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 in [inaudible 00:00:20]. Registered representative. Securities offered through Cambridge Investment Research Incorporated, a broker dealer, member FINRA SIPC. Investment advisor representative, Cambridge Investment Research 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, so we do have Dave Nelson on the line. The program will be live to the bottom of the hour. Now, Dave, I have been stuck in the studio since 5:00 this morning. You are at the office. How was the drive in?
David Nelson:
Well, I tell you. The wind is just whipping. You could hear it as far as, everybody heard it I’m sure last night, what have you. I live out towards the golf course and the … any road moving essentially north south with the way that wind is blowing is pretty rough. So there’s a lot of drifting taking place as far as out in 30 seconds. And today, it was, you can get through, but this thing keeps whipping like it is, I’m looking out the window right now at the office. And the wind as far as the snow blowing and what have you, yeah, it’s going to be a rough couple days it sounds like. Something we don’t want to look forward to. I know I don’t.
Gary Determan:
Yeah, I’m right there with you now. Of course you coach the Irish girls. You got two ball games in already this week, coach.
David Nelson:
Yeah. Busy week. We’re way behind as far as in our conference. Most of the teams have 11 games posted. We’re at nine. The schedule the way it worked out, we had a couple cancellations. The team down the quad cities we were supposed to play, that they came off our schedule. So then it was scramble, scramble, scramble, try to get some games in. So yeah, we had [Wallard 00:02:08] came down, and unfortunately that game got away from us. We looked okay for a period of time, but they just killed us as far as on the rebounds. And so we lost that.
David Nelson:
And then last night we at home again. We had Lisbon come in and had a decent game against them. They’re they’re struggling this year. It’s a young team, what have you. But bottom line give or take 20 points, something like that. And again, we’ve got one Friday, assuming that the weather cooperates. It’s going to be obviously very brisk. We’ll see if the game is played, and we’ll be on the road as far as heading up to Wyoming to play Midland. And they too, they have about the same record as us. So looks like a competitive game ahead.
Gary Determan:
Now you’re telling me Wallard in that ball game, the shots was almost three to one in their favor.
David Nelson:
Yeah, it’s embarrassing. To say it as far as what type of coaching are you doing here? But they’re a team that relies upon the three and the three translates into for those that know basketball, they’re shooting outside and they’re … put that baby up. And, and oftentimes when you miss, they’re long rebounds. And so we did a very poor job as far as rebounding the basketball. Subsequently, they’re getting two and three shots per possession. We’re maybe getting one, maybe two as far as occasionally. And it translated into a 15 point loss and they tripled the number of shots essentially that we had. And we only lost by 15 only. So we’ve just got to do a better job. We’ve got size this year as I think you know, Gary, as far as watching it. It’s something we never really had. We’ve got three legitimate home players, but bottom line, we’ve just got to be more disciplined as far as putting a body on people when a shot goes up.
Gary Determan:
Before we get into the business, just one more aspect. Of course, here in Iowa, there are no holiday tournaments. Generally it’s about a two week time period between the game and the previous year to the new year.
David Nelson:
Yep.
Gary Determan:
Some coaches like it. They say they get to work on different things. Other coaches would prefer playing ball games. What’s Dave Nelson’s take on the break here in Iowa?
David Nelson:
This year, it was imperative because we’ve got a lot of … We graduated six players and for a small program like ours and legitimately four of them that were on the floor a lot. Three almost the entire game, and one other one was probably at least half a game. Losing that essentially four type players, we’ve got a lot of making up to do. And without boring people to tears, the ordeal I went through as far as just from a health perspective, I missed a tremendous amount of off-season stuff, and subsequently we didn’t get that time in. Normally I would tell you, Gary, I would rather play, because again we do a lot of stuff in the off-season and I want games. I want that competition. I want new faces that we’re facing versus just the same people day after day after day.
David Nelson:
But this year was different because we fundamentally just are behind. And I’ve got a few freshmen that came in. And as again, some folks out there probably know last year as far or on the girls side because the COVID, the seasons were basically wiped out. They were canceled. And so this group, the individuals coming in that are ninth graders missed all of their eighth grade season. And so they didn’t get to play. They’re definitely behind. And on top of that, then we have other people that have never played varsity basketball that are now playing lots of minutes as far as in a varsity game. So I needed a lot of time as far as to work on fundamental stuff. Not that you can break habits in a week or two weeks, but that’s the goal is to start breaking some of those bad habits and getting these individuals doing the things correctly.
David Nelson:
Again, we’ll see as far as the season continues to progress, if it made a difference. I think it has. I think our shooting has gotten a little better. Our percentage is improved as far as from three point line, as well as that two point line or the two point shot. So again, I think it was a good thing this year. What’s your take overall?
Gary Determan:
I talked to the Illinois coaches and they like having a holiday tournament to get some ball games in. But then they do take a little bit of a break for about a week before they get back into maybe what would be conference play. But I do miss broadcasting those two weeks. I would love to do a holiday tournament.
David Nelson:
Yeah, us as well. I mean, as far as in a typical year, exactly. We would love to have something like that. And many here as far as just the number of games that they get to play as well. Iowa, we’re restricted to 21 games. And when you play in tournaments, my understanding is you can play multiple games in a day and it only counts as one game. And so just a few of those things, a few extra games really can make a difference come tournament time. I mean, this year, the expectations as far as going into the tournament, we get through a round or two. I think that would be probably pretty good. And normally that’s not what’s coming out of my mouth as far as visiting with the other coaches and/or the players. Just trying to be realistic. Years past I mean, we’re expecting to go deep in the tournament. And many times, oftentimes we have. This group is going to be a little harder as far as to make that happen.
Gary Determan:
We’re going to take a break for the weather here in a couple of minutes, but we’ve been hearing a lot about the Santa Claus rally. Talk about that.
David Nelson:
Absolutely. It’s a very short period of time. I’ll get into more details as far as on it, Gary, when we come back. But essentially it’s the week ending and then the first two days of training as far as in the new year. And the conclusion is this particular year cut to the chase, it’s set up beautifully and the bottom line the results certainly were very good as far as this year.
Gary Determan:
That’s what I had heard as well. Well, let’s go ahead and take that break for the weather. More with Dave Nelson, our update brought to you by the Clinton Midas.
Andrew Stutzke:
We’ll keep a winter weather advisory going until 6:00 this evening. We’ve seen considerable blowing and drifting of snow, especially in the more open rural areas. So watch out for that for reduced visibility and even some slick roads at times. Winds will continue to gust up to 45 miles an hour. Through the morning, we’ll see those relaxed a little bit into the afternoon. Mostly cloudy skies and a snow shower this morning, a few peaks of sun for the afternoon. We’ll see temperatures falling into the mid teens. Much colder tonight. Partial clearing, and thankfully a little bit less in the way of wind. We’ll see lows near three above. Thursday, only a high of six, mostly cloudy, breezy, wind chills below zero for a good chunk of the day. And then a big free fall by Thursday night. Temperatures down to 13 below zero. With your storm tracking forecast, meteorologist Andrew Stutzke.
Gary Determan:
Well, be careful out there. Right now our temperature nine above, but we have west winds and averaging 30, gusting up near 40 miles per hour. Does give us a wind chill value right now of about 16 below. Winter weather advisory in effect till 6:00 this evening. Wind chill advisory in effect midnight tonight until noon on Thursday. Be sure and check our website KROSradio.com for any cancellations or scheduled changes.
Gary Determan:
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Gary Determan:
We continue down to the bottom of the hour with Dave Nelson of NelsonCorp Wealth Management, our Financial Focus. Dave, happy New Year to you. I forgot to do that, wish you that.
David Nelson:
No, thank you. Thank you. I appreciate it, Gary. I don’t know. I noticed it coming in this morning. I just glanced out the window again. I’ve never seen that I recall at least a rainbow this time of the year. There’s a rainbow, just a slight, a glimpse of it, yet it still exists. But when I came in this morning a little before 8:00, rainbow was pretty substantial. So it was kind of interesting this time of the year,
Gary Determan:
I would say so. Now, did you follow it to see if there was a pot of gold there?
David Nelson:
Yes. I couldn’t find it. I tried really hard. Couldn’t find it.
Gary Determan:
Well, you got kind of a … We just heard from the Clinton Midas, but you got kind of a Midas touch, don’t you Dave?
David Nelson:
Well, we’ve been pretty lucky as far as through the years and the Midas touch. Yeah, it’s again …
Gary Determan:
Dave, you there? We lost David. Hopefully he’ll give us a quick call back. Again visiting with Dave Nelson of NelsonCorp Wealth Management. The call just dropped on us there. Not exactly sure why that happened. But again, the program will be scheduled to continue to the bottom of the hour. We do have a program reminder however, that we will not have our River City Sports Review this evening. Again, a number of the schools canceling. Dave, is that you?
David Nelson:
Technology, man. What the heck?
Gary Determan:
Yeah. You just dropped on me there. That’s okay. That’s okay. Hey, before that we were talking, before the weather, a little bit about the Santa Claus rally. Said it was good. If you could elaborate on that.
David Nelson:
Yeah. It’s the final week of that year and the first two trading days of the upcoming year. And so when we look in the rear view mirror, a week back here, what we find is that the market actually had a really nice rally. Now, historically the Santa Claus rally more often not is it works out to be a pretty profitable few days. We’re not talking about a 20% move or anything like that, folks. But again, if you made 1% per month as far as investing in stocks or whatever, I mean that’s a pretty good year. Last year was obviously much better than that. But the Santa Claus rally, we’re talking about a percent, depending on what index you look at. Give or take about one and a half percent. One a half percent and a seven day, seven trading day period of time, that’s pretty darn good.
David Nelson:
So we’ll see if it, that trend continues. Again, we spent a lot of time talking to folks as far as trying to look ahead and what are we seeing, et cetera, et cetera. But history says that when you have a decent Santa Claus rally, historically, you’re going to have an okay year and maybe even a good year. And certainly we hope that that’s the case. Coming off a year like we had last year, again, depending on what index you look at, whether you’re talking about the Dow or the NASDAQ or the international type indexes, all of which had positive returns. Some of them on the doorstep of 25, 26%. So it was a pretty darn good year. Again, the Santa Claus rally followed it up and finished off the year last year and started it off this year on a pretty nice note.
Gary Determan:
I know with you folks at NelsonCorp Wealth Management, you not only have great experience, but you also have great resources, which has got to be comforting I would imagine for the people that you deal with, Dave.
David Nelson:
Yeah, it is. It’s the tools. I mean, for years, most people would come in here and they talk about that somebody told them at one point that you just got to put it in over time. You’ll be okay. I try to as best I can without sounding like a total know-it-all, go through that and explain to people what they just said. And what they just said is that the 30 and 40 and 50% drops that will take place, they just have to turn their head and act like it’s not there and they don’t care, et cetera. One of the greatest money managers of all time worked with Fidelity Investments. And again, this isn’t an endorsement for them. It’s just stating the fact as far as where the gentleman worked. He was there 13 years and he averaged about 26% per year, which is just amazing on a 13 year period of time.
David Nelson:
And he was very, very famous for trying to get people’s attention by bringing this up. And he said, “You got to talk about this because people need to understand it.” And essentially what it is is you’ve got a block of money. And the first year you’re up 50%. Next year down 50%. On the surface, it sounds like you’re back where you started, but for simple math, we’ll just say $100,000 you started with. If you went up 50% that first year, you now have $150,000. And then the next year, if you drop 50%, you’re at $75,000. You’re not back to 100,000 where you started. So the point being, the point he was trying to make is he said, “That’s how I manage money. You have to learn to cut your losses.” And so bottom line, things are going to go up, and they’re going to go down and you really have no control over the small moves, but you can impact as far as the bigger moves.
David Nelson:
So that’s what we try to get people think in terms of. When they saw something like, again, we just have to ride it out, et cetera, et cetera. We’ll go back and we’ll talk about the NASDAQ, which is primarily technology stocks. And if you look at that in the year 2000, and you bought basically at the peak in 2000, which a lot of people were buying during that period. It took you almost 16 years just to get back to your money as far as if you bought that day in 2000 and you rode it all the way down because the NASDAQ or those out there that aren’t aware, dropped over 80% as far as the following year and a half. And the bottom line, my point was that in order to get your 100,000 back, it took you 16 years just to get back to where you were.
David Nelson:
When we talk to people about this, we’re saying, again, “How long is it going to take for you to get back that 30% or 40% or 50%?” In recent times because the federal government has stepped in with quantitative easing of some of these things that people probably heard about. Essentially what it is, it’s flooding the markets with money. And so the government is putting money into the bond market, which is again, then helping the stock market. And this go around, they even came in and bought stocks. And so when you look at that, the market recovered much quicker than historically it would. Our point is, is that a lot of people that we work with, they’re not 12, they’re not 18. They’re not even 30 years old. Most of the people that walk in the doors around here are 50 and 60 and 70 years old, and they can’t take a 30 and 40 and a 50% thumping.
David Nelson:
So they need to have a plan for that. And historically the plan for that was that you need to have a diversified mix of investment. That included a lot of bonds in your portfolio. Well, for those that aren’t aware out there, what bonds are paying today, a 10 year bond has had a big rally over the last literally week. And it’s up to 1.6%. So yes, you heard that right. 1.6% for a 10 year guaranteed government bond. So again, it’s the situation of your options are pretty limited. So in order to try to diversify and not get destroyed as far as your investments, you need to have a strategy as far to the try to keep from those big moves down, because it’s really, really tough to catch up when you have investments that are paying 1% and 2%.
David Nelson:
Again, it’s not a sure thing that you can avoid the massive or the small drops, but it is basically to say as far as the big drops, we’re not advocates of sitting there and hoping for the best. That goes back to the research that you brought up. We buy a lot of research as far as from really, really smart people out there that sell data. They’re nerds. They sell it to us nerds as far as here. And then our job is to apply it to individual client situations. And again, make the ride much smoother as far as so people can stay in the game because they don’t want … most of the people don’t want to go back to work because most of the people we work with are retired.
Gary Determan:
Dave, you’re not a nerd.
David Nelson:
I’m a nerd.
Gary Determan:
Come on. No, you’re not. Anyway, we’re visiting with Dave Nelson of NelsonCorp Wealth Management. Now, at the end of the month, of course, in January, we always have our men’s day. Of course you were in on the program for a number of years. Last year was Andy Ferguson. Mike VanZuiden is going to be coming in on Friday, the 28th. NelsonCorp Wealth Management taking on these tax solution area. How has that really worked out for you, Dave?
David Nelson:
Initially, we weren’t sure. We’ve been talking about this for years. For those that aren’t aware as far as the wealth management side of our operation, essentially we do tax planning as far as looking in the future and trying to help clients as far as in that regard. It’s investments. It’s talking to them about estate planning, making sure that their wills or their trusts, their beneficiaries are current. Everything is set up the way that they want it done correctly to get the money to the people that they wanted it to go to. But the void was the actual preparation itself and being able to coordinate this as much tighter as far as that in the past. In the past, the business model looked this way where you had attorneys in one location. You had CPAs in another location, and then you had the trust officer in another location, and then you had the financial advisor in another location and they really never discussed your particular situation.
David Nelson:
And that’s been a big void as far as in the industry, in particular in this area. And so we decided that we wanted to do something about that and we wanted to bring the tax preparation side and the planning and bring them together as far as to help people make better decisions, not just today, but over a lifetime of decisions. And bringing that under one roof has really been a really successful endeavor. It’s really helped a lot of our clients. We’ve basically transitioned a fair amount of people from the planning side over to the preparation side. And then it makes the coordination of what should we do. We spend a lot of time talking to people about retirement plans and things of that nature. So 401(k)s and IRAs and stuff like that.
David Nelson:
This new animal that came about give or take 15 years ago called a Roth IRA and a Roth 401(k) is a totally different animal. It’s handled the same way as far as from the employer perspective, but you don’t get a tax deduction up front with these, but you don’t have to pay taxes on the backside. Well, when they came out, nobody wanted to do it. I mean, the excitement of getting that tax savings today and the reality as far as in their mind at least that they’re going to be in a much lower bracket as far as tomorrow. And so when we take time and we talk to people about what they view today to be as well as what they think tomorrow’s going to look like, the Roth type approach oftentimes can make sense. The only way you’re really going to be able to decipher this thing is to be able to crunch the numbers and try to illustrate to people. And that’s the benefit of having the accounting people as far as in-house versus trying to coordinate this from afar.
David Nelson:
And it’s been really successful, Gary. Clients are just raving about it. Again, from our standpoint, what we did, we didn’t have the expertise. We brought in three firms. We bought out three different CPA firms. And again, brought it into our operations as far as here in Clinton. And we’re made it available as far as to people outside the area as well. We’ve got a boatload of people from the quad cities that are currently using it as well. So it’s been a really good thing. I know I sound like a broken record here, but we’re committed to this area. And subsequently we love being able to run stuff from here, keep the people employed here and have people from afar basically use those services. It generates more jobs locally here for individuals in our area. So anyway, it’s a win-win.
Gary Determan:
Yeah. Great to hear. And I’m looking forward to visiting with Mike. We got about a minute left in the program. It’s always great catching up with you, Dave. We are into a new year now. Just quickly, how do you see 2022?
David Nelson:
Well, it’s going to be much more volatile than what we’ve seen lately. That isn’t a maybe. That is a sure thing. Now, the volatility can cut both ways, and it will cut both ways as far as this year. We’re just cautioning people as far as we’re coming off of a 15, 20, 30% type return for stocks. And don’t get greedy at this point. Again, things are a little expensive out there today. Talk to somebody that’s knowledgeable. Talk to somebody that’s objective as far as about this and try to make some good decisions as far as to keep you moving in the right direction going forward.
Gary Determan:
As always, great catching up with you. Take care.
David Nelson:
Thank you.
Gary Determan:
And we’ll talk to you February 2nd.
David Nelson:
Sounds great. Thanks, Gary.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the 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, an 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.