish on the market, but everybody kinda get, gets carried away at what they see on the screen. So it's, it's important to remind everyone there's some, you know, a little more analysis you can do, honestly.
Speaker 3 00:21:29 Yeah, absolutely. Absolutely. There there's one other thing I want everyone to take a look at and, uh, you know, people talk, maybe if you watch TV or, or things like that, you, you hear a lot about the VX, it's a volatility index or the fear gauge. There was a, there was a chart that I found that was pretty interesting. It was overlaying the current volatility in the market, you know, as of August 22nd, overlaying that with the great financial crisis volatility. And I'm gonna share it with the audience right here. I don't know if you can see that. So the white line is, you know, basically 20, 20 volatility to just last week kind of similarly, and a little eerily follows the volatility index of 2008 mm-hmm <affirmative>. And then you just had this explosion of volatility, you know, way past 40. If you take a look at the volatility index, you know, the height of COVID, we had volatility at like 40 think about that, doubling, you know, that's what it did in 2008. And that just goes through the roof straight up. That means that the market is doing this down.
Speaker 2 00:22:41 I remember that happening because the market was up fi up or down five or 6% a day. It was all over the place.
Speaker 3 00:22:49 It can get pretty ugly. So keep that in mind, volatility is probably going to creep its way back into the market. We saw volatility today. I wanna say it was right around 19. It's been as low as it's actually been. It's been fairly tame over the last couple weeks, but you know, you may see volatility creep in where we do. We do a 40 print or we see a, a rich trace back to the high, and that would be like 41. So it would be double the volatility. You know, that, that creates a lot of fear in the markets. That's when people start to really
Speaker 2 00:23:31 Sell. And so the point of doing this is to remind everyone that if you are prepared, it's not to freak you out and say, you gotta do something to make a change. You either have, or you have not, you either care or you don't, you know, now right now we've got really good fixed rates on stuff. And so if you're appropriately positioned for this, then it does not affect you. Nobody likes to take losses, but you should have some money in the stock market. And if you've got the right levels of, uh, protection elsewhere, then you don't have to worry about when these things happen. You can just ride it out and it's not a big deal. So that's where John and I kind of work well together, uh, is to, he can point out the places where you should be protected and I can show you the ways to do it. So there you go,
Speaker 3 00:24:15 Spot on Brian, spot on. You know, I just think people should take a cautious approach, you know, having a larger amount of cash, you know, for the short term, if they plan on using a lot of that money in the market, having some cash on the sidelines is not a bad thing. Uh, I know people start to get anxious when markets go up thinking they're losing out on returns, but in the grand scheme of things, I think that things will work out, but you know, may take some time. So it's just having the right advice, having the right plan in place, working with the right advisors is, uh, can make all the difference in
Speaker 2 00:24:49 The world. And I, I, I spoke with a guy yesterday, first time I ever talked to him and he had a decent portfolio, but not a ton of money. And he had an advisor, his advisor said, no, annuity's none at all. And so I, you know, dug into it and, you know, he had about 30% bonds and 70% stocks. And he was down, I don't know, nine or 10% on the year, total, which is not that bad to be in the market, but he had no context. He had no idea what the guy was doing. I had to dig and dig and dig to get an idea of what type of assets he had. And I gave him a couple of questions, go back to this guy and ask him why. So he just said, I don't, oh, I don't know. I, this is what I was supposed to do. I don't want an annuity. I had bonds, but you know, he's 75 years old. He didn't, you know, 30% in bonds, which are down 10, 15% got cut this year. They were all bond funds. It just seems like, you know, not a lot of tensions being paid to it. So we wanna provide the context for everybody so that you have both sides of it. And you understand how to really protect yourself if you need to protect yourself and how to really profit if you wanna profit. So,
Speaker 3 00:25:56 Yeah, that's right. And you know, to the point, bonds, you know, over the last 30 years, bonds have never lost money. And then all of a sudden you have two years of bonds are down double digits. How has that happened? Well, obviously it's a function of interest rates going up, but you have to know exactly not all bonds are created equally as the same with not all stock asset classes are created equally. You have to know what you own. And that's why working with a qualified advisor is so important. You know, if, if you want to do it, if you're do it yourself or God love you do it yourself. But there comes a certain point in time where you want to actually enjoy your retirement. And I tell this to people all the time, you want to enjoy your retirement. The last thing you wanna do is, is we'll be watching CNBC tick by tick every day, you'll go, go mad. And that's why people hire, you know, advisors like myself. That's why people place their trust in Brian to provide them the best solutions possible. It's uh, so you can enjoy your retirement.
Speaker 2 00:26:55 I already go mad. I don't watch CNBC, but I watch Bloomberg man. That stuff will make your head spin. Holy cow. I mean, I gotta get a little bit of it every day, but no, I think it's been great. Hey everybody, thank you for joining us. Episode 56 stock market head fake, is it or not? Tell us what you think comment below the post. When you see this subscribe to the podcast, if you feel like it like the podcast I, I was told that would really help. If you really like the podcast, then, then go and give it a thumbs up or something like that. I don't know, John, do you know what that is? And you know, we got it on YouTube. If you wanna see John's hair looks amazing today and check him out. He's trying to be so non-descript that he hides in a closet to record this. It's awesome. And <laugh> we appreciate you stopping by John. Thank you for being here,
Speaker 3 00:27:47 Brian. Thanks for having me always a pleasure. I appreciate you and happy hunting.
Speaker 2 00:27:53 Hey, thank you. I'm going after a big elk. Hopefully I'll, I'll do a podcast from the flatbed on my truck with a big elk crack on it with it remains to be seen. That is not an easy thing to do, but I'm gonna go for it here soon. So you guys are gonna see this when I'm on my way. Wish me luck. All right, good
Speaker 3 00:28:07 Luck.
Speaker 2 00:28:07 Thank you, buddy. Appreciate it. And uh, everybody have a great day. Uh, we'll have something for you next week, episode 57. It's gonna be good. I guarantee it. And we'll get John back as soon as we can. Okay. Everybody have a great day. Bye.
Speaker 1 00:28:31 You have listening to annuity straight talk. The, the views expressed by guests on this program are their own and do not necessarily reflect the views on the, his partners. No information presented should be acted important that you all insurance.
