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4 Your money is brought to you by NelsonCorp Wealth Management.
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
Thank you, Brandy. Appreciate it.
So you talked last week about this being a weaker time of the year for stocks. Is there anything else you see that warrants caution for investors?
Well, I mentioned last week as far as the seasonality aspect, which again, just refreshing people’s minds, is looking at certain times of the year that historically have been better. Doesn’t always work that way, but history says that gently speaking it will. So yes, right now things are fairly good, but when we look ahead, what we’re trying to do is to size up as far as what should we be doing and not doing.
And one of the items that we like to talk to people about is that trying to weigh out as far as, do I want bonds? Do I want cash? Do I want stocks? And what we look at there is a relative value. In other words, which one from a relative perspective looks more appealing. And when we look over the last 10 years, typically almost the bulk of the time the dividend yield that the S&P 500, in other words, the stock index was paying was actually higher than cash. That’s not the case the last 12 months, give or take. We’ve seen interest rates spike up pretty dramatically and the bottom line is all of a sudden cash looks like potentially a better alternative. The chart is… It shows this nice visual that we’re hitting a 20-year low as far as relating to this very item that I’m bringing up today.
Okay. So what implications does this have for viewers in the near term?
Well, it’s one piece of evidence as we always talk about. The weight of the evidence is really key, but this environment, I think could last a lot longer than what people think that it could. In other words, interest rates could stay up at these elevated levels for a lot longer than what most people believe. Hence, maybe given a better opportunity for those people that are savers, cash type investments, et cetera.
All right, David. As always, thanks for joining us.