EP. 134 More Knowledge, More Wealth: AM 590 Radio Show

Transcript:

Announcer:

This is More Knowledge, More Wealth, with your host, Gabriel Shahin. Gabriel is a certified financial planner and a registered investment advisor at Falcon Wealth Planning. This show is not intended to provide personalized investment advice through this broadcast and does not represent that the services or securities discussed, are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast, in the process of making a full informed investment decision. More Knowledge, More Wealth, on AM 590 The Answer. Now here's your host, Gabriel Shahin.

Gabriel Shahin:

Good afternoon. This is Gabriel Shahin, certified financial planner, and your host of More Knowledge, More Wealth. That's on every weekend, talking about all important topics of personal finance. Our goal is to give you the knowledge you need to increase your wealth.

Now to the listener, you can always reach out to myself or any one of my colleagues at Falcon Wealth Planning. Our phone number is (855) 963-2526. That's (855) 96-FALCON, like the bird. I'm a principal of Falcon Wealth Planning, a registered investment advisory firm. We are a fee-only financial planning firm that also manages money as well. But folks, we go over all important topics of personal finance that goes over where you are today; your current situation, what strategies you should be taking advantage of, looking at retirement planning, taking a look at taxes, investments, insurance, estate planning. Folks, you name it. Anything that involves a dollar sign, give us a call. We can help.

We are offering a free financial assessment to help relate this show to your specific situation. We can help. Our phone number is (855) 963-2526 that's (855) 96-FALCON, like the bird. Or visit our website at FalconWealthPlanning.com. That's FalconWP.com for short. We'll be happy to put a personal financial assessment for you to take a look at what you're doing and what you should be doing as well.

Now we got offices all across California, and we help clients all across the country as well. We'll be more than happy to help. Folks, we are going to talk about today about the media, the news, everything that's going on in the world right now. It's hard not to just turn on the channel and see what news, and it's sad. And we are seeing death, we are seeing war, we're seeing fear. We're seeing a lot of negative things out there, and it's important to know that the information that you bring in, the knowledge that's given to you... I like to say sadly, sometimes it's the entertainment value that's given to you, because remember, people get paid now. News gets paid as of the '90s, because now they have rating system based on making sure you turn on the channel.

So, I want to focus on where scenarios could be good or bad depending on the news that they're sharing. So, that's the main topic today. Because you have to understand, the news's goal is to scare you. Because ratings and analysis has shown that when people are happy, they are less inclined to engage the news channel. So, the goal is always to keep you in fear, is to scare you of what's out there. That's the main focus. Which is logical, because that's when people's alerts are up is when there times of duress.

Now, the issue that we're finding though is sometimes... Now I'm getting away from what's happening with Russia and Ukraine, because that is reality. That is sad, there is invasion, there is war, there is so on and so forth. But just in general, the fear and the over dramatization of everything that's going on right now is causing you to make mistakes in your financial situation.

For example, markets down 10%, 15% year to date, you sell your investments and cash because the media is saying, "It's only going to get worse." I remember talking heads on TV in 2008, September of 2008 saying the U.S. government's going to shut down. Not just shut down like temporary shutdown because they can't come to an agreement, Congress can't communicate well; but we're talking about shutdown. Out of business.

So the issue, and of course look at where we are here now, but the issue is there's always some pundit on TV talking like they're the smartest person in the room discussing what they think is going to happen. And folks, a broken clock is right twice a day. There is over 500 predictions of a massive earth happening that Caltech University has here in Southern California. Over 500 throughout the year. You know what the issue with that is folks? There's 365 days out of the year, and they have 500 predictions throughout the year. You know what that means? There is somebody that's going to be right, and guess what's going to happen when an earthquake comes? That's the person they put on TV, because they're the one who projected it.

So my point of all this is, be aware of this. Be cautious of all this. There is important things that are always going on in the world. Folks, it's always gone on in the world, always. This isn't the first time war has broke out internationally. There's been times America has been involved, directly involved.

So, there are items you just have to be aware of, and do not listen to the media. Their job is to scare you. My job is to educate you. Some may find me entertaining and thank you for that, but the goal is to educate you; and that's what the media, that's what news is supposed to be, but that's just not what it is right now. Not since they've had the rating system and they get paid now for you turning on the channel.

So, be aware of, that you are watching entertainment. Their job is for you to turn on, which is entertainment. So, do not make all your decisions based on what you see on TV, right or wrong. A lot of it could be wrong by the way. Heck, Jim Kramer who's on CNBC who gives stock recommendation and talks about investments, prior to 2018 since he's been on the AR for over a decade was wrong over half the time. You know what that means? If you had this specialist who worked at Goldman Sachs who was extremely knowledgeable in the industry; if you took his advice versus a quarter and flipped the quarter, the quarter would be right, assuming the quarter is 50/50 which we all can agree on, the quarter would be right more than him. Think about that for a moment.

But he gets all excited, he's throwing things, he's rolling up his sleeves. He's having you watch the TV. These are issues that are happening in the world with entertainment to have you turn the channel and get you worried. So, be on the lookout folks for that.

By the way, folks, if you're just joining us here listening, Gabriel Shahin host of More Knowledge, More Wealth. Here on every weekend talking about all important topics of personal finance, and I wanted to talk to you about the media and what's going on and how their goal is to scare you of what's happening in the world today. And you must be aware of what's happening in the world, granted, but take everything with a grain of salt.

Is it going to make every company in America shut down? Because remember, if you are invested in the stock market, you are invested in multiple sectors, multiple companies, and multiple asset classes. What's a sector? That's tech, healthcare, finance. What is asset classes? That's large cap, midcap, small cap, international, emerging markets, developed markets.

So you have your money, hopefully, globally diversified. So, you need to take what you're hearing with a grain of salt, because it's not always accurate. It's not always clear. I actually said multiple times that I have a love/hate relationship with the media. Not because I'm part of the media with this show, but it's because they get you to sell which drives the prices down. I don't mind down drops in the market. It's actually normal. So when it drops, we buy. That's how the stock market works. It's a market. It brings buyers and sellers together. So when everybody's selling, because of what's going on in the media, and it's dropping; there needs to be a buyer and we're those buyers. And we need the novice, the people who don't know what they're doing, to sell. So I thank the media for that, because it gets us a sale for myself and our clients.

But the hate part is, it worries some of our clients, and it worries you and you make radical decisions. Since when it's buy-in area? You have to be either all in the market or all out of the market? No. But yet, that's how people think, because that's what TV is telling them to do. So what I want to discuss with you is scenarios where something comes out in the news, and some people may look at it as positive or negative.

This is why you see companies like Apple, Amazon, Microsoft, Google, whatever the case is, McDonald's, Coca-Cola, whatever the company is; and something will happen. A news will come out, information about the company that's available to all of us, and you'll have some people say, "Ooh, this is good news. I would buy guys. I'm bullish. I recommend a strong buy." And other people say, "Oh, this is going to hurt the company. I recommend you sell. This is bad news. This affects it negatively."

Folks, we're talking same information analyzed two different ways. On one channel somebody will say, "Buy, buy, buy." On the other channel, somebody will say, "Sell, sell, sell." How is this possible? Well folks, because there are different ways to analyze a company. There's fundamental analysis, there's technical analysis, there's quantitative analysis, there's aggregated analysis. Folks, there's so many different ways to analyze a company, which is why other people are saying, "Buy," why others say to sell. So you can't just look at one way of doing things.

If you have a spouse, we'll talk about my wife Sophia. Or we won't even talk about her, she might get upset about what I'm about to say, but some people want to be with a life partner because of their looks. Others because of their brain, intelligence. Some might be because of their personality. Some might be just because of their kind heart. There is no wrong way of why you want to spend a lifetime with somebody. There is no wrong way. And what gets your bells going might be different from somebody else.

I'll give you another example for the men out there. Let's say you wanted to start a basketball team. You have myself, a 5'10 Caucasian male, or a 7'2 African American. Who are you going to choose? Folks, there is nothing racist about that comment. It's common sense. By the looks, I would choose the tall guy.

Okay. Well somebody else, your neighbor might say, "You know what, where did you play, the school? Did you play at Duke University, North Carolina, UCLA? Or did you play at Claremont McKenna," which is a D3 school, very small. Somebody else might say, "You know what? I want to see how fast they are, how high they can jump." Somebody might say, "I want to see them play."

You know what? John Stockton, wasn't very tall and he's one of the greatest point guards of all time. He doesn't even look like a basketball player. You get my point? It all depends on how you analyze the situation. So, I'm going to go over, we're going to take a little break here shortly, three scenarios, and I'm going to talk about the pros and cons of each scenario. How some people may look at it as a positive, and others may look at it in negative.

And folks, if you need help with this, if you've been thinking about getting out of the market, if you have been out of the market, give us a call. We can help analyze what makes sense for you. And remember, it's not your all invested or all out. Some of your portfolios might have globally diversified portfolios, which includes bonds, which means you're not in the stock market. So maybe it's just that proper allocation what you need. Give us a call. We'll help at no cost, folks. Our phone number is (855) 963-2526. That's (855) 96-FALCON, like the bird, where we can help put a personal financial assessment for you at no cost. And we can help all across California, including the U.S. Look forward to hearing from you, we'll be back after a few words.

Welcome back, folks. This is Gabriel Shahin, certified financial planner. Your host of More Knowledge, More Wealth here on every weekend talking about all important topics of personal finance. Today, we're talking about the media and how it confuses you, how it upsets you, how it wants you to react of all the news that's going on in the world.

Whatever it may be, whatever it's political duress, whether it's Republicans, Democrats, whether it's social issues that are going on, whether it's war internationally, whether it's China upsetting, whether it's what's going on in the EU, whether it's the COVID crisis that we recently got over; whatever it may be, their goal is to scare you.

So you have to know that as humans, we are survivors. Companies are ran by humans and they are survivors. Their goal is to stay in business as long as possible, and that's what you should be investing in are these companies, are these indices. Not just one company, but multiple companies, hundreds of companies, thousands of companies, what can be represented in just the one holding, one index investment.

Yeah, sure, you don't quadruple your money in a year. You don't have that potential, but you do get a consistent rate of return. So you have to know first how to invest. And number two, what's your risk tolerance? And number three, which indice makes sense for you? By understanding this, this can help you have a fruitful experience investing. While the stock markets are down 15%, depending on your allocation, you can be the 60/40, 60% stock 40% bond allocation could be down half of that, so it's important to know how you should invest.

And if you need help with that, if you want to even a second opinion of that, folks, we are offering a free financial assessment. Give us a call. Our phone number is (855) 963-2526. That's (855) 96-FALCON, like the bird. Or visit our website at FalconWealthPlanning.com. That's FalconWP.com or short.

Now folks, I wanted to go over just a couple scenarios with you, maybe three scenarios of information that comes up and how it could be spinned, either positive or negative. Okay? These are fairly current events that are happening. Let's start with the biggest one, and that is war.

So the obvious issue with war is you have death, you have fear, you have potential invasion, you have corporations that have shut down their operations in an emerging country. Russia had to lay off some staff. Some of them are still paying the staff. You have some companies that now their assets are being seized in Russia. You have just people just uncomfortable, maybe not wanting to spend. People may be not wanting to travel to Europe, which hurts Europe as well. So, there is ramifications of war.

Now, granted, okay, this is international and America is not involved in it; but let's fixate on what could be the positive of war. Now in America's involvement in World War II, that really helped take us out of the depression during the manufacturing and the government involvement with the private sector to help create items for war. Okay? So, that was a positive that helped America. The war wasn't positive, but the economic benefit it helped with America was positive.

In addition to that, there could be now, instead of drinking Russian vodka, we now drink American vodka. So, there are things we now will do within America. Oil prices. You have Chevron and Exxon and all these other ones over there, even though those two dominate the space from a market capitalization point of view, not to digress; but now oil prices are being more sold domestically, and the domestic companies are now selling internationally. So, this is now causing American companies to be more profitable.

So, these are ways you can spin a negative thing like war, which helped get us out of World War II, and now more domestic U.S. items are being sold or even jobs are coming back to America for these purposes of being shut down in Russia. These are things that are positive, that can be spinned positive. I talked about the negative earlier.

So, it's all on your frame of reference. Nobody's wrong. It was like my example of somebody looking at fundamental analysis versus technical analysis, aggregated analysis, quantitative analysis; all those different ways to analyze a company based on the information that's out there. In this case, all different ways to analyze an economic situation that's happening, a political issue that's happening.

So, let's continue. Number two, oil prices going up. Very profitable for somebody's businesses that sell oil. So now they're selling more throughout the world, because majority of the world, Europe is not buying Russian oil. Let's continue. Electric, EV, alternative energy companies are doing great right now. Tesla has a bunch of orders in. Why? Because people are realizing $5, $6 per gallon is expensive. When you drive 20,000, 30,000 miles a year for work. The car can pay for itself in just a few years if you drive an electric vehicle.

In addition to that, people are now maybe not traveling, doing road trips. They're doing things domestically within their state. These are other benefits that it causes, is by doing things within your local region. Money doesn't disappear, folks, it just shifts.

Now, the negative is shipping costs have gone up. Traveling costs have gone up. Your Uber trip has gone up because all electric, or excuse me, oil prices have gone up. People are not traveling as much, which means that's less oil changes people are doing, less tires, less brakes. They're carpooling more. Heck, they're working remote. They got really good at that during COVID by the way. These are indirect ways that it can negatively affect it.

By the way, folks, if you're just joining me, this is Gabriel Shahin, certified financial planner, your host of More Knowledge, More Wealth here on every weekend talking about all important topics of personal finance. And today, I'm talking about the different ways you can look at information and knowledge. Our media, by the way, their goal is to make it negative because that scares you, and when you get scared, you'll watch more and you make drastic decisions like sell your investments and doing things that are just not right. When you act emotional, you make mistakes. Look at the spikes you've gotten in your personal life. It's based on emotion. Look at all the mistakes you made in your personal life. It was probably driven on emotion. So, these are things that you have to be aware of when you're watching the news and getting your information.

I share with you facts, folks. I have no vested interest to have you continue to listen to my show so I can scare you. You know what I have a vested interest in? Of you getting help, whether with another company or financial professional, or ourselves. Now selfishly, I would want us to help you because how many fee-only non-commissioned true fiduciary advisors are out there? Not a lot, folks. Less than 2% of the industry is like that. So, my gut is telling me that whoever you're currently working with, whether it's a local bank or credit union or big brokerage house, they have series seven licenses, which means they can sell you items and get commissions from that.

Well, our firm, we don't get commissions. We are fee-only. We're all salaried at our firm. And folks, if you want help, if you want us to help analyze your situation, give us a call. We're offering a free financial assessment. We would love to help relate this show to your specific situation. Our phone number is (855) 963-2526. That's (855) 96-FALCON, like the bird. Give us a call. We'll be able to help with your situation.

The final example I want to go over is higher interest rates. With higher interest rates, this can have positive and negative, let's discuss. The positive; this could be helpful for the financial companies out there as they can get more deposit dollars, as they can now lend with a higher margin and spread. They have easier lending requirements. People with assets now instead of that, 0.5% CD, they can get 0.75% or 1% CD. Which isn't getting them out of bed, by the way, but that point is they get more.

What if you're a Fortune 500 company or Apple that has over $200 billion in cash? Now you're getting 1% to 2% on your cash? Guys, that's a big deal. That's $2-4 billion more that they are getting than they have before. So yes, it's relevant for everybody. These are positives of interest rates going up. Some may look at as a positive, it's stabilizing the housing market. Well, maybe now you can afford more of a house because there's less institutions coming in and buying homes.

But let's look at the negative. If you're a company that has high debt, which a lot of Fortune 500 companies do and your debt is variable, and now the interest rates are going up; your expenses are higher. Utility companies are notorious for that. They have high debts. So, this would cause less cashflow, which makes you less profitable.

And that goes on the personal side. If you're looking to acquire whether it's a new car, a new house, or whatever the case is; well, you can't afford a $50,000 car or a $500,000 car as much if the interest rate used to be 3% and now it's 4%. Your payments may be a few hundred dollars more a month,, which may make you unqualified to buy that home or to buy that car; which now affects home sales, which now affects car sales, which now affects if you own a house, the remodeling, the paint, the toilets, the whatever it is that you change when you come in.

Folks, it's the way you analyze a situation. And I'm not talking glass half full or glass half empty. What I'm talking about is there's truly difference of opinions where both people are right. You know what this sounds like by the way? It sounds like politics. But the reality is that there are scenarios where everybody is right, until they're wrong by the way, because nobody can outsmart the market. Nobody knows what you're going to do. They try to control it for economic value with media, but you're the one who's in charge.

And folks, if you need help to analyze this and build a portfolio, or who cares what everybody says and trying to scare you; that's what we do on a daily basis. We can help point you in the right direction. Our phone number is (855) 963-2526. That's (855) 96-FALCON, like the bird. We can help put a financial assessment for you and point you in the right direction.

Man, so much to go over. I swear this should be an hour show, folks. That is all the time we have today. I want to thank you for tuning in with us this afternoon. You can always reach myself or any one of our colleagues here at Falcon Wealth Planning. Our phone number is (855) 963-2526. That's (855) 96-FALCON, like the bird. Tune in every weekend as we talk about all important topics of personal finance. Our goal is to give you the knowledge you need to increase your wealth.

Thank you for listening. Enjoy your weekend. Have a great weekend, and God bless.