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Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indexes mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer, member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. Well, this is Nate. James joined me again today. Obviously September 11th and I know when this day comes on the calendar every year obviously stands out to all Americans, obviously in a not so great way. But I think just remembering the events that happened on September 11th I think will be something that every single one of you out there will remember exactly where you were that day and how you kind of felt. I know going back to me was back in college. In between classes saw it come across the news when the first plane hit the tower and then obviously seeing the second plane hit the tower and you’re just kind of just awe struck, I mean in such a just kind of paralyzing way. I mean, just not knowing what to do.
Nate Kreinbrink:
Is this really happening? What do we do next? And I think just that whole gamut of emotions that people go through and obviously again, you feel for the people that were directly affected. Those people, the thousands and thousands of people, that lost their lives trying to save others and things like that. But again, it’s just, it’s a day that you’ll never forget. And again, we want to continue to honor those that serve and protect us, especially on days like this, but again, every other day.
James Nelson:
Yeah, you’re right. I mean, you said it, everybody remembers where they were when they heard the news or saw the news. And I remember going home from school sick that day and I was watching TV and the news comes across. And yeah, it’s a sad day and all of us will remember this day as long as we’re around.
Nate Kreinbrink:
Right. And again, you look at this day and you try to then okay with the show I mean, how does that translate to markets? Again, the show Financial Focus, tie it into it that way. And we look at the markets just immediately after those events happening and they obviously shut down. I mean for a good week I think it was, and then obviously were drastically lower then once they opened back up again. Again, we talk about the events controlling what you can control. This is obviously an event that sticks out that you couldn’t control. I mean there’s risks with any type of investment that you take on. Stocks, bonds, whatever it may be, there’s risks associated with it. Obviously this type of risk for an event like this is something that you can’t control, but it potentially could happen.
James Nelson:
Yeah, and I think that’s an important point. I mean, not too many people remember the market’s being closed for a period of time. That just seems crazy anymore. You know, a day of not trading on a typical trading day. I mean that seems crazy. But yeah, nobody can control the markets being shut down for about a week and then opening roughly 10% down when they do finally reopen. And yeah, you’re at the mercy. If you were invested at that point in time, there’s nothing you could do. You couldn’t sell, you couldn’t get out, it just is what it is. The things we can control though, going back to what we’ve talked about in the last couple of shows, is where you save the money, how you plan for taxes.
James Nelson:
You can control tax exposure if you’re disciplined and you’re paying attention and you’re looking at what type of accounts should I save in versus other accounts maybe not having those tax advantages. And then knowing how that’s going to effect you when retirement comes. What’s the difference between saving in a traditional 401k versus a Roth 401k or Roth IRA versus traditional IRA. Those are the things that people have control over and those are the things that people should be focusing on because the intraday moves in the markets, nothing we can do about that. But we can control taxes, we can control risk to an extent, and we can certainly control where the money goes and what type of account it goes into.
Nate Kreinbrink:
Right. And I think it goes into some of the most recent events that we’ve had in far as kind of the investors sentiment, their emotions and feelings, leading up to it. I mean obviously the China tariffs and all that’s coming into it most recently. This inverted yield curve and how that has impacted the markets. And again, just the realistic numbers that from March of 2009 to roughly where we are now, the markets are up to 300 and some percent. I mean that is a big bull market that again, has had some teeth in this run that it’s had.
Nate Kreinbrink:
So again, some of these things coming, the way things are starting to shake out, is there going to be a downturn? Recession has been thrown around, who knows? But the likelihood of some type of correction happening in the near future, whether again, not that it’s going to happen tomorrow, but again, you look at six months, nine months, 12 months, 18 months down the road, the likelihood that something of that magnitude may happen is definitely very realistic. And when we say control what you can control, there are things that you can start doing now to kind of proactively take steps to protect your investments, your assets, to be able to hopefully get out of the way of the bulk of those losses.
James Nelson:
Right. And the longer this market runs up, the closer we get to that recession, right? I mean, we’re over 10 years into this bull market. That’s not normal. I mean, we’ve hardly seen any volatility literally in the last 10 years, and history says every four to six years, we’re due for a 20% correction. Every eight or nine years we’re due for a recession. Well, we’re well over due on both of those counts, and we’re probably getting close to being towards the top end of the market. I mean, like you said Nate, 300%. That’s a big move in a pretty short amount of time. You know, we probably are getting late in the game in this run, but again, that doesn’t mean markets are going to roll over tomorrow or we’re panicking towards a recession. We can wiggle sideways for a period of time before things turn and we’re clearly not running for the hills at this point.
James Nelson:
But again, it goes back to having a plan, knowing where you’re invested, knowing how to get out of those positions, and having a sell discipline. That’s the biggest thing. Most people don’t have any sort of sell discipline. I just put the money in my 401k, put the money in my IRA, kind of set it and forget it, and hopefully it’s okay. Well that’s not really a plan and that’s kind of where we come in and try to put sell disciplines and try to show people the downside risk that now exists today.
Nate Kreinbrink:
Right. And I think we kind of go with it by three kind of main points. And that’s investor sentiment. What are the overall emotions and feelings of investors out there? What is the market trend? What is the actual market doing? I mean, it’s not lying. It will tell you what it’s going to be doing if you just know where to look. And in doing that, what is happening with the market? Is that what we think should be happening with the market? And then lastly, don’t fight the Fed. That’s a big one that comes out there as far as what is the Fed doing with interest rates, how that is impacting the overall markets. Where are interest rates currently compared to what they have been historically in times like this. And again, being able to take all that data, all that information together and have a educated decision as far as how we’re invested.
Nate Kreinbrink:
I mean you hit it on the head just squarely, people don’t have that sell discipline. They’ve been in this thing and this is easy. We just put money in and our account keeps going up or putting money in and the market’s going up, times are good. Well, until they’re not. And that’s when the big issues come into play with people’s accounts and they don’t know when to get out. And they get out too late and by that time they’ve already absorbed the bulk of the market downturn and then they’re selling at again, the absolutely wrong time to be doing that. So again, understanding how you’re allocated, when is enough enough. Again, we say investing in your accounts come down to just basically greed and fear. I mean, how greedy do we want to get? How scared are you to take on additional risk? And people don’t understand that or be able to correlate that to their own accounts to be able to get out of the way of anything.
James Nelson:
Well and the other big thing is there’s so much noise out there these days, right? All the headlines, the tariffs, the this, the that, interest rates. There’s a lot of noise and a lot of things people really shouldn’t be focusing on and that’s going to continue. I mean the tariffs are not over. This is probably going to trickle into next year at least and maybe beyond that. Who knows? We’ve got Brexit coming down the line. People have kind of forgotten about that for the first part of this year. But Brexit this Fall, how’s that going to play out? Britain leaving the European Union. We’ve never, never seen a scenario like this.
James Nelson:
There’s going to be plenty of headlines, plenty of scare tactics, there’s going to be all sorts of stuff out there. And then again, the interest rate discussion, that’s not going away. The administration’s been tough on the Fed saying that they want interest rates cut. That’s probably going to continue through the election cycle. So there’s a lot of noise out there and a lot of it people should ignore. But again, goes back to the plan, having a plan, having sell disciplines, and knowing when to get out of the markets and when to be in.
Nate Kreinbrink:
Right. And I think too, a lot of it has to do with timing of where you’re at in your working career. I mean obviously the closer we are to retirement, do we want to take everything off the table? Absolutely not. But again, we want to make sure that if we have a target date in mind that we’re looking to retire and we’ve done the plans, we’ve done the studies and able to go through with that date. We don’t want to take on any additional risks to have our account take a big hit and then have to work another year or two just because of some crazy move that we made with our accounts and taking on that additional risk. So again, as we all said, it’s understanding where you’re at, it’s having a plan, and obviously no one can predict the unpredictable. I mean as far as the events that happened and that goes with anything. But again, having a plan and being able to stick to that and keeping you right on track. Taking that emotion out of your investments in the decisions that you make will obviously put you ahead.
James Nelson:
Yeah, absolutely crucial. And please let us know if there’s any questions, if anybody wants to sit down and talk with us, we’d be happy to do that.
Nate Kreinbrink:
Right. So again, this is Nate and James with NelsonCorp Wealth Management bringing you this week’s Financial Focus. Thanks. Wanted to real quick, announced that we are doing Jeans for Charity every Friday. Money raised in the month of September will be donated to the Quilts of Valor. James, thanks for joining me.
James Nelson:
Sure.
Nate Kreinbrink:
Again. Nate and James with NelsonCorp Wealth Management with this week’s Financial Focus.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indexes mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer, member FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.
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