EP:169 - September Investment Insights

Interactive Transcript

spk_0 Welcome to the Mind of a Millionaire Podcast, the podcast specifically for millionaires and knows aspiring to financial independence.

spk_0 Our approach is simple. Use cash flow to buy appreciating assets.

spk_0 Wear your co-host, Austin Garcia, and Zachary Balk with Denver Wealth Management, and we're gonna tell you how.

spk_0 Am I doing a intro?

spk_0 No, it's a countdown to start.

spk_0 Well, you got it down to it.

spk_0 Welcome to Mind of a Millionaire Podcast.

spk_0 Whoa.

spk_0 On the first Tuesday of each month, our team of Denver Wealth Advisors conducts a portfolio review meeting to discuss our investment's allocations, outlook, and so on.

spk_0 So on the first Wednesday, ish of each month, Zach and I share a meeting takeaways with you.

spk_0 We'll look at what happened last month in the investment markets.

spk_0 We'll review the major asset classes, cash, fixed income, and stocks.

spk_0 Maybe touch on tangible real assets.

spk_0 We'll share our thoughts on appropriate allocations and portfolios.

spk_0 And then we'll cap it off with our general outlook.

spk_0 We usually end with two action items.

spk_0 We've been bringing those up to the front.

spk_0 So folks have that takeaway right off the bat.

spk_0 If you have any questions about your investment portfolio, your asset allocation, your financial plan, your insurance needs to be let over.

spk_0 It might be visit DenverWealth.com to schedule a free consultation with an advisor.

spk_0 Are Zach action items first?

spk_0 It is September, which means there are just a couple months left in the year.

spk_0 And you should be considering if you're not on track to max out your retirement plans through work or max out a Roth IRA or do a backdoor Roth.

spk_0 If you've been putting off your 20, 25 retirement contributions, you're running out of time.

spk_0 So talk to your HR department, talk to your financial advisor, and make sure you're taking advantage of every possible retirement contribution that you can.

spk_0 What are some of the gaps that you see more frequently with folks that maybe your max funding your 401k, but you aren't fully taking advantage of other benefits through work?

spk_0 Where are some of the biggest misses that you see?

spk_0 Well, the biggest miss is what you said is that every year or every couple of years the amount you can put into a retirement plan goes up.

spk_0 But people leave their contribution stagnant.

spk_0 So if you want to get the max, is it 23, 5?

spk_0 I feel like as a financial advisor, I should always know that.

spk_0 But it changes every year.

spk_0 You'll remember and then it'll change next year.

spk_0 Yeah, it changes on me every year.

spk_0 But if you didn't adjust it last year, you can now adjust it before the end of the year.

spk_0 But the thing most people who work at big companies don't realize is once you put in your 23,500, most retirement plans now have the opportunity for additional contributions after tax.

spk_0 The laws like $70,000 you could actually put into your retirement plan after tax.

spk_0 So if you're maxing out your retirement plan, go put into money after tax.

spk_0 If that's right for your financial plan, fund a traditional IRA, fund a traditional Roth IRA.

spk_0 But there's not that many tax breaks that you can get.

spk_0 So be thinking about them and try and take advantage of them.

spk_0 And if folks do have that after tax bucket, do you recommend mega back to a Roth conversions?

spk_0 Yeah, it's cool.

spk_0 I don't recommend it on a mass level.

spk_0 I'd only recommend it one person at a time.

spk_0 But the cool thing about that after tax contribution is you could actually go ahead and roll that money into a Roth.

spk_0 So it's a way to sneaky back to a Roth if you're either over the limit or you've already funded your Roth IRA.

spk_0 So for people who work at big corporations, like if you work at Lockheed Martin or United Launch Alliance or Palantir or any of these big defense companies that are, you know, I'm saying those because they're all Denver headquarters.

spk_0 Those big retirement plans do offer you the opportunity to super fund investments.

spk_0

spk_0 And I think the key is what those after tax buckets are a little bit different and that the growth is taxable.

spk_0 So your principle goes in after tax.

spk_0 You make your contribution after tax, but the growth in the account becomes taxable.

spk_0 So that's where those Roth conversions can become helpful.

spk_0 Yeah. So if you, if you slam it into a Roth IRA as fast as you can before there's any earnings, then all of a sudden all those earnings become tax free.

spk_0 But if you leave it in the retirement plan, then that growth is taxable.

spk_0 It works like a non-qualified variable annuity.

spk_0 What about you? Action. Help me.

spk_0 P and C insurance. No.

spk_0 Property, casualty, home, auto.

spk_0 Do we have to talk about insurance?

spk_0 Well, it's important. It is important.

spk_0 It's important. And a lot of people have gaps in insurance.

spk_0 I've been doing financial plans lately and as part of that, I'm going through declaration pages.

spk_0 And it's really interesting to see.

spk_0 And here what folks think that they have and the coverage they think that they have versus what they actually have and what that coverage entails.

spk_0 I don't expect everyone to be an expert in PNC. I'm not an expert in PNC.

spk_0 I'm not an expert by any means. But talk to somebody.

spk_0 Talk to a broker. Go find an independent broker, an independent insurance broker, to go through your needs and help you identify any gaps.

spk_0 If it's a really good broker, they'll let you know if your coverage looks appropriate.

spk_0 They'll also go through it with you every year.

spk_0 So go talk to an insurance broker. Just make sure you don't want any surprises.

spk_0 If something happens to your home, to your car, medically, you don't want surprises when it comes to insurance.

spk_0 So understand your coverage. Make sure you're covered appropriately.

spk_0 I wish you would have told me that in like 2009 because my house got burglarized.

spk_0 And they literally drug my safe out of the house. Like a full-size refrigerator side safe.

spk_0 And I was like, well, thank God I have property insurance.

spk_0 And then when I came time to file the complaint, the claim, it was like, oh, we cover $200 worth of guns.

spk_0 And we cover $200 worth of jewelry. And we cover $200 worth of blah, blah, blah.

spk_0 So it's like they drag $20,000 worth of stuff out of your house.

spk_0 And then if you've never actually looked at your declarations page, very easily,

spk_0 you probably have the bottom of the barrel cheapest reimbursement kind of policy.

spk_0 Like they stole my bike, which is called a $2,000 bike.

spk_0 The claims adjuster went on Craigslist and they were like, we found a similar bike on Craigslist for $9.

spk_0 So we'll give you $9 for the bike.

spk_0 No, yes, that is a great action item.

spk_0 Even though I feel like insurance is kind of like the opposite of the lottery.

spk_0 In the lottery, you mostly lose. But if you get really lucky, you win big.

spk_0 And insurance is like you win if you lose.

spk_0 If you, if you, if you, if you, if you something horrible happens, then you just get made whole.

spk_0 It's like a winning the bad lottery.

spk_0 Yeah, the best case in areas, you know, use your insurance.

spk_0 It's the same like insurance. Yes.

spk_0 Best case in areas, it expires. You don't use it.

spk_0 Expires before you do.

spk_0 Oh, nice. Thank you.

spk_0 Great.

spk_0 All right. Let's get into the investment markets.

spk_0 It's September. What's happened over the last month?

spk_0 Dude, we are in a super bull market.

spk_0 You can't deny it anymore.

spk_0 I feel like some of the August podcast.

spk_0 I was kind of whiffling and waffling just like, hey, August and September are bad months.

spk_0 The economy is kind of slowing down.

spk_0 Jobs haven't been great. They're revising all these old job reports.

spk_0 They revised more job numbers down again.

spk_0 If you look at, so as of today, September 11th,

spk_0 with SAP 500, almost at 6600 NASDAQs at 22,000 Dow Jones 46,000.

spk_0 If you look under the hood, which is a big part of what we do here at Denver wealth management,

spk_0 is where I was looking like what, you know, the big numbers important,

spk_0 but what's also important is what's happening beneath it,

spk_0 is the lowest quality investments are the ones that have been continually pushing this market up.

spk_0 So companies that are trading at 100 times sales, 200 times sales, speculative IPOs.

spk_0 It's a very speculative market right now.

spk_0 But it's also balanced with like,

spk_0 Oracle earnings came out and the earnings weren't actually that great.

spk_0 It was the guidance that was great.

spk_0 Oracle said, we are going to have more work than we can possibly service

spk_0 over the next few quarters and years.

spk_0 So the AI boom is still booming.

spk_0 And because of that, the market's at an all time high.

spk_0 One of the things that is interesting is because computers have become so efficient

spk_0 that it's shortening like the life cycle of a lot of things.

spk_0 And I was thinking about this on my drive in today.

spk_0 Like, it's called the velocity of money.

spk_0 Austin, I'm sure you know this from your economics 101 class.

spk_0 But like, if you go to the gas station and you buy a burrito for 10 bucks,

spk_0 and that money stays in the gas station until it goes to the bank at the end of the day,

spk_0 and then at the end of the day it's at the bank.

spk_0 That was only one transaction done with that money.

spk_0 But if you go to the gas station and buy a burrito for 10 bucks,

spk_0 and then the gas station pays the gas pump man,

spk_0 and then the gas pump man goes to lunch, and then the waiter goes to the coffee shop.

spk_0 This $10 is moving fast.

spk_0 That's called velocity of money.

spk_0 That's kind of velocity of money.

spk_0 Not necessarily.

spk_0 I don't think my microeconomic professor would approve of that definition.

spk_0 But that's kind of what it means.

spk_0 How fast are things moving around the system?

spk_0 The AI life cycle is happening so fast.

spk_0 And people are building things so fast that money is flying around these tech companies way faster than it was five years ago.

spk_0 So Oracle is a good example of that.

spk_0 The stock was up 40% yesterday.

spk_0 Don't buy Oracle. This is not a recommendation.

spk_0 I don't own Oracle stock. I just have an index fund.

spk_0 But the point is these companies are saying we can't...

spk_0 There's so much business out there we can't even possibly get it all.

spk_0 And investors are saying I want more.

spk_0 How can I possibly sell these companies when they're grown and grown and growing?

spk_0 And that's... I would say in a nutshell, what's happening in the stock market?

spk_0 So you make a good point when you're talking about individual stock and individual company selection right now.

spk_0 It seems like a really challenging time to identify the companies that are going to be leaders over the next call it 10 to 20 years.

spk_0 You have your big companies in the tech space that are really starting to become more dividend-paying companies, more blue chip companies.

spk_0 So you think of the apples of the world. They're not necessarily poised for a ton of growth.

spk_0 But they're not going to go anywhere. I was just having a conversation with a buddy yesterday over coffee.

spk_0 I'm going to have an iPhone for as long as iPhones are around. I'm trapped.

spk_0 But you mentioned no recommendation of purchase individual stock as it pertained to that one company.

spk_0 But you're buying or getting your tech exposure through index funds.

spk_0 My question is, is stock selection worth it right now to co-indictify these companies in your own or do you think investors are better off?

spk_0 As we've mentioned in the past, hunting with a shotgun.

spk_0 So getting more, buying more companies, putting less dollars in, diversifying your portfolio,

spk_0 even if it's just a tech sleeve, our investors are better off going that route rather than putting more of their money until one or two, maybe a handful of individual tech companies.

spk_0 That's a good question. I think that the way we do it here at Denver wealth management is we want you to get to financial independence on track.

spk_0 For some people, that's as fast as possible. For me, I like my job. I don't care if I work till 65. So for me, that might be 65.

spk_0 So your financial independence money, that money needs to be, in my opinion, diversified in a diversified portfolio.

spk_0 So I have my S&P 500 index fund, I have my NASDAQ index fund, and so on. So that's kind of like my diversified money. That is a great way to capture the entire return of the market.

spk_0 And I don't think I'd ever sell those because that is on average, has made 10% a year over the last 50 years.

spk_0 You know that you're going to get 20 to 30 to 40% drawdowns every decade.

spk_0 But so it's not like it's not like you can sleep at night because the market will never go down. Of course the market will go down.

spk_0 You just know that if you're buying all the companies in the whole economy, all the private companies, you have some sort of not guarantee, but assurance that you will do what the market does.

spk_0 And that gives you some level of financial stability, in my opinion.

spk_0 Once you get past that point, so if your financial independence number is 2 million and you have 2 million dollars in a diversified portfolio, that's where I think buying individual stocks is something a lot of people do.

spk_0 I personally do, but I don't bet the farm on it.

spk_0 You know, if I want to buy, I know by a lot of IPOs, but if I want to buy a speculative company, I might put 1% of my portfolio in there, half a percent of my portfolio in there.

spk_0 You don't have to bet the farm. You know, this idea that people make it big in the stock market or lose their life savings in the stock market.

spk_0 It's kind of an old fashioned idea. I think people have a lot more risk tolerance than they used to. They're aware of how these things work.

spk_0 So if you want to buy that tech company that you think is going to go up substantially, do it just buy it in a reasonable way, 1% to 2% of your account.

spk_0 That's how we do it here.

spk_0 How do you go about incorporating rules when it comes to investing in individual companies?

spk_0 And what I mean by that is things like sell disciplines. I think one issue that a lot of investors run into is anchoring.

spk_0 So you purchase a company, you think it's going to make it big. It starts pulling back. Now it's down 50%.

spk_0 You still really feel like it's going to be a winner in your portfolio, so you never sell it. And then it goes to zero.

spk_0 I mean, a hypothetical example. But what do you do to incorporate rules to prevent yourself from anchoring as an investor?

spk_0 Anchoring is the most interesting one. And I've heard, you know, I've been doing this for almost 20 years. And I always hear people say like, well, when this stock gets back to 100, I'll sell it.

spk_0 And the stock market does not care where you bought the stock. And it doesn't care where you want to sell the stock.

spk_0 Those two things exist only in one place. And that's in your mind. So when I hear people, I remember this conversation I had a guy, the guy who he bought like 10 million Iraqi DNR.

spk_0 So after before Saddam Hussein fell, you know, Iraqi DNR was the currency. And then, you know, the US invaded and the money became worthless.

spk_0 This guy bought truckloads of it because he said when the Iraqi DNR gets back to the full valuation, I'm going to be ultra wealthy. And it never did, but he thought it would.

spk_0 And it can be the same way with stocks. Hey, when this stock gets back to 100, I'm going to sell it. But I think talking, if you talk in terms of stock price, it's really easy to anchor yourself, which is bad.

spk_0 You want to talk about the valuation of a company. So if you're talking about like Nvidia, it's a five four, it's called four trillion. I don't know where it is today.

spk_0 Four trillion dollar company. The share price associated that with that is 170 bucks a share roughly. At what point would an Nvidia become a five trillion dollar company?

spk_0 What things would have to happen in their business to become a five trillion dollar company? We started asking that question. It takes the share price out of it because most people, most people who invest and talk about the stuff.

spk_0 A lot of emerges gamblers. You know, there's there's an element of gambling investing. So it makes sense. But if you're preoccupied with share price, you're just gambling. If you're preoccupied with underlying fundamentals of the business, you're an investor.

spk_0 So sell disciplines. There's three ways you can make money in publicly traded stocks. The first is they pay you a dividend. So you get cash flow from the business.

spk_0 The second is you can be part of a corporate action. So that's you you like are part of a merger. Like if you own Coca-Cola stock and it merges with Pepsi and Pepsi buys all the Coke stock, you would get your share price back.

spk_0 So mergers, acquisitions, share buybacks. And the third way is you can sell it on the open stock market. So if you buy Nvidia at 180 and you sell it at 200, you make money in the stock market.

spk_0 As far as I know, there's only three ways to make money in stocks and those are it. If anyone has a fourth way, let me know because I would love to learn. But you should have yourself discipline. You need to know why you're buying the stock. If you're buying a dividend paying company, well, you're just going to sit back and collect the dividend every year.

spk_0 If you're buying a company that you think is going to get bought out, you're waiting for this merger acquisition.

spk_0 The tricky one is the one that you have to sell on the stock market to make money. And my favorite example of this is like a Xerox Xerox like the you did you ever use a Xerox machine.

spk_0 I don't think so. That's what they called it before copying. They would say, get me a Xerox.

spk_0 I guess all the boxes that held the rings of paper, the Xerox boxes. I know the name. I know the company.

spk_0 Well, your parents know the company more than anything. I'll pull up a chart here. Give me one second when was Xerox founded.

spk_0 1906 Xerox started in 1906 in Rochester, New York as the Halleide, Halleide photographic company.

spk_0 The company partnered with Chester Carlston in the 1940s to further develop Carlson's copy machine invention.

spk_0 The process was called Xerography and the company in 1961 officially became Xerox.

spk_0 The reason this is on my radar is we have a client who pretty much bought the Xerox IPO in 19. I mean, I don't know where in the IPO was, but he bought the IPO and he never sold and the company.

spk_0 I don't have a good reliable chart. Unfortunately, my chart only goes back to 1985.

spk_0 But Xerox stock has went from 19 bucks a share all the way up to almost 200 bucks a share like 166. I have a very chart that's not super easy to use and is currently a three bucks a share.

spk_0 So if you bought this, if you bought Xerox in 1986 and held it to 2025, congratulations. Your long term investor, Austin, isn't that great.

spk_0 You had one of the most successful companies in the world, Xerox copy machine. But if you never sold it in the stock market, you never made any money.

spk_0 And I, to be honest, I don't know like the history of their dividend, they currently have a dividend.

spk_0 My point is if you don't have a sell discipline, you could easily be this guy who turned 10,000 into a million and then ran it back down to 3,000 if you didn't have some sort of.

spk_0 So you have to know what, why you own the company, what you think it's worth and when you would sell it. And if you don't have those things, you're just guessing, you're just gambling and it's different for every sector in every industry.

spk_0 I talk about companies that you want to hold forever. I won't I call them platform companies. I know we've talked about that a lot in 2024 platform companies are companies that infrastructure is built on.

spk_0 I think you own a platform company forever. The company's building on the platform. Those have life cycles. Do you remember the flashlight app on the iPhone?

spk_0 99 cents. Your whole screen lights up. You have a flashlight. That's great. Until Apple includes the flashlight on the new iPhone. So now your Apple flashlight app, I bet is very, very unsuccessful company.

spk_0 So you have to know your companies. I think platform companies you can own forever. Not for an actually I wouldn't even say forever because I would have guessed you could own a search engine forever a year ago. Now AI has come in and there's a competitor to search engines.

spk_0 So it's a big if you can master sell discipline, you become one of the most successful companies, investment companies in the world. It's the hardest thing to master. And that's kind of our framework for when we want to sell things.

spk_0 Nice. Let's throw answer. I've been thinking I think a lot percent, but well, I think about it a lot. How do you sell a company? How do you buy a company? It's hard. It's hard on both ends. Your initial example is while sell when it gets to 100. That's a hard thing to do is sit around and wait for it to come back. But the other end is equally if not harder. If a company takes off you want to continue to see the growth. It becomes addictive. You never sell it in a zero. It's zero. It's a new verb.

spk_0 Flattening out. Yeah. All right. Let's talk about about valuations, valuations and the cost of purchasing right now technology companies are really expensive. Is that a deterrent for you right now purchasing technology or you more focused on the next five to 10 years of growth.

spk_0 Yeah. There's a cool data point. So one of my favorite authors, his name is Nick Majuli. His blog is of dollars and data. And he wrote a book called Just Keep Buying. And I've given it to a bunch of clients. And the idea is you buy when the stock markets up, you buy when the stock markets down. I do this with my retirement plan every two weeks. My money goes into the investments. I don't think about it. It just goes. I don't have to push sell. It's automated or buy is automated. So he's like the ultimate always be buying guy.

spk_0 And he had a blog just August 26 said why I'm bearish on US docs, which kind of like sent a little ripple through the blog community because the always buying guy says to be bearish and his his chart is that the S&P 500 is trading at price to sales of 3.41.

spk_0 Which it was during the dot com bubble. That's when you were buying pets dot com for $60 billion. And we're almost up to that number again. Price to sales ratio is basically off the charts. The second highest it's ever been since 1999. And he said for that reason I'm putting 20% of my money in treasuries.

spk_0 That's true. It's a true data point. A lot has changed since 1991. But it reflects the fact that the market is expensive. And I can't believe the bull market is still bull marketing. You know, it's been a wild ride. It's September 11th. And we hit all time highs yesterday. We're going to hit all time highs again today.

spk_0 So in these situations, it's sometimes, you know, back to your cell discipline question. Some things you have to sell if they're way overvalued. And some things you have to hold on to because there's something you want to own for five years plus.

spk_0 They answer your question all the way. I kind of I wanted to squeeze Nick Majuli's blog in there. But you know, they follow up.

spk_0 Yeah, no, I think that answers it. I guess in that same vein in a similar vein, it seems like a challenge to Nick Majuli's point. It seems like a very challenging time to be an investor right now because it seems like the market should be pulling back. But the market continues to hit highs.

spk_0 And one thing that we've been doing last year into this year is a lot of dollar cost averaging rather than putting, you know, if a client writes a check or wants to deposit money or we do a 401k roll over rather than putting everything in the market all at once, we'll break it up over time to to invest in different intervals in the market.

spk_0 That way if it pulls back or if it takes off, we're not put we're not gambling a one direction.

spk_0 It seems like the market just continues to to chug forward though and that makes dollar cost averaging a little bit tough because you're incrementally buying at higher prices, which is not the best case scenario when it comes to dollar cost averaging.

spk_0 What do you think? What are you telling your clients?

spk_0 Good question. We're still putting money in. We're still dollar cost averaging. But it's you and I have talked about this in the past.

spk_0 It doesn't make a huge difference in the long run and I'm trying to I'm trying to convey that more and that we can get these day to day fluctuations and it may help a little bit.

spk_0 But in 10, 20 years, it's going to be a blip. It's not going to matter. I think it's more of a behavioral thing.

spk_0 Yeah, do you remember Bob the world's worst investor? I think about Bob all the time. It was a pot. It was like podcast number seven.

spk_0 I think I think 160 podcasts to go and it's like what if you only invested at market peaks? So like if you invested your money today and today was the absolute tippy top of the market, you go out 30 years and it's almost irrelevant.

spk_0 If you invested today or at the beginning of the year or the end of the year, the data, the exponential growth of money is so powerful that it kind of doesn't matter.

spk_0 It doesn't. But in the short term, it does seem to matter.

spk_0 Yeah, it's a very hard thing. It's a hard thing to invest, alum some of money and then you immediately see a pull back by 10%.

spk_0 Even though we know over the next three, four, five years, it's going to recover and we'll all be better for it.

spk_0 The question that I was getting to is around rate cuts and around headline economic data.

spk_0 So jobless claims, jobless claims are up. They're the highest they've been in four years. The stack amount today and it keeps being revised downward or upward.

spk_0 How everyone said. And then inflation was a little bit higher than expected. Still 2.9%. I think last month.

spk_0 My question is, is that when we get this seemingly negative data, but positive in the sense that it's going to, it indicates more rate cuts in the future.

spk_0 It seems like the market continues to bounce on that. So today we got to pop in the market and I think that's based on jobless claims, which adds pressure to the Fed to cut interest rates.

spk_0 At what point are interest rate cuts, though, going to be priced into the market? It seems like the market should be unsurprised.

spk_0 I think that's happened. So the mortgage rates have already come down substantially. 10 year rate yesterday was at 4.0 coming down not substantially, but I guess meaningfully if I can have two different words for that.

spk_0 I would say it's priced it now. Like the market has said, for sure we're getting a quarter basis point cut next week. And maybe if we're super lucky and get all this bad data, we could get a half percent.

spk_0 And then if you go directly to what that affects, the first thing that's going to affect is refinances because right now the 30 year mortgage, what is it, 6.5 on average?

spk_0 Less does all 6.5, yeah.

spk_0 That would allow I think 2 million, I'm just pulling from memory, 2 million people could refinance, meaningfully if it stays at 6.5. If we get a 50 basis point cut and it drops to say 6.4, then another 2 million people could go refinance.

spk_0 And then those people have less fixed payments and that money just goes straight back into the economy. It goes to grocery stores or restaurants or kids sporting events or you know because most people with mortgage payments are younger, borrowers older people tend to have their houses paid off.

spk_0 In fact, I think only 40% of houses have a mortgage on them in the country, 60% are completely paid off.

spk_0 So that big rate cut would help that part of the sector and it would also help the economy because now businesses can borrow money at lower rates.

spk_0 But that only helps the stock market if the economy is not going down.

spk_0 So usually they don't cut rates when the market's at an all time high Austin. It's kind of a weird, a weird cutting cycle to be honest.

spk_0 It's not usually this would be when they were raising rates. But this combination of joblessness increasing and the economy slowing down makes it see.

spk_0 Usually when that's happening, the stock market's crashing, you know, we're on this crazy bull market run since 2008 and 9.

spk_0 I mean, yes, we've had the COVID pullback, we had the 2022 pullback. But if you look at a chart from 2008, man, this has been I think the second biggest like market acceleration in the market.

spk_0 And US stock market history, but it's justified. It's not just speculation. I think it's justified by the unbelievable technology America is creating.

spk_0 And it's not being created in China or Europe or Africa or the Middle East. It's all here and we're going to export it to the entire world.

spk_0 So I'm not saying the current price is justified, but the boom of the last 15 years, just being a part of it, iPhones, computers, self-driving cars, that's real. And it's making a lot of money for a lot of people.

spk_0 Yeah, I can't wait for I've said it before. I can't wait for Waymotor driving around.

spk_0 They're in Denver. Are they? They're driving in Denver. Nice. I need them in Centennial. I need them around the tech center. I don't go to Denver.

spk_0 No, I saw yesterday first Waymot Drive in Denver on the Twitter. So all right, you're getting closer. It's worth maybe I can just try calling one. It might be expensive, but I'm going to my annual Rockies game next week.

spk_0 I'll see if there's a Waymot down there. Oh nice. Go drive around town with my kids. For you just in time for the end of the season.

spk_0 We usually go in September, sitting on a plastic seat when it's 100 degrees in July is not for me. But if you can wear like a hoodie and go to a game, that's pretty fun.

spk_0 Nice football season now undefeated go Broncos. Yeah, the cold sky also undefeated. Big year for horses. Big year for the horses.

spk_0 All right, what about so interest rates might be coming down or are you starting to lock in bond yields? Have you been I know we've talked about the past. We've been doing it for a while. Are you are you increasing in the exposure bonds right now? Are you comfortable with with where you're at?

spk_0 In our for our retired investors, especially like our more conservative investors, we have been saying we were we've been we've been like you know pigs feeding at the trough for two years. The treasury is six month treasuries been paying four and a half percent.

spk_0 For most of our like income investors. That's awesome. So we've been we've been fat and happy for the last couple years now that we know rates are coming down. We have been transitioning some of that.

spk_0 Like CD CD type money that four and a half percent has been great, but next time it's going to be two and a half percent. We have been moving that into longer maturity bonds because we can get more yield for it.

spk_0 So I think we're kind of going back to a time where cash is not going to pay as much not today. In fact, I went to a conference in San Diego.

spk_0 And I got to hear JP Morgan's Dr David Kelly speak and he said, you know, so take this is just his opinion. It's not mine, but I like it.

spk_0 He said chairman Powell's 10 year runs out in May and you can bet your bottom dollar that whoever becomes the new fed chair will be hand picked by Trump.

spk_0 And part of that hand picking will be you cut rates substantially. So he said they were expecting at least I think he said 75 basis points. Don't quote me on that. It could have been one percent.

spk_0 He said yes, we're getting the September rate cut, but we're getting another one percent in May because that's that's like you're not the president's not supposed to have a litmus test for the fed chair.

spk_0 But he said that tradition is being thrown out the window right now and there is going to be a hard conversation. But for the person gets the election is that when you get in or the appointment when you get in you cut rates.

spk_0 So it might not that that to bring this home here when we're going from four and a half percent to four and a quarter percent might not seem like a big enough trigger to change your strategy.

spk_0 But if we're going from four and a quarter to three and a quarter all of a sudden this short term money is just not paying that much anymore.

spk_0 So yes, we are repositioning in light of rate cuts.

spk_0 So for folks who are looking forward.

spk_0 Did they have CDs CDs and maturing in the next six months, 12 months, three months, however long it is folks who have money and high yield savings accounts folks who are sitting on excess cash right now.

spk_0 What are you going to recommend to them over the next year as their rates start to decrease with the Fed funds rate?

spk_0 Yeah, if you're willing to not have guaranteed income which you know a CD is you know FDIC insured high yield savings FDIC insured if you're willing to venture past the FDIC insurance and go get more yield.

spk_0 I think it's pretty reasonable to buy like investment grade corporate debts that are paying five or six percent. So that's what I would recommend.

spk_0 That's actually not a recommendation to my podcast listeners.

spk_0 But if someone was anticipating these yields going down that's where I would probably send them sure so still going by high investment grade bonds something where you're going to get a little bit more still get some safety not the same safety.

spk_0 But you're still fairly risk averse.

spk_0 Yeah, a lot of these companies like so for example a lot of companies will borrow money to build their company so like Walmart might borrow a billion dollars to go build a new Walmart.

spk_0 Well you as a bond holder you are taking risk because Walmart could fail right and then your bonds become worth zero.

spk_0 But a lot of these companies they borrow money just kind of for like operational purposes like kind of famously a decade ago Apple is a no debt company or wasn't no debt company.

spk_0 But they had all this money domiciled in Europe and to repatriate it to the US they would have had to pay crazy amounts of taxes.

spk_0 I think the US the US tax rate so instead of moving their money from their bank in Ireland to their bank in the US they just raised the you call it a hundred billion dollars in bonds in the US guaranteed by their bonds or their cash held in the Irish banks.

spk_0 So it was just like this arbitrage that it would be really hard to imagine that going south and you losing your bond money.

spk_0 But you were getting a higher yield than treasuries so to me if you know what you're doing in bond land.

spk_0 You can buy some pretty reasonable safety bonds like triple A credit bonds and get a better yield but not but you do lose the FDIC insurance.

spk_0 All right thanks.

spk_0 I think we touched on a little bit everything we touched on owns real assets equities bonds we touched on cash.

spk_0 What do you think about Gold Austin?

spk_0 I talked about Gold on our podcast.

spk_0 Is that expressly forbidden?

spk_0 I don't know like three years ago we got dinged for it so.

spk_0 Well how about the Gold ETF?

spk_0 I don't know.

spk_0 Don't look at me like that.

spk_0 Well I don't know if compliance is going to be okay.

spk_0 I'd say go for it.

spk_0 I'll ask forgiveness later.

spk_0 Well what do you think?

spk_0 I mean Gold Tavern all time year all time high.

spk_0 Clients are calling in saying Gold is at $3,600 an ounce.

spk_0 What should I do?

spk_0 What do you think?

spk_0 I personally have a hard time buying Gold.

spk_0 It doesn't satisfy the need that I'm trying to see because an investor.

spk_0 I'm trying to purchase the large companies that we had talked about earlier.

spk_0 I still don't have much desire to go purchase precious metals.

spk_0 I know a lot of folks do.

spk_0 I think it can be a great diversifier for portfolios.

spk_0 If that's your shake then I'll support you.

spk_0 I think it can be suitable for plenty of investors.

spk_0 Personally those aren't the dollars that I'm chasing.

spk_0 Personally I feel more comfortable putting my money into more growth oriented stock.

spk_0 Looking back since 2008 I don't know the exact statistics around Gold right now.

spk_0 I don't know what it's done this year.

spk_0 I haven't been paying a ton of attention to precious metals.

spk_0 But if you back to 2008, 2009 the stock market as you mentioned bounced back incredibly.

spk_0 It's jumped for the last 15 years.

spk_0 Gold never made that same rebound.

spk_0 Precious metals never made that same rebound.

spk_0 And for me it just seems still a little bit speculative as to whether or not this is going to be a long term run.

spk_0 I know there are other variables that play.

spk_0 I just still don't think it has the same growth potential as

spk_0 other parts of capital markets.

spk_0 Interesting thing about Gold is if you buy an ounce of gold and you actually buy the gold.

spk_0 You set it on your desk.

spk_0 About a gold ring?

spk_0 How much gold does that?

spk_0 Oh that's cute.

spk_0 It's like a little, it's so small.

spk_0 Yeah, I don't know if it's cute though.

spk_0 Yeah very much.

spk_0 You want to me to describe it with.

spk_0 So I guess I am buying gold.

spk_0 It's like not a massive ring like your other ring.

spk_0 Rather wear my gold.

spk_0 It's like the Lord of the Rings ring.

spk_0 It's like so simple.

spk_0 Yeah, it was the cheapest one.

spk_0 It was the thinnest one that they had.

spk_0 That's awesome.

spk_0 Thanks.

spk_0 You are a gold investor.

spk_0 Gold investor but I prefer to wear my gold.

spk_0 You're going to tell your wife like hey I sold my wedding ring because the price appreciated 9% last month.

spk_0 So I'm just going to draw it on with this Sharpie now.

spk_0 Just silicone ring.

spk_0 That's what I have.

spk_0 But my beef with gold as an investor is if you put an ounce of gold on your desk.

spk_0 You come back in 20 years.

spk_0 You still have an ounce of gold.

spk_0 Which is fine.

spk_0 Especially if the dollars depreciate 3% a year.

spk_0 So if you put a dollar on your desk and come back in 10 years, it's lost 3% a year compounding.

spk_0 Gold doesn't do that.

spk_0 Gold historically has kept up with inflation.

spk_0 So if your gold 10 years ago was worth 2,500 an ounce, 10 years later it's worth 3,500 an ounce.

spk_0 So you haven't lost US dollars.

spk_0 Which is so in that scenario it would be better to have a gold bar than a pile of cash.

spk_0 But my beef with gold and why I don't invest in gold is that I like things that grow and do cool things.

spk_0 Because your gold just sat on your desk and did nothing.

spk_0 But if I took that same amount of money and put it into a company that was innovating and producing and creating and building a better world, that's what I like.

spk_0 So that's maybe the math actually supports that too.

spk_0 Historically, capital investors have been rewarded by building companies that do really cool things in the world.

spk_0 And so I'd rather have my money go there versus sitting in a bar gold.

spk_0 I'm not opposed to gold.

spk_0 I just don't own any personally.

spk_0 But it's been a year for gold.

spk_0 Silver is not done as well.

spk_0 But I always keep one eye on precious metals because clients call it and they want to talk about they inherited a silver coin.

spk_0 Should I keep it or should I sell it?

spk_0 And that's an individual decision.

spk_0 Yeah.

spk_0 I tend to agree with you.

spk_0 All right.

spk_0 What else?

spk_0 Closing thoughts?

spk_0 What do you got?

spk_0 I had a few clients and friends text me about our podcast last month.

spk_0 So it tells me people are listening.

spk_0 I mean, I know we get our stats.

spk_0 So we know usually 500 to 1000 listens per episode.

spk_0 But reach out to the show.

spk_0 Let us know if you have questions.

spk_0 Tell a friend.

spk_0 Give us a ranking on the five star ranking if you like our show.

spk_0 And I'll let you sign us off.

spk_0 Then unless you have any closing remarks.

spk_0 Yeah.

spk_0 Come and best with us.

spk_0 Yeah.

spk_0 We don't have any minimums.

spk_0 There's an advisor here for everybody.

spk_0 Whether you have millions of dollars or you're just getting started, reach out.

spk_0 We want to work with you.

spk_0 Our doors are open.

spk_0 So if you like what we have to say, if you're looking for active management, if you're looking for financial planning, reach out.

spk_0 Go to dumberwealth.com, schedule a free consultation.

spk_0 Or just walk in.

spk_0 Come to our office.

spk_0 We're in the tech center.

spk_0 It's walking.

spk_0 And we'll chat with you.

spk_0 But that's it.

spk_0 All right.

spk_0 Sign in off from the mile high city.

spk_0 Oh, city.

spk_0 I was going to say Denver wealth management podcast studio.

spk_0 And my brain already went all the way to the end of studio to say,

spk_0 city.

spk_0 Oh, sign off from the mile high city.

spk_0 Denver wealth management podcast studio.

spk_0 Mind of a millionaire podcast.

spk_0 Securities offered through LPL financial member finra s IPC.

spk_0 Investment advice offered through Denver wealth management.

spk_0 Inc.

spk_0 A registered investment advisor.

spk_0 Denver wealth management.

spk_0 Inc.

spk_0 Is a separate entity from LPL financial.

spk_0 The opinions voiced in this material offered general information only.

spk_0 And are not intended to provide specific advice or recommendations for any individual.

spk_0 All investing includes risk, including the possible loss of principle.

spk_0 No strategy is sure success or protects against loss.

spk_0 All performance referenced is historical and is no guarantee of future results.

spk_0 All indices are unmanaged and may not be invested into directly.

spk_0 The S and P 500 is an unmanaged index, which cannot be invested into directly.

spk_0 Past performance is no indication of future results.

spk_0 The economic forecast set forth in this material may not develop as predicted.

spk_0 And there can be no guarantee that strategies promoted will be successful.

spk_0 There is no guarantee that a diversified portfolio will enhance overall returns.

spk_0 Or outperform a non diversified portfolio.

spk_0 Diversification does not protect against market risk.

spk_0 International investing involves risks such as currency fluctuation and political instability.

spk_0 And may not be suitable for all investors.

spk_0 Any individual securities mentioned are for reference only.

spk_0 And are not intended as a recommendation to buy or sell.

spk_0 Companies mentioned are for informational purposes only.

spk_0 It should not be considered a solicitation for the purchase or sale of the securities.

spk_0 Any investment should be consistent with your objectives, time frame and risk tolerance.

spk_0 All information is believed to be from reliable sources.

spk_0 However, Denver wealth management, Inc. and LPL financial make no representation to its completeness or accuracy.

spk_0 The information provided is for educational and informational purposes only.

spk_0 And does not constitute investment advice.

spk_0 And it should not be relied on as such.

spk_0 It should not be considered a solicitation to buy or an offer to sell security.

spk_0 It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon.

spk_0 You should consult your attorney or tax advisor.

spk_0 The views expressed in this commentary are subject to change based on market and other conditions.

spk_0 These documents may contain certain statements that may be deemed forward-looking statements.

spk_0 Please note that any such statements are not guarantees of any future performance.

spk_0 And actual results or developments may differ materially from those projected.

spk_0 Any projections, market outlooks or estimates are based upon certain assumptions.

spk_0 And should not be construed as indicative of actual events that will occur.

EP:169 - September Investment Insights

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