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 15. My name is Brian Anderson, founder and creator of all things. Annuity straight. Talk my cohost like every episode before is all the way over in Western Washington and say, hello, choke. Hello everyone. Welcome to nudity. Straight talk. So a show runs top planning in Seattle, Washington, a like-minded individual. We started working together and talking about different ideas. One of the things that everybody's going to notice who's been listening for a while is this year, I've made a big point of finding individual people with different perspectives, where I could branch out and share what I've been doing in annuity straight talk, and really solidify the message and find a strong group of people that were qualified to handle any type of planning issue in retirement or otherwise. So what I want to talk to you today, we've got a special guest and, uh, he's a guy I've developed a good relationship with over the past few months, about six months, maybe then he's down in Los Angeles, California. He's an occupied country. His name is John. Why don't you tell us a little bit about yourself, John?
Speaker 3 00:01:58 Well, thanks for having me on guys. I really appreciate it. My name is John Bulmer with the firm called DST wealth management. We're based out of Irvine, California with offices in Dallas, Texas, and Palm desert. We're a re sec registered investment advisor and, uh, Brian really appreciate you having me on the show. Really appreciate you allowing me to join you guys. Uh, we, uh, you know, have a similar philosophy here in terms of retirement planning and wanted to jump in on and kind of tell you a little bit more about what's going on in the market. You may have seen in the last week or so that the market's starting to sell off a little bit. So sometimes that raises some concerns for people and wanted to give you a more of a high level picture of what it might look like going down the next few weeks here.
Speaker 2 00:02:47 And so when, when we first met John, we had another mutual acquaintance that introduced us and I thought it was real interesting. And it was kind of the same way I met you a show where I was thinking, let's take a guy from an investment background that believes in the value proposition of annuities and retirement planning, right? And it was really interesting to see now you're aligned with a big firm in California and cause a lot of the things that we hear are, uh, investment advisors, don't like annuities or this or that. And you know, you've opened your mind to it over time. And I guess you want to show, it could probably talk about the differences in how you guys came from the investment background, but then accept annuities as a viable part of a retirement plan.
Speaker 3 00:03:27 It's true. I actually started my career off as an analyst at an insurance firm. We mostly sold corporate owned life insurance and did executive compensation plans where we would use different types of insurance vehicles like variable annuities, like variable, universal life insurance to fund corporate retirement plans for their top level executive. So I left that world, spent about eight years in private equity and then ended the last two years of my institutional investment experience at BlackRock up in San Francisco and then decided to venture into the retail world. But most of our clients are fairly capital markets intensive. They really like the market. But as you know, we've seen what's going on in the market these days. You've got to look at where we are from a macro economic perspective in terms of how you're going to position your retirement portfolio. And I think annuities are a great vehicle to consider when you're doing some planning for the long-term
Speaker 4 00:04:32 Completely agreed because there's an opportunity for both. One of the people that's in this industry likes to go around saying, well, I hate the other side. And I think that both John and I as investment advisors believe that there can be room for both. As long as you figuring out what do you want this pool of money to accomplish versus what do you want this other pool of money to do?
Speaker 3 00:04:54 Yeah, absolutely. You know, as we're looking at all time lows and interest rates, the bond market's been on a 30 year bull market, we kind of looked as we look to annuities as sort of a, an alternative asset class to, you know, your plain vanilla traditional fixed income. I'm finding that there's a lot more interest in the annuity space now more than ever, because of just such a low interest rate environment.
Speaker 2 00:05:20 Uh, the way I explain it and like, you know, we talk about index annuities a lot and obviously there's other types of them, but you know, you're leveraging low interest rates with no risk essentially to produce a yield. But what I think is funny and you guys could tell me what you think about this. And I read the article in the wall street journal, I don't know, several years ago, people have been waiting for interest rates to rise since 1989. And they've done nothing but fall. Cause John, you just mentioned the 30 year bull market in bonds, right?
Speaker 3 00:05:50 Absolutely. When I first got into this business, I think, you know, one of the big boys on the block PIMCO had about 3 billion in assets under management. Well today they, I believe they sit at north of 2 trillion and that's not just because bonds are such an attractive asset class. It's just because interest rates have continued to go lower and lower. And uh, you know, the fed obviously is driving that policy when interest rates fall, bond prices go up and therefore, you know, some of these big, huge institutional investment managers have gathered trillions of dollars in assets. Well, at what point does that reverse course and do we have to normalize interest rates, that's remains to be seen. There's a lot of fed speak going out in the world today. There's a lot of uncertainty, but we certainly saw what can happen to equity markets when interest rates spike. And we saw that with the, a high growth tech names earlier in the year, March, April, we saw about a 10% correction in the NASDAQ. A lot of those high flying growth names really solidly corrected earlier in the year, just because we had a spike in the 10 year note.
Speaker 2 00:07:01 It's really interesting where I talked for a lot of years were expecting rates to rise or planning for things if they did. And I've talked about bonds versus annuities and a lot of people in the past year. So we had a run-up in the 10 year treasury into the end of 2018, right? And I think the 10 year treasury went to it's over three, maybe 3.2. And a lot of that, what happened last year when people fled the stock market, when COVID came out, there was a, a run on cash assets and the interest rate just dropped, I think, and correct me if I'm wrong. But I think the low point of the 10 year treasury was about, uh, somewhere in the neighborhood of 30, 40 basis points. Does that sound about right?
Speaker 3 00:07:41 Yeah. I think it got down as low as a mid forties in terms of, uh, in a lot of that was to just stimulate the economy. You know, the fed will pretty much backstop and they actually started buying a lot of actual ETFs in the marketplace because your normal fixed interest, you know, when people think of fixed income, they think about safety and they think about income. And it's kind of a surprising thing when the equity markets start to sell off, like it did last February and March of 2020, and you had some fixed income and some long, only bond managers down 25 and 30% just like the equity markets. It's a pretty scary proposition. So we all know from a behavioral standpoint, that is not the head that determines investment success. It's the stomach and volatility and volatility in retirement is just for a lot of the people that we deal with. It's just something that they don't want to have to keep them up at night with.
Speaker 2 00:08:41 Right. And so when you talk about interest rates and bonds and all that stuff, that's where I look at it where a lot of people will say, well, my bonds did really good last year. Well, yeah, cause you had a two and a half percentage point drop in the 10 year treasury, the values of those things shot up, right? Yeah,
Speaker 3 00:08:57 Absolutely. And the fed was, backstopping a lot of those funds in terms of buying those bond assets. And so when we talk about, we hear on the TV media about the feds starting to taper their bond purchasing, it's certainly going to have an impact in the fixed income market for the long run.
Speaker 2 00:09:18 Okay. And that's kind of what it came up with this idea. Now I can say, you know, I don't have the technical background that you guys do in the investment business, but I always say like, I just kind of go with my gut instinct and I go with my, uh, common sense. Right. But I remember it was probably early summer. Last year I wrote the newsletter. What are you going to do with all the free money where the market just bounced back in a hurry after COVID happened? There was, I mean the economy was shut down. Everybody was holed up in their own homes and you think where's the intrinsic value in an equity based assets and why is the value going up? And a lot of it had to do with the fed was flooding the market, buying bonds and all that stuff. So I kind of said, you know, and a lot of people, you know, again, I'm, uh, I'm the cynic where I say, everybody thinks they're a hot shot investor, but really the fed just bought that forum. And so they can complain about the deficit and unemployment and all that stuff, all they want, but they're getting their fair share of it too, inside their 401k. Do you guys agree with that? Yeah,
Speaker 4 00:10:20 I would. I just wanted to say, and I would be curious to get, John's take on this, but I would say many of our clients that are in retirement or getting close to retirement, they can't afford to take certain risks later on because if there's an oops moment, very close to, or in retirement, it's hard to come back. And the vehicles that we like here, the fixed deferred annuities, you're basically transferring the risk of an oops moment with bonds over to the insurance company. And because these equity in, you know, when we track these equity, indices and clients get none of the downside and some of the upside, you're basically removing that downside risk of the equity markets. So that's why for certain pool of funds that our clients in retirement have, it makes sense. And we don't have to speculate on when interest rates are going to come up again. If we use things like ladders, right? Because I go back to what John Maynard Keynes one said, the market can stay irrational longer than you can stay solvent. And we've seen interest rates stay low for much longer than we had expected. Yes,
Speaker 2 00:11:28 It's been, I know it's been a really long time. I can safely say that aside from a couple of years and some incremental upticks in interest rates, interest rates have been falling my entire career. And they're at a point right now where we just don't know what's going to happen. So I guess the point of bringing up all that stuff with the fed was to say about a month ago they gave, or the fed gave an indication they're going start tapering, that bond buying program, they're going to stop flooding the market with money. And it's kind of like the party could come to an end where we still have like less story. I was, I was thinking about telling is in relation to the overall economy, I stopped by a gas station yesterday and it's a big gas station that has a McDonald's hooked up to it.
Speaker 2 00:12:13 And I was grabbing some snacks and a soda. And the lady at the counter said, oh, a McDonald's is closing down again. Like, why is McDonald's closing down? And they said, they can't find anybody to work, which is they're paying 16 bucks an hour and they can't find anybody to work. I mean, that's, there's a different element to that. But just to me, it speaks to the fact that the economy can't be all that great. If so many people are looking for, you know, there's so many people that aren't even working right now. And if the fed is going to start tapering, bond buying, what's that gonna mean for the market? I don't know. John, what do you think about that?
Speaker 3 00:12:50 I really think it's going to create some volatility in the market. Obviously what happens. There was a study that I was reading from JP Morgan. It's what happens? What is the arrow in the Fed's quiver? The next time the market has another crisis. And it seems like we've continually gone down this path of, we have a crisis. We lower interest rates. We have a crisis. We lower interest rates. Now interest rates are at, you know, near no, let's just call it near zero one, one and a half percent. What does the fed do the next time? The market decides to go down 30% or the next time we have another COVID type of pandemic that comes out of nowhere out of left field, but what are we going to do? I'm not exactly sure, but I think it's definitely going to rattle the markets more so than most people are going to be comfortable with.
Speaker 3 00:13:39 And that's why a lot of the times when we speak to clients about retirement, people are looking for income in retirement and 10, 20 years ago, when interest rates are much higher, it could sit on a bond. And asset bond was, you know, as interest rates were going down, they could clip the coupon, but that bond price was going up and compensating for that lower coupon. Now, you know, we're at the point where savings rates are paying nothing, CDs are paying nothing. The real risk is in fixed income. So why not transfer that risk to a vehicle that's backed by an insurance company called an annuity. And you can pick any flavor of annuity that you like, whether it be multi guaranteed, fixed deferred annuity, variable annuity. I know Brian, I knew you talked to clients a lot about fixed deferred annuities or fixed index annuities. We, you know, we think that that's a great vehicle to be in when you're in retirement, no one wants to have a 20% decline in their, in their income because the market decides to go down.
Speaker 2 00:14:41 Right. Well, and that's that, it's interesting where I've got a case study on that right now, as we speak, I'm working with a couple that they're very much on the edge of whether they could guarantee what they need for the rest of their life, but they want some control over their assets and they need some growth to manage inflation and all the other things. Right? So it's a tricky situation really. And we're just trying to help people again, get back to that yield where, you know, a part of their assets are protected and just get the decent yield little helps everything hold up over time. It's really all it is. So, yeah. So, you know, there were a couple other things we talked about as well, John, but because this kind of lends itself to a lot of people say, when do I buy the annuity?
Speaker 2 00:15:25 Or they'll say, I should wait until the market corrects. I want to get in low. If it's an equity based growth side, I want to get in low. I don't want to buy at the top. And I, and I always say, well, if you buy at the top, cause we don't know, maybe the market goes up another 10% for it drops. You might want to catch it. But the idea is protecting those assets. I dunno a joke. Have you heard that? If you guys heard that from people like, I don't want to buy it now because rates are low or the market's too high and I'd rather buy it in a drop.
Speaker 4 00:15:55 I have fin fact, I was having a conversation with somebody who's also in the industry about a week ago. And he was saying the general perception is right now. Look when growth is doing real well, people have more of a growth focus. And typically when we shift and we get into more of a risk off approach, people start thinking more of safety consciousness. And that's what our products are more like the tortoise, right? So right now with the market, the way it's been, it's been more like a hairs market. But I think that, you know, that's the danger. I know we don't look to be real cute and time the market. If the market continues to move up, you're going to get some of the upside. But if the market goes the opposite way, you'll have none of the downside. But I know that the concept of anchoring of saying this is where I got in is huge. And as part of a psychology, what do you think, John?
Speaker 3 00:16:50 Absolutely. I think that, and you hit the nail on the head a show. When you talk about people in a growth mindset, you know, when the market's going up, no one wants to think about risk. They continually look at how their portfolio continues to go up and it's even hard to get clients to rebalance unless we have them rebalancing automatically because they don't want to sell their winners. And it's kind of counter-intuitive, you know, if I see a great pair of shoes on sale for 50% off at a Nordstrom rack or my local sporting goods stores, I'm going to buy those all day long. The problem is is that when we see stocks 50% off or 20% off, no one wants to touch them. And so it's most of the requests I get, we do buy and sell a lot of individual securities and run individual portfolios of ETFs and mutual funds and stocks and bonds.
Speaker 3 00:17:42 And what I normally get is people wanting to buy different individual securities after they've had their percent run-up or after they've had their 200%. Run-up, it's probably the most difficult thing that we have to deal with. On my side of the table is talking people off that ledge. They want to buy Tesla at $800. They don't want to buy it at 200. They want to buy it at 800 things like that. And I don't want to get into individual securities, but that's one of the biggest challenges we have. It's it's teaching them that the markets don't always go up and when they do correct, they tend to be very fast, very ugly. And then it's just, like I said, it's not the head that determines investments success. It's the stomach. And when that stomach's all twisted in turn, it makes it very difficult to get them off the side.
Speaker 4 00:18:32 You know, I think by the way, what's interesting is you were using that analogy of where you go to say Nordstrom's and you look at that pair of shoes and it's 50% off. What most people are in investor psychology are doing. It's almost like you've received those lines at a movie theater where it's out the door. Or if you look at a restaurant where you can't get in and you think I want to go to that restaurant, I want to see that movie. And that's the concept we're doing when we're people are trying to buy at high prices because it's validating, this must be a winner. And we're not really thinking that shoe example that you were mentioning.
Speaker 2 00:19:09 Well, that that's funny, like last year, where, and again, I'm not as a disclaimer to the attorneys who want to Sue me for talking about investments when I'm not a registered investment advisor, go to hell, I don't care what you think. But last year in March, you had the interest rates went down the toilet, right? And so did the stock market. And people had like a 15% bump in their bonds in the bond values, right? Bond funds, all that stuff. And they had a 30, 40% drop in their stock portfolios. And they said, then everybody was bummed out about it. Oh, I just don't want to do anything. Now. It's like, okay, forget annuities. Maybe you don't buy an annuity right now. It's not all about annuities. You just hedged yourself. And you mitigate your losses by a jump in interest rates. The next move on interest rates is not going to be so pretty.
Speaker 2 00:20:06 It's going to the opposite direction, right? So I said, don't sell stocks, do this instead, sell your bonds, rebalance a thing. And a couple of people listen to me. And at this point in time, a hundred percent run-up in the market from it's low. It's like, holy crap. You know, I'm not making money. I'm not selling them anything. I'm just saying like, here's the arbitrage, you're in the middle of it. You want on this side, take your profits and go to that side and do the same thing on the back end. When you get back to the point. Yes. Stuff, some money into an annuity, do whatever you want. And I've had people come back to me and say, yeah, that worked. Then I'm going to throw some money into the annuity. Now I'm just taking chips off the table. So I don't know just ideas. That's why I love talking to you guys. Different perspectives being opportunistic, being opportunistic. Okay. So we kind of covered that. Like, you know, we'll talk about the fed and interest rates and all that stuff. So John, when I brought that idea up to you last week, that's when I had the idea where you talked, I kind of had the idea, we do a podcast. You talk about a couple other indicators you watch. So do you want to kind of introduce us to some of that stuff? And we'll ask questions.
Speaker 3 00:21:10 I use a lot of, uh, you know, when we look at portfolios, we use a lot of technical analysis. Particularly my experience at BlackRock was more of on the portfolio management side on the credit side. So we look at a lot of different technical indicators. And so I've kind of transferred that to more of the S and P 500 type indexes or the NASDAQ type indexes or the small cap index. IWM the Russell. Those are some of the things that we look at, and I'd love to share my screen with you and kind of show you some of the things that I look at. Some of the key areas of concern that I have, or levels of interests that I have in from a technical charting perspective, that kind of allow me to kind of chart the path of the markets, whether I buy or sell a security, just not based on fundamentals, but based on purely on technical. So let me go ahead and share my screen. And we're just going to look at the S and P 500, and then we're going to look at the IWM, which is the Russell 2000. And I just want to kind of show you the difference between the two.
Speaker 2 00:22:16 Okay. So John, just so you know, the Nudie straight talk podcast, YouTube, and on all podcast platforms, you're opening yourself up, you're walking into a world full of wolves. People are going to come hammer you for this. You're
Speaker 3 00:22:31 Probably right. You gotta
Speaker 2 00:22:33 Be a big guy like me and you just don't care what people think. Or, but as John setting that up, we want everybody to let everybody know that John is going to be an integral part of what we do at annuity straight talk from an investment advisor perspective in Southern California and nationwide. If you want to get in touch with us green, schedule a call button on any page on news, straight talk.com. We'll get you onto the calendar. I'm in the middle of big site redesign. If John's open to it, we're going to put his schedule or his calendar up. We'll put a link on that. If you want to make an appointment with John, a show is going to have one as well, but, or you can always just call 804 3 8 5 1 2 1. Uh, you're going to get me for the time being, and I'd be happy to introduce you to either either of these two fine gentlemen, we're building a heck of a team and I'm really excited about it. So, uh, with that, John, why don't you take it away? Great,
Speaker 3 00:23:22 Thanks Brian. So if you could see my screen here, I'm, we're looking at the S and P 500. This is the spy or the most common market cap weighted ETF in the marketplace. And what I look at here, if you can see here, we're looking at the February to March 24th, bottom of the market from COVID when we have the lockdowns. And this really when the fed started pumping money, I believe we've pumped about three, three and a half trillion dollars in the marketplace. Liquidity just sloshing around everyone, getting unemployment checks, everyone, getting stimulus checks, I'm in the wrong business, but you know, what you can see is a lot of the technical indicators that I look for, you know, really play into different things. And you, you hear a lot of people say, buy the dip, buy the dip. And you know, that's something that a mentor of mine taught me never to do.
Speaker 3 00:24:25 And the reason why is we don't want to buy the dip. We want to buy into strength and we want to buy into momentum. And so what I usually look at is when the moving averages, and in this example, I use a couple different moving averages. I use the 50 day moving average, simple moving average. I use the 20 day I used the 200 day and I used the 100 deck, got those out of order. But you know, for this, the purposes of this chart, this is the S and P 500 from the lows of last year to where we are today. And what I normally see here is a nice smooth line. The green line here is the 20 day simple moving average. And you can kind of see that we always have a reversion to the mean. So in this circumstance, if you get the moving average far enough away from where the market is trending, you're typically like a rubber band going to have a snapback.
Speaker 3 00:25:26 And what we've seen over the last couple months is, and I don't know if this, if this chart is going to be really good at showing up, but I'm showing the 20 days in green and the 50 days is in dark blue. And you're going to see almost to the T on a monthly basis here. The market is coming back to the 50 day. And in particular, since right around late March, April, you're going to see this kind of corresponds with option expiration on a monthly basis. So you had it come back in, may pretty close to option expiration. You saw it in June. You saw it again in July. You saw it again in August, and now we're seeing it again here towards the middle of September, where you're breaking the 20 day, moving average on the S and P 500, it's bouncing off the 50.
Speaker 3 00:26:20 So you can kind of see here, how that's happening. My concern is, is that this time now that we have Delta COVID variant, we've got a lot of different things going along in the world. We're passing it with a $7 trillion infrastructure. What's the likelihood, and this is the daily chart. What's the likelihood that this five, six day sell off those past the 50 day and then goes all the way down to the hundred day. That's a concern of mine. It's not validated yet, but it's something that we want to just be aware of. When we take a look at the charts, I'm going to switch this to the monthly chart and we can kind of show you how stretched we are.
Speaker 2 00:27:06 So one real quick, John, I, I read something out what I'd say visually on that. It seemed like the snap back to the moving average came a little quicker. This last time around it sure did. It was a little more compressed on the chart. And I read something this morning. I think the Bloomberg open said, traditionally, September is the worst month for stocks or no, it was another newsletter. I read it. Wasn't Bloomberg, but you know, September being like one of those months, that's always been pretty negative. Like, you know, past 20 years.
Speaker 3 00:27:37 Yeah. The seasonality in September is by, from other months far worse. It doesn't mean that we're going to break that 50. I'm going to go back to the daily chart here. It doesn't mean that we're going to break that 50 day average, but we're pretty close. Now. Uh, we closed, you know, right around 4 44 today, the 50 days sitting right around 4 41, I would be cautiously aware of where the S and P closes over the next few days. You know, we, quite frankly, we might be able to get a bounce. You know, we may bounce off the 50 day and you've seen just in these past charts, we get a pretty strong bounce off the 50 day when it hits, or when it gets close, we have a really strong bounce. We get bullish again, kind of re Mount the 20 day moving average. And we're kind of back off to the races.
Speaker 3 00:28:29 And then, you know, mid month we get some of that weakness, or, you know, we have a lot of companies that are growing. Earnings are growing their profits. They have a ton of cash on the balance sheet. So why are we selling off? Well, if we take a look at the monthly and I like to look at multiple timeframes, multiple charts, you know, look at where we are off the loaves. We, you know, here we hit the 100 day moving average, which is the, basically the 100 month moving average here. We bounced off of that back in March. And we just basically went vertical. And so what we have here is, you know, we've had 1, 2, 3, 4, almost five red months, not even that four red months, but you kind of look at the strength of the market. You've got some pretty pronounced green months where we're going up and up kind of a stall out here, but you're kind of getting to be worth.
Speaker 3 00:29:27 What I like to call is a hanging man. That's kind of a concern to me, this blue line here, it's called the volume weighted average price. That's another indicator that I look at and we can have volume weighted average prices from any point in time on the chart. And sometimes they converge at different points in time. So you can see the different levels of interest that's where institutions are going to buy. They're going to step in and either buy or sell a security or an index. So these are things to look at. If I take a look at the January volume weighted average price, it sits right around 4 0 7. That's a pretty big drop from 4 44 to 4 0 7. That would probably be a fairly decent support level. If we were to go ahead and start to roll over a, I think we might find some support there, but it's just, those are the things that we want to kind of take a look at when we're looking at the charts.
Speaker 3 00:30:27 One area I wanted to kind of show you guys was the IWM, which is the Russell we're kind of in a topping pattern. And you can see here, we've had this sort of consolidation here in this area for the past three months, and that's typically a sign of a topping pattern, but that doesn't mean the market's going to roll over, but you can see right around here around two 10 is a level of interest that we've had a bounce about, about four or five, six bounces. At what point does this start to go back down? That's something that you're going to want to be cognizant of and just be aware of where you are in terms of your investments. This is the Russell 2000, mostly comprised of small caps, but these are the charts that I look at. I, you know, I'm getting, there's a lot of liquidity in the market with interest rates, low cash is earning nothing. Where's that money going to earn a return? Well, it's probably in the market, but I think, you know, near term, I'm getting a little bit more bearish as we speak, just because, you know, we're getting a little stretched on the equity side, but who knows?
Speaker 2 00:31:41 Well, so yeah, just, you know, simplistic look at this, I would assume. Well, actually I believe I'm correct. Like the further apart those 2050 and a hundred day lines are the more volatility there is.
Speaker 3 00:31:54 Yeah, absolutely. You've always heard that. The saying reversion to the mean,
Speaker 2 00:31:58 Yeah, right. And it's doing that right now, but what's on the
Speaker 3 00:32:01 Right. And the next level of interest that we would look at on something like the S and P 500, and we'll just go back to this spy chart. You can see if I just clear this chart here, the orange line is the 100 day moving average. If we go into, we can take a look at the 200 day moving average. And that sets you all the way down here at 4 0 8, which kind of corresponds here with the monthly chart of the S and P on the 20 day. So, you know, here we go, it's getting pretty close. So I would just be, be cautious of how you're positioning yourself. Maybe now might be the time to take some profits and consider something as an alternative asset. And maybe wait, wait that time out until you can get a better entry level.
Speaker 2 00:32:55 And that's where I've talked to you. And I can, I showed my little little spreadsheet, which is probably worth another averaging the market what's worth the different podcast. We don't need to get into it now. Right. But again, just taking things off at the top. I mean, I've been saying it for a year and a half, two years, the market's higher than it's ever been. The market's higher than it's ever been, but it never seems to stop. But again, like when we feel concern for and care about the people we're working with, then you see them expose. That's where it gets really tough. And you just try to find different ways of explaining it to them. Like, Hey, there's nothing wrong with taking some chips off the table. So
Speaker 3 00:33:31 I agree. I definitely agree. And it's all about risk management. And as you enter retirement, you want to be more cognizant of where your risks are.
Speaker 2 00:33:39 Uh huh. That's good. Well, I appreciate you sharing that with us. Again, it gives people just a little bit something else to a little bit different indicator. And I think there's a lot of people that aren't going to fully grasp all of it, but that's, again, what you can give us a call at any point in time. Uh, and we can explain it in more detail. So I don't know. What do you, what do you think is show?
Speaker 4 00:33:57 Yeah, I think that's, and I guess I had a question for you, John, just playing the devil's advocate. Let's just say that you're bearish and you feel like what, in the history of the markets, I think we've seen maybe a three-year downturn, like, oh, oh 1 0 2, but many of the annuities we're looking at have, if you do a very short term Mica, or maybe a, sometimes we have 10 years surrenders, what would you be thinking if people were to reposition? Would it be something short term or potentially longer term? Any thoughts on how that might go to protect one's assets here? Since it's a new,
Speaker 3 00:34:37 I think it all comes down to one of the things that we use at our firm a lot is a more of a bucketing strategy. We have to meet your short-term income needs. We have a bucket of safe, secure type of assets. I refer to it as a bucket. I know a lot of people out, out in our world throw that out or that analogy out or that structure out from time to time. But, you know, I like to, you know, you're always going to want to have a long-term type of portfolio of equities that are going to help you outpace inflation over the long-term obviously, you know, people don't like volatility, but that's something that we're going to have to accept. So it's positioning a portion of your portfolio into something safe and secure on the short end of the curve. And then on the long end of the curve, really having that equity diversified bucket of equities, that's going to outpace inflation, provide that income stream later on 20, 30 years down the road.
Speaker 3 00:35:34 So if you're to take some money off the table, you know, I think there are other areas, you know, short-term a, multi-year guaranteed annuity is a good option, a as short surrender period, there are other options where maybe you have too much, and it's something that you consult. Your advisor would leave. You have too much equity exposure for your age or for your risk tolerance. And it's something that we really go back and talk to our clients about. Is, are they suitable to have, you know, 80, 90, a hundred percent of their portfolio in correlated equities that can fall 10, 20, 30% at any given time? I think we had a, what, a 24 to 28% pullback in three weeks. So, you know, they always say though, end of the market walks upstairs and then jumps out the window. So you want to be cognizant of that when designing your plan, you always, it always goes back to planning, goes back to having a diversified portfolio that's suitable for your risk tolerance, but it's not a bad idea to rebalance from time to time. And I'm just kind of advocating maybe it's time to take a tiny bit of risk off the table to rebalance into something a little bit more conservative, uh, until we kind of normalize,
Speaker 4 00:36:50 Well, I like what you're saying here, because it gels with what we've talked a lot about where we look at different terms of annuities, short term, medium term, longer term, and also we're big fans of the uncapped strategies. So if the markets, they have their ups and downs, but when they're down and they go back up, we want something that's going to give us the maximum crediting strategy potential. So it seems like there's a very nice medium for these tools to work together.
Speaker 3 00:37:23 Yeah, absolutely.
Speaker 2 00:37:26 Well, and a lot of people want that maximum return. They say, oh, the S and P 500 is it's up 70% from a year ago or whatever it was. And they act like they were the ones that bought in at the bottom and took it to the top and sold out. Right. You realize like that is all included with the past 20 years averaging about 7.3% dividends included. Right. And so you have to realize that heck we're talking about four or 5% and yeah, we've got stuff. That'll give you a double digits once in a while, but it's not a, it's just one of those things where I think everybody kind of acts like they got the highest yield ever available when it's not necessarily the case. I don't mean to beat anybody up. I love y'all, but let's be realistic about things, right?
Speaker 3 00:38:10 Yeah. It all really all comes back down to risk management and risk tolerance in a shock. I'm sure you, when you speak with clients about equities and they're diversified portfolios, you will want to talk to them about sure. The S and P 500 is up a hundred percent from last year. The problem is that nobody could stomach that 20% loss if they were in retirement, because the uncertainty there, you know, everyone's looking back to 2008, 2009, and wondering is this the time that my portfolio is going to lose 50% of its value, it take five to six years just to break even. And what am I going to do for retirement income in between those five years? So it's obviously I have
Speaker 2 00:38:56 An idea.
Speaker 3 00:38:58 That's positioning your portfolio in a common sense manner that's appropriate for your personal situation. And that's why I always suggest whether they work with myself or show or Bryant is seek professional help. And didn't mean to put a nose terms, but always deal with the professional.
Speaker 3 00:39:24 Have, you know what I mean? We're inundated as investors and I invest my own money as myself. I get emotional about my portfolio. I can do it at Schwab for free, but am I going to be doing the right thing? I mean, you just Google the word investments and you have millions of different advertisements that come up. How do you sort through all of that? And you know, most of the people that I work with are highly successful. They don't have time and they don't have the know-how or the knowledge or that emotional capability to manage their own money. They don't have the desire. Nobody wants to watch CNBC all day, except for maybe me, but as this is what I do for a living. And, but what I'm in retirement, that's the last thing I want to be doing is watching, you know, my stocks tick by tick, I'm going to want to have a predictable retirement income that I won't outlive that I'm not going to lose a ton of money. And that's kind of where I'm at. That's those are the people that I work with. Well,
Speaker 2 00:40:27 I think that sounds good. And the biggest thing, and the reason why we wanted to have you on is just to add another perspective where we kind of arrive at the same conclusion, but by different means, and you guys both being in the investment business and coming from the institutional side, uh, have a different perspective. And I just think it enriches all of us. And then it gives, you know, the audience, the ever-growing audience, the millions of people that listen to this podcast every week or coming soon anyway. But no. So I appreciate you doing that, John, and we'd love to have you back. If you ever have an idea, just get ahold of us. And we'd love to do some more analysis and just talk about relevance to retirees and all that. What do you think has shown?
Speaker 4 00:41:14 It sounds like the great idea. And we'll also, by the way, I was just thinking we've got John and California. We've had, you've interviewed Marty in Missouri. I'm in Washington, you're in Montana. We'll also get some people also east of the Mississippi river because we're national.
Speaker 2 00:41:32 Yeah. I'm working on that. It's been tough though. I've had a few interviews, but, but John, this was terrific. Thanks for your perspective. I don't want anybody out there thinking that I just pick anyone to do it. So I've met with like hundreds of people this year. It's like a show. Can John are the only ones that made the cut so far my hats off. I appreciate it. Thank you guys. Yeah, no, we're looking forward to doing good stuff together and everybody again, thank you for joining the podcast. If you want to see the video and you want to see the charts that John put up, we're on YouTube. So the podcast is, uh, is, uh, released on all platforms that you could possibly think of, or that we could think of. Write a show. Yeah. So, but we also, we upload them to YouTube.
Speaker 2 00:42:13 So they are on YouTube. You can subscribe to either YouTube or the podcast and you'll get notifications. As soon as each new episode is released a show. And John, I want to thank you both. This has been great. And really look forward to working with you guys going forward, John, you said it like we're going to build a good business together. You've already got one mine's okay. So I think we'll figure some stuff out, right? Absolutely. Absolutely. Okay. Well, thank you both for joining us. And, uh, we will look forward to seeing you guys next time a show. Can I already come back with another case study for the next episode, everybody have a great day. Thank you. And goodbye.
Speaker 1 00:42:50 You've 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 are their own and do not necessarily reflect the views of nerdy straight talk, no information presented today should be acted upon without meeting with the licensed. It is important that you read all insurance contract disclosures carefully before making the purchase decision guarantees are based on the financial strength and claims paying ability,
Speaker 5 00:43:38 Uh, showcase. Ron G is an investment advisor, representative of insight, folios and sec registered investment advisor. The firm only transacts business in states where it is no despised or is excluded or exempted from notice filing requirements. Any fee-based financial planning and investment advisory services are offered through his association with insight folios top wedding LLC is not a registered investment advisor and is not another name under which insight folios provide services. Insurance products and services only are offered through top planning, LLC insight, folios Inc. And top lending LLC are not affiliated companies.
