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 indices 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.
Gary Determan:
First Wednesday of the month. Dave Nelson in studio, and Dave, James did a nice job on men’s day. You allowed him to come in and-
David Nelson:
Yes, exactly, exactly. Dad likes to talk a lot so these opportunities come up a few and far between, but no, it sounds like he did a nice job and again it’s good for him. John, [inaudible 00:01:05] city is probably three days a week up here, probably two days a week. James is up here, four and a half days probably on average, and it’d be like a half a day, give or take probably two days a month he’s up there. So, really glad to hear it. Good for him. And again, this type of venue as far as our line of work, people want to know who you are and what you’re about and what have you and the can I trust you? And again, having a low keyed one where you don’t really talk business, we just talk about stuff, other stuff is kind of a nice setup for him.
Gary Determan:
You know, he was talking a little bit about, with him and his brother and Nate, kind of young blood in there, but I’m much older than you. People always ask me, when are you going to retire? But then I’m thinking, what would I do?
David Nelson:
Correct.
Gary Determan:
And I think you’re in the same boat. I mean, you enjoy what you do tremendously.
David Nelson:
We’re lucky, aren’t we?
Gary Determan:
Yes.
David Nelson:
Yeah. To have that ability to continue to do it and enjoy what we’re doing. And you’re exactly right, I’ve had people say you’ll never retire, and that’s probably true, but I want to be cognizant of not putting anybody in a bad position as far as, Hey, the old guy’s lost it, but he doesn’t know he’s lost it and so that’s really important as far as to again, acknowledge that and be aware of that and not be a burden to the placement.
David Nelson:
We’re in the business, we’ve got a lot of talent behind the scenes these days. It used to be I wore 15 hats. Now, I’m down to probably only five and that’s really terrific because again, behind the scenes we’ve got talent down in Kansas, along with Jake in the office managing portfolios, doing the lion’s share of that work. John James, Nate, meeting with clients. I’m meeting with clients, doing some various public gatherings beyond the road. Before too, too long, I’m going to head over, I’ve got my Western trip to take care of, we’ve got clients in California, Arizona, head over to Honolulu. I’ve got a two day a presentation, we’re going to be doing over there as far as for clients, as far as in Honolulu. So that’ll be a long trip. That’ll be five days and I’ll be in four different States in five days. So it’s going to be a tough grind. But anyway, that’s part of it.
Gary Determan:
That is amazing that you do that. I mean when you talk about that, I just, I shake my head because I remember when you were in [crosstalk 00:03:35] started downtown Fulton. Well, yeah and I remember you at Eagles as a matter of fact now.
David Nelson:
Yeah. Delivered papers then on to detasseling corn and then onto scrubbing over at Eagles and then working at Eagles.
Gary Determan:
And onto Honolulu.
David Nelson:
Yeah, onto Honolulu. So, the office over there has a pretty big clientele and what we’ll be doing as far as over there, we’ve got a conference and then that’ll feed into, we’re going to be doing some gatherings as far as for the clients over there. And so two different events and it should be fun. It should be educational. Our approach is a little different than the folks that we work with as far as on the Island. So they want a different vantage point as far as for the clients to hear. So, really looking forward to that trip. I’ll look forward to getting home and a lot of people, oh, you’re lucky and I said, “I’ll be on the ground I think roughly a day and a half over there.” So, with the jet lag and all that fun stuff, it’s going to be tough. But anyway, it’s my choice, not anybody else’s.
Gary Determan:
So, again, what is it that you do when you’re over there?
David Nelson:
So this particular one I’ll do all the compliance work. That’s number one priority as far as to get that taken care of. So I’ve got to go through and just ensure that things are being run correctly as far as, we monitor, I mean with computers you can do 90% of it anymore as far as online and be able to pull it up, but we’ll have to do some actual fiscal checking as far as what’s taken place.
David Nelson:
Beyond that, it’s going to be two workshops that we’ll be doing. I’ll be talking about, very similar to what we talk about here as far as on this venue as well as public gatherings here. We’ll be chatting about markets and what we see, what’s taken place, what are the scary things ahead that we should be aware of, what are the opportunities that are out there and again, try to make some sense out of that for individuals, and again, I think a typical gathering they have, we’ll have somewhere in the neighborhood of 200, 300 people and so it’ll be a nice sized gathering. Not too big, not too small, but anyway, just chatting about boring stuff, money, that people want to know more about.
Gary Determan:
Are your clientele people who were born and raised in Hawaii or are these people who have transplanted to our 50th state?
David Nelson:
I’d say it’s probably 70, 30, 70% as far as, that are locals and 30% as far as that are transplants that said, “Hey, I traveled over here and I loved it, so I stayed.” And so we’ve got a fair amount of those individuals, so it’s an interesting mix. Some of the locals, as far as spending time with them, they truly do think differently than we do as far low keyed, what have you. I said the first time I was in Honolulu, I’ll never forget it.
David Nelson:
I mean Honolulu is a big town, it’s a very big town. You feel like you’re in New York city or Chicago or something as far as when you’re there, you don’t even realize the water’s just half a mile away what have you, just does it feels like a big city. So anyway, the individuals, as far as there, we’re driving around town, we’re driving here, we’re driving there, somebody would come out and in Chicago, in New York, I mean the horns are just blasting constantly. Not one person honked their horn as far as in Honolulu. It just isn’t a cool thing to do and they don’t do it. I mean, it was really, really stunning to me. So, it’s not my favorite Island, I mean, I wish you were on Maui. I love Maui and I love Kauai, but at the end of the day, Honolulu is kind of the happening place and certainly, the cost of living over there, it’s just absolutely staggering across from the office over there. They have condos, the cheapest condos, 5 million bucks.
Gary Determan:
Oh, my.
David Nelson:
5 million, yeah. It’s just mind boggling and they’re nothing special. So it’s just crazy.
Gary Determan:
That was great. But they got a slip in something about basketball night win for the girls last night, the boys really played well.
David Nelson:
They did.
Gary Determan:
Mertz doing a tremendous job as always. Getting to that time of the year won’t be long in a couple of weeks. You’re going to be playing tournament basketball.
David Nelson:
We will be. We’ve seemed to be indeed in a pretty good fashion. We’ve got Marquette as far as for homecoming Friday night, so that’s going to be a tough game. And then we’ve got Midland and then we go into the tournament. So yeah, it’s counting down. I mean I think the kids are getting excited, they’ve got a different energy than what we’ve had as far as all year.
David Nelson:
That game last night it was kind of nip and talk. They took the lead, we talked to lead. Coming into the final minutes, I was just so thrilled and happy and proud of the kids as far as how they handle it. Years past, we stumbled and we didn’t make good decisions and bottom line let the games get away. We had a game, well, we actually had two games back to back that we lost by one point. Again, games you got to win. So this was one of those that easily could’ve gone the other way. Eastern Valley played a nice game and again, we’re just fortunate as far as to come out with a win and real happy for the kids.
Gary Determan:
I’m glad you mentioned homecoming because it is a Catholic school week.
David Nelson:
It is and a really important week as far as for us and again, small community, not having a football team, it’s pretty much built homecomings, build around basketball and a Catholic school week is again just an opportunity to kind of show off a little bit and let people know as far as what the school’s all about, what have you, and again, the sports programs will again come Friday night and we’ll see what we can do. We like the… Like our boys last night went against Eastern Valley number one in the state and we’ve got, I don’t know last time I looked, there four, I don’t know where they still stand but they’ve got one loss. We want to do what we can as far as to put another one on the last gallon.
Gary Determan:
So you got the tough one this week?
David Nelson:
Yes we do.
Gary Determan:
But they’re all tough-
David Nelson:
Exactly, yes.
Gary Determan:
They’re all tough.
David Nelson:
Yep.
Gary Determan:
Here it is the first of the year, it is a global economy, no doubt about that. A lot in the news about the Coronavirus happening over in China really hasn’t effected us too much yet. Has it Dave?
David Nelson:
No. As far as, if you look at the… What do I want to say, those infected, it’s been fairly minimal, relatively speaking as far as the markets were concerned, we had about a week and a half. I discussed this Tuesday on the news, the morning news and what we went through is, we showed a chart and the big picture, there’s three things that we’re looking at as far as now. And the big daddy is I say is the inversion, we’re talking about interest rate and version. So in simple terminology you have short term interest rates that are generally lower than longer term interest rates. Think of it in terms of a mortgage. If you got a 30 year mortgage, your interest rate is higher than a 15 year mortgage. Same thing on the investing side. So when you have a period of time where interest [inaudible 00:10:25] backside, in other words, the 10 year and the 30 year drop dramatically and become lower than the short term rates. You have this inversion that takes place and basically they flip flop roles.
David Nelson:
Well, translation that typically means recession and it typically means recession 12 to 18 months out. So we had an inversion last May and that was the first one in a long, long time over 10 years. And so again, people are a little frightened, as far as what’s ahead. Do we have a recession coming? And again, why does it matter if you look at markets as far as when markets correct in a recession, it’s almost double what it would be otherwise. So again, we’re talking about 40% type draw downs. So we had an aversion in May, things calmed down, we got back to more normal, longterm interest rates went up, short term interest rates stayed low and literally less than three, four, five days ago we had another inversion. So the long end went underneath the 10 year bond went on a lower yield than the short term.
David Nelson:
Again, translation, not good news. So in markets we’re selling off prior to that and then you throw in the mix of the virus as far as, and that add a little extra fuel. We dropped basically just about 2000 points, which again these days isn’t that big of a drop and now we pretty much got in the back the last couple of days.
David Nelson:
Yesterday was on fire, day before it was good. This morning was quite good as far as when I came up here this morning, so we’ll see. Can’t say that this stuff is behind us, but the SARS virus basically there was more desks that took place as far as in that market sold off. Very similar to what we did here, but it was very short lived. And then the markets reasserted themselves and start moving forward. So again, big picture, just the conclusion is just to stay awake. I mean, again, this thing is not done, done, but I think markets have kind of pushed it aside for a while. And again, you have two big days like we had yesterday and today that’s probably going to send a pretty loud message to people. It’s time to play some offense again.
Gary Determan:
And visiting with Dave Nelson, don’t want to get too political, but there was the state of the union address last night, some likened it to a Trump rally more than they stayed over a union address.
David Nelson:
Sure, sure.
Gary Determan:
But he was talking about the economy and how it is doing so well under his time.
David Nelson:
Yes, and that’s a true statement. It’s kind of interesting. There’re various publications depending on… And again, most of the stuff that we read is business related and they go through the stats as far as looking at it. The first two years when Barack was in, versus the first two years of Trump. Now, three years as far as for Barack, first three years as far as Trump. And it isn’t even close. And it’s kind of surprising when we talk about this, that Barack’s was significantly higher than it was as far as for president Trump. Now, those that are informed will realize that we are coming off a very low bottom. I mean we had this massive selloff that took place at the end of Bush’s era coming into Barack. And so the bottom line is we’re at a much lower level, but the percentages, it’s still somewhere North of 30% the difference in a three year period of time that the markets did better during Barack.
David Nelson:
The other thing that’s interesting is again, we had a decade where we didn’t have a recession. That’s the first decade ever in the history of the stock market that there wasn’t a recession. Seven years of that was during Barack. Three years was as far as with president Trump. So again, another thing that’s not being disclosed and the last item that I’ll hit on as far as employment, employment growth during this last run has been much slower than in any other run that we’ve had similar to this as far as markets going up. So yeah, there’s a lot of good news. Some of it’s from predecessors, some of it’s from current administration.
David Nelson:
Again, full disclosure, this is a political, type discussion and forum, but the facts are what they are, is that clearly people today, if you look at it as far as the business community, feel better about deploying their money as far as investing their money versus say, 10 years ago. There’s no question about that. But again, we’re at a very, very, tough time. The second biggest pullback we’ve ever had as far as the United States next to the great depression called the great recession. And so it kind of slants things a little bit, but at the end of the day, we’re moving in the right direction. The U.S. is dominating as far as world markets. Interest rates here are very favorable in comparison to around the world. Things look pretty good as far as the United States right now.
Gary Determan:
NelsonCorp, something you took on a couple of years ago now is you have a tax department there-
David Nelson:
Yes.
Gary Determan:
And of course we’re here in tax season and I know Nate spends quite a bit of that on his weekly programs-
David Nelson:
Yes.
Gary Determan:
When it’s not the live show, but what a benefit for you to have that now incorporated into NelsonCorp?
David Nelson:
It is. It’s something we spoke about probably at least for 20 years and finally made a decision about five years ago, six years ago, seven years ago, I don’t even remember them now, but we struck up a relationship with Deb. We had her, I had her doing my taxes for a period of time and got comfortable with her as far as if this approach would work. Lynn McGraw came along shortly thereafter and that looked like a good opportunity as far as for her as well as us. So between the two CPA practices we’ve been able to bring it in. We’ve been able to incorporate as far as what they do with our clients and vice versa. It’s been a really good relationship. Not everybody works on both sides of the fence and that’s fine. I mean that wasn’t the goal. The goal is to have talent available when we need it. And so if we have a question, we can literally walk down the hall. We’ve got three people right now as far as in that capacity.
David Nelson:
Probably four will be here within six months. And so we’ll have plenty of talent to go to, to get these questions answered as far as to help our client’s tax situation improving. And that isn’t always lowering it necessarily, it’s making it longterm better for them. And again, with the technology they bring to the table, the technology we bring to the table, the brains they bring to the table, the brains we bring to the table, it’s a pretty tough combination.
Gary Determan:
Nice table.
David Nelson:
Yes it is. That’s right.
Gary Determan:
Got a good look at table then.
David Nelson:
We do.
Gary Determan:
Again, James Nelson was in for our men’s day and one of the things we talked about was, the expansion in the quad cities.
David Nelson:
Yes, we get the question all the time. When are you guys starting down there? And the sooner the better our best guess is going to be now late March. That’s what we’re striving for. Get some cement down and start building. And we’ve been in that location now for more than 10 years. And when we moved in, the idea was if it works, within a couple of years we’ll make the transition and timing just never seem right. And location, we can never find what we wanted for the price we wanted, but we finally determined it’s time, we have no room down there, it’s a very small setup. We’ve got a lot of heads as far as down there. So yeah, the building can’t take place quickly enough as far as the building. And then it’s a matter of getting the current people in there and we’ll be adding a couple of bodies as far as down there as well.
David Nelson:
Probably in the capacity of pretty much what we do as far as myself, as far as an advisor, we’ll have staff down there as well and so we’ll be up and running a 6,000 square feet, so it’s a pretty good size place. We’ll be taking the lion’s share of it and probably be leasing out a portion of it as far as to somebody else.
Gary Determan:
I can recall when you first built down at the bottom of the Hill, one of the things that you wanted to really show is that this is a solid institution. You’ve got the brick building, you wanted to make it look like it was secure.
David Nelson:
Yeah, exactly. And that’s important as far as obviously our line of work. The other thing that’s important is to show people and not just through words, but through actions, show your commitment as far as to the area. And we felt that, that’s key. The other thing that we’ve been really harping on as far as in recent times is making ourself more available as far as to the non for profit world to try to help consult as far as on various topics to help them financially.
David Nelson:
We continually ask and beg as far as for other people as far as to also help. It’s an important time in our area. I think there’s some really good things happening and we got to continue to push this thing. And for those of us that have been blessed, I think it’s important that all of us as far as to give back and to try to make a difference. So, the first building, very important down there to send that message. Second building was out of necessity. We got to have more room, great location, bought the property as far as from the folks here, as far as the electronics would have you, as far as the property and it’s worked out perfectly for us and we think the one down in the quad cities will be very similar. Again, I think we’re at 23 heads as far as here and that will continue and this is the hub will continue to be the hub.
David Nelson:
This place supports quad cities to Burke sports, all the outside offices from Honolulu to North of Chicago. And we’ll continue to have this be home. This is where we’re committed to. My wife and I plan on being here forever. And so the bottom line is this is where we want to have it.
Gary Determan:
You got a couple of minutes left in the program again, Catholic schools week, homecoming.
David Nelson:
Yes.
Gary Determan:
You’re going to get them all fired up.
David Nelson:
We’re going to try to, Gary. I think you probably heard through the years, I’m not as young as I used to be and they won’t be as dynamic, but I’ll do the best I can. It’s kind of like the fundraising with the Irish auction.
Gary Determan:
Yes.
David Nelson:
I’ve dialed that back a little bit from where-
Gary Determan:
You don’t jump up on this stage like you used to.
David Nelson:
Yeah, the body parts you start with, they used to be [inaudible 00:20:35].
Gary Determan:
Remember you rode a bike one time.
David Nelson:
I rode a bike around, that was kind of cool and exciting. Even my wife was literally stroking out as far as I’m going to kill somebody, probably myself and somebody else. But anyway, it’s a great cause and as everybody I think probably out there knows I’m a Clinton High kid.
David Nelson:
I care about this community in a big, big way and POP became home as far as for my five kids, as far as to come through, and I love coaching there and we’re going to be doing I think before too long and other venues as far as to try to educate people on the bond referendum and get people in. Again, it’s not to take a position necessarily, it’s to try to educate. There’s a lot of data out there that I don’t think people are aware of. So again, we got great schools in this community. We’re going to make them better. And then number two on top of that, again, we’ve got committed people in this area that want the community to prosper and I think there’s some really good things happening so we’re going to continue to fight for that and see if we can make a difference as well.
Gary Determan:
As always, great to have you in studio and good luck to you against [inaudible 00:21:38] on Friday.
David Nelson:
Thank you, I’m going to need it. Yes. Appreciate it.
Announcer:
Financial focus is a production of NelsonCorp Wealth Management in Clinton in 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 indices mentioned are unmanaged and cannot be invested into directly. Registered representatives, security is 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.