More Knowledge, More Wealth Ep 199: 2023 - Year of the Raging Bull
[00:00:00] Good day. This is Gabriel Shane, certified financial planner and your host of More Knowledge, more Wealth. You're 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, if you wanna reach out to myself or one of our colleagues, feel free to reach out to us.
[00:00:53] Our phone number is eight five five and 9 6 3 25. 26. That's 8 5 5 96 Falcon like the bird, or visit our website@falconwealthplanning.com. That's falcon wp.com for sure, and you can click on the knowledge center and get any of these video casts, podcasts, or any one of our knowledge center where you can get any advantage of.
[00:01:17] Strategies that we have going around now. I'm the principle of Falcon Wealth Planning. We are a fee only non-commissioned, true fiduciary folks. We go over all important topics of personal finance and we are offering a free financial assessment where we can help relate this show to your specific situation.
[00:01:32] Our phone number is eight five five and 9 6 3 25. 26. That's 8 5 5 96 Falcon like the bird. We can help answer those questions of where you are today, how retirement looks like. Look at taxes, investments, estate planning, insurance, folks, you name it. Anything that involves a dollar sign, we'd love to help 'em.
[00:01:50] We have offices all across folks so we can help people. It doesn't matter where you are all across the country give us a call. We'd love to help. Now, today, I just want to talk about just kind of like the last. I would want to say a few weeks, but I can argue the whole year feels like it's been a raging bull market.
[00:02:08] Now what does that mean? I mean, majority of the indices here are up over 20%. Let me list them up. S and p 500, almost 4,600 now is at 20%. The Dow Jones is only up 7% for the year, but it's. Still at 35,500 Nasdaq, 36% up. This is from last year being down almost 40%, almost at 14,300. The Russell 2000 up, 13 and a half percent.
[00:02:34] That's almost at 2000. Russell 2000, almost at 2000. I mean, it's been quite the year, folks. And here's the thing, people were freaking out last year. People still in cash. We still have people coming to our firm wanting help, feeling they missed the boat. To the party and they're wanting help to see what they should be doing.
[00:02:53] And folks, this is why number one, you shouldn't time markets. And number two, you shouldn't be doing individual stocks. Because what was great during the Covid crash and all these tech companies that frankly weren't even making any money, but that were high flyers, yes, you made a killing off of it. And not only have you lost, but you lost more than what you principal amount.
[00:03:12] Was while the market has well surpassed of where it has been since the Covid crash, because think about it, you were able to buy in super low, and that's the thing, a lot of people just aren't aware of that folks, and this is where I'm telling you, and I've been telling you, I. You gotta just stay disciplined.
[00:03:30] In general. Most people mess this up. They freak out when markets are low, right? And that's why Warren Buffet says, when those people are fearful, that is the time you be greedy. Okay? And then when times are great like that, now people are coming back saying, I wanna invest, I wanna invest, I wanna invest.
[00:03:49] Folks, you need to lose money. So then you can get back on the rebound when you make the money. It's like walking uphill with a yo-yo. If you do that, yes, there's ups and downs, but you're always walking up. The market always goes up. If you believe in capitalism, so on and so forth. If you could feel that you work, so you make money.
[00:04:10] If you feel businesses are in business to make money, as long as you have that mentality, then yes, the markets go up. Companies are in business to make money, and I've heard so many things. I had somebody tell me about Disney lately May taken a political stance and it's costing them billions of dollars on their theme pack in Florida.
[00:04:29] And their last few box office hits have not been hits. They've been misses and they've lost almost a billion dollars in their last few movies. But the, the point I'm making is their goal. Is to make money. How do I know that? I recently went to Disneyland with my family. I, I feel like it cost me a thousand dollars.
[00:04:48] I'm not even kidding. And I'm a California resident, folks. I'm one of the few fools here still in California. I'm kidding. I love California. But you get what I'm saying. There's been a lot of things that's happening in the state that's been on the news. So my point is it, it literally, the past was a hundred dollars a person.
[00:05:05] Yeah, you have to buy, you know, uh, a three pack and use 'em within a three month period. But, you know, in the summer, that's pretty easy. But the point is, for a family of four over the age of two years old, that was 400 bucks. And then just with, with parking, with food, with add-ons, and you buy Genie passes and then it gives you photos, it goes in line.
[00:05:25] I, I mean, it really started to add up. What's my point of all of this jabbing just talking here. Is that companies are in business to make money. Stop trying to debate that. And if you don't need the money in two to three years from now, let alone two to three decades from now, just hush up. Invest your money.
[00:05:48] Market drops are good if you have a strategy, and most people have no strategies. I had episodes last year talking about the things you should be doing when markets drop, but the thing is people don't know what to do. They freak out, they get emotional. This is why you shouldn't be managing your own money.
[00:06:04] It's very few people out there that are actually disciplined in their approach to managing money. The problem is, yet again, when markets drop, they sell. And when markets are going up, they wanna buy in. You have missed the big gap. You get what I'm saying? The market is already up just the s and p 520%, heck, NASDAQ, which most people are invested in.
[00:06:27] Large gap growth is up 36%. Could you imagine having a hundred thousand? Okay. Dropping almost 40% last year. Okay, so now you're at 60,000. Then min missing the runup of 40%. On your 60,000. Now keep in mind, 40% increase on 60,000 is only $24,000, right? So even you see, last year you lost 20 or 40%. This year you made 40% not back at a hundred percent.
[00:06:57] This isn't arithmetic. This is compound interest. You're still down 15%, right? Because six 40% on 60 is 85, right? The $15,000 increase. So my point to you is it's a 25,000 increase. Excuse me. It's, uh, it, it's, you're still down 15%, you're still down 15,000 from your original principle. And so the idea with this is stop trying to time it.
[00:07:25] Nobody ever in the history of all investments has ever been able to time markets of knowing when to sell and knowing when to buy. It's truly impossible. You have to understand so many other factors and leading indicators, and sometimes it's just no logic of when to buy and when to sell. There's no logic of times that it should make sense to invest.
[00:07:49] Heck, things sometimes get artificially pumped up where you end up making incorrect decisions. You end up making incorrect thoughts of what's gonna happen because of the simple fact of the markets Make no sense. It's illogical and. Forget trying to involve politics with managing your portfolio. By the way, folks, if you're just joining me, you're listening to 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.
[00:08:22] Say I'm just talking about the markets in general. Just having a roar for the first seven months. Outta the year. It's insane. And that's just not it. You also have international markets. If you look at a total us uh, international markets in general, they're up over 12.5%. Emerging markets are up over 10%.
[00:08:42] So not only do you have us, that's booming at over 20%. You have international, that's also up over 10%, and that's with the craziness going on with Russia and Ukraine. And that is with the craziness with China and America, China men, those ties, and with Taiwan. And that is the same with what's going on in Europe, being affected by the war in Russia and Ukraine.
[00:09:06] So there's always something going on, right? And it's still up. Now granted, it had a bad last year as well. So the idea is in a perfect world, it'd be nice when you buy, when something is low, you buy when everybody's freaking out. If you don't need this money now, even if you're retired, it's not binary.
[00:09:25] You're not all in the market and all out of the market. It doesn't work that way. So the idea and the logic with you is to, in fact, making sure you have a portfolio that can withstand all types of scenarios with the market. And that's where globally diversified portfolios comes in. It's not just large companies, but medium and small companies.
[00:09:48] It's not just US companies, but it's international developed markets, emerging markets, and also knowing that you may need money at times, which is why you have fixed income. Into the portfolio. We have treasuries, you have bonds, you have private debt. Even. You have multiple different ways to have exposure and be diversified by still getting the yield that you need.
[00:10:09] I. I will take it a step further. Not telling you to invest in these, but I'm just highlighting. Gold is at roughly 2000 an ounce, which is up 4% year to date as well. Oil and gas oil, crude oil is at up 7.5% year to date as well. Silver is even up at a quarter percent. I almost at $25 an ounce, 10 year bond is up.
[00:10:35] Over 4% at, by the way, at roughly 4%. Folks, it seems like just in general, everything is going up. You have to have your money hedged against inflation, and the stock market is by far the number one way around that. It's sad sometimes people don't figure it out, and maybe this is why sometimes the rich get richer.
[00:10:55] I. Some people say the rich are rich because they have professionals doing everything Well, you know what? That's what we're trying to say to you. They have the advisors from tax advisors, the attorneys, they're able to sue when necessary, and they have the financial people that are there to help them make decisions.
[00:11:11] Folks, this is what you can have access to, but you know what the common theme of it is? Rich people are proactive. Yeah, they may not have the time, but they're proactive. What does that mean? You don't need to have a lawyer on return retainer to sue somebody. You just have to go to go through the process of suing, and a lot of attorneys, especially in the state of California, will hire you, will be able to work with you on retainer.
[00:11:36] An accountant, same thing. Have an accountant versus TurboTax. You spend a few hundred dollars more and now you have a professional, make sure you have to meet with a tax planner. That could be even a few hundred on top of that, but still, sometimes you can't afford to cut corners. They may be able to help you save tens of thousands of dollars, if not hundreds of thousands throughout your lifetime.
[00:11:56] I'll take a simple order with investments. Some people like it, but some people don't see the value. They see they have one to 2 million, God willing, and they're spending 10 to 20,000 a year. Some people think like, Hey, I, I can get an employee for that. They're not thinking. They're thinking in dollars, not percentages yet.
[00:12:12] Again, they're counting pennies and nickels, not counting dollars. Could they help earn you one to 2% extra? Heck, you can argue if you missed the runup and only got the punch in the face in 2022 and not the runup in 2023. That could have cost, co cost, 20 plus years worth of management fees. This is the point I'm trying to drive home to.
[00:12:34] You don't overthink it. Making sure you're making the responsible decisions right now to make sure your portfolio, your situation can stand the brunt of time. Folks, if you need help with this, you wanna reach out. If you wanna help relate this show to your situation, see what you're doing, and quite frankly, maybe even talk some sense into you.
[00:12:53] Give us a call. We would love to help. Our phone number is (855) 963-2526. That's 8 5 5 96. Falcon like the bird. Folks, we're gonna go on a quick break and we'll be right back after a few words,
[00:13:05] This is Gabriel Shahin, certified financial Planner, your host of More Knowledge, more Wealth. That's on every weekend. We're going over all important topics of personal finance. We're going over retirement planning, making sure you're prepared for retirement, social security and strategies, real estate taxes, avoiding them now and in the future, investments reducing.
[00:13:25] Fees, commissions, and so on. Insurance and estate planning. Folks, we are offering a free financial assessment that you could take advantage of. We have offices all across Southern California, including the Inland Empire. Give us a call to take advantage. Our phone number is (855) 963-2526. That's 8 5 5 9 6.
[00:13:43] Falcon like the bird, or visit our website, falcon wealth planning.com. That's falcon wp.com for short. Enjoy the show. We look forward to serving you.
[00:13:53] Welcome back folks. This is 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. And I thought I would go over with you the first seven months of the year and going over how great the stock market is doing.
[00:14:06] And yet some people are still bitter, some people are still not happy, some people are still not invested. I had some person over the day saying, man, the market's really crappy right now. And I was like, are you outta your mind? S and p 500 is up. Over 20%. Dow Jones up seven, NASDAQ up 36 Russell 2013 and a half, and you have international markets up 12% and emerging markets up over 10%.
[00:14:28] It's like, really? Tell me again, what's so bad about the market? Oh, well, recession is coming. Well, you know what a broken clock is, right? Twice a day. Sure, a recession is coming, but you know what? A bull market's coming and you what? For every one recession, you have over four years of positive gains in the market.
[00:14:46] I don't understand what the negativity is. Now I understand the media's job is to confuse you, is to upset You. Think about social media now. There's all these studies saying more people on social media, the more depressed they are. How about you just take a step back, enjoy the roses, take a few deep breaths to start your morning, do that a few times a day, and just enjoy life.
[00:15:08] Try that. It's weird that like we've become into a society to be comfortable to be miserable. I'm sure we could thank Covid for that, but how about you just delegate the stresses in your life? You're worried about money. Hire a professional who's legally obligated to make sure your financial situation is going to be able and to keep you on track forever, and they're legally liable to do so.
[00:15:31] That's what we do here at Falcon Wealth Planning. People hire us every day. Literally every day. We get more clients on an annual basis than days in the year. You get what I'm saying? That's why I always tell people we're like the Costco financial planning. You know, they have good quality. They're high volume.
[00:15:47] Sure. They don't make as much as the other people out there. The commission, commission-based advisors out there, the Wells Fargo, Morgan Stanley, Edward Jones, u b s, you name it, I get it. But when you look at the quality and the legal. The liability that we have for you to make sure you are successful and you make sure you don't run outta money.
[00:16:06] You can't put a price to that. It's having those conversations with you, it's keeping you on track, taking advantage of what's going on in the market, what strategies are available for you, custom to you. This is crazy out there. People trying to do this on their own, like, okay, sure you can buy a stock on your own.
[00:16:23] You could buy an investment and maybe you buy and hold it. Hell, maybe a day, trade it. But the point is simple, are you really? Going to be able to focus and study and you're gonna have more knowledge than a professional. It's funny, I make comments to my clients saying, Hey, you, what's going on in the stock market today?
[00:16:44] As we call on the phone and they're telling me, they're like, wait a second, you're my stockbroker. And I start laughing and they're like, you're crazy. Well, number one, I'm not the stock broker, right? I'm not selling stocks for commission. I don't make commission that way. My job is to make sure your net worth increases.
[00:17:01] Part of how we get paid is for your portfolio to increase, but it's not saying that's the sole way we work. Sometimes we recommend taking money out of the portfolio and buying real estate, putting the money in other mechanisms, sometimes gifting money to kids depending on the super rich that might get help with estate taxes.
[00:17:22] It's not just making money in the portfolio. Our job is to help their overall net worth increase. There's a big difference of helping your portfolio increase. Sometimes we may make a recommendation to do a Roth conversion that may cost maybe hundreds of dollars. It may cost tens of thousands, maybe hundreds of thousands of dollars, but guess what?
[00:17:42] It may reduce their estate tax. It may help 'em in other ways, and it might help 'em in other taxes by taking a hit in these few years before tax rates go up. And maybe they can even be in a tax-free situation going forward. You get what I'm saying? There's more to it than just increasing your portfolio value.
[00:18:00] As I just gave examples, sometimes it reduces your portfolio value. You get what I'm saying? So please, Take advantage of talking to a financial professional as we are offering one to two meetings, one to two hours of our time. Folks at no cost. You don't know what you don't know, and you may be very smart, but smart enough to be dangerous by just understanding what your smart logic tells you.
[00:18:26] Makes sense for you, not fully aware of everything else that is out there. We would love to help. Give us a call. We've got offices all over. 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 falcon wp.com for sure, and you can sign up for a free assessment.
[00:18:52] To help relate this show to your specific situation, because I see this often folks where you got very smart, intelligent people and most of our clients are engineers, quite frankly, uh, because they can appreciate the knowledge and the detail and the amount of time it takes to be able to execute a proper plan together.
[00:19:14] And they understand it. I'm not trying to say we only work with engineers, I'm just saying they appreciate it the most, or it's funny because this industry mostly says, I wanna avoid the engineers. Why? Because most of this industries, commission-based salespeople trying to take advantage of the consumer, and they're the only ones smart enough to read the detail on it.
[00:19:31] And some people have an advisor that is an order taker. It's a transactional relationship. Well, this is not a transactional relationship. This is a full on relationship, an in-depth relationship, a financial intimacy to the relationship. Yet again, some people are just hungry and they want to go to McDonald's and get their quick meal.
[00:19:54] Well, you know what? It's fast. It made them not hungry anymore, but there are long-term effects of that meal. At McDonald's, what we are suggesting is a healthier choice, and the funny thing is it ends up being a cheaper choice and it helps you with health. More long term and you understand it and it's customized and it's catered to you.
[00:20:14] Some people want that. They just think it's too expensive, and that's true in reality. But the crazy part is, is here. That is not the case. Sometimes you can't afford not to hire us, and we've seen that before. Yet again, has to be a no-brainer approach. By the way, folks, if you're just joining me, you're listening to 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.
[00:20:40] I today we're just talking about this raging bull market and going down a slippery slope of just say, what are you doing about this? And are you happy? Are you making money? Are you seeing the results in your portfolio? Your account should almost be getting. All time highs. Now, if you remember earlier I said Nasdaq that down 40% now up 40%, well your a hundred thousand is not back at a hundred thousand, right?
[00:21:01] 'cause you a hundred thousand, lost 40% to 60 and you made 40% on the 60. So you're still down 15%. So how are you saying I made money? Well, few reasons. Number one, you're not just invested in nasdaq. Number two, your portfolio, did you buy when the markets were down? Were you able to capture more shares? So when you bought more shares, you didn't just have 60, you bought more shares maybe to bring it back up to 80, and now you made 40% at 80, which means you're maybe at how much?
[00:21:33] A lot more than a hundred. You're at 114,000. You get what I'm saying? The answer is it depends, and I just see it off. Or too often people do not do this type of analysis and do, do, do not, do these type of changes. And it's, it's, it's sad, but at the same time, You almost need to chip your teeth to appreciate it, right?
[00:21:54] Your parents used to tell you this all the time. You almost need to make your own mistakes to appreciate your parents and the advice that they give you. This is why we mostly get experienced individuals, people who have worked with the broker, dealers out there have worked with the JP Morgans, the Wells Fargos, the Morgan Stanleys, the Merrill Lynches.
[00:22:10] You almost have to work there to appreciate what we're doing here. You have to understand, nobody knows what fee is. When we tell people we're fee only, literally right after we say we're fee only, they're like, oh, yeah, yeah, fee base. It's like, no, I just said fee only. Why are you saying fee base? Because it's Wall Street's way confusing you.
[00:22:29] And on top of that, they get to say they're fiduciaries and legally obligated to do what's in your best interest. But what they don't tell you is they don't have to do that 100% of the time, or we do, we don't even have a serious set of license anymore. I forfeited that a while back, almost a decade ago now.
[00:22:43] So the point is why, because we don't have, we cannot charge commissions. We cannot get compensated. Here at Falcon Wealth, we sell brain. That's how we operate and we love that. It makes our interests intact doing the same thing. So please be excited about the market that's up. Please be excited about the future and when a drop happens, be excited for that too.
[00:23:09] 'cause now you have strategy, as an example I gave earlier. You're able to buy more shares and as long as you're diversified, globally diversified, you're able to capture different rates of return on different asset classes. That's what you call is a strategy share. You can put all your money in NASDAQ in January of this year, and you have 40% more than a globally diversified portfolio.
[00:23:27] But is that the right thing to do? No. 'cause if you're drawing off your money and what happened last year, I. If you had all your money in the Nasdaq, what happened? You're down 40% on that. Yeah. How does that feel? Well, if you're living off the money, it's truly impossible, so please be better. Please be diversified.
[00:23:46] Please be smart enough to realize you don't know it all. Once you realize that life becomes a lot easier for you. You are able to be more happy. You can actually spend the time on things you wanna do. Ignore the noise, ignore the news. I'm not trying to say stay ignorant, right? Because if you don't listen to the news, you're ignorant.
[00:24:10] If you listen to the news, you're informed, but at the same time, you could be annoyed in the process. Have balance in your life. Don't be too extreme on one thing over another. Personal finance is more personal than finance. Whew. That was a fast as show. Folks, I want to thank you for tuning in with me this weekend.
[00:24:29] You can always reach 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 at Falcon Wealth. planning.com. That's falcon wp.com for short where you can get this episode or any one of our episodes, previous episodes, and get video casts of this show and go to our knowledge center where you can get a bunch of other advice and strategies that can help you in your financial situation.
[00:25:01] We got over a million views now in under a year, so we feel very proudly about that. Folks, we wanna thank you for tuning in with us. We want you to have a fantastic week and God bless.