Ep. 227 - Decoding Financial Trends

  📍 📍 Good day. This is Gabriel Shahin, certified Financial Planner and your host of More Knowledge, more Wealth here on every weekend, talking about all important topics of personal finance. My goal is to go over the knowledge you need to increase your wealth now to the to the listener. You can always reach out to myself or anyone of my colleagues here at Falkland Wealth Planning.

Our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the bird, or visit our website at Falconwealthplanning.com or Falconwp.com. For short, or you can get this episode or any one of our previous episodes as well just by going to podcast Spotify or iHeartRadio, whatever it may be. Also, if you want to be able to get some more information, send a request at radio at Falconwp.com.

That's radio at Falconwp.com. On our website, we have this knowledge center that takes you directly to YouTube and we have almost a million views on YouTube and we are rocking on rolling on those and just the requests are now continuing to come in. I'm actually dedicating my Fridays just to make videos.

Takes about a week to edit and we throw 'em up there and our videos are getting tens of thousands of views. We have one video that has over 200,000 views and we are able to put those on, so please send those our way. Now, by the way, folks. I'm the President of Alconwell Planning. We are a fee-only non-commissioned true fiduciary folks, and we talk about all important topics of personal finance.

Something as simple as just your current situation today, planning for retirement, talking about taxes, investments, estate planning, insurance, folks, you name it. Anything that involves a dollar sign. We can help you with, which is why we're offering a free financial assessment where we can help relate this show to your specific situation.

Folks, give us a call, we'll be happy to help. We've got offices all across the country and we can help. It doesn't matter where you are. Our phone number is eight five five. 9 6 3 25 26. That's 8 5 5 96. Falcon like the bird, or visit our website@falconwealthplanning.com. That's falconwp.com. On our front page, there's a section there where you can actually.

Just inquire and set an appointment, uh, an inquiry. So folks, long introduction there. I just wanted to go over some information today. A lot of just current events that are going around right now. Uh, one of 'em just, uh, hey, we just got done with Valentine's Day. Happy Valentine's Day for those, uh, last week.

I, I wanna go over a study from the University of Cincinnati. And how they were talking about, there's, the numbers haven't come out yet, but we spend on average, let's call it twenty-five billion dollars. They're anticipating it's gonna be an extra 20, or excuse me, an extra $1 billion to get us to twenty-six billion dollars for this year.

It seems to just consistently go up. I mean, quite frankly, the cost of jewelry, chocolates, meals at restaurants, all of it has just gone up over time. So it's just interesting the economic impact it has. Now, listen, I went on a rant not too long ago talking about all these Hallmark holidays that the government put together to help us spend money.

I. And my wife didn't appreciate that so much. She likes the Mother's Day, the Father's Day, the Halloween. She likes these, uh, hallmark periods where we spend a lot of money. So I get that and I respect that. And there's nothing negative about it outside of the simple fact is it does add massive supply and demand issue.

So for example, you go to a Cheesecake Factory, a normal day might be 30 to 45 minute wait. On that day, it might be two to three hour wait. That's supply and demand. Everybody wants to go out on Valentine's Day, or the Mrs. will be upset. You know, I personally like to go out on different days, but then at the same time, you're sitting there at your house on Valentine's Day, while everybody else is going out, say what you want.

But then social media's flooded with all these people that are having dinner, and I'm over here on the couch with my wife, kids asleep, watching reruns of friends. So the, the point of all this. Is, it's just interesting when you start looking at everything in life based on supply and demand. You know, you look at the price of salt.

You take a look at gas, you look at water bottles, everything has this purpose and the supply and demand side of it. This is why when there was some issues shipping, uh, and people over buying toilet paper back during the covid craze, I. It not. Prices didn't so much go out of control. What happened was they just ran out for some bizarre reason.

People started stocking up on specifically that and you had people just buy a bunch of canned goods and a few other things, so you would go in and the shelves would be empty. Just interesting. That's all. Not saying it was right or wrong, I think it was stupid, especially speaking in hindsight. But you know, some people actually did need to stock up 'cause it was unhealthy for them to go out based on the COVID-nineteen virus.

But not to digress here, the commentary is, this is in everything this happened. The same effect happened with real estate prices. Same happened with car prices because of supply and chain issues. The new cars coming out, we're just not as much. Now we're seeing kind of a regression of that. You had a lot of people that leased cars one or two years ago, and these are coming due.

They're gonna have a massive surplus of cars, of what we're seeing coming up. High supply. Right. Lower is the demand. You have to reduce prices, so we are going to start seeing a shift in certain things. Now, why is real estate not dropping? You mentioned cars. Well, because you still have people that are sitting on these two and 3% rates.

They don't wanna sell that home. Actually, they were planning on it, but now they're not. They're looking to rent that house out and buy another one, and those rates are six, 7%. At a point in time, they were 8%. So the idea is everything is based on this like unique, I, I'm gonna call it a bubble, but this euphoria of what do I need now and what can I use later?

And this is where you have to identify, because I remember people wanting to buy recreational vehicles. These are RVs and boats during Covid 'cause they couldn't travel. So they wanna do things their own. Prices skyrocketed. I mean, those companies made millions and millions and millions of dollars, but those have significantly slowed down.

Some would say it's 'cause of the gas price increases, some would say 'cause people are sick of their local neighbors, uh, not their neighbors next door, but the neighborhood. Uh, attractions. You could do the neighborhood lake that you were doing, the, uh, local camp parks that you were going to because people were kind of over that they wanna get out of the country, they're allowed to move.

People are not doing that as much. If you go on the RV listings and boat listings, the boat traders and so on, you are seeing significant decreases right now. So the commentary I was saying is. Hey, if you're interested in that back then, I know it was heavily in demand then, because that's all you were gonna do.

But if you still are in and in retirement and into that type of extracurricular activities, then this is the time to start looking at boats and cars. Not only are people struggling, but people are now wanting to get rid of it 'cause they just don't need it. As much. By the way, folks, if you're just joining me, you're listening to Gabriel, Sheen, certified Financial Planner, and your host of More Knowledge, more Wealth here on every weekend, talking about all important topics of personal finance.

I. And this all started with talking about Valentine's Day and by, and I love Valentine's Day because you know, back then, and even now, it's just our one time that we, it should be more than one time, but at least the one day that is designated for your love to go out. Right. But they also have. Birthdays and Christmas and uh, maybe other religious, uh, time.

Then you have, uh, what else is there? Mother's Day, birthdays, Halloween, uh, anniversaries. So there's a lot of time that we get to show this, but the idea is they really push initiative, cultural initiative to take somebody out generates just on that day. Twenty-six billion dollars of revenue, uh, just on economic impact just on that day.

That's according to national retail Federation. So, uh, I do wanna switch gears a little bit. And this happened maybe a couple weeks back with Elon Musk. And this is an important one because this, it was kind of hard for me to understand it. It was really hard for me to gather. I didn't quite understand the logic behind this, but I'm gonna go back and scroll in just a text message thread that I had.

Let me tell you when this happened. This was on, uh, January thirty-first, so I had to scroll through it. And so this is a post saying a Delaware just. A Delaware judge, just retroactively voided Elon Musk's fifty-five billion dollars. Tesla Pay package from 2018. This is where shareholders voted in favor of this.

By the way. All milestones were hit and Tesla stock went up 800% since then. This is insane. People will definitely not be able to incorporating companies in Delaware going forward, and Elon Musk has a famous. Quote saying, never incorporate your company in the state of Delaware. I mean, it's just crazy.

Here's the craziest part of the whole thing. The plaintiff, the person who sued this only has nine shares of Tesla, and by the way, this was overruled by 76% of shareholders that voted for this in. So I'm just shocked that this judge was able to move forward on this. It's just crazy that some redic blogger here who owns $2,000 worth of Tesla, sues the richest man in the world.

Okay. And his company's comp plan and wins. This is a dangerous precedent for Delaware. This is just insane. I'm, I'm gonna say about 300 of the Fortune 500 companies has their companies incorporated in Delaware because their laws are stronger and more governed and better governed for corporations. This is insane.

That this was even acknowledged that somebody showed you seventy-six percent of the shareholders, uh, agreed to this. Get out of here. Mr. nine Shares being held. How humiliating this, if this isn't a targeting effect on Elon Musk? I don't know what the hell is, uh, I mean, it has to be right? 'cause there was zero logic, zero common sense to this acceptance.

I mean, so essentially he was working for free since 2018. Because remember, he didn't wanna take a salary. You only want to be paid in stock. It's so unbelievable. It has to get overturned. Like it's so ridiculous when all the shareholders, seventy-six percent of 'em agree to this. I mean, how did this even get to a lawsuit?

The stupidity for judicial system is insane. I mean, I, if this wasn't a show for everybody, I would be saying a lot. More negative things about this with more choice words, but the shareholders board, everybody already approved it. I mean, this is wild. It literally feels like it has nothing to do with Tesla.

I mean, a company that's worth think about this has nine shares of a company that's worth what, six, 700, $600 billion. Red stock prices dropped recently. That can have this much of an impact is insane. I just have to share that because I've been holding that for a while. How humiliating of our just, uh, of our system that this could even happen.

I. Folks, if you have any questions on this, if you wanna know the impact, if you just wanna go over your situation, relate this show to your specific situation, talk about ways to save money during Valentine's, or how you can sue another company over a comp plan over their CEO and founder and, and so on.

Innovator, give us a call. Talk about wanting to hear a rant, huh? Phone number eight five five and 9 6 3 25 26. That's 8 5 5 96 Falcon. Like the bird or visit our website at Falconwealthplanning.com. That's falconwp.com for sure. Folks, we're gonna take a quick break. We'll be right back after a few words.

📍 📍 Welcome back folks. This is Gabriel Sheen, certified Financial Planner and your host of More Knowledge, more Wealth here on every weekend. And we're talking about all important topics of personal finance. That first segment I went on a couple rants about Valentine's Day and Elon Musk, uh, losing his compensation for the past six years of Tesla.

Uh, but this segment, I wanna switch it up a little bit. I thought I would have some fun just in general with the election year coming up and the markets look. Bad then looked good, and now it's like, I don't know how I'm feeling. So we wanna go over, uh, right now just like, just the S&P returns since 19 twenty-eight de uh, depending on who is elected president and what the S&P 500 returns for every single four-year period, when applicable, uh, for, uh, the presidency.

Because when you look at just that total return during that period of time, I think it's just important, uh, for many, many reasons. And so. Uh, another thing. At the end of the day, for the most part, what you'll see in these numbers, Republican or Democrat, doesn't really, and I say this respectfully, obviously matter, it doesn't really matter, and because it doesn't really matter because the markets move no matter what.

But I wanted to kind of show proof of this, uh, through total return numbers. Okay? So the average return. Now I will say, uh, this, uh, information here is from, uh, uh, first trust. And so data source Morningstar, um, as well. So just couple core concepts. Remember, this is not here to skew Republican or Democrat or anything like that.

Okay? Um, so, so just speaking, S&P-Five hundred. Now this goes to 2016. Um, for some reason it should have showed 2020, uh, but, uh, let's just go here till 20, uh, 16. So the average from 20, uh, 1928. To 2016 Republican was elected. It was a 15.3% average return. Uh, a Democratic elected was 7.6, all election years, 11.28.

Keep in mind, it's all above the average. Okay? I mean, 19 of the 23 years, 83% of the time provided a positive performance. That's important to know. That's on just the election year. Okay? So when a Democrat is in office and a new Democrat. Was elected. The total return for the year is 11%. When a Democrat was in office and a Republican was elected, total return is almost 13%, 12.9.

But let's start off In 1928, when Hoover was elected, it was a S&P 500 total return of 43%. Then when Roosevelt came in 1932. Now this is an important distinction, by the way, because and when Hoover came in, keep in mind. Uh, as the crash of, uh, the stock market, 1929. Uh, there was really no standards. You could just say your company made millions of dollars and people would invest in it.

There was a lot of fraud back then. This is why the crash was so impactful. So then when Roosevelt came in 1932, kind of towards the tail-ish end of the, uh, great Depression, uh, the market. Uh, lost 8.2%. Now, 1936, uh, uh, Roosevelt got reelected. Remember he had four terms here. So this Roosevelt's, second term up 33.9%, 1940 during World War Two, down 9.8%.

Roosevelt 1944, up 19.8%. I'm gonna start rounding all this point. All these numbers kind of hurt, right? So four terms for Roosevelt. Negative eight positive 34 minus 10 positive 20. Truman gets in. It made 5.5%. Eisenhower made 18%. Eisenhower, again, second term, almost 7%. Kennedy came in fairly flat, 0.5%.

Johnson, after that made 16.5. Okay. So let's take a break, right? Because you had Hoover as a Republican Roosevelt and Truman as Democrats. Eisenhower is a Republican. You had Kennedy and Johnson as Democrats, Nixon, uh, which uh, we haven't talked about yet, is a Republican. So my point is, so far you had some positive years and if you notice, the reason some of these years were actually negative was because of major impacts, like war and so on.

And remember, the war was in Europe. We came involved, especially after Pure Harbor. That's where we're really. Started to go and go in strong and we had to fight off Japan. They were too close to us. Still ridiculously, relatively far, uh, not only now, but especially back then with the, the technology and so on, uh, for planes to fly that far away.

Big deal. So, what am I trying to say with all this is that the impact isn't always directly with the presidency, for example. You had the great Recession in 2008 when Bush was in power Now directly. He wasn't really involved fully with that because it was extreme, uh, greed by the banks that just kept making these loans that people were buying that they couldn't afford.

You can argue the fact that some of his policies allowed them to be more greedy. So there, that's an indirect reason. 'cause that's a valid argument. And so there are direct and indirect reasons for everything, but I don't wanna go down that, uh, rabbit hole, uh, Nixon, I. Two, uh, years, even though one wasn't fully finished.

Uh, 11.1% in his first term and 19% in his second term, Carter, 23.8%. Reagan 32%. Reagan's second term, 6.3 Bush. Senior 16.8. Okay, so a lot of you remember these name. Majority of those were Republicans. Nixon, Republican Carter was the only Democrat, and then Reagan and Bush senior were also Republicans. So my point of all this is it did fantastic, but I'll tell you this, that was also during Jimmy.

Carter when there was hyperinflation, so on and so far. And then you had the people, the Republican party really inheriting a period of time where they were able to ride that with a high. Stock market yet again, not blaming Democrats and not giving Republicans all the credit either. So just being fair and unbiased.

Clinton seven, uh, Democrats, 7.7%. Clinton, uh, second term, 23%. I. Yeah. Some people say, well, he fell into the.com era. Okay, well, Bush got the tail end of that, which is a, uh, Republican Bush Jr. lost 9% during his first, uh, presidency, his first term. Why 'cause 2000 2001 2002 were negative years in the market 'cause of the.com bubble and the second term did a 10.9%.

Keep in mind. That's with, uh, at the tail end of that, uh, the great Recession Obama who got into office had a negative thirty-seven percent in his first term. Keep in mind, that's because the bottom of the markets happened in 2009, and he got elected in 2008. Obama again had a positive 16%. Trump in 2016 had a 12% return, and so.

All of this is, and we know who's Democrat and who's Republican, especially for those, uh, newer, uh, ones more, more recent ones. The comments with all this is what a lot of this information that you're going to hear and read, yes, it's impactful, but if you notice it wasn't for the great Recession, which we could argue happened in the Republican Party and it got punched in the face in the Democratic party.

It didn't happen for a World War II if it didn't happen for the Great Depression, which arguably could have been failures of previous presidencies versus Roosevelt, uh, when he took it over, uh, or Hoover. It could have been prior to that when they weren't implementing policies in place, they had to typically wait for something bad to happen, to start to create new rules and regulation.

That's normally how it goes. Right now we're entering a world of social media. There really is no rules behind it. They're trying to incorporate that. That's why, uh, mark Zuckerberg to this day, I think last month, was just talking to Congress about it. He quite frankly, even apologized for some of the things that they're doing incorrectly.

So it's not always. What it seems. By the way, folks, if you're just joining me, you're listening to Gabriel, Sheen Certified Financial Planner. You're hosting more knowledge or wealth here on every weekend, and the point I'm trying to make here in this episode today is there is just always more than what we're hearing and understanding, and it's like that in the stock market as well.

I. Take it a step back. You take a look at any situation that happens like the first, God forbid, plane crash. They had to create new rules and regulatory agencies such as the FAA, the wood cars came out. They didn't have rules for cars back then. Right? It created actually a whole new industry once cars came out, right?

Because then you had to have stop signs. You had to have street lights. You had to make new rules for a new innovation that comes out. Same thing with augmented reality. I'm not sure what those are yet, but if everybody starts to utilizing it, there's probably gonna be some, uh, usage and some regulation there.

That's what the metaverse is. Metaverse. Not everybody knows what it is. I haven't been on the Metaverse to an extent. I did something called DreamWorks at Arizona State University, which is virtual learning, which was quite interesting. So there's always something. That is coming out tomorrow that we don't know what the rules are gonna be for that yet.

You have to get there first. Rules will come afterwards, and that's sometimes what you see in the performance of the president of who gets election, uh, elected. They are inheriting a problem. Uh, so for example, we have Bitcoin ETFs now. Okay, great. Still some issues with the regulation of that. Just because ETFs and the SEC approved those ETFs, it doesn't mean it's still not the wild, wild West.

There's still issues with regulation of pricing and the supply and demand and the blockchain and the transaction list and inflows and outflows. These still don't have direct correlation to the spot Bitcoin pricing. When they go up 5%, those ETFs are not going up exactly 5% all the time. There's some deviation between 'em because of bid asks and inflows and outflows.

You have to know what you're getting into. And so when you're looking at a stock, it's the same exact thing and that's how you can figure out what's a good investment to buy in. You're taking a look at information today and how will impact the impact the stock tomorrow. This is why it's so difficult to choose individual stocks.

You have some of the best companies in the world today that struggle based on news that come out that has nothing to do with them. It just could be a potential impact to their business. Maybe a competitor if it takes one to five to 10% market share. That could be impactful. So these are the things that impact long-term effects on a company.

For example, GM Ford hasn't been doing great over a long period of time. Sure. There's parts where it did really well. Why will Because Tesla, that wasn't even around 10 years ago, or maybe I should say relevant 10 years ago, just had the number one selling vehicle in the world last year with the, uh, model y.

I mean, that's pretty impactful to now take that much market share. 1.2, 1.3 million sales of the model Y. That's crazy. I'm here in Southern California. I see those things go around all the time. That impacts other stocks. Microsoft, apple. Amazon, Google. All these companies that are great today, we don't know what's impact they have later on.

Folks, this is why we're offering a free financial assessment, is to have these conversations, these dialogues, depending on the stocks that you hold, look at the outlook, look at the competitors, look at the future. Look at the impact it has on the relevancy of your portfolio, of the need to have it there versus diversifying that out, or even maybe strategically choosing a smaller competitor.

So if it does take market space, at least you can get higher growth from the other stock Folks, this is why we're offering that pre-financial assessment where we'll give you one to two meetings of our time, one to two hours of our time at no cost. Folks, reach out to us, we'd love to help. It doesn't matter where you're located.

Our phone number is eight five five nine six three twenty five. 26. That's 8 5 5 96. Falcon like the bird. Or visit our website at Falconwealthplanning.com. That's falconwp.com for sure. We would love to help in your situation. Folks, there's always more to talk about and we are limited on this show. If you have any increase that you want to reach out and have me discuss on the show, just send it to radio at Falconwp.com.

That is radio at falconwp.com. You can do it through a voice memo. You can just do it through an email direct or in the notes as we have a video cast of this. If you wanted to watch me present this show on YouTube. But folks, that was a fast, fast show. I wanna thank you for tuning in with us. You can always reach out to myself or any one of my colleagues here at Falcon Wealth Planning.

Our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the Bird, or visit our website@falconwealthplanning.com. That's Falconwp.com for short and you can get this episode or any one of our previous episodes as well through podcasts, iHeartRadio or Spotify. And remember, we have that knowledge center on our website that's also sends you to YouTube channel.

So many fantastic videos that we have that is up. Give them a look, give them a try. And yet again, if you wanna see more of those, send it to radio@falconwp.com.