Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:04] Speaker B: Welcome everybody to the Annuity Straight Talk podcast, episode number 113. My name is Brian Anderson. I'm your host, founder and creator of annuitystraighttalk.com.
if you want to schedule a call with me to talk about your retirement concerns, get the best answer. You're going to find top right corner of any page on annuitystraight talk.com subscribe or comment on any of your favorite podcast platforms or on YouTube. Share it with your friends, your advisors, anybody who has a bone to pick. It would only make it better for everybody involved. And one of my favorite guests is here this week. We got John from California.
Say hello to everybody, big guy.
[00:00:45] Speaker A: Brian, how are you? Good morning. Welcome everyone. I'm glad to be back. Talk about some volatility in the market as we head into 2 2026. It's going to be an exciting and perhaps a stressful year. We'll see.
[00:00:59] Speaker B: Yeah, so that's that. Yeah, that's. I'm good. Everything's fine. Stayed busy and mellow. I like that. And it's interesting. We come with these. You haven't been on for a while and there's always a good time to come back and say, hey, what do we look at? What are we seeing? I think and I'm getting more and more comments from people that just an uneasy feeling about the world in general. There's a lot of geopolitical stuff. Major moves. You got Venezuela, you got China, you got Greenland, you got all this garbage. They're hauling people off the streets of Minnesota, everybody's upset. We're getting yanked all over the place with the news cycle. What does this mean for the portfolio man?
[00:01:37] Speaker A: Man, I'll tell you, it's been an exciting year. The first we had a unexpected repeat of 2024. In 2025, markets were very strong, pretty resilient. We had very little volatility after the April tariff tantrum when we did have a 25 plus percent drawdown in two weeks and then a snapback after the tariffs kind of tacoed were paused and we had a really tremendous run in a lot of stocks. Not only just chip stocks, now the memory stocks, companies like Micron Sandisk, which just recently became public again after an absence. Back in the private markets, you're seeing Western Digital, Seagate, all of these stocks ran from below $100 to the mid 3, 4 and $500 ranges. Unbelievable moves.
Was not on, was not expected. But the memory and the AI trade continues. But there has been a ton of weakness in technology. It's a bifurcated market. You have the hardware side which is actually doing fairly decent until just the last week or so. And then you have, you have software which has absolutely gotten crushed under the narrative that software companies are going to either trade at a lower multiple because of AI or they're just going to go away entirely. Now that has yet to be seen, but I think certainly there's has been some pressure in that sector. So if you own software companies, and I admittedly own a lot of software companies, you're down 30, 40, 50 sometimes in circumstances 60, 60, 70% in the last six months. So that's been a, it's been a rough go.
Meanwhile, your banks and your tanks continue to move higher, your energy complex continues to move higher as well as your dividend stocks as a flight to safety over the, let's call it the last month.
[00:03:35] Speaker B: Yeah, so what, it's what happens all the time where the overall index is fine and for anybody with a diversified portfolio is doing well. But the individual stock pickers, individual sectors depending on that. And this is what got people in a lot of trouble over the last several years and a lot of people that weren't necessarily catching the rebound in the market from different points in time is that they were in a more specific stock portfolio in an industry that got hammered.
Whereas the overall, and that's the, the AI, the Nvidias and stuff like that or the big seven from the past year, the tech companies that were carrying everything but any of the other stocks didn't do that well. So not everybody's making a bunch of money right now.
[00:04:21] Speaker A: Yeah, absolutely. Last year small caps underperformed, mid caps underperformed, healthcare underperformed. We saw unh, which is United Healthcare, the largest health insurer in America, go from roughly 600 down to 240. Now it did have a decent rebound, but there was just some news announced last week where the stock dropped from 340 back to 280. So a ton of single stock volatility. I can say if anyone owns single stocks, they trade very differently from your, let's say your S P500 indexes. And what I've found is that if you start to get a rollover in some of those larger cap mega cap stocks, the ones that represent the top 10 stocks in the S&P 500 market cap weighted index represent about 35 to 40% of the index. So it's like a, it's a front weighted index. You're going to start to see if those companies, the apples, the Microsofts the Googles, the Amazons, if those start to falter, you could see some real big damage. And I'll show you later on a chart the bifurcation of different stocks in the market from Amazon and Google, Meta, Facebook, all of these stocks, some of them have reported record earnings, but they've fallen anywhere between 10 and 20% in the last call it three to four months. It's been an unbelievable ride. AMD ran from 97 in April of last year to almost 260 yesterday. I believe it was sub 200. That's been a rough ride. A lot of these names are getting hammered and I can show you individual to show you where the carnage is. But other areas where people, people didn't think they were working last year and they ended up getting rid of them or they just, they didn't believe in diversification. Those are the areas of the market that actually work. So when you talk about indexes or sectors of the economy or individual stocks, you gotta think about all of these things in a portfolio. And your portfolio is all of your kids.
They all mature at different time points. I have, I actually have two boys.
One is still a baby and one is growing into an adult teenager. And so I love them both equally. We struggle at times and butt heads and so you've got to continue to embrace them even when they're struggling because at some point in time they do turn around and they really start to shine for you. And you got to think about your investments that way. You can't just throw the baby out with the bathwater all the time.
[00:06:54] Speaker B: And that's where what's interesting that I was just going to say that's why these are really important every now and then because it teaches people, I think a lot of people are in that leave it alone, it'll be fine. And to some extent that's okay in the long run. But really pay attention to the pieces and parts of it so you understand like what creates a full market and how that can affect your yield. Obviously if you're picking against the major movers, even if the index is stable, you can make a lot of money. That's my pro friend on Wall street loves it when there's volatility. He loves it when there's stocks that lose 50, 60% because that's where he makes his money and trades and options and do that, all that kind of thing. But it's a different game than, than the average retirement saver is dealing with. It's not, they're not professional traders even if they Think they're doing pretty well, right?
[00:07:43] Speaker A: Yeah, absolutely. And I can tell you from personal experience, I've been doing this for over 25 years.
I trade a tremendous amount and it's tough. You get emotional about trades, you end up, you end up losing some money and you make bad mistakes. And sometimes you. And as you and I have talked about this journey, I've made some pretty big mistakes. And the biggest thing in retirement is you have to avoid mistakes. If you make mistakes that you cannot correct, you don't have the time. You get yourself into some trouble and you feel bad about yourself too. You want to kick yourself, you have to go in, into this money game, the financial plan, you actually have to have a game plan. And I think that's, that's what you do really well with your clients, is help coach them through how to put together an income plan, how to be properly allocated towards different types of asset classes, whether that be annuities, whether that be dividend paying stocks or growth stocks.
You don't give that stock advice, but you help really quarterback the plan. And then I help fill the gap with the securities or the risk side of the equation. So you, as a prudent investor, you have to have both bases covered. And I know there's a lot of guys out there that only believe in one thing or another, but I think that, I think that there's a lot to be said about having a really good game plan going into retirement.
[00:09:07] Speaker B: And that's where I don't always want to use this as a pitch for annuities. But I can tell you of the people that I know which ones are less concerned about the fluctuations in the market and the price of stocks. I know some people that aren't affected by it at all, don't care, and other people are set up for it and can handle it and we'll be fine regardless. And there's some people that think, oh, everything's fine and everything's great. I'm chasing all the return I can get. And those are the ones that are going to sit in position to get smacked at some point.
And that's okay, if that's what you want to do.
[00:09:39] Speaker A: Yeah, absolutely.
[00:09:40] Speaker B: I didn't warn you.
[00:09:42] Speaker A: It's investor psychology. Times like this, when things get volatile and the indexes are really not off of their highs too much. We're having a great bounce back today down yesterday, tremendously back up today. But I could take you through some charts and give you real world examples of hey, if you don't take a profit at Some point or you don't rebalance your portfolio. But I always. I have a. Our firm, we just crossed about 520 million in assets under management. We manage a large amount of money for people, and it's usually when times are the best that people ignore advice. They want to continue to ride the train. And it's just prudent portfolio management to rebalance on a periodic basis.
[00:10:26] Speaker B: No matter what.
[00:10:28] Speaker A: No matter what. You can't believe how many people that I've contacted via email, via phone, who have either not gotten back to me or have ignored my request for a meeting. And these are clients, we manage their money on a daily basis because they don't want to sell a lot of their winners. And I can show you what happens when you don't sell a winner or you don't at least trim it and take a little bit of a profit and bring it back into the. Its original allocation percentage can really cause some damage.
[00:10:59] Speaker B: Okay, why don't you.
[00:11:00] Speaker A: Yeah.
[00:11:00] Speaker B: Show us what you want to show us. Give us a maybe a best case, worst case range for say, the next few months. Tell your. Hey, man, next time around the podcast, you might be here in Montana this summer.
[00:11:11] Speaker A: Yeah, I'd love to be. We had a great time. What did we come back? We went up there in June, spent some time on the lake.
[00:11:18] Speaker B: Yeah, it was right after I got back from Alaska.
[00:11:20] Speaker A: Yeah.
Yeah, my boys really loved it. So it's. It's a really special place.
But I can take into some. Yeah, I can take you into some charts.
[00:11:30] Speaker B: Okay, let's do it. And while you're setting that up, just remember John's doing this as a service. It's because we're buddies.
Just a useful information. It's not marketing on his part. Do not look him up. Do not call him, do not bother him. He's a busy guy. He's a family man.
If you do want to talk to him, talk to me first.
I'll see if I think you guys would be a fit. But anyway, don't. Yeah, leave them alone and just say thank you for coming here and giving us some real analysis.
[00:11:56] Speaker A: Okay.
[00:11:57] Speaker B: Go take it, big guy.
[00:12:00] Speaker A: All right, so I'm going to show you right now. This is the stock heat map, actually.
And what you're seeing here is what are the stocks doing today? You can see Nvidia is up almost 7%, Amazon's down 6%. So both of these are large components, probably two of the largest companies in the world, along with Meta, along with Apple, and along with Google and Avago. These companies really. Apple is the lone wolf that's held in there. Nvidia has fallen from 212 to the low 170s. It looks like it's up pretty considerably today. But Google and Amazon reported earnings this week. They had tremendous earnings, record bookings, record guidance. Yet both of the stocks have traded off 10 to 15% in the last couple days. Amazon reported last night they're going to spend $200 billion in capital expenditures this year. When you look at, when you look at different individual stocks, you have to realize how big these companies are. Google is going to spend upwards of $100 billion. And Meta, which is Facebook and Instagram and WhatsApp, Mark Zuckerberg, they're going to spend about $100 billion on this whole AI trade. So you can see the dispersion in the market. And we do have an update. All the indexes are up except, except for these underliers. But they did report earnings. So I'm going to take you through a couple individual stocks and some indexes to give you a kind of a snapshot of the bifurcation in the market. I can show you Nvidia and you can see Nvidia has been consolidating for quite some time. We could say it's been consolidating since July of 2025. So for six months the stock has really not done a whole lot. It's right by its 200 day moving average. It is, did pop up today, 7%. It's trying to recover. Here we are, we have a bout of resistance up here. So Nvidia, it's the hot AI stock, it's the chip stock. They do report earnings next. I believe it's next week, February 25th. So a couple weeks out. That'll be a big sign if we get a break in the market. So you can see it's we went down, we touched the 200 day moving average. You can see how far it was from here. The 200 day came up to it. But I would really watch this stock. If it breaks the 200 day moving average. Look out below, you're going to go back down to about the 150 range. I can show you stocks like Meta, that's Facebook. You can see they reported earnings back here in, in October.
They just reported earnings again. They hit a huge gap up. And what did they do?
They gave all of their earnings pop back.
That's not a great thing. You get a really strong market, you get a really huge pop. You would want this to continue. It failed to Break all time highs here.
So you have right here you have the peak back in oh let's call it. This was in October. I'm sorry it was in August. And then you have a lower high. You have a lower high. You have a lower high. You also have a lower high. I don't know is meta in now in a downtrend, what I call a stage four decline. On the other hand we could take a look at Google. Google has continued to make gains in this market, continued to capture market share.
Google was a stock that everyone said AI is going to kill search. AI is going to kill Google's business.
And you can see where they were back in early May, June, July, in the summer they were $158. They did have a court ruling that came out and they said that they could work with Apple on being their default search engine for Apple's Safari browser which is all in all the iPhones and all the iPads and whatnot. And the stock just took off and it re rated and they came out with a certain chip that's cheaper and runs faster than the Nvidia product. And they're running those chips, they're called TPUs, not GPUs. And the stock is just rerated and continued to run higher then you have Apple. Apple struggled a little bit. They had good earnings but you can see the stock has been pretty volatile. It hit a peak back in December and it traded down. I mean we're talking Apple and I had this conversation with a client.
See Apple can never go down. No one. They probably don't remember Cisco, which back in the dot com was the largest company in the world.
What's to say what happens if someone comes out with something better than the iPhone? People start to switch. Apple was down 16% until their earnings. They've popped back up. They're going to try and test this. We'll see what happens with Apple.
One of the other big names you've got, AMD.
AMD really struggled. It had a double top, hit 265 back in October, struggled a bit and hit 267.
And then it announced earnings and it fell almost all the way back down to its 200 day moving average. That's not a good sign here. It's trying to recover today but you can see a lot of damage has been done. I wouldn't want to be holding this stock at 265 and have a $74 retreat. There's some other stocks that we can talk about. You can talk about palantir which was the darling of last year, Palantir hit a high of 207. It's well below its 200 day moving average and falling like a knife.
Normally the 200 day moving average is a, a very key level that needs to hold and we're seeing a lot of stocks. Remember this is a 400 billion dollar company that only does 3, 4 billion dollars in revenue. Its forward multiple at some point was like 700. It was something crazy. I like the company, but do I buy it at this level? Look where it came from. At one point a couple years ago it was an eight dollar stock.
Even down at this level here you're getting a little bounce here at 125. Who's to say that we don't fall down to this 52 level in a bear market? We're not in a bear market yet, but you can see this was a stock that could do no wrong. And you're literally off the most recent high. You're down almost 35%.
So those are some individual names I can show you. I mean we can look at Amazon. I just want to touch on some of these big names. Amazon big fall back in early March, recovered all of that. And look where it is today. It just knifed through the 200 day moving average.
It's trying to recover. I'd like to see something like this trade sideways and then maybe come back up like that. Who knows? I think Amazon some good prospects. But spending $200 billion in a year is a really big task. $200 billion is more than some countries make in a year. You have to keep that into perspective.
[00:19:09] Speaker B: That's big money. Hey, you don't have to tell me. Got to control cost. Doesn't matter what revenues are if you can't control costs.
[00:19:17] Speaker A: Yeah. So let me show you just a couple more to keep things in perspective. Energy. No one loved energy because oil.
Oil was down last year, down to the mid-50s. Look what energy's done this year. So we're having a rotation from growth to value.
Energy companies have high cash flow. Even the price of oil is low. These companies continue to generate significant amount of free cash flow. Rode along its 200 day moving average here and boom. Beginning of the year they decided we're going to take energy higher. Same thing with value stocks. Schd, which is a stock that many of my clients own. It struggled last year, I'll be honest. It was in a downtrend, it was sideways. And in a downtrend it started its recovery and then it had a little Bit of a hiccup. Look what it's done this year. The stock is up since the beginning of the year.
Stock is up as a sector, almost 15 and a half percent versus growth. I'll show you the growth complex. So you have a rotation from growth to value. This is a value play.
Spy G is a, is another stock that are another ETF sector that a lot of clients own. What has growth been doing since the beginning of the year? And I'll just go back here to the beginning.
Growth is down as a sector, almost six and a half percent.
It has recovered. It's down about 4.
But still you're up 15 on value. You're down 4% on growth.
So you have to keep that in perspective. And I can go into some certain sectors if you like.
[00:20:54] Speaker B: Yeah, yeah. We don't want to go too long, but overall it's important to again, look at the individual components. And those are the bigger players in different sectors, right?
[00:21:02] Speaker A: Yeah. Let me just show you the IGV last.
Here's the igv. This is the software complex Software as a service, you can see it is at its tariff lows.
So last year these stocks were up 55% overall.
They're back down. This is what happens when you don't pay attention.
You have to take profits, you have to rebalance. You have to be a prudent.
You have to.
Because this complex is fallen 32% since November.
It just keeps getting worse and worse. Salesforce, which is one of the largest ones, it's down 27%. ServiceNow, these stocks are just getting decimated. HubSpot, just getting decimated. DocuSign, which is one of my favorite companies, has gotten decimated, down 35% since the beginning of the year.
So you have to keep things into perspective. You just have to be resilient in what you're doing. So I'm going to leave it at there. I know that's a lot of information.
Hopefully we can get a recovery and we'll go from there.
[00:22:13] Speaker B: Just a good quick look at it. Overall, prognosis, top, bottom, next few months. What do you think?
[00:22:19] Speaker A: A lot of headwinds.
Yeah, I don't think that the market crash is coming.
And I'll say that for a couple reasons. I'll say you have a new Fed chairman that is going to be coming into the office in, in. In May.
He's been on record as a hawk in terms of interest rates. I think the president picked him. Love him or hate him, I think the president picked him because the guy's going to lower rates, we need to get housing going, we need lower rates, we need corporate refinancing, we need, we need to refinance our national debt which is at 37 trillion.
No thanks to a lot of the fraud that's being uncovered in this country which is a whole nother topic and.
[00:22:56] Speaker B: I don't think we've even seen the beginning of it.
[00:22:58] Speaker A: No, I don't think we scratched the surface but on that hand, and I don't want to go down that rabbit hole, we have, we have the midterms coming up in November and you have the, the gop, the Republican side of the House. They don't want to lose the House, they don't want to lose the Senate. The President is probably pretty fearful that if he loses the House and Senate he's going to get impeached again. That's just the vitriol that we have in this country. It's, it's unfortunate that we can't get things done but whether he deserves it or not, it's not my place to say but I think what's going to happen is that as the midterms come in, the new Fed Chairman comes in, we're going to have a QE quantitative easing and a lowering of interest rates like we've never seen before.
It's going to rip the market to all time highs, potentially 7, 500 and then we'll see what happens. Could get a huge multi decade. We could get a pullback that we haven't seen in since maybe Covid or since maybe the 08. I don't know. I'm not here to predict markets, I'm here to help people navigate that, that storm.
[00:24:02] Speaker B: Yeah, all right, cool. I appreciate what's happening everybody. This is not ever meant to make anybody freak out, give you comfort.
The idea is solid. Planning on all fronts, especially in retirement have set aside what you need so that these short term effects or short term movements in the market do not decrease your standard of living. Do not put you in a financial bind. We want to keep you away from that. John, thank you so much for being here. Appreciate you giving me a week off so I didn't have to write anything but I got to go back next week anyhow.
[00:24:34] Speaker A: Brian, I look forward to seeing you soon.
[00:24:36] Speaker B: Yeah, you got it. We'll do it guys. This has been episode 213 talking about market updates for 2026.
If you guys need to get a hold of me, top right corner of any page on annuitiestraighttalk. Com thank you for joining me. I'll be back next week for episode 214. Have a great day, guys. Bye.
